Parity? The N.B.A. Already Has It

With the N.B.A.’s collective bargaining agreement set to expire in the summer, negotiations for a new one are not going very well.

How not very well? Oh, 99 percent not very well.

Somehow, the N.B.A. owners and players have to strike a balance between the owners saving $800 million in payroll (the N.B.A.’s goal) and the players losing the least salary possible (the National Basketball Players Association’s purpose). The gap is wider than Dwight Howard’s shoulders, and a lockout appears inevitable.

N.B.A. owners are pressing for a hard salary cap, to replace the current soft cap that allows teams to keep spending through salary exceptions. The hard cap would set a non-negotiable limit on spending, and N.B.A. payroll disparity would be brought in line with the N.F.L.’s tightly contained circle (as opposed to, say, Major League Baseball’s vast gaping chasm).

The party line for the hard cap idea seems to be that it will inject some idea of parity. Often, such a theory cites the N.F.L.’s hard cap. While the intricacies of that sport are not an area of my expertise — I don’t really understand a ball game in which half of the players are not supposed to touch the ball — it is understood that the effect of such a system is players signing deals with huge signing bonuses, and no guaranteed money after that, with almost every team having valid championship aspirations every season and with almost no championship teams repeating the feat. This is cited as a successful system that allows all teams in all markets to compete, a beacon of parity, something to which the N.B.A. should aspire.

But the N.B.A. already has parity.

The best five teams in the Eastern Conference in 2009-10 were Orlando, Cleveland, Atlanta, Boston and Miami. All of those teams have won fewer than 25 games at some point in this decade — Atlanta won as few as 13. In contrast, at the bottom end were teams like New Jersey, Detroit, Indiana and Philadelphia, all of whom were title contenders in recent years. All were N.B.A. finalists in this decade. One of them won the title.

The Western Conference has had less parity in the last decade, due in no small part to the Tim Duncan and Kobe Bryant eras. Whereas we saw eight different Eastern Conference champions from 2000 to 2009, we saw three Western Conference champions, with only the 2005-6 Dallas Mavericks breaking through the Lakers-Spurs stranglehold. But in the decade prior to that, it was the other way around, with Michael Jordan’s Bulls dominating and beating out a variety of Western contenders.

If only a few teams had a chance, we wouldn’t be seeing so many different N.B.A. finalists.

The N.B.A. has as much parity as it needs. It should not be confused with the Greek league, where Olympiakos and Panathinaikos monopolize and dominate while the rest of the league takes turns going bankrupt. There may only be about four valid title contenders in any given N.B.A. season, but those valid contenders change every few years. That is surely sufficient parity; after all, the best-run teams should win more. Indeed, the N.B.A. rewards badly run teams heavily, via the draft system.

It is the draft system that makes bad teams good, not any salary system. It is the draft that allows teams to acquire the superstars that make them contenders, in all but rare circumstances. And the N.B.A. is a superstar-driven league. No salary system could change that, or should.

Futhermore, a hard cap carries the risk of mitigating and undermining the careers of the game’s elite talents. If the objection to the N.B.A.’s parity stems from the way teams acquire stars, then it must be the draft system at fault. A hard cap would not mean all teams have the ability to acquire these stars — a hard cap would mean that teams would pay these stars and then not be able to surround them with talent. A talent like Tim Duncan is wasted if the team that owns him can afford to surround him with only Keith Bogans types because some teams that are too cheap and unsuccessful to make profits insisted that that team be stripped of its financial flexibility, so that they (the worse teams with the worse players) could have a 2 percent chance at winning the title.

This does not sparkle. The Spurs were incredibly fortunate to get Duncan, as was Orlando with Dwight Howard, yet they should not be penalized for that fortune. If a team cannot pay to surround its talent with talent, then pairing Kobe Bryant with Smush Parker and Rick Fox types would go from being an ugly exception to an uglier norm.

A hard cap probably would facilitate further parity. But it doesn’t need to.

That is not to say that a hard cap wouldn’t have benefits. The sad truth of the current N.B.A. model is that teams sometimes deliberately lose. The players might try their hardest on any given night — except for, say, the night Mark Madsen took seven 3-pointers — yet executives often put together bad teams, or blow up mediocre ones, so that they can move up in the draft. If bad teams stood a better chance of obtaining quality players — as would theoretically be possible under a hard cap — then perhaps they wouldn’t only find talent by losing.

