In the last ten years, the NBA has undergone a profound transformation. Franchises like the Miami Heat and Cleveland Cavaliers, with LeBron James, and the Golden State Warriors, with Stephen Curry, became new powerhouses. The league is changing fast though. Before long, every one of the 30 teams will have a legitimate chance to compete for a championship if we manage them right. NBA Commissioner Adam Silver has long prioritized this goal, advocating for a more equitable competitive environment.
It’s led the higher-spending teams to circle back and re-evaluate on their originally higher-spending approach. One of these changes has been implementing salary cap restrictions, called the first and second aprons. This brave new financial world has placed series organizations in the position of having to make retroactive and prospective decisions on their rosters and future paths. As the league adjusts to these changes, the pursuit of constructing a successful team has never been more difficult.
The Era of Dominance
Throughout the 2010’s, the league enjoyed tremendous prosperity from teams spearheaded by legendary stars. Thanks in large part to James’ presence, his Miami Heat went on to win two championships, while the Cleveland Cavaliers won a title in 2016. In much the same way, the Golden State Warriors cemented their dynasty status, winning three titles in that time span. These teams were not only the most dominant of their respective eras, but they established what it meant to be a successful franchise.
These new dynasties have been stories worthy of the legends of past champions. Think the Chicago Bulls of the 1990s or San Antonio Spurs of the 2000s. Their greatness reverberates to this day. In the mid-90s, Jerry Krause took the same kind of risk by replacing nearly every player from the 1993 championship team. He shrewdly retained the essential talent in MJ and Scottie Pippen. That approach proved prescient, as the Bulls beat those same superpowered Orlando Magic en route to a repeat title in 1996.
Similarly, the Lakers’ success during Kobe Bryant’s tenure and the Spurs’ consistency illustrate that maintaining a championship-caliber team often involves making tough decisions regarding player retention and roster changes. This is an especially important lesson to heed today as the current generation of executives face unprecedented challenges that require learning from these historical precedents.
Challenges in Building Competitors
The challenges posed by this past landscape have created one-of-a-kind obstacles for all teams. Take, for example, Paul George, who signed a four-year, $212 million max contract with the Philadelphia 76ers. His ability to make an impact at all has been considerably, if not hampered, altered through injuries. He appeared in just 41 games before requiring a second knee surgery. Provided a wave of uncertainty not only for George but for compatriot max-contract player Joel Embiid.
And so we reach today, where the LA Clippers have decided flexibility is more important than holding on to George. While they acknowledge he’s great talent, his age and injury history create overwhelming hurdles. The Mavericks have full faith they’ve set their roster up perfectly around talent—including Luka Doncic and LeBron James. They will need to address a number of issues in order to construct a lasting threat.
The COVID-19 pandemic has made everything worse, leading to a stagnant salary cap for three years. With contracts still increasing each year 5% to 8%, teams are forced to do more with less as the financial constraints hit harder. As an example, the Oklahoma City Thunder almost exclusively runs as a small-market franchise. This new salary cap structure could make it particularly difficult for them to remain competitive.
“There’s a limited amount of experience that teams have with these new rules.” – Sam Presti
“I wouldn’t be too quick to predetermine, ‘Oh, this is the way this works.’” – Sam Presti
“Now, you have to look at things in not a one-year window, but a three-year window. You literally can’t mess anything up.” – Western Conference scout
Navigating New Financial Realities
The addition of salary cap aprons limits have made teams come up with different financial plans on the fly. And executives are under more pressure than ever to make the right decisions today that will give their team the best chance to be most competitive for years ahead. The need for that long-term vision has never been clearer.
NBA commissioner Adam Silver has expressed his desire to see more parity throughout the league. He is passionately committed to the idea that successful teams need continuity. At the same time, he understands that they’re going to need to make difficult decisions. The hard part is reconciling the tension between financial sustainability and pursuing championship aspirations.
“Our system will allow successful teams to stay together.” – Adam Silver
“But those teams will need to make harder choices.” – Adam Silver
While teams adjust to these rules of the game, they should keep in mind the impact of various roster decisions on their long-term competitiveness. The talent landscape in the league has changed almost completely. With the evolution of technology, fan experience, and entertainment franchises can’t allow themselves to be complacent and get left behind.
Many of our executives have voiced similar concerns about the challenges of continuing any measure of long-term success in this new reality. One still-active Western Conference scout said that teams need to be very careful with each step they take going ahead.
“You have to be right on every decision.” – Western Conference scout
“I’m pro lots of teams having a chance to win championships. But I think that’s a few things beyond the CBA rules.” – East executive
Leave a Reply