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The Unintended Consequences of the 2011 CBA

The owners fought for and won major system changes in the 2011 collective bargaining agreement, but not all of these have operated as intended.

Nate Duncan

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The 2011 NBA lockout was universally hailed as an unmitigated win for the owners. They forced significant concessions from the players, reducing their percentage of Basketball Related Income from 57 percent to 50 while winning on so-called system issues as well. The players received almost no concessions in exchange. The system changes the owners fought so hard for were theoretically designed to level the competitive playing field between big and small markets while allowing teams to keep their superstars.

The only certain thing in such complex negotiations is that some unintended consequences will arise. Even the best of forecasters with carte blanche to design a system may struggle to anticipate the effects or regulation. When such regulations are the result of compromise or negotiation, they grow even more unpredictable. As a result, the 2011 CBA has resulted in some trends that may well have surprised its framers.

Small Market Teams are Less Competitive

The previous CBA featured a luxury tax* in which teams were taxed at $1 for each dollar of salary above the tax threshold. One of the key “system issues” the owners fought for in the name of competitive balance was to increase the luxury tax to far more punitive levels. Teams now must pay a minimum of $1.50 per $1 in salary over the tax, and that increases with each $5 million dollar increment, to $1.75, $2.50, $3.25, and then an additional 50 cents per $5 million after that. Teams that have paid the luxury tax four of the past five seasons add another $1 for each tax bracket, the dreaded “repeater tax.”

*Simply called the “tax” in the actual CBA.

The ostensible purpose of the more punitive tax was to preserve competitive balance by preventing large market teams from spending so much more than small market teams. However, the consequence of the more punitive luxury tax has instead been to widen the gulf between small and large markets, because under the heightened tax only the large market teams can afford to do so. Even worse, the inability or unwillingness to pay the tax has already hurt the title chances for some small market teams.

It was the case under the previous regime that the Knicks paid far more in luxury tax than any other team, with the Lakers also in the top four. But more important than that was the fact that nearly every team paid the tax at one point or another when they thought it was necessary to contend. Taxpayers included small market teams such as the Jermaine O’Neal-era Pacers, the Dwight Howard-era Magic, the early 2000s Kings, the Jazz in 2009-10 and 2010-11, the Timberwolves in their conference finals season of 2003-04, the Cavaliers in the later LeBron James era, the Spurs at various times, and many others. Only the Bobcats, Bulls, Warriors, Hornets, Sonics/Thunder, and Wizards did not pay the tax under the previous CBAs.

Why such an egalitarian distribution of taxpayers? Teams could actually afford to do it when contention warranted, or at least looked like it might. Meanwhile, under the previous two CBAs, the only contender that really hurt its chance at a title though active salary-reducing moves was Phoenix.*

*The Nash/Stoudemire era was the best of times and the blurst of times for Suns fans. Some of the moves: Did not match Atlanta’s five-year, $67 million offer for Joe Johnson (though they did get Boris Diaw and two first-rounders for him); traded Rajon Rondo to Boston to get Brian Grant off the books; traded two first-rounders, one of which became Serge Ibaka, to Seattle to get Kurt Thomas off the books; sold Rudy Fernandez to Portland for $3 million.

Contrast that distribution to the last two years. The only teams that have or will pay the tax so far are the Celtics, Nets, Bulls, Lakers, Clippers, HEAT and Knicks. Aside from the mid-market HEAT, who have a unique mindset with Mickey Arison’s ownership and their three superstars, all of these teams are in big markets.

But even more notable than who has paid the tax is who has not. Three teams that have made the conference finals in the last two seasons have made blatant tax-avoiding moves.* While the Grizzlies’ trades of Marreese Speights and Rudy Gay a year ago were not fatal to contention, the Thunder and Pacers have really hurt their title chances. The Thunder traded James Harden to Houston for players who have not even begun to match his production. Meanwhile, the Pacers dumped longer-term salary by trading Gerald Green, Miles Plumlee and a first-rounder for Luis Scola to offset Paul George’s maximum extension and the coming extension for Lance Stephenson. Those trades may be the two worst of the last two seasons. Both teams have also resisted using their mid-level exceptions, or using other trade assets to add talent despite clear areas for potential upgrades.