Tanking, though, is not the fault of the salary cap. Superstars are no more likely to leave under a hard-cap situation than they are with the soft cap, and with the notable exceptions of LeBron James and Shaquille O’Neal, they almost never do. In the event of a hard cap, teams will wind up paying the superstars while forgoing everyone else. It won’t be the superstars who become available. The primary way to get superstars is, has always been, and will always be, via the draft. Weakening elite teams will not change that.

More pertinent, however, this is not the primary reasoning behind the hard cap discussions. As ever, it’s all about the Benjamins.

Last month, the New Orleans Hornets were sold to the league by an owner cutting his losses. In recent years, the team had maxed out its loans, become overwhelmed by deficits, and reached the brink of defaulting. This descent into the red came while furiously and effectively cutting player payroll and dodging the luxury tax, in a desperate attempt to make negligible operating profits. Yet despite huge loans from the N.B.A. and other sources, concessions on outstanding debts, and strong revenues from attendance, the Hornets just didn’t have the overall revenue to cover their expenditure. And a hard cap is the cited way to reduce that expenditure.

But you don’t need to bring in a hard cap to reduce leaguewide payroll. It might work, but it is far from the only answer. And the players union has countered the idea accordingly.

As things currently stand, owners can spend essentially as much as they want. If they spend all this amount on payroll by choice, then claim to be losing money, it is hard to see a failure of the system. Ideally, the best way for owners to avoid expensive mistakes is to make better decisions when hiring the executives who are supposed to make these decisions, and for those executives to make better personnel decisions. This never seems to happen, but it should.

Under the current, soft-cap system, there is a minimum payroll level, but not a maximum. Teams must spend up to at least 75 percent of the salary cap, yet there’s no cap going the other way. (As we saw before, the theoretical limit is exploitable.) This is not to say that teams can spend what they like; they must work within the regulations of the exceptions, and teams that spend beyond a certain point are subject to the luxury tax, whereby all payroll beyond that point counts double. But by having a soft cap, the theoretical limit is in practice largely arbitrary, and only necessary for determining available cap space.

To put that into some context, the salary cap is currently set at $58,044,000. The Sacramento Kings have a league-lowest payroll of less than $44 million, and the Los Angeles Lakers have a league-highest payroll of more than double that, at just above $90 million.

No one has to spend what they do.

If teams make expensive mistakes — such as Orlando’s $117 million offer to Rashard Lewis in 2007 — whimpering for an escape mechanism from the contract doesn’t rectify the faulty decision-making behind a signing. Unguaranteeing all contracts via a hard cap mechanism benefits teams but victimizes players. It is not Rashard’s fault that he was never as good as Otis Smith thought he was, and the guaranteed money that he signed for should still be his. (Although it is his fault he took steroids.)

Indeed, because of the presence of the luxury-tax system, and the rebates that it provides, those teams that lose money are already somewhat assisted financially by the soft cap. And it does this while having 11 different N.B.A. finalists in one decade. If that’s deemed to be not enough competitive teams, and if the number of teams losing money — determined by Forbes’s Mike Ozanian to be 12 — is deemed too great, then maybe there should be fewer teams.

Of course, it is not an either/or situation. In lieu of a hard cap, a harder cap could, should and probably will be a compromise. Mechanisms to reduce the ability of bigger-market teams to comprehensively outspend the smaller market teams, plus means of ensuring better revenue-sharing among owners, could help to stem the tide of supposed heavy losses amid increasing league revenue. So could a significant reduction in the players’ share of basketball-related income. And so could contraction.

The owners want to significantly reduce overall spending, and the players union is willing to concede a smaller reduction if accompanied by other concessions, notably including instruments such as laxer trade rules that could be used to widen N.B.A. payroll disparity. Cleary, they don’t believe a hard cap is necessary. They certainly don’t want it, at least.

There can be other ways to reduce spending that do not involve this drastic and risky proposition. The modification of the exceptions, the tweaking of their specifics, changes to the distribution of revenue, and the adjustments to the player’s share of the pot. As much as we may lobby for better personnel decisions above all else, the current salary cap rules are misused because the rules facilitate it, and the strict competition among teams for a small group of players encourages it. There has to be a balance struck between allowing a general manager roster fluidity and not encouraging excess spending for marginal gain. There need to be tweaks to the system.

But there doesn’t need to be a complete reformation of it. There doesn’t need to be a hard cap.

And there doesn’t need to be any more parity.

But there does need to be more Pat Garrity.

Mark Deeks owns and operates, and doesn’t do much else with his time. He lives in England near some cows, and supports the Chicago Bulls, which is not always a good thing.