The National Basketball Players Association and NBA ratified a new seven-year Collective Bargaining Agreement (CBA) last week, preventing an offseason work stoppage. Overall the new CBA is very similar to the previous CBA signed in 2011, but the league and players did agree to some subtle tweaks to the salary structure. Here’s how those changes will affect the Portland Trail Blazers.
Salary cap isn’t going anywhere
The players and owners agreed to keep the share of Basketball Related Income at the same level - a roughly 50/50 split, give or take a percent. Consequently, the salary cap will not be increasing or decreasing any more than expected. This is a loss for the Blazers - as a team almost certainly to be in the luxury tax the Blazers would have benefited from more BRI going to the players and a resultant increase to the salary cap.
The good news is that the “tax apron” did increase from $4 million to $6 million, giving the Blazers an extra $2 million to play with before they are “hard capped.”
CJ McCollum’s contract just got a little bit better
Over the summer McCollum agreed to a 4-year, $106 million contract extension. Notably, McCollum’s new deal was for a set dollar amount and not the maximally allowable 25 percent of a team’s salary for a player with 0-6 years of experience. That’s important because the new CBA subtly tweaked the way that maximum salaries are calculated – this point is confusing, but the nuts and bolts are as follows:
1. Under the old deal maximum contracts were calculated using a “maximum contract salary cap” that was slightly lower than the actual salary cap. 42.14 percent of the basketball related, to be exact.
2. The new deal fixes that idiosyncrasy and max deals that begin this summer will be calculated as 25 percent of the actual salary cap. That cap figure is set at 44.74 percent of the projected BRI.
3. Since the actual salary cap is greater than the old maximum contract salary cap, it follows that maximum salaries next season will be slightly higher than originally anticipated (i.e. 25 percent of 44.74 of the BRI is more than 25 percent of 42.14 of the BRI). In real dollars, players with maximum salaries kicking in next season will now make $26 million instead of $24 million for the 2017-2018 campaign.
4. Since McCollum’s deal is locked in at $23.96 million rather than a true max of 25 percent, the Blazers have saved about $2 million on his deal for next season.
Set salaries are increasing
The new CBA has also essentially adjusted for inflation of the salary cap by raising the other non-max set salaries (e.g. minimum contracts, rookie scale contracts, exceptions, etc.). This one is a mixed bag for the Blazers.
On the positive side, the taxpayer mid-level exception has increased by 45 percent. As a team over the salary cap and set to be above the luxury tax apron of $128 million, the Blazers will only be able to add new free agents to the team by using the taxpayer mid-level exception next season. Under the new CBA, that exception has increased from $3.6 million to $5.2 million, meaning the Blazers will have more to spend next summer.
The minimum salary is also going up for all players. This will raise salaries by anywhere from about $250,000 for rookies to $700,000 for veterans with 10 or more years of experience. As a team over the luxury tax, the Blazers will likely have at least one player on the roster next season playing for a minimum salary - the tax for that contract just went up.
The rookie scale contracts will increase next season by 15 percent over the original estimates, and continue to increase for the subsequent two years, ultimately generating a 45 percent raise. Assuming the Blazers pick roughly No. 15 and No. 27 (Cavaliers’ pick acquired by trade) this June, the increase will cost Paul Allen about another $500,000 next season - plus associated tax payments.
In short, the Blazers saved money on McCollum’s extension, but the raises in the new CBA will erase those savings via rookie scale contracts, mid-level exceptions, and minimum contracts.
Lillard Got More Expensive in the Long Run
Damian Lillard will stay locked in to his current contract. But when that deal expires in 2021 he may be eligible for the new Designated Veteran Player Extension. This deal would entitle Lillard to a salary equal to 35 percent of the Blazers’ total payroll, rather than the old maximum of 30 percent. Lillard will only qualify for this exception if he makes an All-NBA team in the most recently completed season, or in two of the last three seasons (it could also be triggered if Lillard wins an MVP or DPoY). Lillard could also negotiate this extension in the summer of 2019.
The Crabbe and Turner Contracts Won’t Look Better in Two Years
All of the raises to the scaled salaries means that there’s going to be less money available for mid-tier players who negotiate non-fixed salaries. For example, imagine a team with two max contract players (25 percent) starting next season, a mid-level exception player, a bi-annual exception player, two rookie scale players, and two minimum salary players. That team will see it’s payroll spike by nearly $10 million - all but cancelling out the expected $12 million cap increase. Add a player on a DVPE, or even a 30 percent max salary, and the additional payroll becomes even more pronounced. And since all of the fixed salaries will be tied to the salary cap going forward, increases in the cap will not have the same dramatic effect on salaries that we saw this summer.
This means that teams are going to have less money to spend on non-max, mid-level players like Allen Crabbe and Evan Turner. Unfortunately, the corollary is that the Turner and Crabbe contracts will not become “better deals” as the cap increases because teams will not have as much money for mid-tier signings. In other words, if Crabbe and Turner were overpays in the summer of 2016 they will still be overpays in the summer of 2018.
Mason Plumlee also fits into that “mid-tier” class and will be a free agent this summer. From an on-court perspective the Blazers likely can’t afford to let him walk as they have no viable alternative at center but the luxury tax payment to keep him is going to be very large. Neil Olshey will need to hope that other teams do the math and realize that they can’t afford to overpay Plumlee in the long term.
Trades Got Easier
Teams under the tax can now take back as much as 175 percent + $100k of the salary they send out as long as the outgoing salary is less than $6.5 million. This is an increase from the previous figure of 150 percent + $100k.
Larger trades and teams over the cap will still face the same restrictions as in the previous CBA, but this is still good news for the Blazers because it increases the flexibility of trade partners.
Cap holds are also increasing but that will not affect teams over the cap, like the Blazers.
D-League changes are “meh”
Teams can now put D-league players on “two-way contracts,” which will allow younger players from the minor league to be added to the NBA team’s 15-man roster for a short period of time. The Blazers have no D-league affiliate so this is mostly inconsequential for now.
Confused? So are we! The CBA is tough. Leave questions in the comments and we’ll do our best to clarify.
Eric Griffith | @EricG_NBA | GoBlazers87@gmail.com
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