Collective Bumbling Argument: What Should NBA CBA Look Like After Lockout?

[From the FanPosts, trucutter digs deep into the CBA issues leaving us plent to ponder. -TL]

I think we all knew this would happen.  Things are finally starting to look up in Pacerland, but now there’s a chance we will have to wait a LONG time to see how good these youngsters can be.  So how is it going to play out?  I know there’s already a thread asking how long the lockout will last, but I wanted to get another thread going with some opinions regarding what should change (not on the court, but in the boardroom).

The players won't allow the owners to get rid of guaranteed contracts or set a hard cap that significantly lowers salaries.  I really think that there's actually almost as much dissention between big and small market owners as there is between owners and players.  I didn't realize that ticket sales and local TV deals weren't part of revenue sharing (that's what I heard recently).  I know those things are calculated into the BRI so I would've thought they'd have to be shared.  There are simple and complex ways to resolve this issue, but I’m going to focus on the ways that the player/owner issues could possibly be resolved and some of them will level the field for small market teams. 

I know this thread won’t be something that everyone wants to get involved in.  Many fans, rightfully so, will say, “I don’t care, just get a deal done.  None the less I like to pretend that I’m smart so I thought I’d propose some changes that might help get the wheels moving.  I’m sure there’s plenty wrong with these ideas so feel free to point that out as well as offer some ideas of your own.  But, here are some things I’d like to see at least explored (some may already be out there).

1. Continue to have player options and team options (partially guaranteed based on negotiation when the contract is written just like now), but also have an option that is both a player option and a team option.  This would be something that could be more equitable for both parties.  Players like player options; teams like team options.  Let’s say for example, a decent young player signs a 4 year deal for just over the league average, but the 3rd year is written with this new dual option.  The player thinks, if given the minutes, he can be worth more than what he signed for.  Team management thinks perhaps he will as well, but he also may not completely pan out (maybe he has character or injury issues or lacks some of the skills needed for his projected role, but could develop them).  Now both parties have a new toy to work into contract negotiations.  Instead of just having a player option or a team option in the 3rd year, they just make the 3rd year optional.  The player can opt out if he thinks he’s worth more on the open market, or the team can opt not to pick up his (full) 3rd year if he’s not doing quite as well as projected and send him packing.

2. Institute an escalating luxury tax.  They can keep the luxury tax threshold higher than the salary cap, but I bet the small market owners would rather have the luxury tax threshold right at the actual salary cap number.  Essentially, this would mean, for instance, if a team goes 10% over the cap (or under the salary floor), they have to pay 100% of every dollar over into the same kind of revenue distribution escrow that they have now for the luxury tax.  If they go 20% over the cap they pay 20% of every dollar over, 12% over and they pay 120% of every dollar over.  That will add up pretty quickly.  If the cap is $60mil. and a team has $66mil. in salary they pay $6mil. in luxury tax (10% over the cap)…In this specific scenario, it’s equal to yesterday’s luxury tax.  But, if they have $72mil. in salary then they pay $24mil. in luxury tax (20% over cap, 200% in luxury tax on every dollar over).  I suppose you could put a hard cap in there, but these type of numbers would force even owners like Mr. Cuban to think twice before over extending themselves and driving up the market like they do now (and the luxury tax still goes back to teams that stay within the cap).  These kind of numbers would darn near set a hard cap just a few percent over the actual cap.  No owner is going to pay much more than 200% luxury tax just for going 20% over the cap.

3. CBA's always have an expiration date.  Let's say they agree to a 10 year CBA.  Let's say they set a soft cap and a salary floor like they have now, but the window between the two is much smaller.  Instead of having the salary floor be 75% of the cap (like it is now), make it 85-90% of the cap.  Then have a window of time where teams can go over or under the cap by a certain amount and roll this over to future seasons over a set amount of time (we’ll call it the “flex cap period”).  For instance;  let's say the cap is $60mil.  The floor is $51mil. (85%).  Teams can go over or under by, say 15-20% for a couple of years and pay the tax on the overage or deficit into an escrow account.  If they are under the team salary floor for a couple years by say 10%, they can then go over by 10% for a couple years during the duration of the “flex cap period” and not pay the luxury tax.  They could also set a 3-4 year window towards the end of the CBA (depending on how long this “flex cap period lasts”) where teams can’t go over or under without paying the tax.  This would ensure that at the end of the CBA everyone has a chance to get their aggregate salary over (or under) during the duration of this “flex cap period” balanced.  If they don’t get their total over/under salary over the course of this “flex cap period” within the total cap range for that same period, then of course they pay the escalating tax if their numbers don’t balance out over the whole period of time.  This would be good for struggling teams.  Let’s say the Pacers, like they are right now, don’t see anyone on the free market they really want.  They decide not to spend any money.  They stay under the salary floor by 10% in 2011/12. But, summer 2012 rolls around and there’s a FA we really want, now we go 5% over in 2012/13 and 2013/14.  It all balances out and we pay no luxury tax for those 3 years.  If we don’t spend any over the cap, but still went cheap in 2011/12 and had 10% under the salary floor in 2011/12 then we pay 100% of that amount into an escrow and we don’t get it back at the end of the “flex cap period” b/c we never went back over the cap to balance it out.

