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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Big names show up to CBA negotiations


LeBron James, Carmelo Anthony, Dwyane Wade and Chris Paul were among the players who attended a negotiating session between the NBA and the union Thursday.

“It’s important for me that all of us, as being the faces of the NBA, to be involved in the negotiations and what’s going on,” Anthony said as he left. “Our future is in jeopardy if we can’t come into a mutual agreement.”

LeBron and Wade are locked into long term deals, and it would be very difficult for the owners to negotiate any kind of changes to those contracts. The guys that really have something to lose with an owner-friendly CBA are Anthony and Paul, who will be signing new deals in the next two years.

Regardless, the show of force from the players’ side is important. The owners need to know that the league’s biggest names are behind the union in these negotiations.

The four-hour bargaining session Thursday was the first since February’s All-Star weekend, when the players — also strengthened by the surprising attendance of some big names — rejected the owners’ proposal. The union recently submitted its own proposal, but commissioner David Stern has indicated it’s similar to the current CBA, and the owners are seeking significant changes to the system.

Stern has estimated the league will lose about $370 million this season, which the union disputes. The sides began discussions last year but remained far apart, creating fears of a lockout next summer.

Stern cracks me up. He effuses positivity whenever he’s asked about the financial state of the league — to the point that I think he’s trying to hypnotize his audience — but now that it’s time to negotiate a new collective bargaining agreement, the league is suddenly $370 million in the red. After going on and on about how well the league is doing worldwide, he’s pleading poverty.

However, the CBA does need a few changes. Contracts need to be guaranteed only to a certain point — say, 50% in years 3-4-5 — or they need to be kept to a maximum of four years. Too many franchises handicap themselves by giving long-term, lucrative contracts to players on the decline. Also, there’s nothing a team can do when a perfectly good player is hamstrung by injuries after signing his deal (i.e. Michael Redd or Tracy McGrady).

I’d also like to see a harder cap. Teams with free-spending owners like James Dolan, Jerry Buss or Mark Cuban make things that much tougher on small market teams who can’t afford to keep up with the Joneses. Fortunately, these teams — the Knicks, Lakers and the Mavs — are generally way over the cap, so they aren’t competing directly with the small market teams for free agents. (The Knicks were obviously the exception this summer, but they’ll be over the cap before too long, especially if they rehire Isiah Thomas in a year or two.) All in all, the salary cap rules aren’t too bad — at least it’s not uncapped, like baseball.

What to do about guaranteed contracts?

I’ve been griping about it for a while, but guaranteed contracts are hurting the NBA. There is no greater anvil over the neck of a franchise than a $10 million-plus contract for a player who is not producing.

TrueHoop had a nice bit about it in its analysis of the Brandon Roy extension.

All the dollars and roster spots tied up in injured or ineffective players is shameful. The Euroleague and the D-League are loaded to the gills with players who would kill for those roster spots, and they’d play for a tenth of the money. The teams, of course, would kill for the same thing.

A fair percentage of NBA trades involve one GM saying “all right, I’ll give you this really really good player, but only if you also agree to pay these other guys who aren’t worth their contracts.” In other words, a decent chunk of NBA employees are burdens to their employers.

Holy inefficient market, Batman! My inner libertarian yearns for a world in which at least the worst of those cases could be set free (with cushy, insurance-funded retirements, or new smaller market-value contracts with other teams) much like the league’s one-time amnesty clause a few years ago. Wouldn’t the NBA be a better place if Daryl Morey could spend that $23 million on seven additional Luis Scolas, or whatever other players he wanted? Wouldn’t all those hungry players, in place of injured has-beens, increase the value and enjoyment of every ticket to every NBA game?

The simplest thing to do would be to make all of these contracts 50% guaranteed. If a player gets injured or is vastly underperforming, his team would have the option of cutting him loose and only have half of his remaining contract count against their salary cap. That way, the player gets some security, but the team has financial flexibility if the player doesn’t keep up his end of the deal. The player would have the option of signing with another team (if someone will have him) so he can still earn if he can still play.

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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