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This Is What's Wrong With The CBA

http://www.depressedfan.com/img/cashTP030909.jpgMy run of bitter posts will apparently last the day, but another blurb really got under my skin. John Hollinger, who I'm beginning to respect more and more recently (even if he does swear by PER above all else) attended the MIT Sloan Sports Analytics Conference this weekend, and he sat on a panel with Marc Cuban. After the jump, we'll take a look at a quote from Cuban, and talk about how much I hate the CBA.

Cuban, never one to pull punches, pulled out a quote that should've blown the roof off the building: "Cuban, for instance, matter-of-factly told us that a win is only worth about a half million dollars to a team's bottom line, so that rebuilding teams with low salary structures are often the most profitable."

This, my friends, is the problem with profit-sharing and salary caps in professional sports. To be more specific, this is the problem with having the "haves" paying into a pool that is then dispersed among the "have-nots" with absolutely no oversight into how the "have-nots" spend that money. Or, to be more accurate, with no insight into how much of that loot greedy owners place directly into their pockets.

In the comments, John has had a particular bone to pick with teams owned by publicly traded companies, and their aversion to spending money. I'm not sure they're the true villians in the sport, but let's just take a look at the math. If a team winds up under the luxury tax threshold, they receive 1/30th of the amount paid into the kitty by the teams over the threshold. So passing the threshold not only costs you one dollar in penalty for every dollar over the tax you spend, but you also lose out on that 1/30th share.

By my math, last year that 1/30th share was worth $3.08 million. Let's take the Sixers for example this summer. Say they sign Andre Miller and wind up right at the luxury tax threshold. Let's also assume the total amount paid over the threshold league-wide remains constant. Under those circumstances it would cost the Sixers roughly $14M to sign a player to the full mid-level exception. ($5.8M for the contract, $5.8M in luxury tax dollars, plus the $3.08M in lost profit sharing revenue). What are the odds that a player who could be had for the MLE will add 28 wins? According to Cuban's math, that's what he'd have to do in order for the team to break even on the deal.

Odds are, the Sixers won't be right up against the cap after re-signing Miller, but I think it's pretty clear at this point that they won't be able to bring him back and sign a full MLE guy as well without heading into LT territory, so here we sit. Our beloved Sixers most-likely unable to add another meaningful piece due to fiscal concerns in a dying economy, when that is precisely what they're going to need to do.

At least we have another lockout to look forward to.
by Brian on Mar 9 2009
Tags: Basketball | Luxury Tax | Salary Cap | Sixers |