Before You Get Too Far
Both the NBA and the Players’ Association have said recently that talks toward a new labor deal in the NBA were progressing in a good and productive way. That should be good news to NBA fans who have endured lockouts over the last two labor deals and are used to a continuous and combative process that historically has cost the NBA games.
This time around, not only does it seem like the NBA and the Players may be able to reach a new deal without the bloodshed of a lockout, they may actually reach a deal before the December opt-out deadline both sides have in the current deal.
Sources involved in the process say the NBA and the Players have been meeting fairly frequently for months, and that both sides have approached this in a very business-like manner that has yielded a lot of positives – enough positives for many to believe a deal is around the corner.
While there are things everyone in the equation does not like about the current system, there is hope that a new labor deal could solve some problems without up-ending the so-called apple cart.
Here are some ideas that both sides should consider before inking the new deal:
Super Max Contract
In the NBA now, there are situations where what a team pays to a player is actually different than how that contract is booked against the salary cap. Some time ago, the NBA installed an incentive for teams to sign older players by eating a portion of a minimum deal, making signing a 10-year player basically the same cost as signing a two-year player. The player’s deal is subsidized by the NBA.
A better example might be how Poison Pill offer sheets like the one the Nets gave to Tyler Johnson. Had the HEAT not matched that deal, Johnson’s deal would have been booked against the salary cap as an average amount, higher than the first year he was actually paid in the offer. That would have allowed the Nets to pay Johnson a huge third and fourth year salary, with a much lower cap hit.
The current labor system does not incentivize a star player to remain with their current team. Sure, proponents of the current system say the fifth contract year and higher annual raises matter, but the truth of the current system is that Kevin Durant will earn $26.540 million playing for the Warriors this season, which was exactly what he’d have earned had he remained in Oklahoma City.
There wasn’t a day-one incentive for him to stay. Sure, he could have done a longer-term deal, but the reality is other than taxes, he gets exactly the same leaving as staying.
Here is a possible solution: Grant each team one “Super Max” contract. This deal is only available to a player who chooses to stay with his current team. The deal must be for five years and is never tradable. Also, no team can have more than one “Super Max” player on the roster at a time.
The deal pays 40 percent of the salary cap in cash, but is booked against the cap as a normal maximum contract.
So take Durant, for example. In this “Super Max” scenario, he’d have earned $37.6 million this year versus the $26.5 million he was offered by the Warriors.
For the player, it is immediately more money than he could get anywhere else; at 40 percent of the cap, he would stay way ahead of even the craziest balloon in the salary cap system.
For the team, most would gladly pay the extra money to ensure they retain their very best player. There is risk in the long-term for sure, but ask yourself, would the Thunder have blinked at a five-year deal for Durant?
As for the non-trade concept, many players want that in their deal anyway.
There has been talk of a Franchise Tag system or some type of disincentive for top-level player movement. Doing a Super Max contract solves the biggest gripes in the current system: Top-level players are not paid enough, it’s too easy for top-level players to change teams, and it likely hinders the formation of super teams.
The Third Round
The NBA is investing and expanding the D-League pretty aggressively; there will be 22 NBA D-League teams heading into the 2016-17 season and there are more on the way as the NBA continues to see the importance of a true minor league system.
The problem is how do you stockpile talent there, and how do you make it attractive so would-be players go there, especially given the economics of the current salary system?
So with that in mind, how about a Third Round to the NBA draft? Agents hate this idea, but hear me out on this.
Each team gets a third-round pick, that pick comes with a guaranteed $100,000 salary and is for one year. The third-round pick will play Summer League for the drafting team, attend training camp for the drafting team, but spend the entire season in the D-League with no call up. This player does not count against the 15-man roster limit.
After the one-year deal, the home team either signs the player to at least a one-year fully guaranteed NBA contract or releases him as an unrestricted free agent.
Here are the two caveats. The one year played in the D-League as a third-round pick counts as a year of NBA service and the NBA home team provides some level of pre-arranged loss prevention insurance in case of a career ending injury.
Adding 30 more picks on draft night might be too much for the TV audience, so like the NFL that could be a Day 2 process that’s not done on the podium at midnight.
If NBA teams are going to spend $6-$7 million in expansion fees to own D-League teams, creating mechanisms for them to get players at a competitive salary needs to be considered.
The Two-Way Contract
Speaking of the D-League, the NBA is pushing pretty aggressively for the adoption of a two-way contract. These deals would have specific values for when a player plays in the NBA and when they play in the D-League.
Currently, teams are giving players partially guaranteed money to come to training camp only to cut them and subsidize the D-League salary system and park them in their D-League program.
The problem with that is while it really is a “wink-nod” arrangement, teams are not protected from losing a player they gave money to.
For example, last year the L.A. Lakers gave guard Michael Frazier $50,000 to come to camp, under the agreement he’d play in the D-League for them. The only problem is the Lakers had to waiver Frazier and lost any rights to him.
The two-way contract prevents teams from losing a player they like, but may not yet be ready to put on their major league roster.
Building a smart two-way contract would offer some security to the NBA team and potentially get more players signed to deals.
Maximum Salary Criteria
This summer was arguably the craziest spending spree we have seen in the NBA. While the players side of things will argue there should be no limitation on what a player can earn and many teams would agree that they should be able to offer a player whatever value they feel is fair to them, is there any doubt that not everyone is a maximum-salary player?
No offense to Harrison Barnes, but is it good for basketball for everyone to be able to earn a maximum deal?
There are some that would like to see maximum caps done away with all together; however, if the NBA went that route, you’d have two classes of players: guys making $20 million and guys making $1 million and there would be no middle class.
The middle class is important, because that’s where the bulk of players play, and having some sort of equality in salary only helps that idea.
With that in mind, shouldn’t there be some minimum qualification to earn a maximum contract?
The NBA in the last Collective Bargaining Agreement added a rule tied to rookie-scale extensions called the Rose rule that was meant to reward players on rookie-scale deals who exploded into the NBA as superstars.
Under the Rose rule, a player is eligible for a larger contract if they are named to the All-NBA First, Second or Third team at least twice, get voted as a starter in the All-Star game at least twice or named the NBA Most Valuable Player at least once.
While that criteria might be a bit extreme, having some level of qualification seems smart.
Some will argue that there is no question Miami’s Hassan Whiteside should have gotten a maximum deal and he would not have met anything close to the criteria mentioned, but shouldn’t there be some level of criteria?
The NBA and Players seem to have a positive dialogue going. Both sides remain very optimistic that a new labor deal could get reached this year, well in advance of the doom-and-gloom of a July lockout.
Nothing is done at this point, but the more both sides talk about where things are in the process, the more likely it seems a new deal is coming. The question is, how much will the system change?
More Twitter: Make sure you are following all of our guys on Twitter to ensure you are getting the very latest from our team: @stevekylerNBA, @AlexKennedyNBA, @LangGreene, @EricPincus, @joelbrigham, @SusanBible @TommyBeer, @MokeHamilton , @jblancartenba and @CodyTaylorNBA .
Make sure to follow Basketball Insiders on Twitter at @BBallInsiders.