Offseason thought: NBA contract solutions

[PtldPlatypus]

People often talk about the problems with NBA contracts. Too long, too big, too little incentive to perform once money is guaranteed, unbalanced in owner's favor if not guaranteed, no loyalty on either side, etc. So since there's nothing going on right now, why not take some time to bandy about some suggestions for making it better?

Seems to me that both players and owners could benefit from greater flexibility being built into contracts. My suggestion: what if all contracts over 2 years in length had mandatory semi-opt-outs on both sides?

• If a player seemed to be significantly under-performing their deal, the team could propose reduction in salary for the remainder of the contract (no lower than half the initial value), in response to which the player could either accept the reduction or be fully released from their deal if they think they can do better as a UFA. Gives teams a recourse from Mosgov/Biyombo-type deals
• Similarly, if a player felt he was vastly over-performing his deal, after 2 years he could opt for RFA to try to go out and get a better deal (at least as long as what remains on the existing deal), but the team would of course retain the right to match. Gives players like Isaiah Thomas or Steph Curry an option to avoid being ridiculously underpaid.

Would something like that create too much instability? Would it be too unbalanced in favor of one side or the other? How would you alter it to make it better? Would you propose a completely different solution to the NBA contract question? Is this just an attempt to fix a non-existent problem?

 

[Mediocre Man]

So basically non guaranteed contracts. The players would NEVER agree to that.

 

[PtldPlatypus]

So basically non guaranteed contracts. The players would NEVER agree to that.

Not necessarily--they'd be partially guaranteed, and only eligible for reduction after 2 years, and by no more than 50%, so essentially 75% guaranteed, minimum. And the players would also see salary increases from the early RFA option, so there's a potential benefit to them as well.

If you don't think the 2-year-RFA is enough to offset the partial non-guarantee, what would it take in your mind to balance the proposal? Or would you propose something completely different altogether?

 

[Mediocre Man]

Not necessarily--they'd be partially guaranteed, and only eligible for reduction after 2 years, and by no more than 50%, so essentially 75% guaranteed, minimum. And the players would also see salary increases from the early RFA option, so there's a potential benefit to them as well.

If you don't think the 2-year-RFA is enough to offset the partial non-guarantee, what would it take in your mind to balance the proposal? Or would you propose something completely different altogether?

Nothing. Players have fought hard to get where they are.

 

[PtldPlatypus]

Nothing. Players have fought hard to get where they are.

You mean, unable to renegotiate when they find themselves in the middle of vastly-below-market-value deals? Yep, can't see why they'd want to change that.

 

[Mediocre Man]

You mean, unable to renegotiate when they find themselves in the middle of vastly-below-market-value deals? Yep, can't see why they'd want to change that.

Ask football players how they feel about NBA salaries.

Players have the option of signing short term contracts.

 

[PtldPlatypus]

Ask football players how they feel about NBA salaries.

Players have the option of signing short term contracts.

Massive difference between my suggestion and NFL contracts.

Yes, players can sign short team deals, but if you can have similar flexibility with more guaranteed money, that's generally better, isn't it? If (for example) Harkless had the option last summer between:

• $20M guaranteed over 2 years
• $40M guaranteed over 4 years
  
• $40M over 4 years with $30M guaranteed and an RFA opt-out after 2 years

Which do you think he would have chosen? There's most certainly an argument for all three.

You're so focused on the 25% non-guarantee that you're completely discounting the value of the mid-contract opt-out. Do you honestly believe the players wouldn't see value in such a deal?

 

[Mediocre Man]

What team would offer the 3rd choice? They would offer less money

 

[Mediocre Man]

What they should do is simply do away with max contracts

 

[Minstrel]

You mean, unable to renegotiate when they find themselves in the middle of vastly-below-market-value deals? Yep, can't see why they'd want to change that.

I tend to think that overperforming free agent deals is actually more common than underperforming for one reason: rookie-scale contracts. A significant part of their youth is always locked up for bargain basement prices, so a larger percentage of their non-rookie deal time in the NBA ends up being late-prime/past-prime. Just as in baseball, it often is true that teams pay at least as commonly for what a player has done as for what he will do. While that might seem inequitable on the surface, I think it tends to be evened out (over the entire population) by how much of their earning power is "stolen" early in their career. Of course, the evening out doesn't necessarily happen for individuals, like players who due to injury or falling off early don't get a lot of NBA time after their rookie deals.

So, free agency is probably a bit unbalanced right now in favor of players, but that's probably fine, in my opinion. Now, if rookie scale was removed, other changes would become fairer.

 

[BlazerCaravan]

Every contract should be guaranteed, but with both a player and team opt out option every year, that takes effect the next summer. So you sign Player X to a 4/70 contract. After the first season, the team says "yeah you're doing great, we won't opt out", but Player X says "yikes no valet parking!" and opts out. But the opt out doesn't kick in until after the second season ends. At the end of Season 2, years 3 and 4 are off the books, and Player X is a UFA.

