Salary Cap Revenue in National Basketball Association (NBA)

Salary Cap Revenue in National Basketball Association (NBA)
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Salary Cap Revenue in National Basketball Association (NBA)
 A salary cap is the spending limit that National Basketball Association (NBA) teams are allowed to pay their players. Just like other sports leagues, NBA teams have a propensity to spend more money to sign a new player or to retain one of their own. The cap is therefore designed to promote and enforce balanced competition across the league (Miller, 2018). It is meant to safeguard against mischief and practice that compromise healthy competition and responsible sporting. As such, the cap serves the interests of all stakeholders in the sports profession and career. Evidence suggests that without this measure, teams with financial muscles can spend twice or thrice or even more, the salary of an average player to sign champions. Just like NFL and NHL, NBA salary cap “is supposed to stop the most lucrative teams from simply buying champions” (Miller, 2018, n.p). The essay looks into the nature of salary cap revenue in the NBA, the existing revenue-generating avenues, how these revenues are shared as well as parity and control. Specific NBA players are referred to in the essay as empirical evidence to support the ensuing arguments.
                                        The Nature of Salary Cap Revenue in NBA           
           The salary cap is derived from Basket-related income (BRI), such as team sponsorship and revenue from ticket sales (Huang, 2016). It is calculated as a percentage of the league’s revenue from the previous season and varies each year. They are categorized into hard or soft cap depending on the nature of the league and experience of the individual player. While soft cap gives the team a window to exceed the set limit of spending on a player, a hard cap does not (Augustine, 2009). What NBA has is a soft cap while NHL and NFL have hard cap. The distinguishing feature of the NBA soft cap is the numerous exceptions. Teams exploit these exceptions to go beyond the set spending limit. Many teams use the exceptions as a shield to spend more than the set limit to sign in champions. Kevin Garmet is perhaps the stimulus that hastened the effort to cap salaries of players. Only in his second year in the league, he signed a new contract making him the fourth highest-paid player in the NBA league (Hill & Jolly, 2012). This development made the owners start locking out players and instituted CBA agreements that birthed the current salary cap in the National Basketball Association.
The minimum and maximum amount of money that a player can is paid in a season is defined by the NBA’s Collective Bargain Agreement (CBA). Apart from the team salary cap, there are guidelines on the amount of money each player can make when signing a new contract. The current CBA gives players between 49 and 51 percent of the basket-related income. However, the minimum and maximum amount due to a player are based on the number of years in the team (Miller, 2018). The provisions of the CBA are binding on all teams, the Association, NBA players as well as their agents and or managers. Any departure or noncompliance with the set conditions attracts a specified penalty in the form of tax. The minimum and maximum salaries are defined by the CBA based on years of league experience (Augustine, 2009). For instance, the maximum salary of a player cannot be less than 105% of the previous one. Therefore, even a drastic decrease in cap level does not affect a player with the previous max...