Business booms for the NBA: How do the Pacers benefit?

Thus far, NBA Commissioner Adam Silver has had about as smooth of a first eight months as he could have hoped.  He handled the Donald Sterling racism scandal with class and professionalism, had this incredibly touching moment at the NBA Draft and the NBA Finals were a ratings hit, which is even more of a plus considering that had the San Antonio Spurs, which have proven to be a ratings sucker in the past.

Silver’s streak turned the NBA’s newest round of television negotiating deals into solid gold.

As was announced earlier this week, the league has negotiated to continue its television partnership with Turner (TNT) and ESPN to up the price nearly thrice as much.  The new contracts total about $24 billion over nine years.

Now that you have had a moment to pick your jaw up off the floor, this does change the landscape of the NBA starting in a couple years.  Sure, much of the agreement includes a lot of expanded TV coverage and web-based stuff, but let’s focus on how it can affect Indy on the court.  The salary cap is expected to jump dramatically in the 2016 offseason, which will redefine max contracts going forward.  For example, LeBron James signed a two-year max contract upon his return to Cleveland, despite his public affirmation that he has no plans to leave the Cavaliers again.  Why two years?  Because max contracts are not necessarily a concrete fixed number.  Instead, they are a percentage of the salary cap under which the contract was signed, which this coming season is set at about $63 million.  Two summers from now, the salary cap could be looking at the $90 million range.  Which would you rather have: a percentage of $63 million or $90 million?  Thought so.

What does all of this mean for the Indiana Pacers?  For one, owner Herb Simon’s wallet is much fatter.  Second, every current player under contract suddenly becomes a significantly smaller part of the club’s cap space, and therefore more tradeable as the correlated bigger contracts start to trickle in.  Does this mean that the Pacers will suddenly have a much better chance of landing the Kevin Durants of the league when they hit free agency?  Not really, since every team will have an extra nearly $30 million to play with.  (Unless you’re the Brooklyn Nets.)  Oh, and cities like Los Angeles, New York, Miami, Chicago and so on still have the big-market draw.  So, as phenomenal a city as Indianapolis is, it’s still behind the 8-ball.  However, Paul George’s current max contract is set in stone and agreed upon the price, so in theory, the Pacers could accumulate some other great assets now that George’s contract doesn’t eat up as much of the books.

In the end, it doesn’t change things much for the Pacers on the court in relation to the rest of the league, but they do have a brief window of golden opportunity to take advantage of the current contracts once the salary cap goes up.

Now, here’s to hoping Adam Silver’s hot streak continues when it comes take for the next round of Collective Bargaining Agreements in a couple years so we can avoid another lockout!