NBA's plan to cut salaries is double-edged sword for Pacers

October 25, 2010
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NBA Commissioner David Stern’s proclamation that the league may cut $750 million to $800 million in player payroll costs is a good news/bad news scenario for the Indiana Pacers.

The Pacers, under Larry Bird’s three-year plan, will get out from under about $32 million of its players’ salary expenses after this season. That means the team should have some cash to spend on a key free agent or two.

But that’s assuming the NBA has a salary cap near its current $58 million ceiling. If Stern wants to slice $800 million from player payroll costs, there goes $26.7 million off every team’s salary cap. Bird’s free agent money just got trimmed to $5.3 million. That might land the team a hot prospect—from the D-League.

The upside is the Pacers, according to team officials, have lost about $30 million each of the last two years. So, a $26.7 million savings just about wipes that away. But if the Pacers can’t upgrade the roster—and lose a good chunk of this year’s roster to boot—I’m almost certain that won’t be good for attendance.

Stern’s proclamation is likely little more than posturing, and the players’ union is sure to fight it during upcoming negotiations for a new collective bargaining agreement. Sources close to the league have said a $400 million cut to the player payroll is more likely. That means the salary cap would be lowered to about $42 million.

Bird would still be hamstrung, but at least he’d have $18.7 million to use to hunt free agents.

Carmelo Anthony is set to make at least $18.5 million next year, but he’s not coming to Indiana. There are some other quality players in that price range, such as Tyson Chandler and Tony Parker. I’m not saying the Pacers will acquire either of those players, they’re just an example of the caliber of player the Pacers might be able to acquire with the money that might be available.

Of course, the other NBA teams would be similarly affected, and who knows how Stern's proposal would grandfather in current contracts.

But suffice it to say, losing room under the salary cap could be another obstacle for Bird, now in his eighth season as the team’s president of basketball operations. No one would say the road he’s traveled in this job has been a smooth one. Along comes another challenge.

  • Question
    Tony, it seems unlikely that the NBA would cut 46% of its payroll today as teams without free agents would be much worse off than the Pacers due to owed luxury taxes for being over the newly reduced cap. This move by Stern is to help the owners not hurt them.
  • Less than smooth
    Agreed...a tough that few of his critics could have navigated any better...roster gutted to placate fans who demanded Jackson, Tinsley, etc.,be sent away. Bird has made a couple of mistakes, which are magnified because they needed every single pick and trade to work out. We knew when we got Murphy and Dunleavy that we had better outscore everyone, because neither one can play a lick of defense. But it all needed to be done to get to the point we are almost at now.
    It took Donnie Walsh forever to build a winner, but the NBA Pacers were never any good, so when it finally happened we were just grateful, and he was suddenly a genius (Walsh had many a misstep, and some bad breaks too, think Scott Haskin, and injuries to Steve Stipo). It would figure that the evil David Stern would stab us, and other small market teams in the heart...Walsh saddled us with a ton of long term max out contracts, and now that Bird has almost dug out, he maybe can't spend even remotely the $$$ he thought he would have available. I realize that this is all talk at this point, and the NBA certainly needs to rein in salaries some...but no body made all these self important billionaires spend all that money. I doubt Donnie Walsh signed O'Neal, Jackson, Tinsley without the Simon's blessing. Stern is just trying to protect these owners from themselves at this point. But it would figure what he would do might hamstring us when we are starting to get close. To real Pacer fans...just remember how long it took for the Reggie Miller teams to even get in the playoffs...after that, it took years of tweaking to get to the finals. Give Bird a little more time...and a note to Larry Legend, your loyalty to Coach is admirable, but if he takes the ball out of Darren Collison's hands, can't tweak his system to fit his players, then it is time for him to go.
  • Maybe
    It might seem like it would affect the Pacers in this way, but if the cap was set that much lower than a Carmelo Anthony, or other free agents, would not have the capability to ask for the same amount as they would this summer (contract ceilings work of a percentage of salary cap). Also, this cap room slice would cause other teams to make tough decisions with their current rosters; which could lead to Pacers having a number of opportunities to possibly pick up someone who wouldn't normally be available.

    So, if the salary cap were to be lowered, I believe the Pacers still would be in just as good of a situation. The actual number they would have to spend would decrease, but the amount each player can demand would also's all relative...

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