Could a Harder Salary Cap Create Parity in the NBA?

The recent creation of the Miami trio may have set a precedent for franchises to begin building these “super-teams."

These teams will certain create more imbalance in the league as history has shown the NBA already suffers from a lack parity.

Just how little?

Statistics

• In the 64-year history, the Lakers and Celtics account for 33 of the 64 championships (51.5%).
• Adding the Bulls and Spurs, they account for 43 of the 64 championships (67%).
• Out the 64 championships series, the Lakers have made 31 appearances (48.4%), while the Celtics have made 21 appearances (32.8%).
• In the past 10 years, we have had five different championship teams. While you may think that's not so bad, taking a closer look we realize the Lakers and Spurs accounted for seven of those championships.
• In the past 20 years, seven different teams won championships, with the Lakers, Spurs, and Bulls accounting for 15 of those titles.

 

In contrast to the NBA the NFL

• The top three championship-winning teams, Pittsburgh, Dallas, and the 49ers, account for 16 of the 44 total championships (36.6%).
• Dallas and Pittsburgh have the most Super Bowl appearances with eight for Dallas (18.1% ), and seven for Pittsburgh (15.9%).
• Seven different teams win the Super Bowl in the past 10 years and 13 different teams win the Super Bowl in the past 20 years.
• Also, only four current teams in the NFL have not made it to the Super Bowl, and that includes the 1995 and 2002 expansion teams,  the Jaguars and Texans.

While the NFL does not have perfect parity, it is indeed better then NBA when it comes to creating a more leveled playing field.

So what are the main reasons why the NFL has more parity then the NBA?

 

It boils down to two differences

• The NFL has operated under a hard salary cap with a hard floor, while the NBA has a soft salary cap with no floor.
• Player changes in the NFL does not affect a team as dramatically as it does in the NBA.

The NFL operates under a hard salary cap, which means a team salaries must always stay under the cap. Also, with a hard floor, teams are required to spend a certain amount (I believe it was 90%) of the cap space. Basically, these rules made all teams spend roughly the same amount on players.

Also, since most NFL contracts include rights, cut players without pay, and are not all guaranteed, players generally will accept the best deal they can possibly negotiate meaning teams will almost always have to pay what a player is worth on the open market.

The NBA operates under a soft salary cap with no floor, meaning they can exceed the salary cap limits under certain circumstances and teams can spend as little as they want. The main reason the NBA operated with a soft salary cap was to allow for star players to stay with the same team also known as the Larry Bird exception.

This exception permits teams to exceed salary cap limits to re-sign their own players. There are also mid-level and bi-annual exceptions, as well as exceptions for rookie contracts and minimum salary contracts.

So will having a hard cap like the NFL be the solution to the NBA parity problems?

Well the answer is no.

While the hard cap in the NFL works for them, it wouldn't work as well for the NBA. The consequences of the NFL's more stringent salary cap rules is that players (even star players) change teams much more often then they do in the NBA. In the NFL, one or two player changes on a team usually does not result in catastrophic changes, except in the case for NFL franchise quarterbacks, which indeed are probably the least likely player to ever change teams.

For example, in 2005, the Colts did not re-sign Edgerrin James, despite him finishing in the top five in rushing that year. However, even without him, the Colts went on to win the Super Bowl in 2007. The NFL tends to have an easier time replacing players who leave, which is a contrast with the NBA.

In the NBA, one or two player changes can alter the future of a franchise. For example, Shaq leaving Orlando to join L.A. The Lakers go on to a three-peat and the Magic go from title contender to barely a playoff team. Boston trading for Garnett and Allen made them go from being one of the worse teams in the NBA to winning a championship and making another finals appearance this year.

Implementing a hard cap in the NBA would have some catastrophic consequences, as it may force teams to give up franchise players. They would most likely have to include contract rules to allow them to cut players at will, which would most likely not pass with the players union.

 

Solution

What the NBA needs is more stringent rules on their soft cap. I believe they need to do away with the majority of the exceptions and only keep the Larry Bird exception, rookie exceptions, minimum veteran salary, and disabled player exception. They should also implement a hard floor possibly somewhere around 80-90% so teams can't underspend.

Also, modify the Larry Bird exception to limit it usage to a maximum of a few players per team, this way teams would be able to keep their primary franchise players. However, they will be forced to make tough decision on their other free agents.

While these rules aren't perfect, they should be able to at least prevent teams like LA, ORL, and Dallas from going way over the current cap. Currently, these three have team salary at $92M, $89M, $84M, while the current cap is around $56M.