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.
jw in jax fla:
Another HW writer said that fines and suspensions will be handed out by the NBA for bad behavior.If these guys are "locked out" doesn’t that mean not under contract essentially? How is this NBA "jurisdiction"? Thanks
Welcome to the chat, everyone! Week three of the lockout is winding down, and it looks a lot like Week 2 did. Let’s talk about it.
jw, my opinion is that just as the NBA curently has no control over players signing contracts elsewhere, they likewise don’t have any control over player conduct during the lockout. In fact, the two issues are in the same paragraph of the standard player contract:
The Player agrees: (i) to give his best services, as well as his loyalty, to the Team, and to play basketball only for the Team and its assignees; (ii) to be neatly and fully attired in public; (iii) to conduct himself on and off the court according to the highest standards of honesty, citizenship, and sportsmanship; and (iv) not to do anything that is materially detrimental or materially prejudicial to the best interests of the Team or the League.
It’d be hard to argue that section (i) in this paragraph doesn’t apply to locked-out players, but section (iii) does. But until this has actually be tested (and perhaps arbitrated or litigated), I don’t think we can say it’s a 100% certainty.
Diego in Durham, North Carolina:
If you expect the soft cap to remain, do you also envision the luxury tax to stay in place? If not, what could the new CBA have to discourage excessive spending?
I don’t expect the luxury tax to remain in place, but that’s because of revenue sharing, not the soft cap.
You’re right that if there is a hard cap, then there’s no need for a luxury tax. But the tax was intended to accomplish two goals: 1) Dissuade teams from spending; 2) Function as a form of revenue sharing. However, the tax never accomplished the first goal — teams wrern’t dissuaded from spending, they simply saw it as part of the cost of doing business. So if it never met its first goal, and direct revenue sharing is a better means of accomplishing the second goal, there’s no reason left to continue with a luxury tax.
Chad in Chicago:
Who would you consider the top 3 trash talkers in the NBA? Where would Larry Legend rank?
There’s Gary Payton, and then there’s everyone else.
But there are a lot of great stories about Bird, so he has to be considered one of them.
Brian in Seattle WA:
Hey Larry – Times like these seem ideal for a group of well funded investors and ambitious agents to pool their resources and knowledge together and form an alternate league. Why don’t we hear much about this as a potential option?
It’d be really tough to accomplish. There aren’t a lot of places to play in, and there probably wouldn’t be a lot of teams at first — meaning most players would still be left out in the cold.
But the biggest problem is that if the lockout ends, then the investors’ big investments probably go right down the drain. I’m not sure how many people would be willing to risk that kind of money.
Rhonda in NEW YORK:
the layoffs and now the release of the schedule without any real negotiations/movement on the LO is not sitting well with many of us. Doesn’t the NBA realize the impression this makes? They have to look like they are TRYING to come to some accord.
Both sides have retreated to their respective corners between rounds. I was hoping they’d start up again by now, but it looks like it’ll happen around the end of the month or in early August. I care less about how it looks than about how it works. If strategizing for a month allows both sides to come to the table with new ideas, then so be it.
Jason in LA, CA:
Hypothetical Q: Suppose a team used two markets as their home (ex. Sac/Vegas Kings). Two TV contracts, fewer games per venue to sell out. Would suck for the players/coaches, but maybe more money. Your thoughts?
Teams have done this. The Lakers used to play a number of games in Las Vegas (in fact, Kareem broke the all-time scoring record there). The Clippers used to play part of their season in Anaheim. I think the Celtics and Bullets are two other teams that had a split schedule, and I’m pretty sure there are more.
Fernando in Houston:
Are the NBA players likely to decertify? And how does decertifying make a lockout illegal?
I’ll answer your second question first. There are two sets of laws in effect in these kinds of situations — labor law and antitrust law. Those two sets of laws are normally at odds with each other (because labor law encourages the kinds of things that would otherwise be illegal under antitrust law), and this is resolved by having a labor exemption in the antitrust laws. As long as provisions are collectively bargained with a union, these activities are exempt from antitrust provisions.
The exemption continues even after a CBA expires, so right now the two sides are still working within the labor law. But at any time, they could decide to switch over from labor law to antitrust law. They do this by decertifying the union. When that happens, there is no longer a collective body for the employer to negotiate with, and the labor exemption dissolves. Once that happens, the antitrust laws take over.
Lockouts are a part of labor law, and not antrust law. By switching from the arena of labor law to that of antitrust law, the lockout potentially becomes illegal, along with the draft, maximum salaries, and a number of other provisions.
Now back to your first question — the players say decertification is more of a last-ditch resort for them. They only want to turn to the antitrust laws if it looks like they can’t get a fair deal in the arena of labor law.
Bill in Boston, MA:
Larry, what are some realistic options for the Celtics in free agency for next season?
