NBA Agent License 2024
1. What is a salary cap? Why have one? - ANS-- [ ] A salary cap is a limit on the amount teams
can spend on player contracts, which helps to maintain competitive balance in the league.
Without a salary cap, teams with deeper pockets could simply outspend the remaining teams for
the better free agents. The basic idea behind a salary cap is that a team can only sign a free
agent if its total payroll will not exceed the cap -- so a team with deep pockets is on a more level
playing field with every other team.
While this is true in theory, NBA teams in big markets nevertheless have been able to
significantly outspend teams in small markets. For example, for the 2016-17 season (the final
season under the previous CBA) the lowest team payroll was approximately $80.5 million1 and
the highest was over $127.5 million (plus an additional $27.3 million in luxury tax).
As a result, there is now a weak to moderate correlation between team payroll and regular
season wins. For the 2016-17 NBA season the correlation coefficient was about 0.35. It was
much stronger in the past -- for example, in 2010-11 (the last season under the 2005 CBA) the
correlation coefficient was 0.53, indicating that deep-pocket teams were able, to a certain
extent, to buy their way to success.
Interestingly, this correlation was only 0.13 (nearly orthogonal) in the 2001-02 NBA season. One
possible explanation for this variation is the changes in the league's luxury tax and revenue
sharing systems over time.
Do any unresolved issues remain from the 2017 labor agreement? - ANS-In 2011 the sides
were rushed to complete and ratify the agreement in time to open the season on Christmas Day,
so they put off discussing several issues. In 2017 they had more time to work through the
issues, so very few items were identified to be discussed at a later date:
* The review and approval of wearable biometric devices (see below).
* The establishment of a player mental health and wellness program, a long-term care
insurance plan, and additional financial education programming.
* The league and union agreed to bargain over new player conduct rules beginning in 2017-18.
* NBA Commissioner Adam Silver mentioned the need to continue thinking about the age for
draft eligibility (see question number 55) but no official determination has been made to re-open
discussions on this issue.
The review and approval of wearable biometric devices will be conducted by a joint advisory
committee to be established after the agreement takes effect. Wearable devices are devices
that are worn by the player, and measure movement information, biometric information, and/or
other health, fitness and performance information.
Teams will request that the committee review specific devices. Their standard will be whether
the device is potentially harmful, has been vetted for effectiveness, and provides adequate
security.
Approved devices can be worn in practice, but not games, and the player may decline to wear a
device. The device can only be used to measure health and performance information, or data
1. What is a salary cap? Why have one? - ANS-- [ ] A salary cap is a limit on the amount teams
can spend on player contracts, which helps to maintain competitive balance in the league.
Without a salary cap, teams with deeper pockets could simply outspend the remaining teams for
the better free agents. The basic idea behind a salary cap is that a team can only sign a free
agent if its total payroll will not exceed the cap -- so a team with deep pockets is on a more level
playing field with every other team.
While this is true in theory, NBA teams in big markets nevertheless have been able to
significantly outspend teams in small markets. For example, for the 2016-17 season (the final
season under the previous CBA) the lowest team payroll was approximately $80.5 million1 and
the highest was over $127.5 million (plus an additional $27.3 million in luxury tax).
As a result, there is now a weak to moderate correlation between team payroll and regular
season wins. For the 2016-17 NBA season the correlation coefficient was about 0.35. It was
much stronger in the past -- for example, in 2010-11 (the last season under the 2005 CBA) the
correlation coefficient was 0.53, indicating that deep-pocket teams were able, to a certain
extent, to buy their way to success.
Interestingly, this correlation was only 0.13 (nearly orthogonal) in the 2001-02 NBA season. One
possible explanation for this variation is the changes in the league's luxury tax and revenue
sharing systems over time.
Do any unresolved issues remain from the 2017 labor agreement? - ANS-In 2011 the sides
were rushed to complete and ratify the agreement in time to open the season on Christmas Day,
so they put off discussing several issues. In 2017 they had more time to work through the
issues, so very few items were identified to be discussed at a later date:
* The review and approval of wearable biometric devices (see below).
* The establishment of a player mental health and wellness program, a long-term care
insurance plan, and additional financial education programming.
* The league and union agreed to bargain over new player conduct rules beginning in 2017-18.
* NBA Commissioner Adam Silver mentioned the need to continue thinking about the age for
draft eligibility (see question number 55) but no official determination has been made to re-open
discussions on this issue.
The review and approval of wearable biometric devices will be conducted by a joint advisory
committee to be established after the agreement takes effect. Wearable devices are devices
that are worn by the player, and measure movement information, biometric information, and/or
other health, fitness and performance information.
Teams will request that the committee review specific devices. Their standard will be whether
the device is potentially harmful, has been vetted for effectiveness, and provides adequate
security.
Approved devices can be worn in practice, but not games, and the player may decline to wear a
device. The device can only be used to measure health and performance information, or data
