Cavaliers Are Indicator Of Recession In NBA Salary Spending

Varejao Holding Out During Contract Dispute With Cavaliers

The Cavaliers are "serving as a giant test case ... for the way business is going to be handled in the NBA," as the team, already looking at its highest payroll ever this season, is “standing firm and refusing to pay more than the market dictates” for F Anderson Varejao and G Sasha Pavlovic, according to Brian Windhorst of the AKRON BEACON JOURNAL. With the luxury tax "now known before the season and after three years of big spending, there is a recession in the NBA." The Raptors are the only team that used its full mid-level exception on one player this summer, Rashard Lewis and Darko Milicic were the only free agents to change teams for more than the mid-level exception, and there were “no sign-and-trade deals of significance.” In Varejao’s case, no team can offer him more than $5.3M for this season, and Windhorst wondered, “Why would the Cavs pay him the $9[M] he wants?” Although Varejao’s handlers are “betting the Cavs will fold,” most of the league “shares the Cavs’ viewpoint.” The summer of ’08 “appears to be just as tight. There will be a couple more teams with salary-cap space than this summer, but the free-agent class is much deeper.” But in ’09 and 2010, many contracts signed in ’04-’06 will expire, and the league “again will be awash in available cash. That’s when you want to be a free agent” (AKRON BEACON JOURNAL, 10/9).