The Summer of LeBron has evolved into the Summer of CP3, with the countdown eventually leading to the Summer of the Lockout. The transformational changes brought about by the free-agent class of 2010 will affect the competitive balance in the NBA for years to come.
But is the formation of Miami's Superteam, coupled with the unhappiness of Chris Paul in New Orleans, a sign that the NBA's system of player salaries and player movement is in crisis? As you might expect, the owners will argue "yes" in the coming months. The players will continue to stump for the status quo.
|Is the Chris Paul situation a sign that the NBA must overhaul its salary system? (AP)|
"I don't think it's such a big issue that we'd have to go to such lengths to address it," said a person on the players' side of the labor issue. "Anything that makes the system less flexible and makes it harder to trade players, I'm always opposed to."
But it's worth at least examining two aspects of restricting player movement that exist in the NFL, but not in the NBA. As part of the labor negotiations that are expected to resume next month, should the NBA look at an NFL-style system with signing bonuses in lieu of guaranteed contracts? As a way to prevent star players from fleeing their teams as unrestricted free agents, would an NFL-style franchise tag be useful in the NBA?
Useful to whom, is the key question. Players and agents in the NFL loathe the relative lack of guaranteed contracts and the restrictions placed on star players by the onerous franchise tag. Owners –- especially small-market owners -– love any rules that limit player movement and give them the ability to walk away from a player contract.
It is clear from the initial exchanges of CBA proposals between the NBA owners and players that the owners will seek to curtail the players' share of revenues –- currently 57 percent -– and also reduce the length of guaranteed contracts and annual raises. But let's take it one step further: If the NBA allowed teams to designate one player on the roster as its "franchise player," and that player's salary didn't count against the cap, what would be the result? If the Cavaliers didn't have to account for LeBron James' $17 million salary next season, wouldn't they have been able to keep their "franchise player" happy by signing or acquiring more good players?
It's a slippery slope, and one that doesn't produce the obvious conclusions that we so often crave when isolated incidents occur –- such as, the Miami Heat monopolizing free agency and hoarding the top talent available by signing James, Dwyane Wade and Chris Bosh.
"The league would love to have [a franchise tag] in place to maintain competitive balance," said Gabe Feldman, director of the Sports Law Program at Tulane University. "The small-market owners would love it, but the big-market owners wouldn't. It's not just a struggle between the owners and the players. It's a struggle between the owners and the other owners."
The NBA's version of the franchise tag is the Larry Bird exception, which allows teams to re-sign their own stars for an extra year (six vs. five) and with bigger raises (10.5 percent vs. 8 percent) than rival teams. That, combined with the league's strenuous restrictions on free agency in the first several years of players' careers, resulted in James staying in Cleveland for seven years –- enough loyalty for one guy to show one city, some would argue.
But here's how the franchise tag would have worked if the Cavs had it at their disposal when James became a free agent. Under NFL guidelines, Cleveland would've been able to designate James with the franchise tag at some point before the free-agent negotiating period began July 1. There would've been a deadline -– let's say, for the sake of argument, July 15 –- by which the team would've been able to continue negotiating a long-term deal with him. James would have had the choice of signing a long-term deal or a one-year deal at one of the highest salaries in the league. If he went that route, he'd become a free agent again next summer, when his franchise tag could be renewed.
Based on how much James enjoyed being a free agent, that probably would've been fine with him. But one of the biggest issues NFL players and agents have with the franchise tag is that it locks star players into a series of one-year deals.
"From the team standpoint, it makes sense," said Chicago-based agent Mark Bartelstein, who represents dozens of players in the NFL and NBA. "But I'm not sure it makes sense from the players' standpoint. With the franchise tag in football, the players always prefer to get long-term deals. You only have so many years to do this and the security and long-term money is what players prefer."
Whenever an NBA player's franchise designation expired –- a provision that would have to be collectively bargained -– he would be free to sign with another team. But unlike the NBA's current system, his previous team would get compensation; in the NFL, it's generally two first-round picks. This would avoid the charade of a hastily (and begrudgingly) arranged sign-and-trade arrangement that got the Cavs some kibbles and bits in return for losing the most valuable sports commodity in the history of their franchise and city.
"The idea is that teams don't just give up players," Feldman said. "They always get something in return to make sure they were compensated and to maintain some semblance of competitive balance. If a star leaves to go somewhere else, you're supposed to get a star or a draft pick or both."
