Playing in the Red: The New NBA

As a Dallas Maverick fan, I have to wonder why teams like L.A., Miami, New York, and even Brooklyn can acquire the players that they have under the new collective bargaining agreement, yet a team that has operated well above the salary cap since Mark Cuban took over can not. Those teams have made a decision to operate in the red and a NBA championship is worth it.

The new agreement was supposed to level the playing field by requiring a much higher luxury tax for teams over the salary cap. What has happened is the plane between contender and non-contender has grown exponentially. At the start of the 2012-13 season, the number of teams with a legitimate chance of winning it all is few and far between. Struggling franchises are finding it hard to attract top free agents and additional revenue streams to compensate for increasing their payroll. The original thought that low salary cap teams will be the go-to destination if a superstar wants to make big money was totally wrong. Lebron is not going back to Cleveland, Dwight is not going to Charlotte, and Chris Paul is not requesting a trade to Milwaukee. The NBAPA forgot that teams have low salaries for a reason; the owners don't want to spend the money.

The league on the other hand is different situation. David Stern and company have decided to help the big market teams get bigger. Recently, the league office allowed teams to place advertisements on game jerseys. An ad on a Knicks or Lakers jersey will be quadruple the price of an ad on a Timberwolves jersey. The Knicks and Lakers also have local TV deals that help balance financial spreadsheets. They also have merchandise sales blow smaller market teams out of the water. The bigger the market, the bigger luxury tax you can afford to pay.

To Mark Cuban's credit he knew this was going to happen before the new agreement was signed. There are reports that he wanted to have a hard cap, meaning that a team can't go over the cap and pay a luxury tax. Imagine the parity of the NBA if that was true. Instead of 5 teams with a chance to win, there would be 20. Cuban has made a good decision to let the dust settle. For the first time his franchise will operate under the cap which gives him great flexibility to do anything. His new challenge is to play the cap game and win another title using the flexibility to his advantage. He already has proven the other way works.