Hornets Beat: Examining the New CBA

Published: November 28, 2011

Hornets Beat is back with a bang this week. We’re rocking five straight days of 5-on-5 discussion to catch you up on everything you need to know going into this season. Read The Beat every day this week, follow the Hornets podcast, and yak it up with fellow fans at HornetsReport and you’ll be as prepared as anyone when the season gets rolling.

In this edition we’re talking CBA, CBA, and more CBA. Joining our regular contributors are James Grayson from SwarmAndSting, and mW from HornetsHype.

1.) What change to the CBA benefits the Hornets the most?

mW –  The rule that any team that uses the Non-Taxpayer Mid-Level Exception or the Bi-Annual Exception, or in year 3 of the new CBA and after that acquires a free agent in a sign-and-trade transaction, cannot at any time thereafter have a team salary at any point during that season in excess of $4 million above the Tax level.  That is going to severally limit the ability of teams to outspend the others.  The new rule barring players who are waived after a trade from returning to their original team until the next season is a close second.

Michael McNamara- The harsher penalties for luxury tax teams is a pretty big win for small market teams. I know most fans wanted a hard cap, but both the players and the big markets were firmly against that. It sucks that the increased penalties do not kick in for two years, but once they are implemented, we will see more competitive balance across the league.

Ryan Schwan – I’ll go with the Amnesty clause.  That will put a pile of veterans on the free agency market.  That will drive prices down for all players, and the Hornets may have an easier time filling out the rest of the roster.  They still only have 5(!) players on the roster.  That’s a lot of players they need.

Jason Calmes – In the long run, the BRI split. This team needs sound finances to live up to the “punching above our weight” that Mayor Landrieu bragged about recently when discussing the team’s future in New Orleans. Ticket sales and sponsorships will fluctuate, but that BRI split should keep $6m – $8m safe and warm in the owner’s wallet each and every year. That’s not small change. If the enhanced revenue sharing unicorn is ever captured, that will help even more.

James Grayson – Have to say it’s the increase in luxury taxes. Over the long term this will benefit the Hornets and other small market teams the most. In a few years it will force teams like the Lakers not to spend as much and will allow Hornets attract more players for a cheaper price.

2.) What change to the CBA benefits the Hornets the least?

mW – I’m actually not a big fan of the Amnesty rules.  It seems to benefit those that can afford to cut ties with players for cap purposes, but still pay them in the real world.  That combined with no changes to guaranteed contracts seems to limit smaller market teams, particularly, and all teams who get stuck with a bad contract, in general.  I would have preferred to simply see the growth of non-guaranteed contracts, or at least partially guaranteed contracts.

Michael McNamara- I kinda answered this in the first question, but I will reiterate it because there is not much that went against small market teams in this new deal (when you compare it to the previous CBA). The fact that the new lux tax penalties do not go into effect until the 2013-14 season means that teams like Dallas and LA can still buy championships over the next two years. The Lakers would have been in serious trouble had the new penalties been instituted immediately and Dallas likely would have had to let Chandler walk.

Ryan Schwan – The ability to keep using exceptions up to a point even if you are in the Luxury Tax?  The Hornets aren’t likely to use it unless they get a Daddy Warbucks owner, and I prefer not to count on that.

Jason Calmes – The Hornets are prepped and ready to grab players, with around $45m committed to 6 players if Belinelli’s qualifying offer stands. The need a Tonto and a Silver. The delay in the harsher taxes may leave Chris Paul a true lone ranger by delaying those players’ departures from their current teams due to financial pressures at a time when the whichever team just doesn’t `have it’.

James Grayson – Has to be the Sign and Trade. The fact that it allows Chris Paul to hold more leverage over the Hornets is not beneficial in the slightest. The Hornets and Dell Demps are probably mad at that, even if the organisation is going to be seeing more revenue.

3.) Would it have been worth missing a year or two if it resulted in a hard cap?

mW – No.  There’s too much money on the table for everyone.  And the new rules get us quite a bit closer to it.  Also, the Players really hamstrung themselves this session in the courts.  So if things go sour in six years, look for the Owners to push for this.

Michael McNamara- I never thought a hard cap was the solution to creating true parity, so I say no. The real solution here would be a hard cap plus one- a system that allows every team to have one player that does not count against the cap and is entitled to an unlimited salary. Under that system, how do you stack superstars? If Wade gets the unlimited spot (and the 30-40 million per year he deserves), why would LeBron turn down 50-60 million per year from another team to make 16 mil per year with the Heat?

Ryan Schwan- Don’t fool yourself.  A hard cap just ushers in the NFL equivalent of salaries when players get “Signing Bonuses” that guarantees them money.(usually over several years)  Sure, players that aren’t performing still get cut, but their signing bonuses remain on the salary cap, just like NBA guaranteed contracts.  You’ll notice solid players in the NFL get really nice signing bonuses.

