Larry Coon the noted author of the CBAFAQ, will answer your Salary Cap and Collective Bargaining Agreement questions. Larry will answers your questions about the Salary Cap, NBA trades and the upcoming CBA talks.
The Alvin Williams Fan Club in Toronto, Canada:
If you were David Khan and were offered the #4 pick and Varejao for the #2 pick + spare parts (to make salaries match). Do you accept the trade? Why or why not?
Welcome to the chat, everyone!
So Jonas Valanciunas (per Chad Ford’s latest mock) and Varejao for Derrick Williams & salary fodder? If I’m David Kahn, I take that. Kahn’s not really in love with Williams, and the chance to have a sizable front line of Love, Varejao & Valanciunas would be something he wouldn’t pass up.
Gil in NYC, Baby !:
What do you feel is the single biggest point of disagreement between owners and players, right now? Would removing that suffice to avoid a lockout?
The split of revenue between players and owners. Everything really comes down to that.
And since it’s the basic, fundamental issue, there’s no removing it from the equation. Everything else flows from this issue.
Ady in So Cal:
What’s your opinion about the MLE, Vet and player min, TPE, sign and trades, etc… do you think that those should be included in the new CBA?
First of all, these things are all just a means to an end. The percentage the players get overall is the primary determining factor for the health of the league. But these exceptions do contribute to the equation. I’ll take them in order:
1. MLE: With a soft cap, it’s important to give teams SOME ability to acquire players when they’re over the cap. But full MLE deals usually tend to be bad (Vladimir Radmanovic, anyone?) I’d keep it, but shorten it considerably.
2. Min salaries: An important thing to keep, and it’s great that vets have a higher minimum. It’s also great that they have a system where the costs are balanced out for the team, so teams won’t shy away from older vets simply because they have a higher salary.
3. Sign-and-trade: I understand the reasoning, but I think it’s a bad rule. It’s like giving a credit line to a guy who can’t afford the things he’s buying — sooner or later he’s going to be in finaincial trouble.
Glen in Ar:
What type of money will Yao and Redd get this year and will that contract be longer then 2 years?
That one’s iffy — both are serious risks. They may be able to get nice salaries, but only on deals with incentives and/or partial guarantees, so the team has an out of the player has to quit.
James in :
Do you think MAvs can pull Iguadala trade with Buttler ,RBuboix, filler?
I’m hearing Philly wants some size. I think they’re more likely to go after Kaman, although they want more from LA. If LA throws in Aminu, they might have a deal.
Josh in Ut:
Larry, Doesnt this trade make sense…Utah send CJ Miles and 3rd pick to Minny for the 2nd pick. Minny get a young shooting vet and then can flip the 3rd for another vet. Utah gets Dwill and can get Jimmer at 12…
I think it’s more likely that Minny looks to deal the #2 (essentially) straight-up for more of a stud.
Eric in :
With the new CBA do you believe players will agree to non guaranteed contracts similiar to football? If the NBA did something like that what affect would it have on the issue of a hard/soft cap?
You can’t have a hard cap, guaranteed contracts AND high salaries at the same time. Something has to give. In the end, I think we’ll still have a soft cap, but the exceptions will be tightened up to make it harder to spend. I also think guarantees will be reduced, but it will be more for getting out of bad contracts where the player isn’t earning his keep than for getting the team to any salary threshold.
George in Vancouver, British Columbia:
Are there any tax or currency provisions for Canadian team(s) in the current CBA? Also do you think in the next CBA they will address the tax advantages that some teams enjoy? If not Texas and Florida will always have an advantage.
There are some tax provisions (not currency provisions — players are paid in US dollars). See my FAQ for the explanation.
The tax situation is complex — players don’t pay tax based on the location of their team, they pay it based on the arenas in which they play — so EVERY player doesn’t pay income tax on the games they play in Florida.
The league has always chosen to ignore this situation, and I don’t think it’s made a lot of difference for free agent movement. When you work out the dollars, it’s really not a huge amount and other factors take precedence. But if the cap really tightenes up, it may become more of a factor.
But there will always be issues that differentiate teams from each other. If they level the playing field tax-wise, then what’s next, surcharging the Lakers & Heat for their beaches & nightlife?
Raul in MO:
Is the new CBA gonna be different in terms of Age Limit of players, Mid Level Exception, Hard Cap, Franchise Tags?. You can’t expect the PA to just sit there and nod their heads to the owners demands.
Of course they’re not just nodding their heads to the owners’ demands — that’s why they’re in negotiations now, it’s why there’s not an agreement yet, and it’s why there likely won’t be an agreement for some time.
But it’ll eventually come down to which side can withstand a work stoppage the longest, and for the players, whether the downside of accepting whichever proposal is on the table is outweighed by the downside of continuing without income — and risking the entire season. The owners are in the driver’s seat here.
Vincent in Fl:
Who are the most tradeable superstars this summer?
Obviously Dwight Howard. If he wants out, Orlando HAS to move him. After that it’s Chris Paul — same situation.