AT ANY TIME during the second season, up to and including the day before free agency begins, the player and team can agree to rescind the opt-out, and continue the contract as originally agreed. This gives a team a chance to impress a dissatisfied player, and vice/versa.

 

[PtldPlatypus]

Every contract should be guaranteed, but with both a player and team opt out option every year, that takes effect the next summer. So you sign Player X to a 4/70 contract. After the first season, the team says "yeah you're doing great, we won't opt out", but Player X says "yikes no valet parking!" and opts out. But the opt out doesn't kick in until after the second season ends. At the end of Season 2, years 3 and 4 are off the books, and Player X is a UFA.

AT ANY TIME during the second season, up to and including the day before free agency begins, the player and team can agree to rescind the opt-out, and continue the contract as originally agreed. This gives a team a chance to impress a dissatisfied player, and vice/versa.

That's even more extreme than my version.

 

[BlazerCaravan]

That's even more extreme than my version.

I'd pair it with an easing of year and money limitations, a lifting of the salary cap, and the ability to re-negotiate the front/back loading of money in a contract year to year. It'd certainly make for exciting FA periods!

Also, the player can be traded during their opt-out year and negotiate to rescind the contract opt-out with the NEW team.

 

[Denny Crane]

How about letting the owners and players sign whatever they agree to? Including incentives, guarantees, opt outs, etc.

 

[PtldPlatypus]

How about letting the owners and players sign whatever they agree to? Including incentives, guarantees, opt outs, etc.

So do away with salary cap and contract restrictions altogether?

 

[BlazerCaravan]

How about letting the owners and players sign whatever they agree to? Including incentives, guarantees, opt outs, etc.

Because mid- and low-money players get hosed in this scenario, just like in the more general economy.

 

[Denny Crane]

So do away with salary cap and contract restrictions altogether?

Sure. Billionaires need protection against their own ability to negotiate?

 

[Denny Crane]

Because mid- and low-money players get hosed in this scenario, just like in the more general economy.

I don't see it. If the player is good enough to be in the league, any competing offers would assure a decent payday.

If I were a player, I'd only accept a contract with an opt out. Just like the elite players get (LeBron, Durant, etc.)

 

[PtldPlatypus]

Sure. Billionaires need protection against their own ability to negotiate?

Seems naive (or disingenuous) to suggest that's the only reason it exists, but I'm not in the mood to argue with you.

 

[BonesJones]

People often talk about the problems with NBA contracts. Too long, too big, too little incentive to perform once money is guaranteed, unbalanced in owner's favor if not guaranteed, no loyalty on either side, etc. So since there's nothing going on right now, why not take some time to bandy about some suggestions for making it better?

Seems to me that both players and owners could benefit from greater flexibility being built into contracts. My suggestion: what if all contracts over 2 years in length had mandatory semi-opt-outs on both sides?

• If a player seemed to be significantly under-performing their deal, the team could propose reduction in salary for the remainder of the contract (no lower than half the initial value), in response to which the player could either accept the reduction or be fully released from their deal if they think they can do better as a UFA. Gives teams a recourse from Mosgov/Biyombo-type deals
• Similarly, if a player felt he was vastly over-performing his deal, after 2 years he could opt for RFA to try to go out and get a better deal (at least as long as what remains on the existing deal), but the team would of course retain the right to match. Gives players like Isaiah Thomas or Steph Curry an option to avoid being ridiculously underpaid.

Would something like that create too much instability? Would it be too unbalanced in favor of one side or the other? How would you alter it to make it better? Would you propose a completely different solution to the NBA contract question? Is this just an attempt to fix a non-existent problem?

I had something like this involved with an arbitration idea I came up with a while back.

 

[PtldPlatypus]

I had something like this involved with an arbitration idea I came up with a while back.

I recall that. I shy away from arbitration because it puts the compensation in the hands of outside parties. But you should reiterate that in this thread anyway, just to add another idea to the discussion.

http://www.sportstwo.com/posts/4175667/

 

[Denny Crane]

Seems naive (or disingenuous) to suggest that's the only reason it exists, but I'm not in the mood to argue with you.

It is the owners crying poor. The whole rationale for reducing the players' cut two CBAs ago was that so many teams were losing money. Supposedly.

Having a team that's bound to paying expensive contracts for years to come would make the team harder to sell, lowering the value. Again, it's $billionaires buying the teams. I didn't see Balmer balk at the highest price ever for an NBA franchise.

Some of the owners are in it for the business, so profit motive drives their decisions. Some of the owners would pay big to try and win. That's the history of sports, though.