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Restudying salary caps

In the NBA, there are soft salary caps where teams may avail of exceptions to exceed limits but a luxury tax is imposed if so-called aprons are breached. The formulas of exceptions are complicated and the computation of a luxury tax is just as complex. A player may negotiate a contract with no individual cap but the restriction is the team’s salary limit of $136 million this season. Among the NBA’s 30 teams, only three are paying under the cap – Charlotte, Orlando and Indiana, meaning 27 franchises are exercising exceptions or paying the luxury tax to the league.

Golden State has the highest annual salary level of $211.8 million with Steph Curry the most expensive player on the planet at a rate of $51.9 million. No other player earns at least $50 million. The next highest-paid players are Kevin Durant at $47.65 million, Nikola Jokic at $47.61 million and LeBron James at $47.61 million. Teams that surpass payroll limits are required to pay a luxury tax. The league sets a luxury tax threshold which is the basis for computing the payment. The tax is distributed to non-tax-paying teams as an incentive for those that observe the limits and also as a boost for teams that aren’t as rich or inclined as others in going over the cap.

It is accepted that in the NBA and sports leagues anywhere in the world, including the PBA, there are rich and not-so-rich franchises. Obviously, the best athletes gravitate towards teams that can afford to pay top salaries. That, of course, has a direct bearing on parity. Through the luxury tax, the NBA found a way to discourage excessing spending and when caps are transgressed, to benefit teams that are not as well-to-do as others.

In the PBA, the team salary cap is P50 million and all teams are required to stick to the limit with no exceptions. Players are signed to uniform contracts with a max salary of P420,000 monthly. The tenure for a contract is a minimum one month and a maximum three years. The lowest salary is P70,000 a month. The top three drafted rookies may be signed to a max contract but the others are limited to a first-year monthly salary of P200,000 and a second-year monthly salary of P250,000.

Uniform player contracts are