But that’s not the issue, is it? Salaries are based on percentages, which rise as the cap rises. A 35% max will still be a 35% max.

but about what people like hubert are implicitly complaining about when they point to players not getting their fair share of climbing franchise values. in a normal business

Actually I see it a little differently, I just didn’t express the details.

The league and its owners devised this second apron/punitive luxury tax system to break teams up partly so they could jack up their valuations and increase the potential expansion fee.

They’re the only ones who benefit from that.

Guys like KAT & Hart get screwed because everyone wants them to take less money to keep the team together (which is bullshit… your team is worth $12BN… you should shut up and pay the men who won you a chip).

We as fans get screwed because the teams we love are being broken up by design.

Over time I suspect this will not be good for the league because team continuity has traditionally been something that drives viewership. Put more plainly: if this Knicks team only plays 1 more year together instead of 4 more years, I think there will be a lot fewer eyes on the Knicks.

it’s a little more complicated than this. the bulk of expansion fees are about new owners paying for their share of the existing nba revenue stream they are effectively buying into. the immediate effect of expanding to 32 teams is revenue and cash-flow dilutive to existing owners before expansion fees. to the extent it works and the pie increases in the long run, you can think of that as shared between new and existing owners such that some tiny part of the expansion fee also reflects a split of that upside. it’s a very different for players.

30 new players get added and so this is technically dilutive. one obvious argument is that these new players are, in fact, “players” and thus players as a whole are not worse off and need no dilution compensation (you presumably don’t want to force new players to pay existing players compensation). and even from the perspective of existing players, it’s not nearly as bad as it looks. even with the minimum salary rules, the marginal salaries added to the league will likely bunch near the bottom of the salary scale both short-term and in equilibrium, leaving a very small effect on median player salaries. the outcome for existing players tends to look more like adding a roster spot to every team than lopping 6% of existing player salaries. median salaries will barely be hit and mean salaries will only be hit a fraction of the overall hit (with most of the 6% decline in average salary coming due to a higher quotient of low end players). and if the pie does increase over time with more teams then even the modest amount of dilution per existing player might be offset with bri growth.

the lurking complication isn’t really about expansion per se, but about what people like hubert are implicitly complaining about when they point to players not getting their fair share of climbing franchise values. in a normal business, the value of the franchise is roughly the present value of discount cash flows, so in the long run get a share of operating value (revenue, earnings) is theoretically isomorphic to getting an equivalent share of company value. but sports are different, because people believe that nba teams produce a huge convenience yield to owners, i.e. people suddenly caring about what joe lacob thinks about ai or what mark cuban thinks about ethereum, and there is no obvious resaon why those fake aura enhancers shouldn’t be considered economic rents that players can also share. a counterargument to that is that players negotiate their deals and maybe they did consider it. maybe they would have only gotten 35% of BRI without the extra trophy value. so the lack of direct participation in asset value increases isn’t itself dispositive.

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