NBA Lockout: Impact of David Stern's "Reset" Proposal for NBA PlayersNovember 8, 2011
NBA Lockout: Impact of David Stern's "Reset" Proposal for NBA Players
On behalf of the NBA's owners, Commissioner David Stern delivered his third ultimatum during the NBA lockout.
Unlike the first two times when the league's offer actually improved following Stern's threats, the third time around is certainly not the charm when it comes to where we stand at the latest impasse in negotiations.
Stern has said that if the players don't accept the current deal on the table (as detailed by Howard Beck of the New York Times), the league will counter with a new proposal which includes a "flex cap" and a deduction to 47 percent of Basketball-Related Income.
Let's detail the true impact of the "reset" proposal.
Flex Salary Cap, Contract Roll Backs
Make no mistake about it: the flex salary cap is a hard cap, and it would contain an "absolute salary ceiling" which would not exceed $5 million above the league average team salary.
Additionally, contract rollbacks would mean that existing deals—as in those that have already been signed—would be decreased "in proportion to system changes in order to ensure sufficient market for free agents."
Neither of these two things are favorable to the players whatsoever, and the NBPA should not be willing to risk being subjected to that type of control.
The mid-level exception is an issue that Stern has stressed publicly throughout the negotiations, and there's one driving factor behind that strategy.
He's speaking directly to the rank-and-file players within the union.
The reset proposal would force the midlevel exception to be decreased, and it would be set at $3 million in Year 1, with a maximum length of just three years.
That's a big difference from the $5 million yearly salary in the offer currently on the table.
Joe Johnson is one player on a maximum contract who currently draws a lot of scrutiny as someone who is overpaid, and that has been a major issue of discussion throughout this process.
Under the league's current proposal, max contract lengths will be set to five years.
With the reset proposal in effect, the max salaries would be reduced.
Are superstars interested in making less money going forward?
After all, they're the ones that drive team revenue.
Impact on Sign-and-Trade
Sign-and-trade deals have become an interesting way for teams losing stars to attempt to re-build, but the rules regarding them would be impacted under the reset proposal.
The rules regarding the usage of the sign-and-trade would remain the same as with the 2005 labor deal, whereas the league's current proposal would only give non-taxpaying teams the option to use it.
If the players do accept the owners' current offer, it will be interesting to see how that might impact the competitive balance within the league.
Contracts for "Bird" Free Agents
Luke Walton is often pointed to as an example of a team misusing its Bird Rights, and that's something that the league is seeking to alter going forward.
Contracts would be cut to just four years for "Bird" free agents, and raises would be limited to just 4.5 percent annually for those players.
Under the current proposal, those same free agents will have max contract lengths of five seasons and an annual increase of 5.5 percent.
Again, this is speaking directly to the rank-and-file players of the league.
Raises in Each Year of Contract
In terms of annual raises in contract under the reset proposal, they would be limited to just 4.5 percent for non-"Bird" free agents.
That would prevent strongly back-loaded contracts, and it would prevent teams from manipulating the salary structure.
As for the league's current proposal, annual contract raises are set at 5.5 percent.
A one percent difference might not seem like much, but when applied to a multi-million salary, it could certainly represent a sizable chunk of change.
Both the current league proposal—as well as the reset—include an "amnesty" clause that will allow every team to waive a player and have 100 percent of his salary removed from the cap.
This will be a one-time provision for clubs to use, and it would make for a highly intriguing free agent class as the market will be flooded with some interesting names as a result.
There are some obvious candidates around the league, and if cut by their current club, the rich could very well get richer in a hurry.