While there are obvious benefits to such a model, it's worth noting that the NFL -– which has fewer guaranteed contracts and far less player movement than the NBA –- is facing perhaps an even tougher labor fight than the NBA with the expiration of its own collective bargaining agreement. If the NFL's system is so good, the NBA union would argue, why are so many people looking to change it?
"In the NFL, outside of quarterbacks or maybe defensive ends, players are viewed as much more replaceable than in the NBA," Bartelstein said. "There's only five guys on the floor in the NBA. Contracts, like anything in life, are a product of the market. So if people want you enough, whether it's a big signing bonus or a long-term contract, that's what you're going to get. That's the way it should work: supply and demand."
But what happens when a 25-year-old star, in the prime of his career, signs a fully guaranteed, four-year, $68 million contract -– and then decides two years into the deal that he wants to be traded? Such is the situation with Paul and the Hornets, and this is where the NFL's model of signing bonuses instead of multiple guaranteed years might be useful.
Let's say Paul received a $40 million signing bonus two years ago as part of his four-year extension. If the NBA adopted cap rules similar to the NFL's, there would be no point in Paul asking the Hornets to trade him this summer. He'd understand that the remaining, pro-rated portion of the signing bonus -– $20 million -– would accelerate against the Hornets' cap, thus making him untradeable. There would've been no need for him to fire Octagon and hire Leon Rose and rattle the front office's cage seeking a trade.
"If a player like Chris Paul leaves, that cripples a franchise," said a person who has worked on the management side in the NBA.
The question is whether Paul's tactic this summer is an aberration or a trend.
"To me, that's a really great rule," the management person said of the NFL using signing-bonus accelerations to discourage player movement. "This is what the league likes to do for teams, is give them the ability to say, 'You knew it when you signed it.' I kind of like the idea where the team can say, 'There's nothing we can really do for you here,' and kind of avert all these issues."
Another possible tweak to the CBA, the management person said, would be to relax restrictions on how often extensions can be signed or allow contracts to be restructured. Under the NBA's current rules, Paul isn't eligible for another extension until the three-year anniversary of the previous one.
According to the management person, the Hornets could say, " 'Look, Chris, we can go long-term with you. You're our guy. Help us bring in guys through free agency right now.' Doing [an] extension now would probably be better for him."
Having received the players' counterproposal earlier this month, the owners plan to schedule another bargaining session sometime in August or September, sources say. Their focus, according to people familiar with the owners' initial proposal, is mostly on reducing the players' share of revenue and imposing some form of a hard cap. The players staunchly oppose removing cap exceptions, and say you can look no further than the spending restraint in the NFL during an uncapped offseason heading into the expiration of the league's CBA.
"Everybody feared that with no salary cap, the NFL would fall apart," Bartelstein said. "Washington, Dallas and the New York teams would outspend everybody and it'd be chaos. Well, we had no salary cap this year and it didn't happen. ... If you have revenue sharing and good management, you don't need a salary cap, and the NFL just proved it this year."
Removal of exceptions currently available to exceed the NBA cap would curtail player movement to a degree, but eliminating the Bird exception might result in the undesired effect of more free agents leaving their current teams. It's not clear which one is preferable to the NBA, from the standpoint of competitive balance and what its customers -- i.e., you -– want.
"Look how much interest there was in the NBA this year with all the player movement," Bartelstein said. "Look at how much interest there has been in the NFL in the last month with all the player movement and with no salary cap. People like player movement. It drives ticket sales. There's no question the NBA had the biggest increase in ticket sales it's probably had in a long, long time."
We'll find out in the coming months what each side wants, how hard they intend to push, and whether the Summer of 2010 will go down as a fluke or as an example of why the NBA's system must be changed.
"I don't know that one top player demanding a trade is a crisis yet," Feldman said. "I think it may be symptomatic of a different problem. And that problem is assuring that these owners are able to spend enough money on their teams. If the Hornets had gone out and gotten a big free agent this year, I don't think Chris Paul would be demanding a trade. And if they didn't form the Superteam in Miami, maybe Chris Paul thinks differently.
"From the players' perspective, if you see right off the bat that your team can't compete, you want your owner to get better players or you want to go to a team that has better players," Feldman said. "The issue that they want to fix is making sure that all teams are competitive, that the fan bases think their teams are competitive and certainly that their own players think they're competitive."