Understanding the New CBA in 30 Minutes

Can the various complexities of NBA’s new Collective Bargaining Agreement (CBA) be broken down in just 30 minutes?

The simple answer is no, but in early March, Larry Coon, author of the NBA Salary Cap FAQ, gave an informative, half-hour presentation on the NBA’s new deal in Boston at the MIT Sloan Sports Analytics Conference.

“The new CBA really looks a lot like the old CBA,” Coon said. “Which is fantastic when you consider that the 2011 CBA was the result of a long, protracted negotiation, complaints, anti-trust suits, they came up with an agreement just in time to salvage the season.”

Coon noted that lower-level salaries and exceptions, which were based on fixed schedules in the 2011 deal, were raised in the new deal and tied, by percentage, to each year’s salary cap.

“They’re bumping up everything by about 45 percent,” Coon said. “Instead of putting hard numbers in, they put hard numbers in for just the first year. The rest is tied to what happens with the revenue. The revenue goes up a lot and these numbers are going to go up a lot too.

“The system is going to stay balanced in the next agreement. That was one of the big things they fixed,” he continued.

Coon broke down several deal points by associating them with specific players:

Kevin Durant Rule

One of the most interesting features of the new CBA is the designated player veteran extension which encourages superstars to stay with the team that drafted them.

“The impetus for this was obviously Kevin Durant deciding to leave Oklahoma City, going to Golden State, forming a super team with Steph Curry,” Coon said. “They wanted to provide a little bit less movement with these superstar kinds of players. There are two ways to do that. You could further restrict player movement, or you could provide an incentive to stay, and they went with the latter.”

The new rule applies to players entering their eighth or ninth seasons, and they are only eligible if they’ve been with the same team for the previous four years.

“For those players, for the real stars, the ones who meet those high-performance criteria … they’re providing the same opportunity, a higher maximum salary for a five-year contract, you can get the full 35 percent max, if you meet that criteria,” Coon said. “It’s only gonna apply to a few players every year.”

If a player earns the NBA’s Most Valuable Player Award in the three previous seasons, they are eligible — like Curry with the Golden State Warriors this summer, who will be eligible for a five-year deal at $207.1 million instead of the typical $177.5 million.

Other criteria include either Defensive Player of the Year or an All-NBA Team designation in either the year before the extension/contract (or in two of the three years prior).

“That’s gonna keep the real star players with the teams they started with, and by and large, when you talk about superstar players, their movement tends to go from small market teams to the bigger market teams,” Coon said. “So, they’re doing something to help keep the safety of every market in the league.”

Yogi Ferrell Rule

The new CBA also includes the advent of the two-way contract, for players to have convertible deals that will have them partially in the D-League (or the G-League starting next season) and the NBA.

“Two-way players are, by and large, D-League players who have the ability to be called up by the parent team for up to 45 days a year. This is designed to help improve the D-League as a place for developing talent,” Coon said.

Salary will be based on days spent in either league. Teams will be given a 16th and 17th roster slot for two-way players.

The Dallas Mavericks found a nice prospect in Ferrell, signing him as a free agent away from the Long Island Nets (affiliated with the Brooklyn Nets). That wouldn’t be possible if he was signed to a two-way originally with Brooklyn.

Brendan Haywood Rule

The handling of non-guaranteed contracts in trades has also changed, at least for contracts signed in July or later.

“One of the things that happened in the trade market over the last few years is we saw a lot of crazy trades not for basketball value, but for the guy’s contract,” Coon said.

The last year of Haywood’s 2015-16 contract was for $10.5 million, but none of the salary was guaranteed. The Cleveland Cavaliers acquired him as a trade asset, eventually dealing him to the Portland Trail Blazers for a sizable trade exception.

“For new contracts, they’re only counting that guaranteed salary in the trade math,” Coon said. “So, a $10 million player, $1 million guaranteed, the trade math is based on $1 million, not $10 million.”

Mo Williams Rule

The Atlanta Hawks acquired Williams from the Cavaliers, even though he had already announced that he is retired as a player (unofficially, no retirement paperwork was filed).

Atlanta turned him around to Denver in trade, who then waived him. The 76ers claimed Williams, then waived him — only for the Nuggets to claim him back off waivers.

All that maneuvering by Denver and Philadelphia was to get to the salary cap floor of $84.7 million.

“Teams have to spend up to 90 percent of the salary cap, some teams won’t until the last minute,” Coon said, noting that the acquiring team is credited with the players’ full salary towards the floor but only pay the portion owed for the remainder of the season.

All of this will go away.

“In the new agreement, the salary gets applied to the team’s cap prorated,” Coon said. “Two-thirds of the way through the season, you trade for the guy, you get credit for a third of the salary.”

Chris Bosh Rule

While Bosh would like to play for the Miami HEAT, the team won’t let him a clear a physical because of a blood-clot issue.

To handle similarly unique cases in the future, the new CBA has set up a fitness-to-play panel.

“If a physician diagnoses that a player has some career threatening, life-threatening condition, illness or injury, the league or the Players Association can refer the players who want to use the fitness-to-play panels,” Coon said. “The panels consist of three doctors, medical experts in the field of which they’re referring the player for, and they’re going to evaluate the player using the best gold standards of medical evidence.

“If they say the player can’t play, he cannot play. If they say the player can play, he’s cleared to play, as far as the league is concerned,” he continued. “You can’t force a team to play any specific player, ever. So, the team still doesn’t have to let the player play, just like they have that discrimination ability with anybody. But if the panel clears the player to play, and the team doesn’t let the player play, they have 60 days to either trade or waive him. It gives the player some recourse to be able to find work elsewhere if the panel clears him.”

Coon covered a lot of ground in a very brief window. He’ll teach a comprehensive course on the new CBA this July in Las Vegas as the Sports Business Classroom, which is currently open for registration.