(from PeterJohn)
Last month

Application of the Bench Cap

PeterJohn
A few hours ago

"Although getting the bench under the cap would be interesting as ****"

Not sure that will be a problem for any team this season. AFAIK the changes for next season's salary cap should be:
- The cap for lowest paid 5 players will be 40% of the salary floor.
- The salary floor will be 90% of the soft cap.
- The soft cap will be the average team spend for the season just gone (just under $1.7million).

So floor of ~$1.5million and cap on lowest 5 paid players of $600,000. i.e., average salary of $120,000 per player in that lowest paid five. Average salary for a non restricted player for the season just gone was ~$122,000.

So teams should be able to pay some of those end of the bench guys a shedload more than last season and still get under that cap. The question is whether the advent of a new team will drive locals' asking salaries up substantially or not, creating a bidding war for some of the better locals and limiting the money left to fill out the 9th-11th spots.

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Anonymous  
Last month

You wouldn't have to pay up to the $600000 though, ie five players on $80,000 each would be $400,000, imo you could then pay your other players more.

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Hogwash  
Last month

Or big spending teams could work it to their advantage say 10/11th man get 55K , the 8/9th man get 85-90K each leaving around 300K in bench cap.

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Anonymous  
Last month

Anyone know the source of the soft cap being $1.7 million?

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alexkrad  
Last month

http://www.heinz.com.au/products/variety-sauces/heinz-tomato-ketchup-1l

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D2.0  
Last month

Thought this was deserving of its own thread.

I know in the past, some have tended to dismiss the bench-cap, suggesting it was easy to comply. But I feel those arguments underrated how much even mediocre players get.

The bench-cap appears to work, and has clearly had an obvious impact on some teams.
Perth possibly had a some grandfather concessions, but last season, signing (and keeping) Cooke, plus Walker, and replacing Knight with Steindl, was clearly influenced by the cap.
This season just past, having Steindl, Hire, Vague, and Jervis (and no 3rd import) was again presumably due to the cap.
Sydney signing Ray Turner, etc, etc.

And I think its a good thing. Can you imagine if Perth or Sydney had signed a quality 3rd import??

Just because the minimum salary is ~$45k, doesn't mean lots of players will sign for it. Especially since many would have the option of playing in some 4th tier comp o/s, and the fact is that even half-decent locals are always in demand.
If you look at Perth next season, they'd be hoping that Damo and Wagstaff will re-sign for less coin, and hopefully be squeezed into the cap, but you're got going to insult them with a low-ball.

The other thing to remember is that most coaches want at least a decent 7 or 8 man rotation. So sure, you can fill the end of the bench with a couple of srubs, but there will be active competition for those 6~8 guys.

You also have to remember that salaries will grow to fill any gap.

Also, whilst those calcs are as per the original plan, plans do change. The Soft Cap needs to work so that the tax on the overs can subsidise the poorer clubs up to the Salary Floor. That doesn't work if you simply keep increasing the cap.

And lastly, if they believe the bench-cap is working as intended, the league can always trim the percentage to keep it within their preferred parameters.

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PeterJohn  
Last month

All good points D2.0. I was using the average local player salary as a guide. If the average is $122,000, then the total pool for local players last season was about $8 million, probably a little less.

I expect the 10 highest paid local players would account for over $2 million of that (i.e., average of $200,000+ each - Bogut, Lisch, Newley, Goulding, Johnson, Kay, Wesley, Bairstow etc.) - probably way over that amount. The next 15 would account for at least another $2 million or more (i.e., average of $135,000+ each - Norton, Sobey, Martin, Hodgson, Webster, etc.).

That would leave $4 million for the 40 guys who made up the bench cap. i.e., an average of $100,000 each last season and that's most likely a high estimate. Some would have gotten more than that and some a lot less.

So that leaves clubs spending an average of $500,000 or less on their bench cap players last season. Next season on average each club will then have around $100,000 or more additional salary they could choose to spend on those players without busting the bench cap.

All of my numbers are based on the assumption that those bottom 5 players are always locals. That may not be the case. There are some third imports who may fall into that cohort. That doesn't affect the results materially as the imports would have to be getting less than low paid locals to come into the bench cap consideration. e.g., Bowen's $100,000 Next Stars salary is consistent with the numbers above.

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PeterJohn  
Last month

PS - yes, the calcs are as per the original announcement 3 years ago. The rules may have been changed. I have no way to find out so if any one on this forum has knowledge of whether they've change materially, it would be good to share that.

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Anonymous  
Last month

"The Soft Cap needs to work so that the tax on the overs can subsidise the poorer clubs up to the Salary Floor. That doesn't work if you simply keep increasing the cap. "

It's an interesting point you make. Especially as the cap is set as the average of the previous year's spending.

So if the cap is 1.5m and a bunch of teams spend 2m+ then there's a bit of money to help the others get up to the floor. But if next year the teams spend the same amount but are now no longer over the cap (as it's been set to a higher level based on the previous year's spending) then where is the funding to help the smaller clubs get up to the higher floor?

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Lovebroker  
Last month

The salary floor was $900k 2 seasons ago, $600k is a massive jump for anyone to catch up with let alone the less profitable clubs.

For clubs unable to reach the salary floor, this means they'll have their hands out for even more welfare.

Either remove the salary floor requirement or cease all equalisation payments.

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Anonymous  
Last month

You have the marquee rules as well, doesn't that go outside the cap. Melbourne, and Perth seem in the best position, Sydney NZ if there owners want to spend, Brisbane who knows the rest no chance.

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koberulz  
Last month

So if the cap is 1.5m and a bunch of teams spend 2m+ then there's a bit of money to help the others get up to the floor. But if next year the teams spend the same amount but are now no longer over the cap (as it's been set to a higher level based on the previous year's spending) then where is the funding to help the smaller clubs get up to the higher floor?
If one or two teams are only spending the floor, the other teams holding steady will always be over the cap because the floor-spenders will drag the average below the spend of the other clubs.

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Anonymous  
Last month

"If one or two teams are only spending the floor, the other teams holding steady will always be over the cap because the floor-spenders will drag the average below the spend of the other clubs."

Fair call

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D2.0  
Last month

"If one or two teams are only spending the floor, the other teams holding steady will always be over the cap because the floor-spenders will drag the average below the spend of the other clubs."

Point is that the floor keeps getting lifted. It's an upward (diminishing) spiral. The floor goes, so clubs have to pay more, so floor goes up again.

Also, keep in mind that its not dollar for dollar.
There are Marquee concessions, the tax is on a sliding scale, and IIRC the maximum rate was 75%.

It would make sense t me to exclude any subsidies from the average calculation, ie consider only what the poor clubs would have paid.

That said, getting the subsidy may not be easy. The conditions are (or were) as follows:

it can reasonably demonstrate to that:

(a) It has in all respects complied with the terms of its then current
License Agreement and the rules, regulations and standards of the
NBL;

(b) It is of the informed opinion that it will not have sufficient financial resources to meet the Salary Floor or Salary Cap (as the case may be) in respect of any NBL Season;

(c) It has made all reasonable efforts to procure or attract funding
sufficient to meet the Salary Floor or Salary Cap (as the case may be)
in respect of that NBL Season; and

(d) It has in place a sustainable business model that indicates that it
should be in a financial position to meet the Salary Floor in future NBL Seasons.

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