Posted: Mon Jun 20, 2005 1:03 pm Post subject: comments on Re-Negotiating CBA article by Dan Rosenbaum
i agree with easing trading rules (reportedly will be 125% +100K instead of salary comparison of 115% and 100K) because i think it offer a lot of aid on competitiveness even apart from reform of the underlying financial structure.
on "Reducing the Guarantees in Long-Term Contracts", i agree with some of the motivation behind the proposal to allow teams to waive players they are not satisifed with, but differ on the solution. Dan's proposal would essentially allow a team to waive a player for a payment of 50% of one year's salary and 25% of the next year's. that could range from less than $ 1 to $10 million, up to $20 million in the few extreme player cases. that isnt free, but i do think the system would get used a lot. and it is presented without any conditions on when teams could waive a player. it appears to an nfl like freedom to waive any one for any reason, but at a price. it would certainly help teams reload and rebuild. and yes the players have a revenue guarantee so the money should ultimately find its way to better performing players. but i still have an old-fashioned preference that a long term contract should really mean a commitment. if not, then just have short contracts only. if there is to be an out for team dissastifaction at a price, out of fairness should there also be a player out for a price, for those who could earn more money now based on strong recent performance (or simply wants change to a more competitive team or preferred city)? if i was a player or the union i'd argue that and block a one-sided flexibility. but i'd rather not go down this road quite so far. instead, it would be easier for me to support a waive option that only dealt with refusal to perform or accept a trade first and probably with no buyout cost; and an easier morals break contract clause that teams could use, perhaps with some buyout cost in non-criminal cases.
insurance and removal from the salary cap already deals with the worst inability to perform cases. at least the cost part. the injured player exception helps on the court, but only when the league acts, which is fairly rare and slow. (reportedly it will now give cap relief from injuerd player's contract after one year not 2). the league could also, if it wanted to, develop a more frequently used system for the cases where a player has partial diminishment in ability and playing time.
i think limited waive rules and a diminshment exception should probably be coupled with shorter contracts. Dan's proposal would allow 6 & 7 year contracts to continue offset by the greater freedom to waive, but i do think that very long contract lengths are part of the problem and should adjusting them should be part of the solution. i could go as low as 3/4 or at least to 4/5 years. and i would also recommend that year to year salary increases be restrained from the top rates currently allowable in some way. perhaps smaller increases allowed for max (or near max) contracts, or perhaps just for after the third year, or perhaps even no increases after that, or even required salary reductions after some age threshold such as age 35 could help with the normal aging/performance curve. it is the 6/7 year deals that bloat 10 or 12.5 % a year to a way out of whack level by the end of the contract / older age that are the worst problem, so i think contract length and increases need to be part of the reform package. (they are.)
on the rookie contract terms proposed, i'd probably keep the same terms you offered those with 2 years of college for players with 3 & more years of college. i dont think the system of salary premiums to those draftees with college experience paid for by teams that draft those without would be put in place as proposed because of the inter-team transfer payments.
(19 and a year after class graduation put in place instead of step scale. rookie contract system stays uniform but third year is a team option.)
Last edited by jambalaya on Wed Jun 22, 2005 12:37 pm; edited 16 times in total
Joined: 03 Jan 2005 Posts: 413 Location: Greensboro, North Carolina
Posted: Mon Jun 20, 2005 3:24 pm Post subject:
Thanks for the comments, and I will comment on those later, but for now I would like to point out that on my web-site I have another version of the same piece, but it includes 900 words of footnotes and lots of links. (It is actually an HTML file and not a PDF file.)
Posted: Mon Jun 20, 2005 4:03 pm Post subject: the footnotes
the footnotes are very candid and important in understanding the whole story.
footnote 6 on shares under evenue changes could be very important, down the road. and since it could go both ways, "watch out players."
footnote 13 on paying for draft camp participation could also help a little if the amount was sufficiently motivating, but i assume that it would probably be modest and not that persuasive in key player cases (who are the real targets for it) and thus camp would still be frequently bypassed.
Last edited by jambalaya on Fri Jun 24, 2005 7:33 pm; edited 4 times in total
Your article doesn't work for me for some reason - it says: "Article does not begin with %PDF." _________________ "Statistics: The only science that enables different experts using the same figures to draw different conclusions." - Evan Esar
Joined: 03 Jan 2005 Posts: 413 Location: Greensboro, North Carolina
Posted: Tue Jun 21, 2005 9:58 am Post subject:
Here is what I added to my CBA piece about the latest proposed deal.
