NBA 2011: 6 Ways the New CBA Could Impact Free Agency
The NFL lockout lasted more than 100 days and now the sports world can focus their scrutiny on the NBA lockout that began July 1. The NBPA and NBA owners are thought to be miles a part from what they want to accomplish in a new Collective Bargaining Agreement.
Like the NFL, coaches and front-office personnel are not allowed to contact players, and players are not even allowed to be drug tested during the lockout. If you thought the NFL lockout was ugly, you haven't seen anything yet.
The NFLPA and owners were in a disagreement about how roughly $9 billion dollars in television revenue should be split, but the NBA is in a far different situation. The NBA has said as a whole teams lost around $340 million in 2009-10 and $300 million in 2010-11.
Clearly things need to change if those numbers are accurate. The NBA may look drastically different when a new CBA is reached, especially teams dealings with free agency.
Here are six ways the new CBA could impact free agency.
Less BRI for Players Means Smaller Salaries
NBA salaries have gotten out of control. Elton Brand receiving a max contract (bad knee or not) is a joke. Teams become crippled by the longevity of contracts and the amount of money that is now the norm for mediocre players.
That's why the owners are asking for a larger share of the basketball related income (BRI) in the new CBA. NBA players are obviously very satisfied with the 51% of BRI that they currently receive, while the owners are claiming that the old CBA does not take into account the money they spend on marketing.
The owners want a larger share of the BRI, and if the league lost as much money as they are claiming, they will get just that. A smaller percent of the BRI will be going to the players, which means smaller salaries for mediocre players.
No More "Larry Bird Rule"
NBA players have fought long and hard against a hard cap, but the owners would be smart not to budge on this issue in the new CBA. The "Larry Bird Rule" allows for NBA teams to exceed the salary cap to re-sign their own players, but the owners seem adamant about a hard cap that would not allow for any team to exceed the set salary cap.
A hard cap was a huge issue for the NHL in 2004-2005, and the reluctance of player's to agree to it led to the loss of an entire season. A hard cap will make it much less likely that teams will pay huge amounts of money for marginal players.
NBA teams often feel forced with the current CBA to spend any available money they have on free agents so they can put more people in the stands. The best players have no desire to play on teams that struggle because it is extremely difficult for teams to turn around their franchises in the NBA.
A hard cap will ensure the smarter spending of money by NBA teams, and less money for marginal players. The top players in the league will always get their money, but you will not see a player like Eddy Curry receiving more than $10 million again.
Smaller-Market Teams Will Be Competetive in Free Agency
The NFL has become so successful because small market teams have the ability to sign the same marquee free agents as large market teams. The Kansas City Chiefs or Green Bay Packers have the money to sign the same free agents as teams like the Dallas Cowboys or Philadelphia Eagles.
Revenue sharing is how that is possible. NBA teams do not split their local revenue and that is why teams like the Los Angeles Lakers and Chicago Bulls will always turn a profit, and the Phoenix Suns and New Jersey Nets (before they move to Brooklyn) will struggle.
If an NBA team is in a large market, there is a great chance that they will make money even if their team loses. The New York Knicks have been awful for more than a decade, but they had the cash to acquire Carmelo Anthony and Amare Stoudemire because they sell merchandise.
The lack of revenue sharing means that an owner might rather have a bad team in a large market than a good team in a small market. There is a good chance he would make more money.
Sharing local revenues will allow for smaller market teams to be players in free agency. Every season the NHL Free Agency period is loaded with non-stop action because any team that has cap space can sign players because the revenue is shared.
More teams will be active in free agency (better for the fans) and that will discourage the super teams that have become the norm in today's NBA.
NBA teams can become seriously hamstrung for years if they sign a player to a large, long contract and he is a bust. Teams like the Philadelphia 76ers, New York Knicks, Los Angeles Clippers (okay, they always stink anyways) have literally "paid" for some of their bad contracts for more than a decade.
The owners will push for shorter contracts that will allow for teams to not be handicapped for a decade if they make a mistake. Shorter contracts will allow for players to become free agents faster and more times throughout their careers, allowing them to cash in multiple times.
Shortening max contracts to three, or more likely four years, should please the players because they will be able to sign multiple max contracts.
Getting Under the Salary Cap Will Hurt Free Agents
Carmelo Anthony pined for a trade for a large part of the 2010-2011 season, and he got his wish when he was moved to the New York Knicks. Anthony was able to sign a maximum contract extension with the Knicks, but he may find that he will not be earning as much money as he originally thought.
If a team (like the Knicks) are over the salary cap, they will be able to "roll-back" player salaries to get them under the salary cap threshold. http://sports.espn.go.com/nba/news/story?id=4894018
The proposed CBA would reduce guaranteed maximum salaries by almost a third of what they were in the current CBA. So any players receiving maximum salaries face the realization of potentially receiving a lot less money.
Salary roll-backs will hurt both free agents and players currently under contract as they could be seeing a lot less money.
Losing Money Means Less Teams?
With the NBA reportedly losing anywhere from $300-400 million per season, it is clear that many teams in the NBA are losing a lot of money. Is it possible that the NBA owners will choose to contract as a league and cut franchises that they feel have little chance or turning a profit?
This is an alarming proposition for fans of smaller market teams, but NBA owners would be smart to use this at the bargaining table. If the NBPA does not agree to their demands, they can say that they will be cutting a team or two (or three), and that could mean a lot of players will be out of jobs.
The possibility of the NBA contracting is very real, which means that the 12th man on many teams' rosters should be very worried right now.