After spending almost half the year in a pitched labor dispute that shutdown league operations, the NBA owners and players union agreed to a new collective bargaining agreement last weekend. The reformed players union—which had disbanded last month to file an antitrust lawsuit against the owners as a negotiating tactic—and league representatives are set to meet again Friday afternoon to come to official terms on the ten-year contract. As long as the final details (such as drug testing and player age restrictions) are worked out over the next week, a shortened 66-game season will kickoff on Christmas Day.
The general consensus on the deal is that the owners came out ahead at the players' expense. The old contract had stipulated that 57 percent of basketball-related income go toward players' salaries, while the new deal reduces that number to 51 percent next season, and possibly even lower in years to come.
But the fight wasn't just about the overall divide of money, and for the other details "winning" in this case isn't what you would normally expect in a labor disputes.
Besides guaranteeing a minimum salary (which at $473,604 for an entry level player is significantly cushier than most minimum wage jobs), the players union wants a largely deregulated league, a free market where the owners and players are able to negotiate whatever contract they choose. The owners, though, wanted specificity on the length of the contracts they can offer and what types of raises must be on the table. It's all because the owners essentially can't trust themselves to spend their own money wisely. They ran wild under the last collective bargaining agreement, offering midlevel players outrageously large salaries that all objective observers saw as foolhardy, but the owners just couldn't resist.
The last time the owners locked out the league—losing some of the 98-99 season in the process—the skyrocketing salaries of the league's star players was the main point of contention. At that time, the Chicago Bulls were paying Michael Jordan over $30 million dollars a year. While it wasn't surprising to see the greatest player in NBA history was raking it in, his younger brethren were also signing unheard of contracts. In the season before that lockout, my beloved hometown Minnesota Timberwolves extended 21-year-old Kevin Garnett's contract by 6 years and $126 million (worth every penny in my entirely unbiased opinion.) It was the largest contract in league history, granted to a player who was still only in the third year of his career, so owners were rightfully afraid of what might come the next time a star free agent hit the open market. That lockout was resolved when the two sides agreed on pay scales that limited the maximum amount owners could offer to their star players based on years of experience.
This time it was the NBA's middle class, players who earn less than the superstars but more than the benchwarming utility players, that the owners hoped to rein in. The league had been handing out too much to middling players who never saw much playing time. When 30-year-old Brendan Haywood's contract expired in the summer of 2010, the Dallas Maverick's offered him a lavish six-year, $55 million deal after he had averaged 8 points per gamer and 7 rebounds with the team following a midseason trade. A lumbering seven-foot center, Haywood was supposed to be an anchor for the team's future and the $7 million he earned last year made him one of the highest paid players on the Mavericks when they won the NBA Finals this past June. But that contract turned out to be a waste of money, as Haywood spent most of his time lumbering from the bench to the locker room. He had almost no role in the team's playoff wins. Eight other players logged more minutes than Haywood during the Mavs' playoff run, and Haywood averaged just 3 points per game.
Spending that much money to have someone sit on the bench was probably frustrating for the Maverick's owner Mark Cuban, but he couldn't feel too bad when his team was stocked with superstar talent like Dirk Nowitzki or Jason Terry. The problem of the overpaid middle class was much more pronounced for middling teams before the lockout. The Detroit Pistons had money burning their pocket in the summer of 2009, but none of the league's top talent had any interest in playing there. So they threw as much money as they could at Charlie Villanueva and Ben Gordon, two solid role players who had done nothing to justify the five-year deals both signed. Gordon earned $10 million and Villanueva took in $7 million last season, both averaging just a measly 11 points per game as the Pistons finished with an abysmal 30-52.
NBA teams are operating in an imbalanced market. Unlike the NFL, where the majority of positions allow teams to compensate for a poor quarterback by beefing up their defensive line, a successful NBA team is built around only a few players. It's a league where getting one or two of the best players in the game can propel your team to a championship. There are 12 players on most teams' rosters, but only seven or eight get any real playing time on average. Once the major market teams have gobbled up all of the star talent, the mid- and lower-tiered teams are left to engage in bidding wars, skyrocketing the costs for players who would add little actual value to their teams. The NBA salary cap is designed to discourage player movement, making it easier for teams to re-sign their own players rather than bringing in new talent. Once teams were committed to these stinker contracts the owners and the teams' fans were stuck watching a struggling collection of players on the court, either waiting until the day the contracts finally came off the books or praying for the team to get lucky and nab talent from the draft.
With the new deal, the teams' abilities to rush in love with the player of the moment will be capped. Teams can only offer a four-year contract to entice new players to their team, and the midlevel exception (a provision that allowed teams over the salary cap to sign one $5 million player per year) has been greatly restricted. Owners and the General Managers who advise them will surely still become overly infatuated with players, but those busts will at least spend fewer years wasting time on the bench.