There are a lot of moving parts and details to go along with what I'm proposing in Part II of the Berger Plan to fix the NBA. I'm sure I'm missing something, but here are the basics:
• Luxury tax: Buh-bye. The luxury tax will be no more under my plan. The $70 million to $75 million in luxury tax payments due for the 2010-11 season (approximately $20 million of which was earmarked for the revenue-sharing pool) will be converted to 100 percent revenue-sharing dollars in future years. The league's plan to increase total revenue sharing to $180 million to $200 million would be just a start. The poorest teams will get an immediate influx of cash in the first two years through the small-market reinvestment plan, and that will be supplemented with aggressive revenue sharing that includes local money like broadcast deals and gate receipts.
There are a lot of moving parts to go with this cap. I'm sure I'm missing something, but here are the basics. Read More >>
The idea with a hard cap is how much it will affect big-market teams, but small markets could have it tougher. Read More >>
• Contract length: To keep big-money teams from abusing the signing-bonus provision, the length of signing bonus prorations should be limited to five years. I also propose limiting the number of years of guaranteed base salary to three -- with the exception of two franchise players per team, who could get five years guaranteed if they stayed home as free agents. This will allow players to be guaranteed they'll be paid what the market bears when their playing ability is most predictable while avoiding the problem of saddling teams with massive contracts for players who are no longer worth it (Gilbert Arenas, Rashard Lewis).
• Incentive-based guarantees: This could replace or supplement the three- and five-year guarantee proposal, and it's the brainchild of Kauffman Sports' Matt Tolnick, who has written extensively on CBA issues for HoopsHype.com. His proposal is to allow five- or six-year guarantees, with Year 4 converting to a team option if the player fails to reach certain performance benchmarks (such as playing time) in the first three years. So if Arenas signed a five-year, $80 million deal and was no longer contributing as a starting-caliber player, his team could A) decline the team option for the fourth year, making him a free agent and allowing him to sign with a team for a price more appropriate to his diminished production and role; or B) restructure his contract to reflect his new market price. This is a far better allocation of resources that would prevent teams from being crippled by monstrous contracts for diminished players, with the added benefit of freeing up that money for one or more other players who deserve it or better fit the team's strategy. This is what executives I've spoken with say they want: roster and payroll flexibility, and the ability to turn over the roster without getting locked into toxic contracts. This is what fans want, too; they want their teams to have a chance to remain competitive or become competitive, regardless of market size.
• Franchise players: Each team would be able to designate a tier 1 and tier 2 franchise player, but the restrictions would not be as rigid as those imposed on NFL franchise and transition players. The point would be to sweeten the incentive for free agents to re-sign with their teams. As LeBron James and Chris Bosh proved last summer, the marginal financial benefit to saying home (an extra year with 10.5 percent raises as opposed to 8 percent) is no longer enough to keep free agents with the teams that drafted them. Under this proposal, franchise free agents would be able to get a five-year, fully guaranteed contract from their current team vs. a five-year contract with only three years guaranteed from other suitors. Tier 1 vs. tier 2 would have to do with the compensation a team would get if it loses a franchise free agent. In this article at HoopsHype, Tolnick proposes a variety of compensation solutions, including A) one player selected by the team losing the free agent from his new team's roster, with each team able to protect certain players from such poaching; B) one top-15 pick or two top-30 picks; or C) two top-15 picks and a second-round pick. The problem, obviously, would be how to handle situations where a team doesn't have the prescribed draft picks to give, but such details are ironed out all the time in trades. The point is to strengthen the incentive for franchise free agents to stay put and enhance the compensation for the team losing him beyond low-level draft picks and trade exceptions that often expire without being used.
• Bird rights: Bird rights were created to prevent teams from losing superstar players such as, um, Larry Bird. The concept has become thoroughly corrupted, with Bird rights being assigned to every Tom, Dick and Harry in the NBA. No more Bird rights under my proposal, other than for the tier 1 and tier 2 franchise players declared by each team.
• Midlevel and bi-annual exceptions: No more. If teams sign players to cap-friendly contracts that reflect production over time and manage their cap wisely, they can sign any player they want -- provided they have the cap room. If in the first few years of this new CBA, low-payroll teams get the lion's share of midlevel free agents simply because they have cap space, this would merely supplement the two-year small-market reinvestment plan and enhanced revenue sharing to further bolster the struggling teams. Isn't that what owners say they want?
• Toxic contract amnesty: Every other year on Sept. 1, each team would be able to waive a player entering the final year of his contract who has failed to meet certain performance benchmarks and will account for at least 25 percent of the cap. If the remaining money owed is contractually guaranteed, the player will be paid (subject to a negotiated buyout), but the money will not count on the team's cap. If the player signs with another team, his original team will get an offset for the amount of his new deal.
• Minimum payroll: If you have a ceiling, you have to have a floor. Under the expired CBA, the NBA's minimum payroll was 75 percent of the cap. I propose 85 percent. With revenue-sharing help from the big-spenders, the low-paying teams have to do their part to pay what it takes to be competitive. In the NFL talks, owners have proposed a 90 percent payroll floor.
• Hybrid roster spots: This would be a cost-saving measure for owners and a boost for deserving players who aren't getting a chance to develop. Each team would be able to allot three roster spots as hybrid NBA/D-League spots. If the player is on the NBA roster, he would be paid his NBA salary. If there are no minutes for him with the NBA team, he can be sent to the team's D-League affiliate and be paid a new D-League salary that is more than the current pay for that league but far less than the NBA minimum. The player would get the experience necessary to develop into an NBA rotation player, and the team wouldn't be forced to pay the NBA minimum. Last season, that figure ranged from $473,604 for rookies to $1.4 million for players with 10-plus years of service. Some provisions would have to be made for first-round picks, whose pay was dictated by the rookie scale under the previous CBA ($850,800 for the 30th pick last season). Also, D-League assignments would need to be limited so teams can't send players to the D-League simply to get under the cap.