The End of the Chase:  What if there was no Cap Space after all?
By:  Gary Adornato
12/13/01


There is a great deal of logic behind recent reports indicating a tight 
market for the NBA television contract. The initial bid from NBC was 
apparently 25% below the total of the last contract, and while first 
bids are just that, it's not too early to speculate on the potential 
impact of a decline in TV revenues, and the resulting affect on the 
salary cap.

In previous projections, both in the media and from various fan sources, 
it's been assumed that the Mavs would have room to pursue Tim Duncan (or 
some other premium free agent) as a result of the expansion of the cap 
over the next two years. That assumption may well prove false; if in 
fact the revenues from the television contract decline by 10% or more, 
other revenues (merchandising, stadium revenues, etc.) will be hard 
pressed to fully compensate.

Given the new realities in advertising revenues, and the logic of a 
tighter market in general, it is entirely possible that the cap for next 
season ('02-'03) will be lower than this year's number, or at best the 
same. And that any increase from the current cap to the figure for 
'03-'04 will be marginal. 

Indications will continue to come in over the next few months, but I 
think it's safe to assume that Cuban is all over this one. And that 
he'll have an educated guess fairly soon, if he doesn't already have 
one, as to what the future looks like for the cap. We won't have that 
quality of information until well after the fact, but we can certainly 
guess...

Let's play with the following assumption:

The TV contract comes in slightly (10%) lower than the last level, and 
ancillary revenues increase enough to compensate. The cap next season 
manages to stay the same as it is currently ($42.5 mil) and goes up by 
10% the following year to $46.75 mil (Yes, this is simplistic, but 
useful as a starting point).

The Mavericks are committed to approximately $37.3 mil in salaries that 
year, including Fin, Dirk, Nash, Bradley and Eschmeyer. That number does 
not include Harvey, who will be in an option year, and assumes that the 
team has not signed it's first round pick from next year.  That would 
appear to provide about $9.5 mil in cap room... but a provision of the 
CBA offers an additional restraint.  It appears (lacking a law degree, 
"appears" is the best that I can do) that teams are required to hold a 
minimum contract for each slot on the roster - up to 11 total players.  
Round figure, assuming that minimum to be $350,000, that means that 
another $2.1 mil (6 slots X $350,000) will be used up.

The result?  Under this possible scenario, the Mavs will have only $7.4 
mil in cap room to pursue a free agent - clearly not enough to attract a 
prime player.  And that number presumes that the Mavs have given 
up/renounced everyone else on their roster.  Harvey, Najera, Buckner, 
Griffin, Cook and Wang will all be fairly young players with some value, 
but all will be gone unless they are willing to sign for minimum 
contracts or can fit inside the available exceptions.

And Howard will be gone, too... with no value in return.

If Cuban believes that the cap will be stagnant, or at least not 
inflationary, then he knows that he cannot win Duncan - or any other 
free agent of high caliber - on cap room alone. He will need to 
sign-and-trade, and he will need to have the assets to do so.

And so, the test begins. If Cuban lets this season go by and continues 
to hold down payroll in the hopes of building a better team through free 
agency in '03, then he's betting the farm on not only a successful 
signing, but on an extraordinary expansion of league revenues in order 
to make that signing possible.

And if Cuban continues to hold down payroll beyond the point in time 
where a decline in television revenues is inevitable, then it is 
completely fair to wonder about his motives... and about the future of 
this basketball team as a contender.

If, on the other hand, Cuban pulls the plug on the Duncan chase this 
season, and again moves into accumulating assets and building quality 
beyond the big three, then this period of austerity has been nothing 
more than a defensible plan changed in the light of new realities. Cuban 
remains intact as an aggressive, win-at-mostly-all-costs owner, and the 
future of the Mavericks seems as bright as any.

It should be interesting...