Quote:
2. The Current Proposed Deal
The deal that Chad Ford is outlining, in my opinion, is a big, big win for the union. It appears much more favorable to the players than the current collective bargaining agreement and the deal I propose in this piece.
There could be other details that are very important (such as what is happening with the mid-level exception), but here are some of the major points.
· Age limit of 19.
· Rookie scale contracts that stay the same, except that the third season becomes a team option.
These will be labeled “concessions by the union,” but no player currently in the union is made worse off by these “concessions.” In fact, the current members of the union probably have more reason to support these provisions than does the league, since these provisions will open up jobs for veterans.
· Maximum contract length of six years for players who sign with their own team and five years for players who sign with a new team.
· Maximum salary increases of ten percent of first year salary for players who sign with their own team and eight percent who sign with a new team.
These two provisions are concessions by the union, although much of the effect of the second provision is undone by the increase in the salary cap.
· Players are guaranteed 57 percent of basketball-related income (BRI).
· Salary cap percentage rises to 51 percent of BRI from 48.04 percent of BRI.
Note that in the current collective bargaining agreement, maximum salaries are percentages of the salary cap. If that is not changed, then maximum salaries will increase under this provision. In fact, the total salary of a maximum salary player with maximum raises may end up slightly larger per season than under the old deal, thereby undoing much of what is conceded by the players.
I believe that the players’ share of BRI will be higher than 57 percent in this deal, so I do not believe the guarantee to be much of a concession by the owners.
· Escrow tax maximum falls in stages from ten to eight percent.
By the end of the collective bargaining agreement, this is likely to put $50 million per season more into the pockets of players.
· Luxury and escrow tax distributions are equal for all 30 teams. There also is no “super” tax on high-spending teams.
This is a huge concession by the owners. The distribution scheme in the current deal arguably reduced team spending more than the luxury tax itself did. Without the 300 or 400 percent effective tax rate on team salary just above the luxury tax threshold, teams will be more willing to pay the luxury tax. The league must have given in on this point due to pressure from its teams. The amount of money being redistributed under the current deal must have been too extreme for too many teams.
Now I am figuring that there are details that go in the league’s favor, or else it looks to me that the league has been taken to the cleaners on this proposed deal. Because with what has been described so far, I would expect the players’ share of BRI to push past 60 percent, perhaps well past 60 percent, by the end of this deal.
One other point. If this pretty much is the current outline for the next deal, I would expect an explosive free agent market this summer. Teams should expect to pay substantially more for free agents than they did in the last few summers. The higher salary cap will result in more teams having more room under the salary cap and the change in how luxury and escrow taxes are distributed will greatly lessen the effect of luxury taxes on spending.
This all is really remarkable. Based upon what we have heard so far, it looks like the players did really, really well. This could be really bad for teams like Seattle that cannot afford the salary escalation that likely will occur with this deal (provided that significant details are not being left out).
Joined: 03 Jan 2005 Posts: 460 Location: Washington, DC
Posted: Tue Jun 21, 2005 10:05 am Post subject:
Thanks for the analysis of reported details. I wonder if Ford's primary source on this is from the players' side. That could result in greater emphasis on what the players are getting vs. what the owners "get" in this deal. _________________ If you can't explain it simply, you don't understand it well enough.
First, Dan, great piece - you managed to address the major issues of the current CBA in an equitable way. I've always had a reflexive dislike of removing guaranteed contracts, but I thought your arguments were compelling (the Knicks fans out there would certainly be excited - actually as a Timberwolves fan the thought of letting Troy Hudson return to the free agent pile is pretty compelling..) It would certainly change the dynamics of the trade market - the 'expiring contracts for a decent, but overpaid player' transaction that has become almost the prime motivation for trades would presumably largely go away.
It will be interesting to see what the actual deal is - I agree that if it's as Ford has described it's a pretty impressive upset win for the union.
Joined: 03 Jan 2005 Posts: 460 Location: Washington, DC
Posted: Tue Jun 21, 2005 12:49 pm Post subject:
My favorite DanR proposal in this is the mutual escrow account. If player salaries dipped below the guaranteed amount, then money flows back to the players. If salaries exceed a certain amount, then money flows back to the owners.
One question -- how would the money get divided up by the players? Equal shares? Team-by-team vote similar to how they divide up playoff money? _________________ If you can't explain it simply, you don't understand it well enough.
