The NBA owners used the lockout to snag billions of dollars in revenue from the players. But they also used it to engineer “competitive balance,” in part by restricting how star players could move around the league. Stars are the most valuable commodities in basketball, and the NBA wanted to give small- and mid-market teams lucky enough to draft top-10 players a better shot at keeping them.
Almost precisely five months after the start of the lockout, we are experiencing an exact repeat of last season’s Carmelo Anthony trade madness, only with two actual top-10 players threatening to force their team’s hand just as Anthony did with the Nuggets. And the league is ready to pounce.
The Nets, flush with cap space and desperate to keep point guard Deron Williams, are prepared to offer center Brook Lopez and two first-round picks to Orlando for center Dwight Howard, according to ESPN.com’s Marc Stein and Chad Ford. The report says New Jersey is also willing to absorb forward Hedo Turkoglu’s disastrous contract (three years and $34.8 million left) to improve its proposal.
Meanwhile, the Celtics are reportedly willing to deal one All-Star point guard (Rajon Rondo) for another (New Orleans’ Chris Paul, who is uninterested in Boston for now). The Knicks will surely use whatever means they have to make a run in free agency or via trade for Paul, who, like Howard, can hit the open market after this season.
This will test many things: the new collective bargaining deal; the power of big markets as fun places to live and endorsement drivers; and the willingness among stars to forfeit money to play where they want. As I’ve written before, the proposed collective bargaining agreement didn’t do anything dramatic to tether stars to incumbent teams. There was never a serious discussion about an NFL-style franchise player tag, something the union would not accept. The NBA has long had rules, called Larry Bird Rights, that allow incumbent teams to offer more money and years for their stars than rival suitors can.
The new CBA merely tweaks those rights. But those changes appear to have closed off every loophole that had allowed stars such as Anthony to switch teams and still earn precisely the maximum-level salary that only their old team could have offered. In other words: Paul and Howard would lose significant amounts by switching teams, either via trade or free agency.
Howard Beck of The New York Times and Mike Kurylo of Knickerblogger have done the math on Paul’s possible moves, and I urge you to read their full stories. The gist, using salary data from ShamSports and the eight-page summary of the proposed CBA, via SI.com’s Sam Amick:
• If Paul eventually hits free agency, the Hornets could sign him to a five-year, $100 million contract — a classic Bird Rights deal, with 7.5 percent annual raises based on his salary ($17.8 million) if he exercises his player option for 2012-13.
• A rival team with maximum cap room next summer — something the Knicks will not have, but the Celtics might — could offer Paul a four-year, $74 million deal, with 4.5 percent annual raises based on his 2011-12 salary ($16.4 million).
That’s a difference of one year and $26 million, though that last number is a little misleading. Barring a major injury, Paul would make plenty in that fifth season through a new deal, and if he earned, say, $15 million (a conservative estimate), he’d have cost himself “only” about $10 million over five seasons — about $2 million per year. That’s a lot. Is it enough to dissuade movement?
But this is old news. The expired CBA carried similar provisions, which is why LeBron James and Chris Bosh earned less in Miami than they could have by staying in Cleveland or Toronto.
The real news happened with extend-and-trades, the Carmelo-style transaction in which a player simultaneously signs with his old team at a maximum rate and gets dealt to another team for salary-matching assets. The owners wanted to ban such deals, fearing repeats of last year’s situation with Anthony. But the NBA bent in the end and allowed them, with limitations. Here’s how such a deal would work in Paul’s case:
• Those instant, Anthony-style extend-and-trades are still allowed, but the league has limited such extensions in length (only two additional years if a player is in the final year of his deal) with raises of “just” 4.5 percent. Because Paul has an option for 2012-13, he could receive only a one-year extension, valued at $18.5 million, in a simultaneous extend-and-trade to New York. (Note: This analysis ignores the fact that New York lacks any attractive trade assets.)
• Players like Paul have another extend-and trade-option: Their incumbent team can sign them to a richer and longer extension and still trade them, provided the club waits six months. In Paul’s case, that richer extension with the Hornets would be a two-year deal worth about $39 million, based on those 7.5 percent raises. The goal of the sixth-month waiting period is to make it awkward on both teams involved in this potential transaction. Depending on the timing of the original extension, the waiting period could drag far enough into the offseason to muck up plans for the acquiring team.
The waiting period goes the other way, too: Any team that acquires a player in a trade must wait six months to sign him to an extension carrying those extra years and 7.5 percent raises.
In short: There is no way for Paul or Howard to change teams without forfeiting money and/or long-term security. These are real changes, and they will force players to make real decisions — choices that are theirs, not ours. There is no real “loyalty” in sports, and players choosing less money in exchange for a city they like and teammates they’d prefer is a decision that carries no moral weight.
As for Paul and Howard, we’ll have plenty of time to break down their games, and how they’d fit with potential suitors. These are two of the half-dozen best players in the game, and it’s probably going to be impossible for Orlando and New Orleans to get back equal value. In a star-driven league, the true stars — the uber-efficient scorers who help on both ends of the court — are the most valuable commodities, and it is not close.
If anything, the stories of these two players — and LeBron, too — point out the massive amount of luck and management skill involved in retaining stars. Drafting such a player remains the best way to become an elite team. Keeping that player over the long haul means annual championship contention, whether in Los Angeles (with Kobe Bryant), Dallas (Dirk Nowitzki), Oklahoma City (Kevin Durant) or San Antonio (Tim Duncan).
Those teams, through luck and skill, nailed high draft picks (the Thunder) or mid-to-low first-rounders and even second-rounders (the Lakers with Andrew Bynum, the Spurs with Manu Ginobili and Tony Parker) to build around their stars. Money has clearly helped the Lakers and Mavericks rotate the cast around those stars through aggressive, predatory transactions, but the draft remains the most important means of building an NBA team.
And once you get below the top five picks, it is basically a crapshoot. Rare is the team that drafts a franchise player and gets another crack at the top five.
Since drafting Paul, the Hornets have had three lottery picks: Hilton Armstrong (No. 12), Julian Wright (No. 13) and Cole Aldrich (No. 11, immediately traded). The Magic have had two: Fran Vasquez (No. 11, never played in the NBA) and J.J. Redick (No. 11, easily the best of this bunch).
If you think those non-Redick picks are whiffs, go look at the players selected below them and study the history of the draft. The average No. 10 pick has the career arc of Erick Dampier. And if the draft gods aren’t kind to you, then you need to reach in free agency and the trade market, introducing all sorts of unpredictability.
It hasn’t quite worked out for Orlando and New Orleans, though both teams made major strides behind their stars. The Magic were a (very tough) Courtney Lee layup away from tying the 2009 NBA Finals at 1-1 in Los Angeles. But it’s 2011 now, and we get to test this new CBA right away.