Understanding and fixing this whole CBA mess

By Max Trueblood

It’s a depressing time to be an NBA fan. Right about now, we should be ready to start watching the recently drafted rookies playing ball, albeit sloppy ball, in the Vegas summer league.

The moratorium on free agent activity should be coming to a close with the actual trading and free agent signings starting up this week.

Internet chatter and debate should be at a yearly high and thankfully, it would’ve been a “Decision” free off season.

Most importantly, the Oklahoma City Thunder are contenders for the crown and any basketball missed is bad for any diehard Thunder fan.

Unfortunately, that’s not the case. Instead, we have ourselves in the midst of a lockout, the first one in the NBA since 1998 and since it’s just day 7 of this mess when this article went to press, we’re most likely looking at a best case scenario of another 2 months of no basketball and possibly much more.

We can argue about how we got into this bind. You can read literally hundreds of articles siding with one side or the other and at the end of the day, you wind up more confused than before you first started your research. Rhetoric is at an all time high and both sides make every threat imaginable in order to gain more leverage against the other side, further alienating themselves from the people who get hurt most in this soap opera, the fans.

Does it have to be this way? Well, it depends on how you look at it. Yes, the system needs changing but not nearly as drastically as some make it sound like it needs to be. Anyone who thinks that missing the entire season is the way to go is more likely to be very anti player whereas those who feel that this is a big charade by a bunch of greedy rich guys is more likely to be anti owner.

A few online articles have challenged the owner’s claims of massive losses. Among them are Forbes, the New York Times and the well respected cap guru, Larry Coon. To counteract those articles, the league has further exaggerated losses while at the same time questioning how Forbes even gets their numbers in the first place. This is completely understandable given that the league is in full blown leverage mode.

On the flip side, the players claim that the losses are minimal and that the owners can fix this mess by creating a better revenue sharing model. Again, this is no surprise given that they are in leverage mode and don’t want to give much back either or at least not as much as the owners want them to.

Personally, I take the objective, middle of the road opinion of the common fan that the answer lies somewhere in between. If history can take one event that shaped our political system more than any other, I would say it was named after the concept of compromise in the form of the “The Great compromise of 1787” that wound up establishing our system of bicameral legislature that resulted in our current setup of a House of representatives and the Senate. If cooler heads prevail, that middle ground can again be found, 224 years later and quickly at that. Here’s one man’s opinion on what a good cba for the owners, players and fans should look like.

FLEX CAP or MID LEVEL EXCEPTION THRESHOLD

The owners want to get rid of the mid level exception while the players not only want to keep it but add a 2nd one with more penalties heaped on teams that utilize a 2nd one.

I’ve always maintained that I support the concept and existence of the MLE but that it had to be limited so that the big markets don’t take advantage of it and create a league where competitive balance and parity gets tossed to the side. With the luxury tax in place during the just expired collective bargaining agreement, my thinking was that if you limited the MLE to the teams whose payroll fell in the window of the soft cap of $58 million and the lux tax threshold of $70 million and disallowed it for big market teams who were already well above the threshold, you would have a league with much more parity.

Towards the end of June, when the league and players were trying to come to an agreement, the league made a proposal to the players that included something called a “flex cap” which sounded very similar to what I wrote in the previous paragraph. While details were somewhat sketchy, the rough draft idea was that teams could slightly exceed the soft cap in order to sign MLE players or resign a player using their early bird or bird rights but that they could only exceed it to a certain extent before hitting a hard cap.

The players countered that they don’t want any form of a hard cap and that since the “flex cap” still used a hard cap above the flex cap, it would be considered a hard cap and thus, a non starter.

Since this is a compromise oriented article, my solution is to meet halfway. I like the idea of a hard cap as long as you have the layers of a flex cap/mid-level exception threshold cap then a soft cap and a minimum cap where at least 75% of the soft cap must be spent by owners on player payroll. Since current payrolls are so high, you would have to phase this in over a 3 year period. For me, it would look something like this…

• 2011-12 season……$95 million hard cap followed by a $68 million flex cap and then a $55 million soft cap.

• 2012-13 season……$88 million hard cap followed by a $65 million flex cap and then a soft cap of $53 million.

• 2013-14 season…….$78 million hard cap followed by a $62 million flex cap and then a cap of $51 million.

• 2014-15 season……League would finally get to a hard cap of $70 million, $60 million flex cap and a $50 million soft cap. Adjustments from here on out would be based on whether revenue is increased or decreased as a whole for the league.

The concept of how this works is simple. Like it is now, teams who want to sign a free agent to a contract exceeding the MLE would have to get below the soft cap.

Teams could exceed the soft cap by resigning their own free agents AND using the MLE or any portion of it as long as their payroll falls below the flex cap level. For example, if they have $3 million below the threshold and the MLE is $4 million, a concept I’ll get into later, they would only be able to spend $3 million of the MLE instead of the full $4 million.

Teams could then only exceed the flex cap up to the hard cap by signing their own free agents.

The owners could then decide if they want the flex cap/mid level threshold to also act as a luxury tax threshold depending on if revenue sharing solves their in house problems or not.

In summation, I think the players would be wise to accept a hard cap but not at the ridiculously low number of $45 million. Get it up to $70 million with the possibility of going up or down based on league revenue and you have a legitimate middle ground.

Example on how this would effect the rest of the league:

The hard cap numbers of $95 million for the first year and $88 million for the 2nd year are derived from contracts already on the books for players. $95 million represents the largest payroll, this case being the Lakers and since the owners aren’t allowed to terminate any guaranteed deals YET, another concept that I’ll get into later, we have to set a cap where the largest payroll is.

In year 2 of the deal, the Lakers have options on both Lamar Odom and Andrew Bynum. The thinking behind the $88 million is another compromise. They would have room to keep one but have to get rid of the other.

On the flip side, the Lakers wouldn’t be able to improve their roster beyond signing their 2nd rounders to minimum deals since they would already be up against the hypothetical hard cap and wouldn’t be able to improve their roster via the MLE since they are also well above the hypothetical flex cap number of $68 million. Not only the Lakers but world champion Dallas, Boston, Orlando and Miami would be at a disadvantage due to being too close to or over the flex cap number. Dallas would be limited to concentrating on their own free agents like Caron Butler, Tyson Chandler and J.J. Barea, Boston with Big Baby and Jeff Green while it would be James Jones and Mario Chalmers or bust for the Heat.

On the other hand, teams on the cusp like New York, Chicago, New Orleans and Milwaukee would be far enough under to sign an MLE level player and thus create a level of parity and competitive balance that the league has stated that it’s looking for.

How this effects the Thunder:

I purposely didn’t include the Thunder in the list of teams on the cusp since their roster is already loaded enough and they don’t really have room for an MLE player anyways.

On the other hand, the hard cap could prove to be a minor obstacle down the road since the talented players on the roster will eventually be up for a big pay raise and the team will most likely have to decide on who they want to let go and who stays. Still, with Sam Presti in charge, it’s a good bet that they make the right decision. At the end of the day, even with all these changes, it’s going to be the collective intelligence and work ethic of the people in charge that make the difference in whether a team is a title contender or not.

Max Trueblood has studied NBA business for the last 16 years and is a contributor to Daily Thunder. Part II coming tomorrow.