As you've most likely heard by now, the NBA formally announced their new TV deals with ESPN and Turner this morning. The combined deals came in at $24B for nine years beating even the most aggressive estimates. The current expectations are for TV revenues in 2016-17 to increase from this season's $930M to $2.1B. Most likely the salary cap will increase from $63M this season to somewhere around $70M next season and then to as high as $82M in 2016. There's a possibility that the league will "smooth" the cap increases but at some point 50% of the new TV deal has to end up in player salaries and the new deal is so massive that only so much can really be done.

We can make a reasonable set of cap projections for the next decade if no "cap smoothing" can be worked out:

Year Cap Projection $ Increase % Increase 2014 $63,065,000 2015 $67,000,000 $3,935,000 6.24% 2016 $81,500,000 $14,500,000 21.64% 2017 $84,000,000 2,500,000 3.07% 2018 $86,500,000 2,500,000 2.98% 2019 $89,000,000 2,500,000 2.89% 2020 $91,500,000 2,500,000 2.81% 2021 $94,000,000 2,500,000 2.73% 2022 $96,500,000 2,500,000 2.66% 2023 $99,000,000 2,500,000 2.59% 2024 $101,500,000 2,500,000 2.53%

Now, I don't believe the cap figures will look anything like that because a 20% cap increase followed by 3% increases would cause so many problems but without more information on the exact yearly structure of the deal or how the league and players plan on stretching the increases out we have to start there.

There are a lot of winners in this deal including Adam Silver and many of the players. Unfortunately the Celtics may not be among the winners and may ultimately be one of the significant losers. Any analysis of the changes to the cap multiple seasons out is a bit of a fool's errand but, at the moment, there seems to be some negative impacts on the Celtics' projections.

Projecting Boston's Cap Space

As with most teams it's difficult to project where the Celtics will be in relation to the cap beyond this season. With Rajon Rondo's (we'll get to him) free agency and Jeff Green's player option it's at least possible that the Celtics will be well under the salary cap next season. The Celtics haven't been under the salary cap in about a decade so that's a real step in our rebuild but, in my opinion, it's likely we'll be staying over the cap for one more year. Last season I was pretty sure we'd stay over the cap and it's not as clear in 2015 but we'll probably either keep Rondo or try to swing a sign-and-trade and those contracts will lead us to stay over the cap, even if it increases to $70M. If it's around the current $67M projection it's even more likely. A deadline trade of Rondo would be the surest sign that we're going for 2015 cap space, of course.

That leaves us looking at max cap space in 2016. The problem is that this was going to be the case even with cap increases more in line with historical norms. It's just where our rebuild was going to land with our commitments to Jeff Green and Gerald Wallace coming to a close. Now, instead of getting to be one of the few teams with true max cap space in a given year, we'll hit the season where EVERYONE will be able to clear max space. The teams that might have been angling for "double-max" space will be looking at making that sort of space with ease.

Everyone says that the Celtics can't attract free agents. To a certain extent that's because we rarely try but a team in a cold weather, high tax city is always fighting an uphill free agency battle and so it seems highly unlikely that we'll be pulling in a premium name when we're bidding against fifteen other teams. Our timing advantage is likely lost to an even greater degree than expected.

Rajon Rondo

The above section is colored by my expectation that we'll now be offering Rondo a max contract next offseason. If the cap hits $70M in 2015 Rondo's five year max will be around 5 years and $110M. With max space floating around and cap increases for the foreseeable future someone else is going to make the offer. I can't be sure that he'll stay with us but we're at least going to make the bid. The cap is going to be $90M by the time his contract ends and signing a max contract that doesn't increase as a percentage of the cap is an attractive idea.

This is maybe the only place where we get an advantage out of this deal. As I wrote about a few month ago, the timing is right to have an all-star player coming up for free agency. If we can lock up Rajon before the big cap increase his salary will be based on the first year cap number. The thing to watch for is that if the cap increase is "smoothed" some of these financial benefits will be lost. Ideally no agreement is made on smoothing the increases and the cap sits somewhere around $67M next season before skyrocketing the following season to $82M. It seems like smoothing is coming; if it's significant it's another loss for the Celtics. If the cap goes to $72 million through an artificial deal and then $80M the benefit of signing him before the deal kicks in is lost entirely.

The Brooklyn Nets

This is where maybe the biggest hit comes in. When ESPN recently tried to project every teams' near-term future they pegged the Nets as the worst in the league. This is mostly because they're facing cap hell and have given us their picks through 2018. Unfortunately for us a huge cap increase means the Nets may be able to clear double-max cap space even before we've taken all their picks. They could also re-up Brook Lopez a season early without fear of closing off their 2016 space. If they make max space in 2016 or 2017 and can draw a star, the value of those picks we've all been counting on lose a ton of value. You know Prokhorov and Guggenheim will spend what it takes so instead of looking at lottery picks we could be sitting on a bunch more mid-teen selections.

If the Nets are running out Kevin Durant and Joakim Noah in 2017 that pick swap won't be worth a thing and the 2018 selection won't be much more.

Additional Threats and Benefits

The new deal not only removes some of the advantages we've been positioning to have but also creates some new threats. First, the big market teams are going to be on the super team prowl. Both LA teams, the Knicks, Nets, Rockets, Wizards and Bulls are all going to have a legitimate chance to put together super teams to rival Cleveland. If power shifts to the East with attractive but previously poorly managed teams like the Knicks and Nets receiving a "get out of jail free card" we lose another advantage that has previously propped up the hopes of mid-pack Eastern teams.

On the plus side, a rising cap makes rookie deals even more valuable as their salaries are fixed through 2021 and will not increase at nearly the rate the cap will. We have a lot of picks so we'll have a lot of cheap labor. It's possible that some teams will gorge themselves in the feeding frenzy of 2016 just to find themselves with a cap now only increasing by a few million a year but a set of post-increase contracts on 4.5-7.5% raises. A team that misses out on that first year and built on lower cost deals may find opportunities in 2017 and beyond.

Conclusions

It's hard to say that any team loses when everyone involved makes more money. It's not clear cut that any team will lose from this but at the very least the Celtics don't see huge benefits like other cap strapped teams do. Because our future is somewhat tied to the fortunes of one of those capped out teams we probably take a bigger hit than most franchises.

It will be interesting to see how this progresses with every team angling to structure the cap dealings to their advantage. If I were Wyc I'd be lobbying to keep next year's cap based on the current deal (to help with Rondo) but then to more slowly ease in the cap increase over the following 2-3 seasons. That would preserve some of our cap advantages in 2016 while also setting the longer term trap for less soundly managed teams. I'd also be a happy man trying to decide how I'm going to spend my ever growing stack of NBA cash.

Edited to clean up some of my grammatical tics now that this is pinned to the front page