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The Score - Anthony Schoettle

Welcome to The Score, your place for hard-hitting sports business news, fast-breaking updates and fuel-injected debate.  Buckle up.  I'm your host, Anthony Schoettle, IBJ sports reporter.

Sports Business

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

October 25, 2010
KEYWORDS Sports Business

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.
 
 

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