*It is an open question whether small-market teams cannot afford to pay the luxury tax, or simply are using the more punitive tax as an excuse. Either way, the fact remains they are not doing it so far.

In past years, those teams might have been willing to suck it up and pay the tax to maximize their title odds. Now, only the large-market teams do that.*

*Even the HEAT decided to save cash through the amnesty of Mike Miller, a player who was very important in spots to their two title runs and absolutely would have helped this year.

Superstars Are More Likely to Leave as Free Agents

Another big priority for the owners was to help teams keep superstars like LeBron James, Chris Bosh and Carmelo Anthony rather than allowing them to so easily leave for greener pastures. Class of 2003 draftees James, Bosh and Dwyane Wade all negotiated Early Termination Options (ETOs) into their rookie contract extensions. Owners like the Cavaliers’ Dan Gilbert apparently believed that seven years of team control for rookies was insufficient, so the owners negotiated for a number of key changes:

  • Maximum rookie extensions now must be at least four years, exclusive of any option years.
  • ETOs are only allowed on five-year contracts, and can only lop one year off the contract.
  • The amount a player could receive in a sign-and-trade was limited to what he could receive as a straight free agent signing with another team, namely four-year contracts with 4.5 percent annual raises rather than five-year contracts with 7.5 percent annual raises if he stayed home.
  • To avoid what happened with Carmelo Anthony’s 2011 trade from the Nuggets to the Knicks, contract extensions within six months of a trade are limited to three seasons (including the current season) with 4.5 percent annual raises rather than four seasons with 7.5 percent annual raises.

Unfortunately for the owners, they also decided to limit contract extensions in an effort to save them from themselves. Under the previous CBA, teams gave out ludicrous eight-figure per year extensions to veteran players like Richard Hamilton and Stephen Jackson long before they were due to become free agents. In an effort to curb this, the new CBA limited any extensions for veterans (i.e., players not coming off rookie contracts) to four years, including the current season. Because the “current season” in this instance continues until June 30, the longest extension that can ever be given before a player becomes a free agent is three years.

As a result, it makes almost no sense for any decent player who is not coming off a rookie contract to extend before becoming a free agent, because the player can receive a five-year new contract from his current team.* Even if he signs elsewhere, he can still get a four-year contract with another team rather than only three years had he extended.

*A player who has been in the league eight years, including the last four with the same team, can also get a no-trade clause if he becomes a free agent and re-signs a new contract with his prior team. This is not possible with an extension.

Thus, much of the work the owners did to deter free agents from leaving was undone by taking the best method for retaining players–preventing them from becoming free agents in the first place–out of the owners’ hands. To date, only Andrew Bogut and Kobe Bryant (who was encouraged by the Over-36 rule) have signed veteran extensions in the nearly three seasons of the new CBA.

Consider the case of Dwight Howard. Had the Lakers been able to offer him a four- or even three-year maximum extension upon his arrival in Los Angeles in the summer of 2012, he very well might have taken it, especially considering he was recovering from major back surgery at the time and the Lakers appeared to have assembled a superteam. Instead, due to the limitations on extensions he was essentially forced to wait and become a free agent, the Lakers imploded, and Howard left for Houston.

Mediocre Teams Cannot Get Anything For Their Stars

Now, consider the fact that shorter contract lengths and extensions mean that all players, including superstars, are going to be free agents more often. Moreover, players are generally closer to becoming free agents than they were under the previous regime. Unfortunately for mediocre teams with superstars, this means both that they are more likely to lose such players in free agency and that they cannot get as much for them in trade even if they are sure to leave.

