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News » Recession has hit NBA

Recession has hit NBA

Recession has hit NBA
Main Street isn't the only place where the global economic recession is causing friction.

The NBA is feeling the effects of the economic crunch, too.

Sure, there still are plenty of jaw-dropping multi-million-dollar deals being handed out across the league, but not nearly as many as there have been in the past.

For every team such as Orlando or the Los Angeles Lakers, which are spending whatever it takes to maintain a championship level, there are three or four teams pinching pennies this summer to make sure they don't go over their budgets.

It's a culture shift that could be jarring for fans in places not used to worrying about their favorite team's bottom line.

"I don't think there is any question the financial element of our game has become a focus of attention," Indiana Pacers general manager David Morway said. "We all have to be very, very concerned about it. And quite frankly, it's a new reality that everyone has to embrace."

The warnings about the potential crunch was sounded last fall by agents and league observers and realized last week when the league announced the salary-cap and luxury-tax figures for 2009-10 --- the cap is set at $57.7 million per team (down $1 million from $58.7 million from 2008-09) and the luxury-tax threshold at $69.9 million (down from $71.2 million).

The $1 million drop in the cap marks the second time the amount has fallen since the NBA instituted a salary cap for the 1983-84 season. And that means fewer dollars for free agents this summer and a much different forecast for the ballyhooed free-agent summer of 2010, which includes LeBron James, Dwyane Wade, Chris Bosh and Hawks captain Joe Johnson.

It also affects the conversations taking place between players and their agents and teams and those agents during negotiations on new contracts.

"You're looking at a cap and luxury-tax threshold that have declined this year and has the potential to decline again next year," Morway said. "And that's startling, because for so many years, teams managed the luxury tax and operated from there.

"From our perspective, we've been looking at it and evaluating it here for the last three or four years. There was an expectation originally that there would be some money in this year's market and a lot in next year's market. Now I think we're all realizing there is not going to be quite as much money as available."

Longtime NBA power broker and agent David Falk said he had to explain that new economic reality to one of his clients, Hawks point guard Mike Bibby, who signed a three-year, $18 million deal with the Hawks on Monday.

"As an agent, you have to be realistic with your player," said Falk, the first person to publicly sound the alarm about the league's changing economic landscape. "I had to tell Mike Bibby this year, 'You made $15 million last year; there is a recession going on; the cap is coming down. You have to readjust your expectations and be realistic.' That's your job as an agent.

"Of course, because of the global recession, the type of money that was out there last summer will simply not be available this summer and beyond."

Author: Fox Sports
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Added: July 21, 2009


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