Everyone feels it's a foregone conclusion that Chris Bosh, Dwyane Wade, LeBron James, and possibly even Amare Stoudemire deserve max money in next year's free agent bonanza. However, with a falling salary cap is it worth a six year commitment averaging over 20 million a season?
Let's split this out into two cases. For LeBron James, yes. For the
other three? That's a dicey proposition, and the risk grows greater
now that they appear to be waiting a year to hopefully sign six year
extensions rather than signing five year extensions now. That adds 1
year on of total commitment increasing the odds of a deal going south prior to it's end.
A max contract for one of these players will start at 105% of their
previous year's salary. Assuming that they want to work out sign and
trades, it will total $125,509,471.over the six year span. The
salary cap is declining, and it may continue to decline for some time as the league has never been able to recover the audience after losing Jordan, and a
pro-longed recession hurts everyone. At least the NBA's television
contract is locked up through 2015/2016 or else they'd feel a world of
Still fans will drop the NBA faster than they'll drop the NFL or MLB.
Season tickets are declining around the league at an alarming rate.
Most franchises will lose money next season, and their value as an
investment tool may rescind as well making the yearly profits more
important. The new CBA that must be negotiated soon is likely to be
a repeat of the 1999 scenario where the owners MUST win or else they'll
lockout the players. Many owners will lose less money by eating their
leases than fielding a team for a season, so they will not budge until
they get an agreement in place that works for them.
For a practical example, look at how bad most players on the seven year
12% raise contracts looked by the end of their contracts relative to
the players who signed after a new CBA and had six year 10% raise
contracts. That's the same type of difference we're likely to see
with a new CBA this time around as total contract length will almost
assuredly drop at least one more season down to four years for a new
team and five for an existing team. The percentage of BRI going to
the players (lowering max salaries) and max raises may also decrease.
So here's the deal, the salary cap is expected to fall to between
50.4-53.4 million next season. What if it falls to 50.4 million and
then it takes another beating the following season and drops down to
say 47 million. With the potential of a lockout, revenues could drop
even more sharply and cause the cap to fall even more. It's not out
of the realm of possibility to see a 40-45 million dollar salary cap if there's a
lockout. At that point is Chris Bosh worth near half your pay
roll? Do you trust Amare or Wade to stay healthy for six seasons at
half your payroll?
If you put your chips down on a guy at that price then you need
superstar performance out of that player. I trust LeBron to deliver
that for six seasons. I trust Wade to deliver it if healthy, but I
don't' trust his health. I don't trust Amare's health or attitude,
and Bosh is very good, but simply not superstar good. A superstar paid a single year later is going to be on a much better deal after the new CBA.
However, regardless of whether it's prudent, I would bet on all four of
these guys getting max contracts. Amare being the only possible
exception, however, even Amare probably gets a max deal from the Knicks
if they strike out elsewhere because they'll be desperate to make a big
splash by this point. They've sold their fans on this plan and need
to get someone.
I believe the Bulls can lure one of these players to them next season,
and if the salary cap continued to rise, I wouldn't question a max
contract for the big three and would at least consider one for Amare.
However, with a falling salary cap the "should we" debate has almost as
much teeth to it as the "could we" debate.