SBD/Issue 197/Leagues & Governing Bodies

Economy, Ticket Sales, Salary Cap Could Hinder NBA Free Agency

 
A "variety of factors -- including a poor economy, weak season-ticket sales, a declining salary cap and the LeBron sweepstakes itself -- could conspire to make this an unhappy off-season for most free agents," according to Howard Beck of the N.Y. TIMES. Only four teams are "expected to have significant salary-cap space, and not all are expected to use it." Beck notes the salary cap is "not expected to change much" from last season's $58.7M figure, but it "could drop by 10[%] next season, by some estimates." The luxury-tax threshold "could also fall, forcing teams to rein in spending now." One Eastern Conference GM: "No one knows what the marketplace is going to be. It's a brand new world in that respect. This year, the top-flight free agents will go quickly. Then, it will be a long free-agent period" (N.Y. TIMES, 7/1). In Newark, Dave D'Alessandro wrote if the NBA is an "authentic reflection of society at large, this is the summer when consumers ... are likely to start socking away their disposable income." The "vast majority of the 158 players looking for a fair wage will learn that very few teams have the budget to be fair anymore." Nets President Rod Thorn: "Everyone realizes the economic situation, and everyone's alert to it." D'Alessandro noted most GMs "believe only a handful of players in this market will merit more than midlevel exception money" (Newark STAR-LEDGER, 6/30).

TAKING A HIT: The GLOBE & MAIL's Michael Grange writes free agent players like Fs Shawn Marion and Rasheed Wallace and G Allen Iverson are "still potentially effective players with lots of basketball left," but collectively they are "staring at a pay cut in the range" of $30-35M next season. One Central Division exec said, "There's just not any money out there for anybody, they'll be lucky to get the mid-level." Grange notes "just four teams have room under the salary cap to go bidding for free agents." While that means the "other 26 teams can use the mid-level provision to go after players," Raptors President & GM Bryan Colangelo "didn't foresee a rush." The salary cap and luxury tax thresholds are "expected to be flat compared to last year, but that's worse than it sounds." One Western Conference exec said, "This time last year teams were basing their budgets on the salary cap going up to about $62[M] (a team), so that's already a hit" (GLOBE & MAIL, 7/1). ESPN The Magazine's Chris Broussard said NBA agents and team execs are "really wondering what's going to happen in this free agency" period due to the economy. Broussard: "Right now, it looks like a lot of players are in for a rude awakening" ("Outside the Lines," ESPN, 6/30). The WASHINGTON POST's Paul Tenorio added, "It's going to be tough for some of these mid-level players to get any type of big money. … I think you're going to see a lot of guys that maybe in the past would have opted out of their last year going into this summer … stick around and play out that final year" ("Washington Post Live," CSN Mid-Atlantic, 6/30).

SIGN OF THINGS TO COME? The Bucks earlier this week indicated they would not offer F Charlie Villanueva a qualifying offer, making him an unrestricted free agent. ESPN.com's Jackie MacMullan said the reason is "purely economics," as Bucks Owner Herb Kohl "needs to save money." L.A. Times columnist Bill Plaschke: "It is about the economy, but it's not just Milwaukee. It’s everywhere. This is the first sign the NBA this summer will be all about people saving money. This is the first example" ("PTI," ESPN, 6/30).

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