Joined: 03 Jan 2005 Posts: 413 Location: Greensboro, North Carolina
Posted: Tue Jun 21, 2005 12:59 pm Post subject:
WizardsKev wrote:
My favorite DanR proposal in this is the mutual escrow account. If player salaries dipped below the guaranteed amount, then money flows back to the players. If salaries exceed a certain amount, then money flows back to the owners.
One question -- how would the money get divided up by the players? Equal shares? Team-by-team vote similar to how they divide up playoff money?
I was suggesting that the money come back proportional to their salaries, just like the escrow tax is proportional to their salaries.
And moneyp, I have been asked about the NHL's situation a few times, but the problem is that I really don't follow hockey much. I suspect that something like what the NBA has would be good for them, but I am not sure. They have less national TV money to spread around, which would suggest to me that there would need to be more revenue sharing in the NHL deal than in the NBA deal.
Joined: 03 Jan 2005 Posts: 460 Location: Washington, DC
Posted: Tue Jun 21, 2005 1:04 pm Post subject:
In Dan's system, I like the idea of letting players decide team-by-team how to divide escrow money. It could be a nice way for players to reward a low salary guy who was vital to the team -- something like that. _________________ If you can't explain it simply, you don't understand it well enough.
Posted: Sun Jun 26, 2005 8:18 pm Post subject: the special waiver rule in the new cba
the rule that lets teams waive a player and remove them from luxury tax calculations is a limited tool but does seem to help some with restoring competitiveness. usually not enough by itself to save teams way over the cap but a step in the direction of hope.
one player, one time during the 6 years of the new cba. saves in effect about half the total money they would cost. so it isnt a get out of jail free card, which i think it good from the standpoint of upholding responsibility for committments given.
i am curious how quickly and frequently it is used. teams with existing quality depth at the positon in question or no realistic chance to compete for a championship soon would seem more likely to do so. some might go out and get a free agent replacement cheaper. but in some cases teams lusting for a championship might decide to ride it out awhile thinking that while expensive keeping the diminshed star may give more talent than they would otherwise have and that if they go for a free agent they want to add on top of what they got rather than substitute.
no negative impact on the player's money, contracts still are committments. i think it is a good, measured solution. better than doing nothing or unlimited power to revoke contracts.
Last edited by jambalaya on Mon Jun 27, 2005 10:15 am; edited 1 time in total
Joined: 03 Jan 2005 Posts: 460 Location: Washington, DC
Posted: Mon Jun 27, 2005 5:10 am Post subject:
To clarify -- the "Allan Houston rule" removes the player's salary for luxury tax purposes, it doesn't remove the player from the salary cap calculations. _________________ If you can't explain it simply, you don't understand it well enough.
Dan -- as always a great read, very insightful and thought-provoking. In particular, there was one section that I wanted to discuss:
Quote:
These demands feed the perception that the NBA is full of spoiled, prima donna players. Such perceptions – despite not being true for most NBA players – make it difficult to market the NBA to fans outside the NBA’s core constituencies. For this reason reducing long-term contracts could benefit both owners and players alike by making the NBA more marketable. The league and union have discussed shortening the maximum length of long-term contracts. My proposal goes much further.
· Once a player is waived, teams would be obligated to pay just 50 percent of a player’s salary during the first calendar year after waiving him, 25 percent during the second calendar year, and 0 percent thereafter.[7]
· Maximum contract lengths would remain seven years for free agents signing with their own teams and six years for free agents signing with other teams.
· Maximum salary increases (or decreases) would continue to be 12.5 percent of the first-season salary for players signing with their own teams and 10 percent for players signing with other teams.
This proposal in essence eliminates long-term guaranteed contracts for unproductive players and thus it is a big concession to the owners. Without revenue guarantees (described above) that are a bit uncomfortable for the owners and rise when BRI increases, it would be suicide for the players to agree to the elimination of guaranteed contracts. But with appropriate revenue guarantees this proposal is good for the league and for the players, since the guarantees requires that this money would be redistributed from unproductive players to productive players (and their agents).
Under this system, would the team that waived the player be allowed to then turn around and re-sign the same player? And if so, does his previous salary still count against their cap, IN ADDITION to his new salary, or does one dip in to the other (as with the current system)?
What if a new team signs him? Does his old salary still count against the old team's cap, and do they have to continue paying him? _________________ Statistics are like a woman's bikini. What it reveals can be fascinating, but what it conceals is ultimately critical!
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- actually as a Timberwolves fan the thought of letting Troy Hudson return to the free agent pile is pretty compelling..) It would certainly change the dynamics of the trade market - the 'expiring contracts for a decent, but overpaid player' transaction that has become almost the prime motivation for trades would presumably largely go away.