Questionnaire:
What games do these final scores represent? 136–100, 130–86, 135–102, 129–115
a) 2017 Harlem Globetrotters vs. World Allstars
b) The 1992 Dream Team in the Olympics
c) WNBA vs. NBA all-star exhibition
d) The 2017 NBA conference finals
If your answer is anything other than ‘d’, you might not be aware of a record-setting disparity problem in the NBA. The past 2 playoffs have been the most lopsided on record since the current format was instituted, a span of 30+ years.
Full disclaimer: As a Boston fan for 20+ years, in the current duopolistic state of the NBA, I actually think they’ve had the most successful season in terms of overachieving given expectations while setting themselves up to take over in the post-LBJ era. So if the following sounds disagreeable or like sour grapes, then you’re probably from the Bay Area or Ohio…
The fundamental problem: The NBA construct under the current collective bargaining agreement may be too outmoded given decisions made by today’s millennial athletes. During the NBA’s rise, the ‘love of the game’ argument used to explain Jordan, Pippen, Magic, and Bird’s contracts masked the vastly undervalued nature of those contracts (even after adjusting for growth and inflation — save MJ’s last couple of years in Chicago). In fact, MJ’s career earnings — especially before his last 2 years in Chicago — were nowhere near the top among his contemporaries.
The pre-millennial superstars also mostly stayed with their original teams. As players’ bargaining power increased over time, they now have much more freedom to switch jerseys, and the lure of an easier path to winning championships is proving too great for young star athletes of this era. For one, the decision by LeBron, not once but twice, to abandon a weaker team to join the better team exemplifies this (sorry Cavs fans; despite the sensationalized story he’s spinning about the homecoming being bigger than himself, there’s no way LBJ rejoins Cleveland if not for the assets created by an unprecedented number of top picks: three #1's and two #4’s during the 4 years he partied in Miami).
The most recent example is Kevin Durant, who joined a Warriors team that had just won 73 games before choking in the Finals (guess that makes him a slightly less egregious front runner?). Without a greater disparity in money, his decision was simple math: ‘do I play in OKC, LA, or Boston and have to go through the Cavs and one or both of Spurs and Warriors or go to the Warriors and beat the Cavs only? Thus, his choice to shun OKC, LA, and Boston by creating distance between GS and those 3 teams + the Spurs, effectively knocked out up to 4 contenders in one fell swoop, which is shockingly in stark contrast to his own logic (not exactly MJ mentality).
Publicly acknowledging that superteams are not ideal, the league responded with measures to make the sport more egalitarian, such as the graduating luxury tax, repeater tax, and ‘designated-player exception’. Unfortunately, they don’t go far enough.
Some ideas the league can ponder:
- Get rid of max contracts
The designated-player exception was already a step in this direction, so why not take the socialist lid off completely? Getting rid of caps on individual player salaries (enabling Godfather offers) while enforcing the soft team cap would make stars more likely to stay with smaller market teams. Imagine if the Thunder could pay KD $45-50 million a year while Golden State only had $30 million to spend without dumping major contracts. Was KD really ready to say, “I hate OKC by $100-million-over-5-years worth”?
2. Incorporate some version of the franchise tag (LeBron Rule)
This rule would allow teams to designate 1 player already on the team — presumably the best player — that they feel needs extra protection from free agency. The amount of protection could be correlated to accolades and/or contract size. Imagine if LBJ had a franchise tag in Miami and Cleveland was forced to outbid Miami’s best offer by say 25% and hand over future draft pick(s) to sign him away. This would be a parallel to protections against corporate raiders in a capitalistic world (think poison pills) and would make superteams harder to sustain.
3. Adjusted cap holds (Kevin Durant Rule)
Note that the NBA has never had the same teams meet in the Finals three straight years; let alone the 2–3 more times Cavs and Warriors are overwhelmingly expected to meet between 2018–2020. The reason fans are now seemingly subjected to more annual Cavs-Warriors showcases than Fast & Furious sequels is in no small part due to last year’s salary cap loophole. Imagine if all teams spent exactly 100% of the cap, and the league then increases the cap enough to sign a superstar like KD. He will have essentially been given a choice of playing anywhere with nothing but his competitive fire to stop him from piggybacking on the best team.
But in reality, the best teams usually already have stars signed to large contracts and lack financial flexibility when the cap stays relatively level. So in essence, a significant cap bump creates a free-for-all, where slightly to moderately cap-constrained teams all of a sudden can take advantage of the additional millions in new cap space to sign star talent. This is precisely what played out. KD on the Warriors is essentially the result of a fluky arbitrage opportunity.
To address this, any time the league injects a sizeable cap increase, there could be an ‘adjusted cap hold’ on the said increase. For instance, say a current team cap of $100m is increased to $120m. For a team that utilized 90% of the current cap ($90m), there should be a cap hold of an additional 20% on all existing salaries to match the overall cap increase. Thus, this team would not have the full $30m of additional cap room to use for free agents, but only $120m minus $90m*1.2, or $12m to spend.
Moreover, the cap holds should remain in place for the duration of existing contracts. For example, Klay Thompson’s ~$18m a year deal that runs through 2019 would have a cap hold of $18m*1.2=$21.6m each year until then, with cumulative holds for any additional major cap increases in subsequent years. This amounts to a ‘phase-in’ of sorts.
In practice, this is game changer, as teams with efficiently managed caps would have been able to offer KD much more money than the Warriors. Instead, the presence of max contracts and a lump sum cap increase inadvertently punished prudently managed teams.
As it stands, the NBA’s attempt to create parity appears halfhearted, raising the question of whether the league or the players union have any incentive to alter the competitive landscape given the tremendous revenue and salaries generated by the current setup. For fans not in NorCal or Ohio, father time remains the best hope for ending this repetitive loop. See you in 2020.
