Did the NBA screw up the new collective bargaining agreement?

In discussing the possibility of a Dwight Howard deal and the rumors of Andrew Bynam going to Cleveland, Terry Pluto points out some strange new rules in the CBA that make a deal very unlikely.

1. There are at least 40 million reasons why Dwight Howard and Andrew Bynum won’t sign contract extensions to help complete a trade. That’s right, 40 million, as in about $40 million. Howard and Bynum are under contract through the 2012-13 season. If they are traded and sign an extension now, it can be for no longer than three years.

2. That’s why Howard’s agent has said his client has no interest in signing an extension now. He’ll wait for free agency. The new labor agreement changed the rules on players signing extensions before free agency. It made it wiser for players to wait to become free agents because they can sign longer, more lucrative deals. (So much for helping teams keep their stars.)

3. Bynum is expected to follow the same path as Howard. Why sign a three-year deal in the $60 million range when he can wait a year, and sign for more than $100 million over five seasons?

4. Any agent that takes a contract extension for a prime-time player in the final year of his contract is either giving poor advice or has a client — who because of injuries — wants security now. That’s why every proposed deal for Howard has been a mess. He won’t commit to a contract now because he can get so much more later.

Dwight Howard is taking a lot of heat for his flip-flops on what he wants to do, but it’s hard to blame him for this CBA quirk that seems to be making it much harder to get deals done. Also, as Pluto points out, it makes it much harder for teams to lock up and keep their star players.

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Players’ union not pleased with proposed CBA

Per ESPN…

In the strongest comments yet by a players’ union official since NBA owners made a new collective bargaining proposal, vice president Adonal Foyle of the Orlando Magic said the offer put forth last week by commissioner David Stern’s office is “ludicrous.”

“I think it’s a proposal that’s far-reaching,” said Foyle, the union’s second-in-command behind president Derek Fisher. “This [new proposal] has gone too far. It wants a hard cap, it basically will create no middle class and which, in effect, means none of the Bird rules would apply,” Foyle added, referencing the so-called Larry Bird exception that allows teams to exceed the salary cap to retain their own free agents.

In addition to a hard salary cap to replace the current system of a “soft” cap, with its accompanying luxury-tax penalties for teams that exceed a certain payroll threshold ($69.9 million this season), owners have asked that contracts be shortened to a maximum of four years, Foyle said.

A hard cap would likely increase parity. The NFL has a hard cap, so teams have to decide which players to keep even if they have an owner with deep pockets that would be willing to re-sign everyone. This is why dynasties are extinct in the NFL.

NFL stars understand that every dollar they make is a dollar that the club can’t spend somewhere else, which is why we often see star players restructure their contracts to free up cap space. A hard salary cap provides a completely level playing field, which is one reason why there is so much parity in the NFL.

The downside to the hard cap, especially in the NBA, is that with only five starters and 7-10 bench players, it’s difficult to keep continuity year-to-year. Fans want their teams to be able to keep their star players, which is where those “Larry Bird rights” come in.

I don’t see the soft cap as a major problem, but if you look at a list of the top payrolls, there is a direct correlation between money spent and regular season wins. Is it fair? Not really. A hard cap would certainly level the playing field for small market teams like Milwaukee, Minnesota and Sacramento, as they would become far more competitive in the free agent market.

The larger problem is the length of guaranteed player contracts. The proposed CBA would lower the maximum length to four years, which is a good idea. One of the biggest reasons for bloated payrolls is the guaranteed contract. They should shorten the max length or make the last two years of a six-year deal non-guaranteed, which would allow the team to cut the player and only pay, say, 50% of his salary.

In any case, Foyle’s comments (i.e. ludicrous, rash, unfair) are worrisome, as it indicates that the two sides are very far apart at this point in time.

There’s a CBA storm brewing

Whenever I see the acronym “CBA,” I still think of the Continental Basketball Association, which is apparently still around, but only had four teams to start the season — the Albany Patroons, the East Kentucky Miners, the Lawton-Fort Sill Calvary and the Minot Skyrockets. Seriously.

CBA also stands for the NBA’s collective bargaining agreement, which is essentially the agreement between the league, owners and its players regarding salary cap structure, trades, length/size of contracts, etc. Commissioner David Stern wants a major overhaul to account for the number of franchises in financial straits, but Billy Hunter, executive director of the NBA Player’s Association says the current system is just fine.

“One of the principle issues is that some owners are having a hard time with cash flow,” Hunter said. “I don’t see why that automatically means more give-backs from the players. It seems to me a new revenue-sharing plan among the owners is one of the things they have to look at. Then you wouldn’t be looking to the players every time there’s a shortfall.”

The current labor pact, signed in July, 2005, will expire in June, 2011. No substantive talks with the league on a subsequent deal will begin until after July 1, Hunter said, because union president Derek Fisher and other board members are involved in the playoffs. The current system guarantees the players 57 percent of basketball-related revenue (BRI).

Hunter declined to outline what the players might be seeking in the new deal, but a source said repealing the age limit, reducing the amount of player salaries held in escrow, loosening rules concerning restricted free agents and changing the league’s disciplinary system top the list.

The biggest points of contention are likely to be the age limit and the disciplinary system. The current deal requires a player to be 19 — and one year removed from high school in the U.S. — before he is draft-eligible. There has been talk that the league would like to raise the limit by another year, but one union source said “90 percent” of the current players are against it now.

Hunter’s logic is interesting…

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