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Breakdown of NBA Collective Barganing Negotiations Part 1

Posted By Anthony Raia On Aug 11 2010 @ 9:03 pm In NBA | No Comments

As we leave behind one of the most scrutinized and followed off-seasons in the history of the NBA and enter into a season that is full of question marks, the 500 pound gorilla in the room must be addressed:

The 2011 Collective Bargaining Agreement.

At the current stage of negotiations a lockout looks more likely as offers from both the players union and the owners get rejected by both sides. A lockout would be disastrous for a league that seems to be at the height of its popularity in the post-Jordan era. For those not familiar with the negotiating points of the new CBA, below is a breakdown of what the owners presumably wants.

What The Owners Wants

1. A Hard Salary Cap

Owners are not very fond of the current soft cap system, which allows teams to go over the stated salary cap when using the Larry Bird Exception, the Mid Level Exception and also when signing players to minimum contracts.  A hard salary cap has both positives and negatives for the owners, but the negatives outweigh the positives.  One positive that would come out of a hard cap is that it would control spending by keeping teams from overpaying their own players (see Amir Johnson), thus raising the price of other free agents on the market.  It would also keep the top teams from signing top talent while over the cap by using the Mid Level Exception (see Miami Heat and Mike Miller). Talent would be more equally distributed as it would harder for players to team up without taking significant paycuts.  However by installing a hard salary cap the NBA would most likely need to eliminate the Larry Bird Exception, which will make it harder for teams to keep their top players that they drafted.  With a hard cap in place the Oklahoma City Thunder most likely will not be able to keep together the nucleus of Kevin Durant, Russell Westbrook and James Harden without the three of them taking significant pay cuts.  Does Westbrook leave a significant amount of money on the table to stay in Oklahoma City when he can make more somewhere else?  Another way that it hurts teams is that trades involving teams at the cap line would have to be for even salary, thus throwing the 125% of salary plus $100,000 rule out the window.  Under the rule a team at or over the salary cap threshold is able to take back 125% plus $100,000 of the salary that they are sending out in a trade.  It will become difficult for teams to trade stars to create cap room or take on expiring contracts to free up space.

2.  Shorter and Smaller Contracts

As currently constructed the maximum contract for unrestricted free agents signing with another team is five years, while signing with their own team is six years if the Larry Bird Exception is used.  In most circumstances the maximum salary for a player signing a new contract in 2010 ranges from $13 million to slightly over $19 million a year.  Shortening both the length (presumably to four years) and lowering the amount of contracts will help owners to control spending, and allow teams to fit more players under a potential  hard salary cap.  It is also gives teams the ability to cover up for past mistakes, as you wont have Emeka Okafors signed to six year deals at $11 million per year.

3. Non Guaranteed Contracts

This another move by the owners to have less accountability for their mistakes.  By having every contract non guaranteed for example, the Knicks would be able to cut Eddy Curry without taking a hit against the salary cap, minus whatever money was guaranteed for the years remaining on his contract.  This will be the hardest bargaining point for the owners to try to get the player’s union to concede on, because it would be a devastating blow to its players.  Injury riddled players like Michael Redd, non existent players like Eddy Curry and under performing players like Vince Carter would be waived in order to create cap space.  If you thought teams clearing cap space for the Summer of LeBron was ridiculous enough, imagine how out of hand it would have been if teams could waive players while taking only a minimal cap hit.  Every team in the league would have attempted to do what the Knicks and Heat did, and is that something the league wants taking place every summer?

While a lot of the suggested changes by the owners will improve the game, and help make them make more money, it won’t be an easy sell to the players. Why? The first reason is that the union is going to find a hard time believing the owners are losing so much money if teams’ income rose last year despite the national recession. Lets not forget the massive spending that took place this off-season. A lockout looks very possible, as does a radically changed NBA.

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