The owners scored a significant victory in the labor negotiations this season shaving at least $300 million off of player salaries heading forward and strengthening the penalties for teams exceeding the luxury cap threshold. However, to get the players to agree, the owners needed to give the players some form of a win.
This is what Billy Hunter said the wins were for the players:
- BRI Split: The players were formerly receiving 57% of all Basketball Related Income (BRI). Under the new contract they will be bound to a range between 49 and 51%. This is exactly what the owners proposed in the last deal the players rejected; however, the owners did guarantee the players that they would receive 51.2% of BRI this coming season. This means the players gave up about $300 million a season in salaries, but got back a guarantee of $60 million this one time.
- Mid-Level Exception (MLE) for Non-Taxpaying teams: The contract length for teams eligible to offer the MLE will be 4 years. The MLE used to be available for every team regardless of their team payroll. That is no longer the case. However, the MLE was rarely used by luxury tax paying teams, so it really comes down to simply giving the MLE exception an extra contract year.
- Player Options: The players can receive options on their contracts. The owners previously asked to eliminate all such player options on contracts for higher compensated players. This means that a player who may be past his prime and seeing his value to the team diminish can still enforce the final year(s) of a contract on a team. This is partially deflected by the teams having an one-time amnesty situation where they can cut a player from the team and not have his salary count against the salary cap for luxury tax considerations. The team would still have to pay the player, but could offset that amount by reducing or eliminating the luxury tax.
- Qualifying Offers: This one is definitely a bonus to certain players and the first truly major concession in my opinion made by teams in my opinion. Qualifying offers for “starters” coming off of rookie deals have been changed. “Starter” is defined as someone who started 41 games or played 2000 minutes on average over the previous two seasons. The new offers will be significantly higher especially for second round draft picks, such as Sam Young for the Grizzlies. 1st round picks will receive qualifying offers no worse than what the 15th player drafted would receive. 2nd round picks or undrafted player will receive the qualifying offer for the 21st pick in the draft. However, the owners also said that any lottery pick who doesn’t qualify as a starter, such as Hasheem Thabeet, would only need to be offered the 15th pick’s qualifying offer amount.
- Max Salary: A player finishing his rookie scale contract will be eligible to receive a maximum salary equal to 30% of the Cap (up from 25% previously) if he signs with his prior team and is either: 1st, 2nd or 3rd team All-NBA two times, an All-Star two times or 1-time MVP. This is to reward players such as Derrick Rose for example.
- Minimum Salary: The owners dropped their demand that the minimum salary be decreased by 12%. The league’s minimum salary is unchanged under the new CBA.
- Rookie Scale: The owners also dropped the demand to lower the rookie pay scale and it will remain the way it was in the old CBA.
- Extend and Trade: The owners dropped their request to eliminate extend and trade deals. However, they did say that players receiving extend and trade deals lose the Bird Status. This means they are for shorter years and with smaller raises. In essence, they made it so the benefit for the player is lost, but the benefit for the team remains. Somehow, I don’t see that as a large sacrifice for the owners. They pay the player as if he was leaving via free agency, but also get something back in return for making the deal.
- Annual Increases: The annual increases are set at 7.5% for Bird players and 4.5% for non-Bird players.
- Taxpayers Use of MLE and Sign and Trade: The owners agreed to a $4 million ban around the luxury tax to allow such deals to occur. Teams can go up to $4 million over the tax threshold to use the entire $5 million MLE or acquire a players via a sign-and-trade deal. Teams already over the threshold are barred from these types of deals but it allows teams on the edge to fully participate in them.
- CLIFF: This is a term I actually had to do some research to understand in the CBA language and it is a bit complicated so bear with me here. Teams that are over the cap pay a fine to the league. That money used to be evenly divided among the non-taxpaying teams. Now, no more than 50% of those funds can be allocated solely for to the non-taxpaying teams. The league has discretion about how the remaining 50% will be allocated, but it is not to be simply for non-taxpaying teams. What this could mean is that taxpaying teams could receive back some of their tax (50% of their 1/30th share) to soften the blow of going over the tax. However, it doesn’t state that this is how Stern has to use the money. It is at the commissioner’s discretion on how the 2nd 50% is allocated as long as it isn’t solely along the line of non-taxpaying teams. This is one of the concessions that may not be so big of a concession at all if you look at it in more detail. The league owners still have to work out a deal among themselves on revenue sharing. The 50% not allocated solely to non-taxpaying teams can be allocated to small market teams in an attempt to offset the earnings disparity among the league. That isn’t to say that this is what Stern had in mind with the concession but surely it was more than just a means to soften the blow on teams paying the tax.
That is it. Those are the concessions made by the owners to end the lockout and get the league back to playing ball again. No one single item is that big of a deal, but in total, it gave Hunter and the NBAPA enough wins to accept the offer.
For a comparison as to how this new CBA stacks up to the previous one signed in 2005, check out Larry Coon’s recent article on it.