With opening tip rapidly approaching, we reached out to a friend of the program to provide some insight on what the pending CBA negotiations (contraction!?) could mean for a team that is in a giant state of flux. The following are the words and wisdom of one Joe Kotoch, an opinion-filled legal expert of all things hoops who just so happens to hail from Cleveland. Do enjoy…
Opening day for the NBA’s most highly anticipated season. After a long summer in which The Decision dominated sports headlines and Carmelo Anthony and Chris Paul each tried to indirectly force their respective teams to trade them to the New York Knicks, it is now time for basketball. No more trashing of LeBron’s character or laughing at the outrageous contracts awarded to mediocre players by teams. No more talk about Oklahoma City being the next big thing or the Miami Heat being the team to beat.
As the season begins fans care about two things: their team and whether there will basketball played beyond this season. As for the first part, the old adage around the league is that within one month teams will find out who they really are.
The second part, however, is much more complicated. Many fans hear the term “Collective Bargaining Agreement” (or “CBA”) and don’t really know how complex it is. The CBA is required to be bargained by the NBA and its players’ union. David Stern does not just make up rules on whim; many rules must first be negotiated by both sides. For instance, the salary cap and any change to it must occur during the negotiations. For what it is worth many of the statements regarding the new CBA and any changes the league is discussing is posturing.
Recently the new owner of the Washington Wizards, Ted Leonsis, was fined for stating on the record that the owners would like to see a “hard cap.” The problem with a hard cap right now is that many contracts in the NBA are fully guaranteed and even the contracts that aren’t are partially guaranteed. Also, a hard cap would eliminate the “Larry Bird exception,” which allows teams to spend over the salary cap to keep a player who has been under contract for a set period of time. Leonsis’s statement was telling, but were likely a bluff as the players would fight this change and the owners do not have uniform stance.
This much is certain: The league would like to reduce the length of contracts, reduce the amount of guaranteed money and limit raises. Often times, fans choose to ignore that professional sports is a business and focus on the idealism of the game that grew up loving. The reality is that the owners and Commissioner of the NBA care about dollars and cents. The CBA negotiations are intended to protect the owners from themselves – the same people that willingly gave Drew Gooden, Charlie Villanueva, Elton Brand, Eddie Curry, and many others excessive contracts that paralyze the long-term financial flexibility of a franchise. During the last CBA negotiations, the league successfully reduced the length of contracts and will look to do that again this time around.
Additionally, Commissioner Stern recently started uttering the dreaded “C” word – contraction. While contraction is possible it is also very unlikely. The league would certainly face litigation battles with the union over collusion and would incense the players to unite for these negotiations.
In reality the owners prefer to have a divided union so that they can more easily force their will during times of need. Furthermore, contraction is highly unlikely due in part to the viability of several markets ready to adopt teams. Among the cities able to absorb teams are Las Vegas (Sacramento), Kansas City, Seattle (if it builds a new arena – teams will fight to go there), and Nashville. The teams most likely to be rumored for contraction are New Orleans, Charlotte, Sacramento, Memphis, and Toronto. The League is more likely to relocate them instead of paying off these owners for franchises valued around $300 million. The recent sale of Golden State all but made contraction impossible for the league. And for the Cavs fans out there, rest assured Dan Gilbert is too invested in his casino to allow the team to relocate or be contracted. He needs a draw to keep that district of downtown Cleveland well-attended.
Just like negotiations in life, the CBA negotiations are a game of chicken designed to reward the side that doesn’t blink. The owners, due to their wealth, have a distinct advantage and they know it. If a lockout occurs, the owners can recall the last lockout and know that today’s athlete saves little of what they actually earn. (As an aside, I predict that over the next decade, you will see many more former stars file for bankruptcy ala Antoine Walker).
Final prediction: The owners and the league will successfully reduce the length of contracts, guaranteed money, raises, and possibly even implement the hard cap. There will be no contraction, merely some minor relocation, neither of which impacts the city of Cleveland.