Nearly every team in the league is gearing up for 2010 free agency. But based on terms of the collective bargaining agreement, which is designed for teams to retain assets, there are a few million reasons why LeBron James, Dwyane Wade, and Chris Bosh will opt to remain with their current employers. Previous reports estimated the Cavaliers, Heat, and Raptors would be able to offer their franchise cornerstones extensions worth $30 million more than any other team. Sam Smith, writing for Bulls.com, calculates the difference under a declining cap:

The rub is the new NBA economics. The key is the salary cap and luxury tax set in the summer of 2010. Even NBA commissioner David Stern already has said publicly the cap and thus the luxury tax threshold could be down as much as 10 percent next summer.

If the cap drops 10 percent (two percent decline expected this July for next season), the cap is about $52.6 million. For players going into their seventh season at that point, like James, Wade and Bosh, a max player can receive a top offer of 30 percent of the team’s salary cap if he changes teams. That would be about $15.8 million to start. The raises would be eight percent annually in a five-year deal for about $91.5 million.

A player who elects to stay with his own team for a similar max offer would be eligible for a six-year deal (instead of five) starting at $17.4 million (10.5 percent above their final season). The annual raises would be 10.5 percent instead of eight. That contract would total $132 million.

So if Bosh or Wade or James were to stay with their own teams-assuming the Stern predicted salary can decline-and get a max deal they would be able to sign contracts for $132 million compared with about $91.5 million.

Posted by djsunyc:

Nearly every team in the league is gearing up for 2010 free agency. But based on terms of the collective bargaining agreement, which is designed for teams to retain assets, there are a few million reasons why LeBron James, Dwyane Wade, and Chris Bosh will opt to remain with their current employers. Previous reports estimated the Cavaliers, Heat, and Raptors would be able to offer their franchise cornerstones extensions worth $30 million more than any other team. Sam Smith, writing for Bulls.com, calculates the difference under a declining cap:

The rub is the new NBA economics. The key is the salary cap and luxury tax set in the summer of 2010. Even NBA commissioner David Stern already has said publicly the cap and thus the luxury tax threshold could be down as much as 10 percent next summer.

If the cap drops 10 percent (two percent decline expected this July for next season), the cap is about $52.6 million. For players going into their seventh season at that point, like James, Wade and Bosh, a max player can receive a top offer of 30 percent of the team’s salary cap if he changes teams. That would be about $15.8 million to start. The raises would be eight percent annually in a five-year deal for about $91.5 million.

A player who elects to stay with his own team for a similar max offer would be eligible for a six-year deal (instead of five) starting at $17.4 million (10.5 percent above their final season). The annual raises would be 10.5 percent instead of eight. That contract would total $132 million.

So if Bosh or Wade or James were to stay with their own teams-assuming the Stern predicted salary can decline-and get a max deal they would be able to sign contracts for $132 million compared with about $91.5 million.

http://ballerblogger.com/2009/07/06/declining-cap-could-put-the-sqeeze-on-class-of-2010/

Posted by kam77:

so who in the hell would lose out on a potential extra $40m to come to NY?

Writers always leave out that 6th year if LeBron were to re-sign here, he wouldn't play that year for free. He'd still get his 20 mil. So its more like an extra $20mil that he could easily make up here in 6 years with 3-4mil of endoresments per year tied to NYC.

Heck, bloomberg should pay him 3mil a year to be city spokesman.

[Edited by - kam77 on 07-07-2009 2:41 PM]

Posted by Cosmic:

Posted by djsunyc:

Nearly every team in the league is gearing up for 2010 free agency. But based on terms of the collective bargaining agreement, which is designed for teams to retain assets, there are a few million reasons why LeBron James, Dwyane Wade, and Chris Bosh will opt to remain with their current employers. Previous reports estimated the Cavaliers, Heat, and Raptors would be able to offer their franchise cornerstones extensions worth $30 million more than any other team. Sam Smith, writing for Bulls.com, calculates the difference under a declining cap:

The rub is the new NBA economics. The key is the salary cap and luxury tax set in the summer of 2010. Even NBA commissioner David Stern already has said publicly the cap and thus the luxury tax threshold could be down as much as 10 percent next summer.

If the cap drops 10 percent (two percent decline expected this July for next season), the cap is about $52.6 million. For players going into their seventh season at that point, like James, Wade and Bosh, a max player can receive a top offer of 30 percent of the team’s salary cap if he changes teams. That would be about $15.8 million to start. The raises would be eight percent annually in a five-year deal for about $91.5 million.

A player who elects to stay with his own team for a similar max offer would be eligible for a six-year deal (instead of five) starting at $17.4 million (10.5 percent above their final season). The annual raises would be 10.5 percent instead of eight. That contract would total $132 million.

So if Bosh or Wade or James were to stay with their own teams-assuming the Stern predicted salary can decline-and get a max deal they would be able to sign contracts for $132 million compared with about $91.5 million.

http://ballerblogger.com/2009/07/06/declining-cap-could-put-the-sqeeze-on-class-of-2010/

Not this again..... *sigh*

The max contract is based off of a percentage of the cap. The cap could drop 5M it won't change a thing because a max contract is still a max contract and cannot be more. The lower the cap the lower the max contract number. That lower max contract number will still fit a team who is under the cap to afford a max contract. When that team is under the cap for a 2009 max contract, and the cap drops, they will still be under the cap for a 2010 max contract.

Why this is completely ignored is beyond logic.

But it's just like saying CLE can offer LeBron 30M more.....completely ignoring that it is six years instead of five and the actual number is more like 5-6M - something he easily recoups through endorsements in a bigger market.

But, whatever, the sky is falling I suppose. Let's undo the Crawful and Zachass trades and re-sign Marbury!

Posted by Bonn1997:

Well it's $91.5 mil for 5 years or $132 mil for 6 years. So if the 6th year salary is around $20 mil, then the total income disparity for six years would be closer to $20 mil (not 5-6 mil) unless I'm misunderstanding something. I do think Lebron would easily make that up in endorsements in NYC versus Ohio, though.