How the proposed CBA would affect Paul and the Hornets (Part One)

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Published: May 12, 2011

The facts about the proposal that the league made to the players last week have started to trickle out and surprisingly the owners are not going for the death blow that most experts assumed that they would try to deliver to the players. While NBAPA President Derek Fisher claimed that he was “disappointed” in the offer, the truth is that the two sides appear to be much closer than previously thought. While it would still be a miracle for a new CBA to be in place before the old one expires on June 30th, there is reason to be optimistic that no games will be lost next season.

So now that we have an idea of what the league is pushing for in the new CBA, let’s take a look at how likely they are to receive each of those items, and how it will affect the Hornets if they do.

1.) The Kinda Sorta Franchise Tag

How it would work: You might as well scrap what you know about the NFL’s franchise tag when trying to understand the one that the NBA is proposing, because the two are nothing alike. In fact, this tag would be more akin to the “exclusive negotiating rights” that we have seen in baseball, most notably in the case of Daisuke Matsuzaka.

The franchise tag would not restrict a players movement, nor would it be a guarantee to the player that they would be paid a top level salary as it does in the NFL. Instead, it would simply give the teams the chance to offer that one player an amount of money that is substantially higher than any other team could offer. This tag would also allow more of this money to be guaranteed (as the league is hoping to do away with fully guaranteed contracts) and the ability to add on an additional year to the contract- all things that no other team would be able to offer should that player take their chances on the free agent market. Additionally, the new CBA proposes that teams will not be allowed to do sign and trades. So, if a player wants the most money he can get, there is only one way to get it, and that is by resigning with your current team.

How this would affect the Hornets: Quite honestly, this doesn’t sound much different from what is currently in place, as Cleveland was able to offer more money and additional years to Lebron James this summer, but that was not going to dissuade him from joining the Heat. In addition, does the amount of guaranteed money really matter when negotiating with superstars? Let’s say CP3 signs a 4 year/60 million dollar deal, with only 35 million of it being guaranteed. Is there any doubt that he sees all 60 million? Would any team that signs him cut him after two years? Of course not.

Look around the NFL. Peyton Manning sees all of his money, so does Brady, Brees, etc. The guys who get the shaft are the middle of the pack guys who are scheduled to make 11 million dollars and aren’t worth half of that (ahem Reggie Bush). The lack of fully guaranteed contracts would have hurt the Peja’s of the world if they were in place over the last few years, not the superstars, so I do not see how having the ability to give franchise caliber players more guaranteed money will help entice those players to stay at home.

Where this would help is in the extra year and extra salary that can be offered. But how big will that difference be? Are we talking about a max of 5 years/100 million to re-sign versus 4 years/60 million as a max if you go elsewhere? We have already seen that 2-3 million dollars per year and an extra year will not dissuade a player, so it will have to be more substantial. Bottom line: this and this alone will not ensure that CP3 stays.

Likelihood that players agree to this: 99.9 percent.

It might not be in this exact form, but there will be something close to this in the new CBA. It already exists in a slightly watered down form, and this only affects 2-4 percent of players anyway. And it affects them in a purely positive way. It will get done.

2.) Hard Salary Cap

How it would work: The League proposed that the hard cap would go into effect in 2013-14, which would give teams two seasons to get their rosters in order. At that point, the league would institute a hard cap of between 50-55 million dollars. There would be no exceptions, no Bird Rights that allow you to go over, and no luxury tax. Just one rule- stay under that line.

How it would affect the Hornets: Quite simply, this would raise the value of the franchise more than any other change to the CBA could. If you could guarantee to a buyer limited costs for personnel, while still being able to remain competitive in the marketplace, you are in a good position to sell. If the NBA could get the players to sign off on a hard cap, buyers will be willing to pay far more than what the league purchased the Hornets for, and Chouest would likely be at the front of that line.

As for how it affects current personnel, it is possible that it could be somewhat damaging for David West. Teams will be less likely to want to give him a big contract that extends into that first year of the hard cap and beyond. Perhaps he can get himself a deal that decreases in value from year to year, but overall, this would likely reduce his already declining value. For the Hornets, Trevor Ariza and Emeka Okafor both have deals that would extend into that 2013-14 season, as they will both be in their final year, earning 22.2 million combined. The Hornets also have a team option for Q-Pon that year at 2.2 million.

Likelihood the Players agree to this: 60 percent

This will be one of those issues that both sides are determined to not give up on, but one side eventually will, and my guess is that it will be the players. Some kind of cap is coming, as the owners need to protect themselves from themselves. A hard cap means that we are likely also talking about the end of fully guaranteed contracts, and in order to get the players to agree to that, the league will likely have to concede something major in return.

(In Part Two we will look at: the league’s desire for immediate rollbacks, amnesty clauses, and non-guaranteed contracts. How would this affect the Hornets roster and their ability to find a local owner? Plus, a closer look at what this means for David West’s immediate future and if these changes would benefit the Hornets more or less than it would other teams)

10 comments
DownUnder
DownUnder

Good luck NYC with your 10million dollars cap space to spend on 10 players in 2013 and Miami, we'll just how you get around this delema wont we.