Consider the case of the Timberwolves and Kevin Love, who can be a free agent in the summer of 2015. Even if they come to the realization that he is likely to leave, Minnesota cannot expect much return because a potential trade partner has no guarantee he will stay either. It still makes sense for Love to become a free agent rather than extend, and only the best teams can be confident that a player like Love would choose to re-sign. Even that can go awry, as we saw with the Lakers and Howard. In past years, a small-market team with a ton of assets like the Jazz could offer picks or young players to the Wolves after working out an extension with a player like Love. Now, they would be fools to trade much for him knowing he will be a free agent.

Trading Season is Much More Boring

All of the above factors combine to make trades a lot less interesting than in past years. In addition to the disincentive to trade or trade for superstars, the new CBA restricts cash payments in trades to only $3 million per season rather than $3 million per transaction, while the punitive luxury tax makes cost-controlled first-round picks too valuable to trade for a mere rental of a free agent-to-be. This year’s trade deadline proved this to be the case. Not a single first-round pick changed hands, and no stars did either.

Nate Duncan is an NBA analyst and attorney. He writes regular features for Basketball Insiders and chats weekly at 11 Eastern on Tuesdays.

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NBA Daily: Trail Blazers Come Up Short and Now Search For Answers

The Portland Trail Blazers were swept in the first round of the Playoffs and now face tough questions, writes James Blancarte.

James Blancarte

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The playoffs have been a wild ride so far. On Sunday, all three Eastern Conference playoff games were exciting matches that featured star players stepping up in the clutch. As a result, each series is tied up, two games each. The other game of the day featured the San Antonio Spurs, who stayed in control and never once allowed the Golden State Warriors to take the lead. The Spurs managed to get a win against the defending champs despite missing their best player and now their head coach indefinitely.

For the Portland Trail Blazers, there was no such Game 4 turnaround. In fact, with the Spurs win, the Trail Blazers have the lamentable distinction of being the only team to be swept in the first round of the playoffs. This is just one way to describe how disappointing and surprising this playoff series loss to the New Orleans Pelicans was for Portland. Many NBA observers and Pelicans fans were quick to point out that every ESPN NBA personality chose the Trail Blazers to win the series, as did select writers of the Basketball Insiders team.

The Trail Blazers’ players and front office also made it clear how surprised they were at the result. Forward Evan Turner shared his surprise.

“Obviously finishing so quickly wasn’t definitely the plan and to a certain extent it was shocking,” Turner said.

General Manager Neil Olshey chimed in as well.

“Nobody expected [the playoff sweep] to happen. It did. We had our chances in Game 1, we had our chances in Game 2. Clearly Game 3 was a setback,” Olshey stated when describing his surprise at how the series ended. “Stunned, I think disappointed.”

Credit should be given to the Pelicans and their ability to fully harness their talent and impose their will in the series. Turner was effusive in praising the talent and ability of the Pelicans.

“Unlocked Jrue is pretty dangerous and we all see how Rondo plays. He’s a homerun hitter but he is always solid. He can mess around. He’ll get two or three triple doubles. Anthony Davis is a problem,” Turner said.

When asked how he felt about the playoff exit, starting center Jusuf Nurkic stated that he is beyond disappointed.

“I mean, the way I finish the season, I feel shame. The way we have a season, like a team and group, and being in position to be third in the West, and finish like this, is not good,” Nurkic stated. “It’s not something you should be proud of, because all you do through the year, fight for playoff and to be in position to have a good postseason.”

Despite the early exit, many within the organization were quick to highlight that they continue to see the regular season in a positive light, including Head Coach Terry Stotts.

“I thought we had a very good regular season, I thought we had a very disappointing end of the season,” Stotts stated.

Damian Lillard shared a similar sentiment when reflecting on the season as a whole.

“I think I’ll always remember the way [the season] ended. But I won’t forget the kind of season we had. You can’t ignore the fact we won a division title in a division where there was some great teams,” Lillard stated. “We came out on top.”

