The Lazy Statistician Looks at the History of Salary Cap Raises
In the 28 seasons that PBSL has been in operation, the salary cap has grown from a measly $11,900,000 in 1990 to a booming $86,031,165 heading into this season. That's a $74 million gap, and this year's cap is over 7 times what it was at this league's inception.
However, recently, cap raises have seemed pretty stingy. Sure, it's not the booming 90's anymore with the dot com boom and all. Interestingly enough, though, there does appear to be some interesting movement going on around the year 2000, possibly caused by the Y2K bug or album sales of Willennium directing the nation's jam-hungry youths away from basketball and towards writing catchy verses with no need for curse words. However, there really wasn't a golden age with insane cap jumps that mirror the NBA versions fueled by TV contracts. For the most part, the cap raises by sheer dollar amount have remained within a pretty flat range.
- pbsl_raise_amt.png (47.54 KiB) Viewed 751 times
Part of what makes the cap raises seam smaller might be short memory. 2015 saw the cap increase by only $168,237...only the 2nd time that the raise was less than a million dollars (2006's almost got to the 7 figure mark at $953,962). 2016 didn't bounce back, barely clearing the million dollar bar. However, the three largest leaps were also in the last ten years.
* In 2008, the cap rose $5,016,829.
* The very next year, 2009, it rose by $5,278,244
* And in 2011, the cap rose by a whopping $6,205,678 (about the same as the following 3 seasons combined)
However, another explanation as to why the cap doesn't seem to move very much is that by raise percentage from previous year, there was a sharp dropoff in the year 2000.
- pbsl_raise_pct.png (54.32 KiB) Viewed 751 times
In the first 9 seasons of PBSL basketball, the salary cap increased over 12.5% from previous year 7 out of 9 times. 1999 was the last time there was an increase of over 10% from previoius year--in fact, in 2000, the increase was only about 7%, and it more or less hovered there for another decade before dropping off to between 1 and 4 percent in the 2010s.
SO WHY IS THIS A BIG DEAL?
Well, when we offer long term contracts to players, we have to decide what their yearly increases are. In the 1990's, when the salary cap was routinely increasing by over 10%, it was a lot safer to give folks the maximum increase per year and stay parallel, or even slightly ahead, of the cap. Nowadays, however, as the cap is rising only a couple percentage points from the year before, those max increases add up and crush cap space in upcoming years.
However, we're not really adjusting to that as GMs (and if we are, it's showing up in the form of more players on 1 year vet mins). I took a look at the average increase in salary between this year's contracts and next year's contracts, and even taking out contracts less than $1,000,000 (2nd round rookies with > 40% increases due for next year) and players under 25 (to eliminate as many 1st year rookies on set salaries as possible), the average increase due to a player on contract this year and next year is between 8 and 9%.
Of the 68 players that qualify, 49 of them are on contracts that were given 10% yearly raises (or more). 12 of the remaining 19 players are on flat contracts, and only 7 out 0f the 68 are somewhere in between.
This presents a complicated problem as the league as a whole avalanches towards tax abuse. However, unless every GM backs down from offering salary increases that are non-commensurate with the salary cap percentage increases, nobody can back down (or they'll strike out in free agency).
And it's only going to get more and more disparate as time passes.