James Grayson
James Grayson

Yea, I've tried explaining it to them a number of times on my site, they just don't seem to understand that there will be a hard cap and you can't go over it. Melo's 20M + Amare's 20M + CP/Dwight 15M = 55M Predicted hard salary cap: 50M-55M Good luck. Haha

504ever
504ever

I think the way to make the league more equitable is to have the tax line penalty put on an increasing sliding scale. The first $xM over the tax line you pay $1 in tax for every $1 over the tax line. Then the next $xM over the tax line you pay $2 in tax for every $1 over the tax line. Then the next $xM over the tax line you pay $3 in tax for every $1 over the tax line. So what you have is the tax becoming a mechanism to share revenues. LA has a $100M a year from TV revenue to cover player salaries over the tax line. Make them share a ton of it when they outspend small market teams. Same for other big spending teams in big markets. Put the x around $3-4M and there would be some real money coming to the under the tax line teams, who would all likely small market teams. [Phase it in if need be, so teams can adjust to it.] The bonus is the players don't worry about a hard cap lowering their salaries. because it still makes sense for the big market teams to be well over the tax line. They can still afford it.

NO-CHI
NO-CHI

I agree with this. But also add another variable to the taxing. Location: for example: (hypothetical) if New Orleans and the Lakers spent equal amount of money above the luxury tax, they still get taxed the same. Add Market to the equation. Also add things: such as defending champions and how far they went in the playoffs. That really would allow small-market teams to keep their superstars. Because New York is in a bigger market than Memphis. New York should get taxed at a higher rate than Memphis. Also, make the cap only slightly harder by imposing a max on the sign-and-trade. (Lower than the max otherwise). And it might make the players lose some of their ego that makes paying such a bigger salary. Either you get paid a lot and play on a team that sucks, or you can get paid less and play for a team that is decent or even contend for a championship as we can bring in these guys that WILL HELP THIS TEAM! I'm sure any player would rather win championships and make less money than the opposite, or play at the clutch minutes than start. Adopt a team-first, team-last mentality. It's not about the money (most of the time) and starting. It's about the clutch minutes and championships. Allow players to become like assistant coaches and radio announcers and thing like that. THE BEST THING THAT CAN BE DONE IS 2 ELIMINATE THE AGENTS! (This is why Utah was so successful, and Stockton and Malone for so long. They didn't need agents.) If you don't have to pay an agent you don't have to accept as big of a contract. (And we can stop all this b**ls**t about players's actions because they SHARE an AGENT!) Let's say you pay your agent 2 million. In order, for you to get 8 million, you have to ask 4 10 million. Now that 10 million goes onto the team's books AS 10 million and the team gets taxed AS though the player is getting paid 10 million. Consider not paying that agent 2 million. Now you only have to ask 4 8 million, and the team gets taxed less. AGENTS SCREW WITH THE SALARY CAP!

NolaHog
NolaHog

This is an interesting thought.

paul
paul

I am not sure what's really happening here. You mean the players win.......? How? They top guys still do their dealing and conniving and the lower tier seem to become even lower. The top players win, the mid to lower get, well...lower. Rich teams still call the shots. IF owners do not hold to that top cap, what ever it is, they are stupid and seem to be being played by a few within. I say hold the line. The players don't play ball in negotiating, then no season. Who cares? They can load the teams up with lower level players and fans still will come. Doesn't anybody remember the successful sub NFL season? Even if it was a lower level, it was watched and attended...and the players caved. Please somebody grows some balls.

42
42

Something like this, I think, would really only work in the context of a hard cap. If it's coming, great, but these guys can still be assembled beforehand. It's really, to me, just bigger Bird rights . . . Eagle rights? Johnson rights? (yeah, I said it) . . . Maybe if there was a provision where if a players were traded in that contractual state, that the receiving team would have to send theirs in return, or that slot would have to be open. You couldn't have 2. Maybe this is implied. It's fun to think about it.

Ryan Schwan
Ryan Schwan

I agree with you Michael, but without the details of the Franchise Tag, it's hard to know how impactful it will be. Honestly, the difference between home-team contracts and free-agent contracts isn't tremendously huge, but if they do make it massive - I.E. you can get almost twice the guaranteed money in a Franchise Tag contract - then this could have a really big impact.

Michael McNamara
Michael McNamara

Agreed, and without the ability to do sign and trades, the players lose some leverage as well. I think the franchise tag will come down to how often an owner can use it. FOr example, if they put it on CP3, and then negotiate a long term deal with him, can they use it again next year or will they have to wait until CP3's contract is up. As I said, it will give the Hornets an advantage, but if CP3 doesn't see the Hornets having a legitimate chance of winning, no amount of money will keep him here. Nor should it.

hornetshornetshornets
hornetshornetshornets

I think the higher guarantee ceiling is a big deal because players are always worried about injuries. Gilbert Arenas, Grant Hill, Penny Hardaway, Tracy McGrady are just four examples off the top of my head of max money guys who got paid despite being injured a large portion of the time. Say the Hornets could offer 20 million more in guaranteed money with a franchise tag on Chris Paul. Wouldn't he have to think really hard about it because it's basically insurance if he gets injured. And I'm confused as far as the hard cap. If the players are guaranteed 57% of the revenue and that's what sets the cap, does that mean players are getting paid more than that if teams are going over the luxury tax right now? Because if you add up all the payrolls, it's definitely more than $58 million/team. I think the players are going to fight the hard cap for awhile because they want to have owners like Mark Cuban throwing $10 mil a year to backup centers or midlevel salaries going to guys like Stromile Swift. It just drives everyone else's price up.