Still, the success of the regular season makes the playoff result that much harder to grasp and deal with for some. Nurkic again didn’t hold back when comparing the success of the regular season with the team’s playoff failure.

“Very surprised,” Nurkic stated. “You definitely didn’t see the team who we are in the playoffs.”

Explaining why the Trail Blazers came up short against the Pelicans is no easy task. Clearly Portland’s attempt to feature its two premiere guards failed as the Pelicans were able to clamp down on Lillard and McCollum effectively in each game. Complicating matters further was the inability of the Trail Blazers to effectively utilize Nurkic on both ends of the court. However, there was at least some praise to be heaped on the backup bigs, Zach Collins and Ed Davis.

“I think Zach played really well for us,” Olshey stated. “He had an impact defensively.”

Also, Al-Farouq Aminu was able to do his part as an acceptable defensive option against Davis while spreading the floor with his outside shooting

Regardless, Turner shared his assessment that the team failed to have an adequate game plan for a scenario where their two best players are neutralized.

“One thing that may help, it’s no jabs or anything, but building the identity outside of our two strong scorers,” Turned stated. “[W]e sometimes go downhill when a team fully focuses on a lot of attention on our stars […] But I think we might need certain plays, certain structures that kind of prepare just in case that occurs.”

With their postseason concluded, the Trail Blazers are suddenly left trying to answer questions with no easy answers. Who, if anyone, is to blame for what happened? So far, many head coaches have been let go and unsurprisingly some speculation has turned toward Coach Stotts. Stotts, when asked, focused on the team and deflected any analysis of his performance.

“I’m not going to evaluate the job I did,” Stotts said.

Lillard, on the other hand, was effusive in his praise of his coach.

“Coach Stotts has done a great job from day one. We’ve been in the playoffs five years straight,” Lillard said.

For now, there does not appear to be strong rumblings about Stotts. With the offseason just beginning for the team there is still time to reflect and assess what went wrong. Additionally, the team has to resolve what to do regarding its own free agents. No name looms larger than Nurkic, who despite his poor showing, represents one of the team’s top talents and expressed his guarded optimism regarding a return.

“I want to be here, it’s no secret,” Nurkic stated when asked if he wants an extension in Portland. “Yes, definitely.”

Nurkic ended the thought by stating, a bit ominously, that he did his part and a deal may or may not get worked out.

“My agent and people here are going to figure out the rest, or not,” Nurkic said.

Complicating the desire to retain Nurkic is the team’s financial situation as the team is currently over the cap and under obligation to center Meyers Leonard, who has struggled to stay in the rotation and is earning roughly $21.8 million over the next two years.

“It’s our job to be measured and not to overreact. [Because] when you overreact is when you make mistakes,” Olshey stated.

Lillard was quick to emphatically shut down the notion of splitting up him and McCollum when asked if that would be a good idea.

“I mean, I don’t agree with it. I think it’s that simple,” Lillard declared.

When asked what the team plans to do going forward, Olshey expressed optimism but tried again to pay credit to the season’s effort overall.

“We’re going to do everything we can to upgrade the roster as we always do but we also aren’t going to lose sight of the success throughout the course of the season,” Olshey said.

“I don’t have all the answers for you today,” Olshey surmised. “A lot of times you don’t know where your help is coming from.”

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The Problem With ‘Championship Or Bust’

Should an NBA Title be the only measuring stick when we’re talking about a team’s success?

Spencer Davies

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In this day and age, there’s a constant need for instant gratification. It goes for everything, really, but especially for sports.

Before the 2017-18 NBA season kicked off, the general outlook on the league was that the regular season would be a waste of time. People dubbed the Golden State Warriors as clear-cut repeat champions. Other then that franchise, there were maybe one or two others that could put up a fight with such a juggernaut.

While that story has yet to play out, others are developing quickly.