They’ve got one more run left with KG & Ray Allen, so they need to try to reclaim some of the size they lost with the loss of Shaq, (potentially) Big Baby, and from the mistaken Kendrick Perkins trade. But they’re going to be capped out, and the new rules likely won’t provide a lot of help. I don’t even think the sign-and-trade provision will survive, which would allow them to flip Jeff Green for an asset, I’d ordinarily say someone like Chuck Hayes would be a good — if undersized — fit, and maybe in their price range, but I think they’d need more than that. I’m just not sure how they get it.
Sven in Boston, MA:
Can the NBA prohibit games like the philippines exhibition coming up or the proposed china tour with NBA players from being shown on TV?
Nope. The NBA has the right to lock out the players. They don’t have the right to stop the players from earning a living elsewhere.
likeaabull in :
Whom says no?d12,hedo,ryan anderson,bass,quinton richardson for noah, deng,boozer,bogans plus our future1 pick. Magic would have money 2 fill out tha roster. Then bulls trade taj/for courtney lee
Chicago yells "Prank caller! Prank Caller!" and hangs up the phone.
chig in la, ca:
If the lockout last two seasons what happens to the seniors who graduate while the league is locked out? Will there still be a draft?
There’d be no 2012 draft if there’s no CBA. The CBA is what says there’s a draft in the first place. If the lockout lasts two years, then any players who would have come out in 2012 would have to wait until 2013. The league & players may mutually agree to add more rounds on a one-time basis, but they may just leave it at two rounds.
yahoo in everywhere:
cbssports mentioned that mid level staff from both sides are tackling smaller issues and try to build momentum that way. is that a way to make headway and find a solution to the big problem?
The big problem is the split of the pie between the owners & players. I don’t see how smaller issues lead up to a solution to the big problem. It’s the other way around — how they split the revenue determines how they will solve the smaller problems.
Ercan in Cologne, Germany:
Hey Larry, what is the latest date for the next season to start? Is there a certain deadline in which the season has to be cancelled?
They went trough this in 1998-99. They set a deadline in mid-January. At that point, they’d be able to salvage a 50-game season, which is the minimum number of games they agreed they could play and still call it a season. The deadline will be similar this time.
RAndy in Nj:
CaN a team acquire arenas in a Dwight deal and use a hypothetical. Provision on him?
Amnesty provision? Potentially, yes — but it’s hard to say how a hypothetical rule will work.
But remember, even if a team gets cap relief through an amnesty provision, they’d still have to pay the player. Giving Arenas $60 million is a pretty steep price to pay in order to land Dwight.
Ryan in Atlanta:
How do salary rollbacks work? Do they put in provisions into a players contract that says that they can roll back salaries in case of a new CBA? Or does the new CBA "void" all past contracts?
The new CBA would retroactively amend all contracts to reflect the revised salary numbers. It’s legal because the players mutually agree to the CBA that includes this provision.
Randy in Nj:
I remember you saying giving teams 1 get out of jail free card per season(or not in consecutive years) wouldn’t solve anything. I feel that it saves the most mo ey and sacrifices the least.(overpaid or lazy players)
The biggest issue is the amount of money that goes to the players, and teams still have to pay the players they cut via the amnesty provision. It’d help individual teams a little, but make the league-wide problem worse — I presume they’d waive one guy in order to sign another guy, so now you have many teams with extra contracts on their books.
CoL in Co:
Larry, with the new salary cap and rules whatever they are. would teams like the mavs be annihilated from the get go and without any possibility to re-sign or get new players? or would there be an amnisty or similar
I don’t think the league would put in rules where teams with high payrolls would be forced to dump productive players right away. I think we’ll still see a soft cap where teams can BE over the cap, but don’t have a lot of options to spend more money while they’re there.
Even if there IS a hard cap, we’ll see teams help by some combination of salary rollbacks, an amnesty provision and/or a grace period.
Sean in Brooklyn, NY:
How united are the owners? Does each owner get one vote, meaning that once a deal is reached, we could have 16 owners who support it and 14 who don’t support it, but who have no choice but to go with the majority?
Yeah, as far as I’m aware, the majority carries for the owners as well.
Dino in Pasadena, CA:
Are they aware that there hasn’t been an income gain in the last 10 years for average Americans? I don’t want to see a corp. ever strongarm employees, but that’s likening the NBA to Apple Inc. when they are more like Ford Motors.
Part of the problem is that they don’t see themselve as average Americans — and they’re not. They are an extraordinarily talented product, in an industry that reaps billions of dollars.
Dino in :
Are the players privy to ESPN’s website numbers for lockout related articles? I think it’s important for them to know exactly how many fans they are disappointing every day.
I don’t think they need website traffic numbers to realize the impact the lockout is having.
Shem in Honolulu, HI:
I understand that with the players association it’s 1 player, 1 vote. Who are the members of the players association? Only players with existing contracts? What about guys who got 1 or 2 ten-day contracts during last season?
Union membership consists of all active players, whether they’re currently under contract or free agents.
