NBA teams and fans are gearing up for the 2010 summer. Teams are trying to clear salary off the books within the next year, while fans are praying that their team might have a shot at a top tiered free agent.
Could all this hope and planning be for nothing? In the wake of the recent economic crisis, yes!
The NBA is in trouble. By now, everybody has heard of the line of credit JP Morgan and Bank of America provided the league. This is just the tip of the iceberg. The league hasn't truly felt the brunt of the economic crisis because season tickets were already paid for before the market collapsed in the fall.
Next year, I doubt season ticket subscriptions are as high. Plus, keeping the average fan in the seats will mean discounting tickets or other promotions that cut into margins. All of this equates to the 57% of league revenue that is allocated to the cap will decrease.
The players likely to get max money, like LeBron, Wade, Bosh, Pierce, Stoudemire, and Yao will be inclined to do two things: 1)resign with their current teams and 2) resign this summer. Doing this allows for two things. Firstly, by resigning with their own club, the salary cap becomes irrelevant, since teams can go over the cap to resign their own players. Secondly, the aforementioned players will all qualify for max contracts worth 30% of the cap, and 30% of this summer's cap will be more than 30% of next summer's cap.
As a fan, I do hope there's a huge shakeup in 2010, but it just doesn't make economic sense.
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