The all-of-a-sudden dangerous New Orleans Pelicans are the only ball club to have advanced to the second round of the playoffs as the sixth seed in the Western Conference. LeBron James and the Cleveland Cavaliers are deadlocked in a tied series with an Indiana Pacers team that everybody seemed to believe was lottery-bound before the year began.

After falling nine games under .500 in late January, the Utah Jazz have caught fire and are up two games to one against the league’s reigning league MVP and a re-constructed Oklahoma City Thunder roster. We’d be remiss to leave out the sensational play of Ben Simmons and Joel Embiid as the Philadelphia 76ers continue to show how dominant they’ve been in a hard-hitting affair with a gritty Miami Heat bunch.

The start to this postseason trumps last season’s already. There is a competitive fire within the majority of these encounters. It’s all on the line to prove who will be the best of the best.

And having said that, there can only be one that takes home the Larry O’Brien trophy.

One. That’s it. In the last 18 years, there have been a total of eight different organizations that have earned the right to call themselves champions. All things considered, it’s not that many.

But there’s a giant misconception about parity in the NBA that needs to be thwarted.

This league is filled with talent, top to bottom. Just like in any sport, you have the basement dwellers still trying to right the ship. Whether it be coaching, injuries, or inexperience—they’re attempting to find their way. That’s why those players are sitting at home in late April.

Then there are those who are not merely spectators, but are involved in the remaining field of 15 teams (sorry, Portland Trail Blazers). Of course, in their minds, there is a common goal of winning a title, as it should be.

However, is it fair to quantify the success of every one of these franchises simply based on whether they accomplish that goal or not? Heck no.

Are we supposed to just forget about the progress made from end-to-end? What if — hear this out — both teams have talent and one just beat the other?

Building championship basketball takes patience. There has to be some semblance of playoff experience involved. Continuity is a must have. You might not want to hear it, but the postseason is where the seeds are planted, where the understanding of the stage really starts.

There can be a collection of young players who have been teammates for years, but have never taken part in the playoffs before. Sometimes there can be a team that’s full of veterans that have been there, but they may not have played together as a collective unit. Each one of them has a different background in a different setting.

It’s a whole different beast at this point. Some are so naive to see how elevated and intense the environment really is, so they assume a team that loses a few games isn’t championship material. Newsflash: Not one team in the history of the NBA has gone 16-0 in the playoffs.

And then, the ones who fall—whether it be in The Finals, conference finals, or in first two rounds—those organizations didn’t accomplish anything. Wrong, wrong, wrong.

So in this basketball world we live in where everything has to be a 20-point victory with zero losses and it’s “championship or bust” as the measuring stick, take a step back and appreciate the work it took to even get to the postseason.

Win or lose, many of these teams are building towards bigger things in the future. These experiences will make that clear in the years to come.

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NBA DAILY: Who’s the Next Donovan Mitchell?

Donovan Mitchell provided elite value at the back end of the lottery. Who might that player be this summer?

Joel Brigham

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The entire reason that so many non-playoff teams worked so diligently to blow their seasons was to get the best odds possible for the first overall selection in the 2018 NBA Draft. Watching LeBron James (a former first overall draft pick) do what he’s done to the league for the last 15 years, the desire to land a top pick is understandable. Ben Simmons, the heir apparent and likely Rookie of the Year, also was a first overall draft pick a couple of seasons ago.

In fact, of the 38 former first overall picks dating back to 1980, 28 of them would evolve into All-Stars, and it seems like only a matter of time before Simmons is added to that list, too. A higher percentage of top picks have been named All-Stars than any other slot in the draft. Numbers don’t lie. There is no pick more valuable than the very first one.

But…

Donovan Mitchell is good, too. Like, really good. He’s so good that there’s just as strong an argument for him as this season’s Rookie of the Year as there is for Simmons. Mitchell, though, was not a first overall pick. He was picked 13th, at the back end of the lottery.