Evelyn in :
Larry, can you publish a list of what the various teams receive in TV revenue? Is it the #1 difference between small & large markets? who has the highest/lowest share? and is this revenue part of the 57% BRI? Evelyn
The league, for obvious reasons, keeps this information closely guarded. Local TV revenue is a big chunk of the difference, but it extends much farther than that. One league exec told me that a team like Milwaukee couldn’t make as much hosting a Finals game as the Lakers could make hosting a regular season game.
You can find a list of the things included in BRI by looking here: LINK
Shawn in Rochester, MN:
Hi Larry. Do you read anything positive into the recent meeting between mid-level folks from owners/union? Is that how things really get worked out, or is this just posturing?
From what I hear, it’s a meeting primarily to talk about more meetings — i.e., to plan the course they’re going to take. It’s more procedural than anything else. The real work will get done when the full groups get together.
Actually, the real work will probably get done late in the process when it’s just David Stern and Billy Hunter.
Stantonia in Wichita, Ks:
Why doesn’t NBA go to performance based contracts? The franchise type of players get guaranteed and everyone else performance based non guaranteed. This would cut the one year wonders!
As much as the league would enjoy that, the players would have a significant problem with it. Most of the players — i.e., most of the voters on any proposal — are NOT the franchise players who would be taken care of in such a deal.
Tom in :
The Wolves pick was protected from the Clippers this year, but is unprotected next year. Hypothetically speaking, could the Wolves have dropped the protection this year, given the Clips the 2nd overall pick and gotten their next years pick back?
No. The pick is conveyed under a specific set of conditions, and neither side can change those conditions unilaterally. The Clips made the deal knowing that they’d eventually have the pick unconditionally if the Wolves continued to be a bad team, which is part of the reason they made the deal in the first place. The Wolves can’t change the terms just because it’d work out better for themselves.
byron in :
magic got VC before.u could only exceed the cap with a mid lvl contract but VC was 14mil and u cant give players that contract if ur above the cap right how that happened? does that mean we can also sign a lot of free agents like TC and jrich
There are several "exceptions" to the cap, which are mechanisms that allow teams to spend money when they’re already near or over the cap. One of those exceptions is the mid-level, but there are others as well.You can find a full list of them here: LINK
To acquire Carter the Magic used the trade exception, which eseentially says teams can make trades when they are over the cap, as long as the salaries of the players they acquire aren’t more than 125% of the salaries they send out. The Magic adhered to this rule when they acquired Carter.
And no, even if your premise was correct, it wouldn’t follow that the Magic should now be able to spend freely on free agents.
Arne in Mannheim, Germany:
Why doesn’t the NBA hire external consultants to go through the books to erase any doubts about misinterpreted numbers? An external voice is more believable.
They do have an independent accounting firm go over the books. If there was anything amiss from an accounting perspective, then that firm would have blown the whistle.
The problem is, the dispute between the players & owners isn’t about that. Nobody is saying the league is lying about the numbers, or that they aren’t following the standard accounting rules. It’s more of a philosophical discussion.
The players are saying, "Some of those losses wouldn’t be there if you didn’t make bad decisions. We had no say in those decisions, so we don’t want to pay the price for your mistakes." An example is the interest on the league’s long-term debt. The players are essentially saying, "We didn’t tell you to whip out the credit card to pay for that. We’re fine with covering the expense itself, but not the interest payments because you chose to finance it."
The owners are essentially saying, "But we wouldn’t have needed to finance these expenses if we weren’t already paying you 57 percent of the gross revenues. You’re only reaping the benefit when money comes in the door; you’re not sharing in the burden when money goes out the door. And the two are connected — we need to spend money to make money."
These are the kinds of discussions that can’t be adjudicated by a third-party accouting firm that’s looking at the books.
Paul in chicago in :
Who is Kobe passing the torch on to next season DRose, Lebron, KD or Blake Grifffin
Ordinarily I’d be saying, "If you think Kobe is willingly going to pass the torch to ANYONE, you’ve got another thing coming. Whoever wants the torch is going to have to pry it out of his hands." But this year at the All-Star game, Kobe made reference to being on the way out, and guys like Derrick Rose being on the way in.
Ultimately, the "torch" goes to the guy who can lead his team to titles. None of the guys you named have done that yet. Let’s see who earns it over the next couple years.
Josh in Utah:
Larry, Being that you are the guru of the lockout I would like to know your perspective on things. What do you find bizarre and outlandish in negotiations at this point?
Honestly, I don’t think anything is bizarre or outlandish. I think it’s all a part of negotiation. Both sides have their own perspective on the situation, both want the best possible deal for themselves, and both are willing to spin it in order to make themselves look better.
Both sides go into negotiations asking for more than they think they’re going to get, and eventually they start serious horse trading and meet somewhere in the middle. Right now we’re still at the point where the two sides are asking for the moon and the stars, and haven’t begun to make serious concessions toward a deal (although the owners moved more than I thought they would prior to July 1).
That’s all for today, everyone. Talk to you again next week.
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.