The NBA announced a nine-year extension to their media rights deal on Monday, one that will kick in ahead of the 2016-17 season and extend to 2024-25.
The new contract is reportedly worth $24 billion over the nine years, nearly tripling the previous annual national television revenue for the league. This stands to have a major impact on the league's salary cap, as national media rights are considered basketball-related income, the primary basis for determining the cap.
NBA commissioner Adam Silver admitted Monday that the new deal will significantly impact the cap, and he is set to meet with new NBPA executive director Michele Roberts to discuss how the league and union can best handle the spike in salaries.
Silver will meet with Roberts on Monday to discuss what he called "a profound effect" on the cap. His hope is to "smooth out" the jump, meaning that instead of one enormous leap in the salary cap when the new deal kicks in for 2016, the league would instead structure the cap to rise incrementally over a number of years.
With the new numbers crunched, team executives estimate a salary cap of $91.2 million for 2016-17, according to Ken Berger of CBS Sports. If that jump in the salary cap happens all at once, every team in the league stands to have more than $20 million in cap space based on the increase in space alone. Most teams could carve out the room to offer at least one maximum contract. LeBron James and Kevin Durant can both be free agents that summer, and may lead a push to try and abolish maximum contracts as a result.
That number may be high - the deal almost surely starts smaller and escalates year-over-year - and Grantland's Zach Lowe has it pegged as "around $80-plus million" for 2016-17, using some fair assumptions. Lowe also cites sources who say the deal is expected to start at $2.1 billion in the first year and rise incrementally to $3.1 billion by the end. The salary cap in future years would adjust accordingly, as each year's revenue would be used for the following year's BRI and salary cap calculation.
Smoothing the initial impact would not impact the percentage of income the players receive - that can't be negotiated again until 2017 at the earliest, when both sides can opt out of the current collective bargaining agreement - but would stand to spread out the sudden influx of available cash for player salaries.
That's something the union should be in favor of, as it would allow free agents in multiple summers to cash in under a higher cap rather than a lucky cohort in 2016. It's possible the union could play hardball since more than half the league has the ability to become a free agent in the summer of 2016, and they may ask for minimum contracts and other exceptions to be adjusted before 2017 CBA negotiations, as a concession for allowing the cap jump to be smoothed out.
