A CBA Proposal for Ending the Lockout

I am not a financial expert, nor do I play one on TV.  I am also not a CBA expert, lawyer, or marine biologist.

However, like many fans, I've read a fair amount about the NBA lockout and have a few ideas on how it might be resolved.

Read about them below the jump if interested.  Feel free to post your own in the comments.


Both the players and owners have certain key goals they would like to achieve in the new CBA.  Below I've listed the ones that I tried to address:

Player Goals:

  • Retain current soft salary cap and guarenteed contracts.  They view a hard cap as leading to non-guarenteed contracts which is a non-starter.
  • Ensure the system provides for a middle class.  They want to avoid a scenario where the super stars are paid a maximum contract and everyone else is paid the minimum.
  • Retain a realistic right to free agency, where players can choose where they want to play at some point in their career.
  • Force the owners to resolve at least some of their financial issues themselves through revenue sharing from the richest teams (LAL, NYK, CHI, ...) to the poorest (CHA, MIL, ...)
  • Avoid a 'franchise player tag' system that removes the ability of a star player to enter free agency.

Owner Goals:

  • Improve their financial situation in general.  They state 22 teams out of 30 are losing money.
  • Modify the BRI split so that owners retain a larger percentage of the income.  Players currently receive 57%.
  • Change to a hard salary cap or at least a much harder cap.  They view this as a key objective of the lockout in order to address competitive balance.
  • Establish some method for escaping from bad contracts for players who are clearly underperforming, especially due to factors within their control (e.g. Eddy Curry).
  • Eliminate the mid-level exception, which has resulted in a large number of undesirable contracts (e.g. Hedo Turkoglu, Marko Jaric, Luke Walton).  The key issue is probably the length of these contracts and the compounded annual raises rather than the first year salary amount.
  • Improve the ability for teams to retain their own star player free agents.


Proposed CBA Changes

  • Increase the amount of 'direct' revenue sharing from the wealthiest franchises to the poorest ones. However this increase would not need to be dramatic due to other funding sources identified below.
  • Establish a progressive and tiered luxury tax system.  Contribute all luxury tax penalties to the general revenue sharing fund.  With properly set tax levels, this should provide a 'de facto' harder salary cap and provide much greater funding to the revenue sharing pool.

    For example: Suppose the soft salary cap is set at $60 million and the luxury tax starts at $70 million. There could be a $3 dollar per dollar tax from $70-$75 million, $5 dollar per dollar from $75-$80 million, etc. Set the tier ranges and tax amounts to whatever level is deemed necessary to discourage any team from spending more than $15-20 million over the soft salary cap.
  • Do not require teams to have a team salary below the first luxury tax tier in order to receive revenue sharing funds.  This avoids the current issue where teams have an incentive to make moves which harm their roster and competitiveness in order to stay a few dollars below the luxury tax line so they receive tax payments.
  • Require teams to spend an amount greater than the minimum team salary in order to receive any revenue sharing funds. This would provide incentive for small market teams to field competitive rosters and not just pay a minimal team salary while also receiving revenue sharing funds.

    For example, if the salary cap was set at $60 million, and the minimum team salary was set at $40 million, mandate that teams have to spend at least $50 million on salary to qualify for revenue sharing dollars.
  • For any income that is collected at a league-wide level and then distributed to the teams, contribute some percentage of that income to the general revenue sharing fund.  For example, if all income from jersey sales is currently collected by the NBA and split equally among all 30 teams, contribute 20% of those funds to the revenue sharing pool and then split the remaining 80% equally among the 30 teams.
  • Replace the mid-level exception with a new "middle class" exception. Players could be signed for an annual salary up to the league median salary, but the contract could not exceed two years in length.  Teams could sign multiple players using the "middle class" exception if desired.
  • Retain the current veterans minimum exception and slightly increase the value of these contracts.
  • Retain the current "Larry Bird" exception allowing teams to retain their own free agents.
  • Set the maximum salary amount and duration such that players can receive 20% more per year and sign for 2 additional years if they resign with their current team.
  • Eliminate "sign and trade" transactions.
  • Every other year a team would have the option of buying out one player contract at 80% of its remaining value. The player would then be free to sign with any other team in the league.  If the player signed a new contract worth more than the 20% remaining on their previous contract, they would not be required to pay it back to their previous team.
  • Determine the eighth playoff spot in both conferences by a single elimination tournament at the end of the season (e.g. the Bill Simmons Idea). All teams that are not currently in the playoffs would compete in this 'wildcard' tournament. It would discourage teams from tanking for lottery purposes or making financially-based trades that weaken their roster.  Wildcard playoff seeding and home court would be based on regular season record to encourage winning late season games.
  • Grant the owners a larger percentage in the BRI split, such as a 50-50 split.  The exact percentage would be a compromise based on economic projections from both players and owners.
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