4) Super teams created excessive spending which results in diminishing parity
Excessive spending was caused by the NBA having a soft salary cap with a basic luxury tax for any team that spent more than the maximum amount. A soft cap allows the richest teams to basically buy their way to the top and thus dissolves the competitive balance.
Threatening the majority of the owners in the NBA with a basic luxury tax is not going to even come close to deterring them from spending more than the cap if they want to. This is why a hard salary cap is needed. Teams will have to make decisions realistically based on how much cap space they have. The current structure is more of a guideline than a cap, and teams are more than willing to ignore it.
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In order to really build a contender in the NBA today, a team either has to tank a few seasons and get lucky in the draft, or they have to spend more than the cap. Spending wisely is also a factor, the Brooklyn Nets paid roughly $100 million on players salaries in 2013, plus an $80 million tax penalty. Though the amount seems high, Mikhail Prokhorov’s net worth of $8 billion swept the tax penalty aside.
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