One of the more prominent issues being negotiated in the NBA's new CBA (Collective Bargaining Agreement) is the league's salary cap. As it stands, the NBA employs a "soft" salary cap, allowing teams to spend more money than the cap states as long as they pay $1 in luxury tax for each dollar they spend over the cap.
Conventional thought is this allows big-market teams (for example the Lakers and the Knicks) who can afford to pay the luxury tax to outbid smaller market teams for top players with no regard to how large their payroll swells. This policy would seem to favor these big market teams in getting the best players and therefore the best chance to win a championship, excluding small market teams from this elite club of contenders.
Is this true?
Going back to the 1996-97 season, the last 16 NBA champions have all held one of the top six overall records at the end of the regular season. Labeling the top six teams as "contenders," we find that last year's "contenders" (Bulls, Spurs, Heat, Lakers, Mavericks, Celtics) spent an average of $74,874,546 on their payroll (salary information gathered from hoopsworld.com). The league as a whole had an average payroll of $67,663,050.
Clearly, the "contenders" spent more than the league average, but was the difference statistically significant?
As it turns out, it was (based on a simple statistical hypothesis test). From this crude calculation, we can draw the rough conclusion that in order to win a title, you must outspend your competition. So what happens if the league institutes a hard salary cap and you can't outspend anyone?
As a point of reference, let's take a look at the National Hockey League. The NHL lockout caused the loss of an entire season in 2004-2005. Hockey came back in 2006 with a new CBA that enforced a hard salary cap. In the 29 seasons before the lockout, only 11 different teams won the Stanley Cup. In the six seasons since, there has been a different Cup winner each year.
The list of NBA champions looks eerily similar to the pre-lockout NHL. In the past 32 seasons, only nine teams have won an NBA title (Dallas just joining the club this past season). There have been seven back-to-back champions and three three-peat winners in that span. Just eight teams have represented the Western Conference in the NBA Finals since 1976 (and all eight of them have done it at least twice).
Just like it did for the NHL, the institution of a hard salary cap may change the landscape of contenders in the NBA, increasing the number of teams in the mix for a title. The question is: Is that a good thing for the league?
What kind of salary cap should the NBA institute?
I say no. Speaking purely as a connoisseur of high-level basketball, I want to see the best possible level of play in the postseason. That means having a few terrible teams to offset the great teams (like the six "contenders") that duke it out for a championship at season's end.
As this past NBA season has taught us, having teams loaded with star talent is fascinating to watch. The Heat kept us tuned in all year whether we loved them or hated them. Fans follow the Celtics and Lakers in droves. People even outside of New York (Like me, for instance) can't wait to see how the Melo-Amar'e Knicks turn out.
If the cost of that is a few bad teams like the Cavs and Timberwolves, I think it's a small price to pay. Those teams are never on national TV so they are out of most fans' stream of consciousness. No one remembers the details of the regular season anyway (Heck, I'm having a hard time recalling much of the first playoff round).
What matters, what actually sticks in our minds, is the postseason. I believe we should aim for the highest level of play we can get at that point.
I can already hear the angry voices belonging to fans of small-market teams who can't afford to spend on multiple superstars crying for justice. Don't tell me you'll never have a chance. The Spurs winning four championships in nine years have proved that theory false. While the Spurs have faded since, teams like the Thunder continue to be models for how to win in a small market. And on the other end of the spectrum, we've seen big market clubs like the Knicks and Clippers be consistently putrid for the last decade.
It'll take excellent management and a little luck with the lottery balls, but it can certainly be done. Just this past season, two of the four conference finalists had payrolls at least $10 million under the league average. The trick is to build around a budding superstar on a rookie contract. Of course, landing that superstar is where some of that luck comes in.
It even adds another element to the perfect postseason we strive for—the underdog. How many people hopped on the bandwagon and rooted for the Thunder or Grizzlies this past playoffs? I would rather see an NBA season come down to a few great, compelling teams with a couple stalwart underdogs thrown in than a bunch of halfway decent teams that I could care less about.
Sports are always better when there are good guys and bad guys. Davids and Goliaths. Derrick Roses and LeBron Jameses (I'll let you guess who is what).
I'd tell the NBA to keep the soft cap, and let great seasons (like the one we just witnessed) keep on coming.