A Substitute for War

Basketball philosophy

A simple, but effective NBA CBA fix

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Next season, the NBA will impliment a new Collective Bargaining Agreement. A lockout is possible if the owners and players come to odds. The owners want changes because despite overall success for the league, a large number of teams are bleeding money and paying too much to the players. Naturally, the players don’t want to surrender money back.

Lots of radical proposals have flown around including a hard cap, an NFL style franchise tag, eliminating the Mid-Level exception, and contraction. I believe a more simple set of revisions is the best option:

– Limit contracts to 4 years guaranteed, with 5th and 6th years as team options
– Limit Mid-Level Exception contracts to 3 years guaranteed, with 4th years as a team option

That’s it. The biggest problems with the present CBA comes from “bad contracts”, when player’s contracts stop representing their value and the player cannot be moved. Andrei Kirilenko and Peja Stojakovic made 18 and 15 million this year when they are perhaps worth 6 and 2 million respectively. Desagana Diop made 6.5 million and isn’t getting any minutes at all. Most team’s rosters are filled with similar overpaid players. Since owners are still spending to win and appease stars, this extra commitment might as well be money lit on fire. If the owners have the flexibility to adjust for budget and simply spend less on the rest of the roster, this hurts the quality of team which in itself lowers fan support and sales – and can lead to a star’s departure via free agency, which is financial devastation. Despite the talk of a franchise tag allowing teams to retain stars, a better option may be to help teams build title contenders around them. Shortening guaranteed contracts increases the efficiency of payrolls. Teams can build better squads for cheaper – and increased flexibility will allow owners to more easily decrease payroll if their finances drop.

With shorter max contracts, Baron Davis, Elton Brand and Rashard Lewis would be expiring this year – instead they are owed 2 years and 27, 35 and 45 million respectively over the next two seasons. Atlanta wouldn’t owe Joe Johnson over 50 million in the 5th and 6th years of his contract when he is in his mid 30s. Instead of Travis Outlaw and Drew Gooden getting 5 year/35 million contracts, they’d perhaps be on the books for 3 years and 18 million. Take contracts like this off every team in the league and the financial savings is enormous. The owners may choose to spend their new capspace created by these shorter deals, but they are not locked into spending more than they wish and with salary spent on quality instead of deadweight can put a more competitive product on the floor.

The kicker with this proposal is it isn’t bad for the players. The only contract given back is undeserved. With this salary off the cap, it will be redistributed to the other players in the league. Everyone not on an overpaid salary benefits from this increased meritocracy. Since this is the majority of the league, it is arguably an enticing proposal for the players at the least agreeable enough to avoid a lockout.

As for the rest of the CBA, I believe it works and should stay. Bird rights, luxury tax, the rookie scale. The hard cap, franchise tags or eliminating the MLE would be hard to get one side or the other to agree on, and may take a lockout to pass. I believe shortening contracts is a revenue fix that works for both the owners and players. The owners win, the average player wins, the fans win, the only losers are the players making more money than they should. Which should be the goal of the new CBA’s revisions.

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