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Jul 15 2016

Could the New CBA Screw the Sixers?

The following is a loosely edited gmail exchange between Xylon Dimoff (@xylondimoff) and Bryan Toporek (@btoporek):

Xylon Dimoff: Welp, he did it. Kevin Durant, the 2014 MVP and quite possibly the league’s second-best player, signed with the 2016 Finals’ second-best team (sorry, I had to). It’s now the Warriors’ league for the foreseeable future, and NBA owners and fans outside the Bay Area aren’t exactly thrilled with the idea of being rendered hopeless against another juggernaut.

Problem is, the NBA is usually prone to a bit of an overreaction: Kevin Garnett’s gargantuan, Bradley-Beal-sized $128 million contract ultimately caused the 1999 lockout, the formation of the Heatles led to lost games in 2011 — and in the irony of all ironies, our next stoppage may well be caused by precisely what the previous one was meant to prevent.

NBA Twitter has bounced around ideas since Independence Day on how owners may attempt to prevent these overpowering supergroups: abolishing the max, amending a supermax, instilling a hard cap — basically everything short of disbanding the league.

But let’s get to what’s really important here: How could a renegotiated CBA affect the Sixers’ future? Philadelphia could certainly benefit from owners striving to prevent their stars from leaving their first team, but measures such as expunging the max could spell trouble when trying to pay a budding Sixers roster a few years from now. So, Bryan, how do you see the Warriors affecting the 2017 bargaining discussions?

Bryan Toporek: Before we dive into the Sixers-related implications of #KD2GSW, two broader thoughts:

1. The Durant-Warriors situation isn’t necessarily proof that the CBA in its current form is broken. There are things which could be improved, sure, but the salary cap as is and the punitive luxury tax installed in the 2011 version worked largely as intended. It coerced OKC into trading James Harden a year prematurely, forced the Big Three-era Heat to hemorrhage bench players (see: Miller, Mike) and limits the ability of superteams to build out their reserve units, as the Cleveland Cavaliers and Los Angeles Clippers have learned in recent years. A perfect storm of circumstances — particularly Stephen Curry’s laughably below-market contract combined with a $24 million overnight spike in the salary cap — is the only reason Durant was able to join the Warriors.

2. These next few seasons are going to be particularly tricky to navigate because so many players will be under old-cap contracts. John Wall is making $80 million over five years, while his oft-injured teammate, Bradley Beal, just got roughly $50 million more on his five-year deal. Those old-cap contracts could facilitate the creation of superteams, as they’ll be a much smaller percentage of the new cap than the old cap. (A $15 million starting salary under a $70 million cap is 21.4% of a team’s space, whereas it’s only 16.0% under the new $94 million cap. Ed. note: can we start measuring salaries by cap percentage?!?) Unless the new CBA adjusts each contract to align with the percentage of the cap when they were signed — i.e., all old-cap deals will be tilted up to reflect the new cap — I don’t know if there’s a way to avoid this problem over the next 3-4 years.

As for the Sixers… one has to assume that small-market owners are going to be terrified of a Durant-esque situation happening to their teams, particularly with the cap projected to jump again after next season. I would assume they’ll push hard to give additional benefits to incumbent teams, as an extra year on a contract and slightly higher raises (7.5% vs. 4.5%) aren’t always enough incentive to retain players in free agency.

I don’t expect the union to push for the full abolition of max contracts, as that would only help a very small percentage (no more than 10-15 players) while hurting the rank-and-file. If LeBron James and Kevin Durant can suddenly earn $60 million this summer instead of $25-30 million, that’s $30 million less for a guy like Evan Turner, Allen Crabbe or Timofey Mozgov. I do, however, think owners — particularly small-market owners — will want to raise the percentage of the cap that each max contract can consume. Whereas there’s now a 25/30/35 split based on years of experience in the league, I could see that jumping to 30/35/40, 35/40/45 or even 30/40/50.

My favorite proposal that I’ve seen, from Nate Jones of Goodwin Sports, was allowing incumbent teams to offer a so-called “supermax” while restricting other bidders to a normal max. So, in the case of the Sixers, they’d be allowed to offer 40-plus percent of their cap space when re-signing Ben Simmons in nine years, while other bidders would be restricted to 30 percent. That financial difference might be large enough to keep players on their incumbent teams, no matter how enormous their off-court earning profile is.