4.  Allow contracts to be re-negotiated after the 1st year (even rookie contracts maybe).  With the cost of moving and tighter team salary cap restrictions there may be more motivation for players to take slightly adjusted contracts.  This would be entirely up to the player.  No cutting players like the NFL, but just give the player the option to take a slightly lower salary to help the team (probably never happen, but could happen for older vets who want to stay where they are but allow their team to get a few more tens of thousands under the cap to make a move…again probably never happen).  But, it also could be used by players to allow them to get a more money mid-contract.  This would basically be like an extension, but might give the team more leverage to give raises earlier and spread the money out over a longer time before having to deal with a player hitting the open market.

5. Allow teams/players to negotiate buyout clauses at the time of writing a contract as well as allow them to negotiate percentage reduction of buyout payments based on future contracts with another team that overlap with their original contract.  For instance, let’s say Jerome James signs a 5 year, $50mil. deal ($10mil. per year) with New York.  At the time the contract is written they negotiated a buyout clause for the 3rd-5th year where the Knicks agree to pay 80% of the remaining contract if they decide to buy him out and of course he can become a FA. That 80% buyout is still counted against the Knicks salary cap over the remainder of the original contract (this is how buyouts work now pretty much).  So, after 2 years of underwhelming play by James, and they aren't happy with him they buy him out before year 3.  He then signs a 4 year, $20mil. deal with the Clippers.  Part of the original contract with the Knicks also said that 50% of whatever the player earns in a new deal with another team is subtracted from the buy-out pay out.  So, now instead NY owing James $8mil. per year over the final 3 years (80% of $10mil.) of his would be contract before the buyout now becomes just $5.5mil.  This is $8mil. minus 50% of $5mil. (the amount he's receiving per year from the Clippers).  This savings is also reflected in the Knicks cap, so in addition to saving $2mil. in cap that they would've paid James had he not been bought out, they also save another $2.5mil. b/c he signed with another team.  There could be caps on the amount of these percentages I guess b/c  without it I could see players, owners, AND other teams being taken advantage of.  But, the percentages would have to be negotiable initially. This wouldn't really be great for the players compared to now, but teams could use this to offer bigger deals with a bit of an out clause that players could agree to up front.  Ultimately this gives teams a little more leverage when writing up contracts.  It would be a bit easier to outbid some other teams on a player that has a bit of risk, if you know you can buy him out for a pre-arranged amount at some pre-defined point.

6. Lower the length of contracts by a year.  Currently Bird exception contracts and extensions can be up to 6 years and most others can be up to 5 years.  They should make free agent contracts be a max of 4 years and Bird rule and extensions up to 5.  Or at least make all up to 5 years.  Players won’t like this, but it could be a good negotiating chip for the CBA and shorter contracts would make taking advantage of item number 3 above easier to manage which could increase the overall money spent on salaries slightly.

7. The draft is sort of broken as well.  The one thing the NBA has more right than the NFL is the rookie wage scale.  A lot of the stuff I mentioned above really hurts the top earning teams more than the small market teams.  Right now most of the bigger markets have some pretty decent squads and most owners are not really worrying about top draft picks, but they may not like some of these cap/tax propositions when a team like CLE, OKC, or LAC can luck into a star like Lebron, Durrant, or Griffen and earn profit on the cheap.  Something that could help balance that out a bit and keep some of these worse teams from going cheap and tanking games (which should benefit the league as a whole) would be to raise the rookie wage scale.  If rookies made 100% more than what they make now, proven players (with more recognition from their college days) might get more consideration at the top of the draft which might be better for ratings…at least until they’re terrible NBA teams keep losing.  I don’t really like this idea as much.  But, the draft lottery is something that I think a lot of owners don’t like.  Here’s another idea.  You can’t allow teams to bid on draft picks out right with cash, but perhaps, you could allow teams to bid cap space or maybe even shared revenue claims for ping-pong balls.  Maybe give all the lottery teams one ping-pong ball, but let them buy some more if they want.  This money could go towards charity, escrow, D-league supplements, whatever.  Maybe you shouldn’t give all lotto teams just one ball.  Maybe you give them the same percentage chance to win the lotto that they get now based on record, but then let them buy more ping-pong balls.  Maybe let them offer up a future draft pick for 10 extra ping-pong balls (it couldn’t go to another team of course, but just having one less team drafting helps everyone that WOULD pick behind them).  This is probably a bit more drastic and less helpful in the process.

If you made it through all of these, you can see, I just want basketball, and I want all the teams to have the same chance to win (maybe not the same chance to earn money, but at least level the playing field some and give the owners some more negotiating leverage when it comes time to sign player contracts…and the CBA in general).

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