What we've been told about the Owner's recent proposal for a new CBA

ed: bumped to front page

With an impending lockout in sight, as the current Collective Bargaining Agreement will expire on June 30th, there has been a lot of speculation both in the media and here on BlazersEdge as to what the new CBA will look like once the owners and the NBPA (player's union) come to an agreement.  I wish I could tell you what that agreement will entail, but I don't own a crystal ball.  No one knows with full certainty what  the rules will be under a new CBA.  We do, however, have a good idea of what the owners are suggesting that it looks like, based upon their most recent proposal.

I have seen and heard discussions of single pieces of this proposal, but have yet to see anyone try to put together a full picture of what has been proposed.  So I thought I'd compile various media reports and try to do so.  Note that it is extremely unlikely that every element of this proposal will actually make it into the new CBA, as the NBPA quickly rejected the proposal earlier this month, but by understanding what the owners appear to want, we might be better able to predict what the landscape could be like for the NBA to conduct business in the future.

I am basing this list on several recent articles: a piece by Chris Sheridan and Chris Broussard of ESPN on May 4th, a piece by Mark Stein of ESPN on May 12th and a piece by John Lombardo of the Sports Business Journal that appeared on the Sporting News website on May 16th,   These reports indicate that the owners have proposed the following:

A hard salary cap, starting in the 2013-14 season at a level of $45 million.   The next two years would continue to operate under a soft cap (meaning that exceptions will continue to make it possible for teams to operate above the cap) with a luxury tax system, but by the fall of 2013, every franchise must have a team salary figure of less than $45 million.  Teams could no longer go over the cap to re-sign their own free agents or go over the cap to sign 1st round draft picks or go over the cap to do any of the things that current exceptions allow them to do.

Reductions in all existing player contracts of between 15% and 25%.  Apparently, current contracts would be seen as being in one of three tiers, based on the amount of annual salary that the player is scheduled to make, with each tier bringing one of those percentage reductions.  There looks to still be a minimum salary amount for players, so the reductions would not take their salary below that minimum level, but a large number of players whose contracts extend further than this season would see significant reductions in how much money they would make.

Reductions in the maximum contract amounts available.  Players would not be able to make as much as they are able to make under the current CBA.

Reductions in the amount of future rookie scale contracts.  1st round draft picks that sign within 3 years of being drafted currently are slotted into a rookie scale amount based on their draft position.  Under this proposal, rookie salaries would still be limited, but at a level even lower than they are under the current CBA.

Reductions in raises from one year to another within a contract.  Under the current CBA, most players signing a non-minimum contract are eligible for a yearly raise equal to at least 8% of the first year's salary amount in that contract.  If a player is signed using the Larry Bird exception or the Early Bird exception, he is actually able to receive a yearly raise equal to 10.5% of the first year's salary amount.  However, the owners are now proposing that those percentages be reduced to 2% without Bird rights and 3% with Bird rights.

Reductions in the maximum contract length available.  Under the current CBA, players with Bird rights can sign a contract of up to 6 years in length.  All other players are limited to a contract that is, at most, 5 years in length (some players, depending on their circumstances, are limited to even shorter deals).  The owners propose that those players with Bird rights would be able to receive a contract of up to 4 years in length, with all others limited to 3 years at most.

The elimination of sign-and-trade contracts.   Currently, a player can negotiate to sign with his previous team and be traded within 48 hours to the team of his choice, as long as all three parties are amiable to such a deal.  This would no longer be available under this proposal.

The elimination of fully guaranteed contracts.  No longer would NBA contracts be fully guaranteed.  The first $8 million of any contract could be, at most, 50% guaranteed and any amount over $8 million could be, at most, 25% guaranteed.  This would cover both existing contracts and any new contracts signed under the new CBA.

The creation of a 'Star' designation for one player per team.  This is not the same as the Franchise Tag designation of the NFL, which is a unilateral decision on the part of the team.  Instead, players with this designation would, if they agree to re-sign with their previous team, receive more salary and a longer contract than what would be available for any other player on the team.  Players would have the choice as to whether or not to accept this offer, but there would be clear financial incentive to do so.  I have not seen any details printed as to what specific incentives would be available to these players, but it appears that they would be the only exceptions to many of the restrictions listed above in terms of salary amount and contract length.

An amnesty program which would allow each franchise to waive one player and not have that player's salary count against their cap.  Each player waived under this provision would still be paid, although it is unclear whether this payment would be at the current salary amount or at the amount reduced by the provision described above.  It is also unclear what other rules would apply to such a program, although the assumption is that they would be similar to those that accompanied the 2005 amnesty program.

Designation of each player into one of 4 categories.  Under this proposal, each player contract would fit into one of these categories: 1) A minimum salary player; 2) A rookie scale player; 3) A maximum salary player; 4) Everybody else, with their salaries dictated by whatever salary cap room is available after the first three categories of players are accounted for.


IN SHORT, the owners clearly have put together a proposal designed to reduce player salaries by the implementation of a hard salary cap that would start in the 2013-14 season.  The other proposed changes are, for the most part, designed to aid franchises towards reaching that goal.

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