Ryan in Los Angeles, CA:
Hi Larry, Do you think the Clippers should trade Kaman for Iggy or try to be players in the 2012 free agent class by keeping their cap space?
The Clippers are just a piece or two away from not only making the playoffs, but making a lot of noise in the playoffs (I know, the Clips are perennially just a player or two away….).
Re-sign DeAndre, do Kaman for Iggy, and parlay the Minny 2012 pick into something nice (they’ve offered it to New Orleans for Chris Paul), and this team is seriously good.
But if they wait for the 2012 free agent market, then not only do they have to put their plans on hold for a year, they also have to take the risk of not landing the player(s) they want.
Seymour in Nobody’s Business:
If the season gets cancelled w/out a new deal getting done – say on February 5 – does negotiating leverage shift to the players, (since, at that point, they won’t get paid until the 12/13 season starts anyway)?
No, it’s still in the owners’ favor. Nothing will change the fact that the owners can better withstand the loss of income than the players can.
Spencer in New York, NY:
You looked better with the mustache, FYI.
You & my wife can debate that one, but in the end I’m valuing her opinion over yours.
David in Tigard, OR:
Can the Blazers offer Oden a multi-year deal instead of the one year qualifying offer?
Yes. I’m sure they’ll offer a reasonable multi-year deal (they can have both on the table at the same time), but won’t risk a lot of money in a long-term deal.
ike in :
When a team signs a free agent,does a new contract have to be paid in =increments over the life of the deal?What’s stopping a team from paying the FA $1M yr 1& $7m next five? allowing the acquiring team to let an expiring contract free up in year 2.
There’s a limit to salary increases & decreases. Eight percent of the first-year salary is the maximum amount it can go up or down in a given year. So if a contract starts out at $10 million, it can only go up or down by as much as $800,000 from year to year.
For players with full Bird rights, the percentage is 10.5%.
Scott in :
What are the rules on signing a player to a contract extension and making his first year way more than the rest of his years? The Clips are under the cap so could they give Jordan say $15 million the first year and say $4 million the remaining 4 yrs?
Look at the previous question. ^^^^^
Sam in La, CA:
With the draft being just 1 week before the expiration of the CBA, do teams just have 1 week to sign rookies?
No, nobody can be signed before July 1. And with the lockout taking effect on that day, everyone will have to wait until the labor situation is resolved.
vince in santa ana , CA:
this has nothing to do with salary but I want to know what you think of Minny keeping beasely and derrick williams and have one be like lamar odom , a sixth man
The Lakers have the luxury of bringing Odom off the bench because they’re loaded in the starting frontcourt. I think Minny needs to worry about getting good players at all five positions.
Chris in Altoona, Iowa:
Because of guarantees, the 28-30 draft spots are less valuable than 31-33. Why doesn’t the NBA CBA address that in some fashion? Do you think we will see more renouncing of 1st round picks ala Travis Knight if something isn’t done?
Yeah, there is a cliff there between 30 & 31, but so far the league hasn’t been unable to find takers for those late first-round picks. Travis Knight is the only first round draft pick I can recall whose rights were renounced.
Jim in Chicago,Illinois:
Do you see Dwight Howard being traded to the Nets? Would Lopez, Humphries, Farmar/Morrow, and draft picks do it?
Here’s the thing — I do see the Nets as a viable candidate. And as much as Nets fans want to pair up Dwight & Deron, if I’m Orlando and the Nets want my superstar — the best center in the league — then I’m asking for Deron. Do they eventually settle on a deal that doesn’t include Deron? Maybe. But a lot of other teams will be in the running as well — is a deal without Deron the best the Magic can do?
Don in Indiana:
when do expiring contracts actually expire this year? pacers have alot coming off the books but can they use that space before july 1?
Nope, the NBA’s odometer turns over on July 1. All contracts run through June 30.
Jacob in Oconomowoc, WI:
Is there any possible chance that max contracts will be removed if a hard cap is instituted in the next CBA?
If there really is a hard cap, then max contracts make less sense. Same with luxury tax — with a hard cap, the tax goes away.
Dennis in Flushing, N.Y.:
Can the NBA Players Union sued the owners with a anti-trust lawsuit without having to decertify or does the NBA Players union have to decertify in order for them to sued the owners with a anti-trust lawsuit.
Labor laws and antitrust laws are at odds with each other. To get around this, the antitrust laws have a "non statutory labor exemption" that protects employers from antitrust violations so long as the rules were arrived at through collective bargaining. Even when the agreement ends, they are protected as long as a "labor relationship" continues to exist.
So players need to decertify — that changes the organization from a labor union to a trade organization, which removes the labor exemption. If they don’t then the exemption continues to protect the league.
Don in Indiana:
I kind of understand the steipen rule but the clippers situtation has me puzzled. can they trade the wolves pick (next yrs draft) even though they have already traded their own? and could you explain why or why not thank you
Right now, no. The Stepien rule applies to future drafts, and right now ’11, ’12, ’13, etc. are in the future. Right now they don’t have an ’11 pick, but they do have a ’12 pick (Minnesota’s) If they trade the Wolves’ pick they won’t have one in either ’11 or ’12, which is not allowed (two consecutive future drafts without a first round pick).
