Since news broke that a new CBA has been reached, the digital media universe has been teeming with rumors about possible changes from the previous structure. Everything from an amnesty clause to a mandatory pay scale has been floated around, with wild speculation not far behind. In this version of Nuggets News, we’ll take a glimpse at some of the hottest topics of discussion and evaluate how they might affect the Denver Nuggets moving forward.
Breaking down changes in new CBA by Larry Coon: As mentioned in the previous version of Nuggets News, Coon is well known as being the king of all things CBA related. In this must-read article he points out and explains the differences between the old CBA, restructured in 2005, and the new one supposedly reached last week. Here are some of the most significant changes:
Amnesty provision: Unlike the old CBA in which a player could be waived only before the NBA entered into a new set of rules in 2006, this time around, one player can be waived every year prior to the start of that season’s campaign as long as their contract was signed before the start of this new CBA. Players who sign contracts after the new CBA comes into effect are not eligible for amnesty. Salaries of those who receive amnesty will not count against that team’s payroll or luxury tax. Also, once that player is amnestied he can be claimed by teams with enough cap room at a reduced rate before he hits the free agent market.
Revenue sharing: According to Coon, small-market teams will greatly benefit from the new system as the amount shared will likely be three times what it previously was.
Minimum team salary: For the first two years of the deal teams must spend at least 85 percent of the cap, then 90 percent in every year following the 2012-13 season. Keep in mind that this clause somewhat tampers with the potency of the previously mentioned amnesty provision as it will be difficult for teams to consistently stay above such a high threshold, therefore many “unwanted” salaries will have to stay on the books to meet this restriction.
Luxury tax: Again, for the first two years of the deal the tax will remain the same with teams paying $1 back to the league for every $1 they go over the cap; however, after 2012-13, that system changes in that for every $5 million that a team goes over the tax, they have to pay an additional incremental tax that gets worse every time a new $5 million is spent. For repeat offenders (i.e. those that go over the tax limit four out of five years) the penalties are even worse.
Additional limits for taxpaying teams: Not only will violators of the tax limit receive a larger bill in the mail, but with the new CBA, they won’t receive the same benefits as non-taxpayers on the free agent and trade market as well. Taxpaying teams will reportedly have a smaller midlevel exception, won’t be able to acquire more money via trade and are prohibited from using the biannual exception. Come 2014, taxpaying teams won’t even be able to participate in sign-and-trade deals either.
Stretch provision: I found this to be quite interesting. Apparently from here on out if a player is waived his contract payment can be stretched out over a much longer period of time. This simply allows teams to recognize financial mistakes, but not have to suffer so harshly for their misjudgments.
Free agents and restricted free agency: Cap holds are largely reduced. Teams now have three days to match an offer sheet for a restricted free agent and qualifying offers can now be altered depending on performance.
New contracts: Instead of six years with a 10.5 percent raise for players with Bird rights, it’s now five years at a 7.5 percent raise. Regular free agents will receive four years with a 4.5 percent raise, instead of the previous five years with an eight percent raise. Players coming off rookie contracts are eligible for more lucrative deals if they reach certain accomplishments like winning MVP or making the All Star team twice. (It should be noted that Coon points out how the temptation for superstars to leave the franchises that drafted them diminishes greatly in this new CBA as those players are now eligible to “cash in” much earlier on in their careers.)
Midlevel exception: Non-taxpaying teams will be able to offer four years at $5 million with 4.5 percent raises, while taxpaying teams are only allowed three years at $3 million per year with a 4.5 percent raise. Teams with cap room who do not need this provision will receive an extra midlevel contract that is good for two years at $2.5 million with a three percent raise.
Trade rules: Nothing changes for teams over the cap. They can only receive 125 percent plus $100,000 of the salaries traded away; however, teams under the cap can now receive 150 percent plus $100,000 of the salaries traded. Also, teams can only trade up to $3 million in cash in exchange for players.
Poof! Goes a Bad Contract, if Any N.B.A. Team Wishes by Howard Beck: This is an excellent article in which Beck gains inside access to several NBA executive’s thought process, who go on to claim exercising of the amnesty provision will not be as ubiquitous as originally projected. There are many great points made throughout the piece and for those still attempting to grasp the concept of this “get out of jail free card,” I highly recommend this story.
