We’re less than a week from the announcement of the new
media deal and discussions about the new Collective Bargaining Agreement
("CBA") are out in mass. We've
already heard from the movers and shakers such as Mark Cuban, LeBron and Kevin
Durant regarding restructuring maximum deals and the possibility of removing
guaranteed contracts.
After LeBron and Kevin Durant publicly lobbied the owners
to remove maximum salaries; Cuban responded with the following:
Mark Cuban
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“If you give up guarantees, [i]t’s a trade-off….”
“It was discussed during the lockout time among owners, but never got
anywhere. So it was just one of those trial balloons. I’m not offering this
as a negotiation, I’m not suggesting it, all I’m saying is that was something
we discussed before, and max contracts are always big question, guarantees
are always a big question. But we have two years before that’s even an issue,
so no point discussing it now.”
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These contrasting viewpoints have polarized much of the NBA fan
base; and as such I thought I could shed a little light on the issues being
discussed:
Maximum Deals. As a direct result of explosion of
contracts given to star athletes which occurred during the mid-to-late 90’s;
one of the owner’s biggest wins during the lockout of 1999 was the imposition
of maximum contracts. Fresh off the
megadeals signed by Shaquille O’Neal (signed seven-year, $121 million contract
in 1996) and Kevin Garnett (in 1998 signed six-years, $126 million
while only 21 years old) the owner’s had a legitimate reason to fear the
increasing costs of superstars.
Additionally the
owners had an unlikely ally here as they had the support of the vast majority
of the players in the union. These
players realized that the star’s salary being capped leaves more money
available for the rest of the players on the team; and because these players
represent the lion’s share of the union this alliance was enough to approve
the inclusion of max deals.
While I am optimistic
that the value of max deals will increase substantially; I doubt the influx
of money will be enough to defeat those two powerful forces and totally
remove max deals.
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Guaranteed Contracts. While most of us know that the bulk of NBA
contracts are fully guaranteed; most of us do not seem to know why,
mistakenly believing that the basis of the guarantee lies with the CBA.
The truth is the only
NBA contracts mandated by the CBA to be guaranteed are those belonging to 1st
round picks on their rookie deals. Any other guaranteed contract was the
result of the negotiations as they exist in the current market not the CBA.
Therefore any
changes in the structure of contracts would be the result of a change in the
market and not the CBA.
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So while it was interesting to hear these powerful voices
make their stances known regarding labor issues; I am not optimistic that this
will result in any changes.