Here’s the thing I’m most immediately keeping my eye on: How CBA negotiations affect Nerlens Noel’s extension talks. How do you think the Sixers should proceed on that front, Xy?

Dimoff: I know the idea of “Nerlens Noel, Max Player” leaves a sour taste in the mouths of many Philly fans, but it should be a foregone conclusion that he’s offered the maximum extension. Never mind the fact that several much, MUCH worse centers this summer have received close to what that number would be for Nerlens; we have no idea what will go down in the negotiation rooms next summer, and it’s critical that Philadelphia locks up its best assets now rather than potentially losing them for nothing due to some CBA revisions. It’s easy to see why the abolition of the max may be a non-starter for 90 percent of players, but I’m not yet totally convinced that it’s an impossibility. We should remember that NBPA Director Michele Roberts has publicly spoken out against the max, and that Chris Paul, whose career earnings have been hampered significantly by capping his salary, is NBPA President. An open market, while probably being the right move in a purely capitalist sense, would obviously spell trouble for the Sixers trying to keep its core in place around Simmons.

I’m all for Jones’s idea of the supermax — in which case, by the way, Nerlens’ “regular” max looks like a steal — but it might already be faced with a few issues:

  • It would likely have to be tied to Bird Rights, meaning that Durant wouldn’t be able to sign a one-year old max in Golden State and then re-sign for the full supermax.
  • Players might not be thrilled with the idea of only the incumbent team being able to offer a supermax — can you imagine Boogie Cousins’ reaction to finding out that only the Kings can pay him an extra 10 percent of the cap?
  • I could see some pushback from the (alleged) destination cities on this front as well. I mean, oh man, can you imagine the Knicks trying to clear out supermax space in free agency?

And while the supermax works out great for the Sixers, giving incumbent teams leverage here may only further incentivize multi-year tank jobs. Perhaps we could make these provisions to balance out the scales a bit:

  • Instill a two-tier, two-player cap system for incumbent teams (e.g. Philadelphia could offer Simmons 40% of the cap, Embiid 35%, and then only have the old max left if the team so chooses).
  • Divorce years of experience from the max so that teams couldn’t stack up on rookie maxes, which is already a completely arbitrary restriction on the max — there’s no reason why Ben Simmons can’t earn 40 percent of the cap, just as much as the other proposed supermax players, if that’s what the market deems he’s worth.

But you’re the CBA expert here, so what we need from you is to come up with a system that simultaneously helps both the Sixers and the league as a whole! What say you, Bryan?

Toporek: See, I’m less sold on giving Nerlens a max extension now, but it’s not because he isn’t deserving of one. It’s just that the CBA uncertainty terrifies me.

If the Sixers can get him to agree to anything even remotely below a max deal — say, a four-year, $90 million extension — they should do that in a heartbeat. If he says “max or bust,” though, I think they should wait until the new CBA comes out to see what a max deal for him actually entails. If owners do go ahead with the “supermax” idea and he’s suddenly consuming 40 percent of the Sixers’ salary cap instead of 25 percent, the idea of blindly maxing him out this fall becomes a lot less palatable. This screwed the Thunder with Durant in the last CBA: He became eligible for the Rose Rule even though it wasn’t in the 2005 CBA, which cost OKC $3 million more annually — maybe having indirectly contributed to the Harden trade. If they can agree to give Nerlens four years, $94M and not tie it to a percentage of the cap, I’m all for it. But I don’t know if that’s allowed.

I doubt owners make drastic revisions to restricted free agency — at least revisions that hurt incumbent teams — so worst-case scenario, you’re making Nerlens wait a year and matching whatever offer sheet he receives next summer. (Given his his injury history, I highly doubt he gambles on taking the qualifying offer to become a UFA in 2018.)

I do like the idea of your tiered supermax system, since that might provide a healthy balance between the ability to construct superteams and funneling money to players who deserve a heftier proportion of the cap than they’re otherwise receiving at the moment. As you suggested, the supermax should definitely be tied to Bird rights to prevent circumvention via the 1+1 deals. I’m not as opposed to keeping maxes tied to years of experience — and I’m not only saying this as someone with a vested interest in the Sixers being able to keep their lottery picks together for as long as possible — since that’s a way to help owners not shoot themselves in the foot nearly as often.