He isn’t alone in landing elite value for teams picking outside of the lottery’s top half. Devin Booker was picked 13th in 2015. Giannis Antetokounmpo was the 15th selection in 2013. In 2011, Klay Thompson was picked 11th, while Kawhi Leonard was chosen with the 15th pick that same year. Paul George went 10th overall in 2010.

In other words, there are plenty of really good prospects every summer to give late-lottery teams hope. They might not generate the same hype as the guys vying for that top overall selection, but they’re also clearly a lot better than the tiers of players that start coming off the board in the 20s and 30s. All-Stars lurk in the 10-to-15 range of the draft, especially in a loaded class like the one we’re looking at this summer.

That begs the question: who is this year’s Donovan Mitchell?

Here are three possibilities:

Collin Sexton

Back in November, a series of unfortunate circumstances in a game against Minnesota led to a mass ejection of Alabama players that resulted in just three players being allowed to play the final ten minutes. Sexton was one of those three players and led a Crimson Tide rally despite the lopsided Minnesota power play. ‘Bama outscored the Gophers 30-22 in those final 10 minutes despite being down two players, and Sexton finished the game with 40 points. That’s how good he is.

Of course, he could slip in this draft if only because there are so many flashier names ahead of him. It appears as though seven players (DeAndre Ayton, Luka Doncic, Jaren Jackson, Marin Bagley, Michael Porter, Mo Bamba and Trae Young) likely will be drafted before him, which puts him in a category with guys like Mikal Bridges, Wendell Carter, Shai Gilgeous-Alexander, Miles Bridges, and Kevin Knox. Sexton probably will fall somewhere in that range, which means he would fall somewhere between the eighth and 13th pick.

He is competitive, charismatic and incredibly driven, so there’s a really good chance he does well in interviews and workouts and shows how elite he is. On the other hand, if he falls to the Sixers or Hornets or Clippers, some non-tanking team could end up with one of the biggest stars of the draft.

Miles Bridges

Coming into his sophomore season, Bridges was considered one of the top NBA prospects in college basketball, and while that is still true to a certain extent, his stock dropped a bit this past season while several players—including his teammate Jaren Jackson, Jr.—saw their own stocks rise.

Despite a minor loss in momentum, Bridges is one of the most NBA-ready players projected to be selected in the lottery. He’s still young enough to have a high ceiling, but he’s older and more physically mature than a lot of the other players vying to be drafted in his neck of the pecking order. He does nearly everything well, from ball handling to rebounding to shooting, and he can play both ends of the floor. His athleticism is his calling card, and that added to everything else he does well makes him a lock for some measure of NBA success.

He has his flaws, but he’s probably an All-Rookie First Teamer that will be selected after ten players that aren’t. That makes him a potential steal on the back-end of the lottery.

Jontay Porter

This time last year, Porter was a 17-year-old kid deciding whether or not to reclassify and play at the University of Missouri with his older brother Michael Porter, Jr. and under his father Michael Porter, Sr., who is a member of the coaching staff there. Obviously big bro is a high lottery pick, but the younger sibling was the 11th rated prospect in his high school class (the one with Zion Williamson and R.J. Barrett) before reclassifying.

He has declared for this summer’s draft but hasn’t yet hired an agent. If he stays in, he’ll be the youngest player in the draft, and mid-first round is where teams start gambling on the uber-young players with mountains of potential rather than older, more proven college players.

In Porter’s case, that could mean a mid-to-late first-round team ends up with a tremendous bargain, even if it takes him a few years to grow into himself. He’s 6-foot-11 but is incredibly smart and well-rounded on offense. He shoots threes (he hit 110 of them as a freshman at Mizzou), but he’s know for his vision and passing more than anything. That’s a modern-day stretch-four or stretch-five if ever there was one, and getting him a year before his time could be a way for a team to steal a deal in the middle of the first round.

With the playoffs in full swing, most observers are focused in on the battles for conference supremacy. For many of the NBA’s other teams, though, the draft preparation process has begun.

In short order, we’ll see which teams end up snagging the next Donovan Mitchell.

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