Dwight in Orlando fl:
Can I make it any clearer that I’m taking the shaq route to LA?
Shaq became a free agent, and LA cleared up enough cap room.
If Dwight does his part and becomes a free agent, then where’s LA supposed to get the cap room to sign him?
Chris in Grand Rapids, MI:
If there is a hard cap, why are analysts not talking about the LA Lakers problems. From what I can tell they have $90 million in salary commitments for the next several years.
We don’t know what the rules will be or how the teams will be affected. Assuming there is a hard cap (i.e., no exceptions), then salary rollbacks, an amnesty provision, changes to guarantees, a two- or three-year grace period, etc., can all be used. I don’t think any team will be hung out to dry.
Don in Indiana:
I love reading your chats/tweets on espn, how in the world do you not have a job? I hear GM position in Portland is open, temporary job for 11 months only though
Thanks! And I have a job — in fact, I’m at a point in my regular career where it’d be really tough to change and do something different, as interesting as an NBA job might be. The offer would have to be overwhelming. And for more than 11 months.
Brendan in England:
If the Owners and the NBAPA asked you to come up with a compromise CBA to suit both sides(as much as that’s possible), what would be your 3 key points?
1. Change the BRI percentage to be based on net revenues, rather than gross revenues.
2. Reposition the percentage guarnatee based on the above, and set to give the owners (on average) a reasonable profit.
3. Roll back current salaries so the current players are earning that percentage of net BRI. Do it stepwise, so the low earning players are hurt the least.
Radeesh in Germany:
Hey larry, everybody is talking about mike brown in lakerland, but nobody about the acquistion of Ettore Messina? he is one of the best off. coaches in europe & knows the zone better than anyone else in the nba, even R. Carlisle.
From what I hear (I don’t really follow European ball), landing Messina was a coup. It looks like he’s going to fulfill the role Tex Winter fulfilled for Phil Jackson.
Jim in Subic Bay, Philippines:
LBJ, talented as they come? I’d take BG over him to build a time around without hesitation. HUGE/STRONG! No Clue how to utilze it. What about a "Post" game? He should be imposing his will. Barea "D"ing him? He’s WAY too deep into his own head.
He’s not a perfect player. No one is. I think he can develop a better post game. But whether he develops that true killer instinct — the willingness to put your team on your back and carry them as far as you need to — is another question. Few players really have that.
Jason in Los Angeles:
With a new CBA would the NBA and/or owners ever think of putting ad’s on jersey’s?
No. Revenue has been fine — it’s spending that’s an issue. If you try to fix the problem by increasing revenues, then at best you simply delay the problem. Salaries rise at a greater percentage each year than revenues, so no matter how much you increase revenues, salaries will still catch up.
I think ads on jerseys is a line they won’t cross — and per what I said above, there’s not a compelling resaon to do so.
Scott in Santa Barbara, CA:
How did OKC sign Nick Collison for $10 million and then like $3 million the other years?
A big chunk of that $10M was actually a signing bonus.
Jake in Long Island:
What is your favorite article you’ve ever written? Also, if you’re Otis Smith, what are your next few moves besides praying to keep your job
My favorite was this one, and it’s also the piece for which I received the most & best feedback from inside the league.
Smith needs to try to resolve the Dwight Howard situation. It’s the elephant in the room, and will affect every other thing he does. If the lockout goes all year, then it’s possible Howard has already played his last game for the Magic. The only opportunity Smith will have to do something where he’s in control is between now and June 30. After June 30, it’ll become a roll of the dice.
Smith also needs to wait for the new CBA to see what rules will be able to help him. For example, if there’s an amnesty clause that allows teams to clear cap room, then Gilbert Arenas can pack his bags.
Dylan in Charlotte, NC:
What is your take on Rich Cho becoming a bobcat? do you think he will do a good job?
I think Cho got a bum rap in Portland. His biggest move turned out to be a steal for the Blazers, and I wonder if he would have made that trade had he known he’d be the Bobcats’ GM in a few months…
cj in :
with all the money the heat gave up this last FA class, i think they should really look at mid level guys via trade or FA. someone like r.lopez, n.kristic, or s.hawes. they dont have the money for nene, gasol, dalembert, chandler or even d.jordan.
Correct. The plan was to use their cap last summer on their core guys, make one good mid-level signing (Miller), and fill in the rest of the roster on an interim basis. In later years, they would primarily use the mid-level exception to plug the holes at one and five, assuming the talent doesn’t develop in-house.
This summer will be Year 2 of that plan, assuming: 1) We have a new CBA; and 2) The new CBA allows them to go after free agents.
You’re right that they won’t have the money to chase any of the high priced guys.
That’s all I have time for today — thanks for your questions. The chat was slammed today, apologies to those I missed.
Look for more from Larry Coon on Twitter at http://www.twitter.com/LarryCoon, become a fan of the Salary Cap FAQ on Facebook, and find the FAQ itself at http://www.cbafaq.com.