In some ways, many of the CBA’s goals tie back to that point: How can the NBA create rules that save owners from themselves? As we’ve seen this summer, when most teams have a wealth of cap space at their disposal, they’ll spend like drunken sailors. Removing the ceiling on max deals might be as much of a non-starter for owners as it is for the union, as owners will have nightmarish flashbacks to the albatross deals that Joe Johnson and Amar’e Stoudemire signed near the turn of the decade. Now, imagine doubling the size of those contracts.

If the two sides go the supermax route — either the tiered system you proposed or just a higher ceiling on all max contracts — it’ll likely prevent the Warriors from re-signing both Durant and Stephen Curry next summer, thus restoring some semblance of competitive balance to the league. It won’t, however, cause financial ruin if a franchise decides to hand Blake Griffin a deal that gobbles up 60 percent of their cap space, only to see him break his hand again while punching another team staffer.

One thing I can almost guarantee will be in the next CBA: another amnesty clause. It feels like some of the contracts handed out this summer — hi, Timofey Mozgov — were made with such a provision in mind.

Do you think some version of the supermax is the best compromise, or do you have a better idea in mind? And am I crazy for my stance on not wanting to hand Nerlens a full max due to the CBA uncertainty? (Again, even a penny less than the max, I’m all for. His contract just cannot say “the maximum allowable amount” or it’ll be tied to the new CBA, which could be bad news bears.)

Dimoff: How could I forget the Durant/Rose Rule ThunderBlunder?! Sorry, Nerlens — I love you, I’ll probably name one, if not all of my children after you — but I couldn’t possibly agree to a max deal now with the uncertainty of the new CBA creeping in the back of my head.

The league trying to save owners from themselves is always an interesting, if not annoying monkey wrench in this process — especially as it pertains to the supermax proposal. Can you imagine stringing together drafts such as Orlando did over the last few years, only to eventually be pressured into giving Aaron Gordon and Mario Hezonja the 35-40 percent of the cap? Lacing experience into the supermax may be helpful to teams here, possibly helping avoid another Kevin Love-Timberwolves fiasco (what ultimately led to the downfall of Love’s relationship with Minnesota was not being offered the “designated player” extension).

I’m fully supportive of the amnesty clause, and call me crazy, but wouldn’t it be insanely fun to offer it to every team as an annual or bi-annual clause? I always thought it was a bit arbitrary that amnesties were only reserved for contracts signed before the last CBA, and offering multiple amnesties could a) help owners clean up after their own mistakes, b) ultimately help players as the amnesty is a generally pro-labor concept, and c) make everybody, both owners and players, breathe easier about potential superstar injuries as you mentioned. Plus, how damn fun would it be to see who gets amnestied every year?!

Toporek: I love the idea of an annual amnesty, but I’m guessing that’s a non-starter among small-market owners. That would allow big-market teams like the Lakers or Knicks to hand out egregiously awful contracts on a yearly basis with little reservation, as they’d know they have a get-out-of-jail-free card in their back pockets at all times. Since only one free-agent class was subject to the cap boom, one amnesty per team seems fair.

One other idea that CBS Sports’ Ken Berger threw out Wednesday: The new CBA should absolutely address the disincentive for players to sign extensions with their current teams. Under the current rules, extensions are limited to no more than four years, including seasons still remaining on the current deal. The Oklahoma City Thunder are currently feeling the adverse effects of this, as it makes little financial sense for Russell Westbrook to agree to an extension this summer in the wake of Durant’s departure. The new CBA should address that loophole, making it financially sound for players to sign extensions with their incumbent teams if they so desire.

Ideally, players should be allowed to sign extensions that match the contracts they could sign in free agency. So, Westbrook would be eligible for a six-year deal with OKC this summer, which would remove any incentive for the Thunder to trade him. This system would benefit the Sixers as much as any team, as it would give them even more of an advantage once Simmons, Embiid, etc., are nearing unrestricted free agency a half-decade from now. I’d say an overhaul of the extension rules are a no-brainer for the next CBA, while the supermax is more of a dicey proposition given the negative ramifications for rank-and-file players.

One thing is clear, though: Based on Adam Silver’s comments Tuesday from after the annual board of governors meeting, it’s clear Durant’s decision to join the Warriors poured lighter fluid all over CBA negotiations. No matter what structure the CBA ultimately takes, let’s hope both sides can reach an agreement quickly and avoid a prolonged lockout.