Looking Back At Leonsis' 100 Grand Hard Cap Comments | Wizards Blog Truth About It.net

Looking Back At Leonsis’ 100 Grand Hard Cap Comments

Updated: October 7, 2010

[Editor’s Note: Beckley Mason has contributed to Wizards player previews on TAI, this is his first piece. You can read more about him here. – Kyle]

In late-September when Wizards owner Ted Leonsis spoke publicly about the NBA owners’ position heading into the 2011 CBA agreement, he quickly learned that David Stern will not accept anyone breaking the company line in the form of a 100 Grand — a fine, not the candy bar. As owner of the Washington Capitals, Leonsis has come to appreciate the benefits of the NHL’s hard salary cap rules.

“In a salary-cap era — and soon a hard salary cap in the NBA like it is in the NHL — if everyone can pay the same amount to the same amount of players, it’s the small nuanced differences that matter,” Leonsis told the press at a breakfast reception he hosted for the business community in Northern Virginia.

The wisdom of that statement has been widely debated around the internet. Notably, ESPN’s J.A. Adande and CBS Sports’ Tim Berger have pointed out some flaws in the hard cap pipe dream.

Adande’s primary beef with a hard cap is that it could prevent franchise dynasties and encourage even more player movement because teams would be prohibited from spending enough to keep a dominant group intact. He wrote:

“The NBA peaked when the Lakers and Celtics alternated possession of the championship in the mid-1980s and again when Michael Jordan and the Bulls locked it down for most of the 1990s. And a primary tool to maintain the dynasties was the soft salary cap, most notably the “Larry Bird Exception” that allowed teams to go over the cap to re-sign their own players.

Stern is the one who always championed superstars staying in place. A hard cap would only lead to more transient players, as we had this past summer.”

For his part, Berger simply says it’s stupid to compare the NHL to the glamorous NBA:

“There is virtually no chance that the NBPA would agree to a new CBA that includes a hard cap before the current deal expires on June 30, 2011. It took a lost season for the NHL Players Association to finally agree to a hard cap, and the players had to swallow a 24 percent rollback on existing contracts, too. If the NBA went that route, the owners would also have to accept their thriving sport imploding before their eyes; imagine LeBron James and Dwyane Wade squaring off against Kobe Bryant on the Versus Network, all with 25 percent pay cuts.”

So why would Leonsis, by all accounts a sharp dude, say that the NBA owners are still seeking a hard cap?

Searching for answers, I asked a guy who quite literally wrote the book on sports business, Professor Scott Rosner of the University of Pennsylvania’s Wharton School of Business. Rosner, who is the author of The Business of Sports and a principal of Hudson Sports Consulting, also thinks a hard cap is exceptionally unlikely:

“Well I don’t necessarily think that a hard cap is going to be the ultimate answer. You’d be hard pressed to imagine that the NBA players would accept that sort of scenario…

The league might be able to get it if they’re in for the long haul, remember the NHL got a hard salary cap after shutting down the sport for a year to get that. I’m not so sure that they want to go down that road, and that if they go down that road, that they’ll be successful.”

It’s true, if you imagine a continuum of agreements that are possible going into negotiations, a hard cap is the last thing that NBA players would want. The chances of the owners getting everything what they want, assuming they do want a hard cap, are essentially none.

So how much should we really read into Leonsis’s comments?

Hit us again, Rosner!

“He has a greater degree of institutional knowledge than most of the other teams… he understands the benefits of a hard cap world and how that changed the game for the NHL. So he speaks with a greater degree of knowledge on that than many of the other owners, but the running of the business of the NBA is David Stern’s domain and he has made it very clear as have the commissioners of the other leagues that they need to speak with one voice.”

I’ve always wondered who really holds the power in that room. David Stern is as willful as any man alive, and his task is coordinating the interests of exceptionally successful men with enormous egos.

Perhaps Leonsis is playing negotiation games with his comments, publicly announcing the owners’ collectively desired outcome. Or maybe he’s simply a wealthy goat, ritually sacrificed by David Stern in the name of order. Keep Rosner’s final quip in mind: “I can’t remember a collective bargaining agreement in which at least one owner was not fined by the commissioner.”


Beckley Mason