Amnesty clause: Team’s top candidates by Marc Stein and Chad Ford: In case you’re wondering which players are prime targets for receiving amnesty, ESPN has you covered, suggesting the most likely players for all 30 NBA teams. I’ll give you one guess who they nominate from the Nuggets. (Hint: It’s not Kenneth Faried!)
Summary of Principle Deal Terms (Google Doc.): If you’re you’re the type of person who likes to watch court cases unfold over month-long stretches while you knit your cat a detailed sweater to the tune of some salisbury steak TV dinners, maybe this is the type of document for you. All joking aside, this is essentially the NBA’s official release of the rules and regulations agreed upon for the new CBA. Kind of boring, but it’s all there.
Five key points from the new Collective Bargaining Agreement by Scott Carefoot: If you’d like a little flavor in your analysis of the new CBA (i.e. you’re not into knitting sweaters for your pets), then read this.
New ‘Rose Rule’ could pay a few rookies more by Royce Young: The players didn’t win much in this new agreement, but as Young points out, being able to collect a hefty salary at an earlier age should soften the blow for some.
China could block NBA players return by Adrian Wojnarowski: Not good news for former Nuggets, J.R. Smith, Wilson Chandler (still technically a Nugget) and Kenyon Martin. According to Woj, “The Chinese Basketball Association is showing no inclination to let unhappy NBA players out of their contracts for the 2011-12 season, and will likely mandate they not receive clearance letters to return to the NBA until the Chinese season ends in March… As a member of FIBA, the NBA needs a letter of clearance from Chinese teams to allow players to sign NBA deals.” This is where I type, “SMH,” right?
What all this means for the Nuggets
As far as the amnesty clause goes, contrary to what a lot of Nugget fans originally thought, using this provision on Al Harrington might actually not be in the cards, at least for now. With the NBA’s mandate that teams spend at least 85 percent of the salary cap, and the Nuggets sitting at a cool $28 million, there’s a lot of money to be spent in order to meet this ultimatum. Dismissing Al Harrington and his remaining contract would not only send the Nuggets in the opposite direction, monetarily speaking, but it would also essentially create another hole that would probably end up being filled by another bad contract anyways. As Coon mentions, teams don’t have to use their amnesty clauses, and if the Nuggets aren’t hard pressed to shed salary then it just doesn’t make much sense to get rid of Big Al, especially when he’s still fully capable of playing a high level. After all, $6 million this year is noting short of pedestrian in terms of bad contracts that have been shelled out in NBA history. When it’s all said and done, count on Harrington being on the Nuggets roster to start the 2011-12 campaign.
Glancing at the other changes, from the Nuggets point of view this has to be seen as a win. Revenue sharing now weighs heavily in our (small market teams) favor compared to the last deal, luxury tax penalties are going to create much more balance throughout the league while preventing an MLB-like monopoly where teams at the top easily obtain everything they desire, and overall, the league appears to finally be heading in the right direction for the first time in years, both financially and ethically. I can’t even begin to stress just how much of a breakthrough this agreement was in terms of getting accomplished what desperately needed to be changed. I know David Stern is a popular lightning rod for criticism from the NBA “cool crowd,” but I admire his unrelenting stance on issues that simply had to be addressed. Had the players received what they wanted, the league would have continued to spiral downwards with teams like the Lakers, Heat and Knicks reaping all the benefits while the Nuggets and other small market franchises watched as their best players participated in mass exodus towards the cities with the most skyscrapers.
It’s going to be interesting seeing where the Nuggets go from here. Had the minimum team salary aspect of the new CBA been left out, I’d be firmly of the belief that the Nuggets were heading down the road to rebuilding, but by enforcing a mandatory league-wide spending spree it’s hard to say where teams like Nuggets will come out. I still somewhat fear that small-market teams will end up getting the short end of the stick some way or another. My guess is that all the most talented players will continue to flock towards big markets, leaving everyone else to sign the mediocre players to over payed contracts in order to meet the 85-90 percent threshold, but only time will tell. For now, re-signing Nene should continue to be the Nuggets top priority, while simultaneously monitoring the situation that is Marc Gasol, because if you have to end up overpaying one position in order to meet a stipulation, center is probably it.