Jason Calmes – Not a chance. This is something that, if truly wanted, should be transitioned to slowly. There are often unanticipated effects of making huge changes to games. I prefer slow change with careful observation. Say the Hornets signed Chris to a max deal going forward, and he blows out a knee in exhibition, similar to Blake Griffin in his rookie season. How do we recover from that? How to compete using 70% of our precious cap? There’s no exception anymore, right? And if he comes back as Christopher Paul again? Then what? Such is the nature of a cap. I’m for a cap, but a well-thought-out one. A cap in itself . . . meh . . . Test, data, test, data . . . That’s how you get your cap, not by demanding it in a tantrum and shouting, “Lemme have it!” Pies seem to hit people in the face pretty often when that happens on TV.

James Grayson- Probably not. It would mean that Chris Paul, David West and any other player would leave that much more easily. More importantly though, all the efforts of the Hornets organisation, particularly Hugh Weber and Jac Sperling, would be wasted with their pursuit of getting 10,000 season ticket holders and a new local ownership group.

4.) Does this new CBA give the NBA true parity and/or competitive balance?

mW – You can’t have true parity unless there is 1) a hard cap and 2) increased revenue sharing.  But, I would agree that the new CBA, as proposed, greatly adds to the competitive balance.

Michael McNamara- No, it doesn’t. But that’s not really possible in my opinion. In a league that markets individuals instead of teams, those individual players are always going to want to be in the larger markets to collect bigger endorsement checks and secure a post-NBA career. People love to point to the NFL as a model to follow, but that is apples to oranges. Can’t be done in my opinion; larger markets will always have a slight advantage.

Ryan Schwan- Superstars make teams competitive in the NBA.  Does anyone believe that if Chandler hadn’t got hurt and then traded, and that the Hornets had not spent all that money on Peja Stojakovic, Morris Peterson, James Posey, Bobby Jackson, and several other overpriced veterans and instead had brought in a young talent or two, that Paul would be on the verge of walking now?  It is possible to be a small market and contend.  I talked myself into all those signings, but every single one of them made me sick to my stomach when I first heard of it.  Just like the Ariza contract does right now.

Jason Calmes – No. No CBA would. The NFL is trotted out as the paragon of parity, but the CBA doesn’t do that. It allows it, sure, but it doesn’t inoculate the NFL against the disease of the dynasty, as the Patriots have shown us, and Steelers, Saints, and Packers fans are all hoping show. This CBA will expose the front offices more than ever, and that is progress. 3 coaches have won half the NBA titles, all in big markets. If they have to live with their mistakes now more than ever, we may not see such a stat in the next 50 years.

James Grayson – To some degree it does, but in a lot of ways it doesn’t. I think because more revenue is available to the NBA owners it will mean less teams will be in the red. That doesn’t mean that their capacity to outspend the Lakers or Celtics is better than it was. Ultimately it will be a matter of time, but I get the feeling that not much has changed other than the balance sheet in the Accounting Department.

5.) On a scale of 1-10, how do you rate the new CBA?

mW – 9.  There is a lot to like in this deal for the League as a whole.

Michael McNamara- In a vacuum; 6. Compared to previous deal; 9. Look, it is not perfect by any means, but it is a significant improvement over what we had. I love the amnesty waiver wire concept and the adjustment they made to rookie contract qualifying offers. I wish they would remove maximum contract limits and I would have liked to see them reward teams that don’t use their amnesty clause in some way, but other than that I am happy.

Ryan Schwan – 7.  It’s fine.  It’s an improvement, and when 4 billion dollars are involved, baby steps are the norm.

Jason Calmes – 5. It’s better than the last CBA, the poorly thought out document that brought the world several purchased titles. It brings some changes to the system, eventually, but can expire after only four years of being fully in effect. So two years of one set of rules, two years of another, then two years of negotiating before the next lockout. Short term peace is not what this is supposed to be about. Also, the biggest change was in the BRI split. This may keep the teams floating for the 5.5 guaranteed years of the deal, if ratified, but if the underlying causes for the losses that motivated the BRI swing are not addressed, we’ll be back here again for sure. So, what changed the causes? We cured symptoms. In medicine, some would call that nice in one setting and idiotic in another. Symptoms are data, after all. Pure data.

James Grayson –
It really depends on your perspective. From the NBA as a whole; 9. From the Hornets perspective; 7. For the NBA they needed to get a deal done before any more damage was done to the game. For the Hornets it’s a deal they can live with and will allow them to build around Chris Paul (if they’re given a chance) or rebuild without him.


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