With parity at the front of minds during CBA negotiations, the league missed the forest for the trees and might ruin what was working so well.
The NBA and NBA Players Association (NBAPA) finally agreed to a new collective bargaining agreement (CBA) right before the deadline, and while the surgery was a success, the patient died.
When the news dropped, I had the pleasure of sharing a pot of ale between friends, and one of those friends, Leandro, was fortunate enough to have his ear bitten off by my complaining. There must be no better feeling than having to console your local Golden State Warriors fan after the league made it harder to maintain a dynasty.
Several new rules in the CBA hamper the league’s best teams and make it impossible to assemble some of the recent NBA juggernauts we’ve seen in recent seasons without the players losing out.
And in the rare scenarios where the players don’t lose out in the dynasty-assembling business, the NBA world as a whole is going to miss out on what really makes this league tick, giant superteams trying their damnedest to win a title.
If Adam Silver wants the league to be a happy little universe where everyone has an equal shot at a title and there’s no clash between elite teams, then this new CBA is limiting what makes basketball such an amazing product.
The culprit: The second tax apron
Here’s how the second tax apron was first described to ESPN: “The NBA is curbing the ability of the highest-spending teams, such as the Golden State Warriors and the LA Clippers, to continue running up salary and luxury tax spending while still maintaining mechanisms to add talent to the roster.”
To do this, the league is setting a second line at $17.5 million above the tax line called the second tax apron. Any team in breach of this number will lose several team-building mechanisms including:The taxpayer mid-level exceptionThe ability to use cash in tradesThe ability to move first-round picks that are seven years awaySign players on the buyout marketTake on more money than is being sent out
Before we get into the nitty-gritty, what’s the goal of this CBA? Like all of them, it’s so all parties (players and governors) can agree on revenue sharing, maintaining a peaceful work environment and ensuring nobody kills the golden goose that is the NBA’s financial success.
Outside of pure employer-employee relations, it’s an opportunity to address league-wide issues. Some of those issues may be drug testing (marijuana is no longer part of the season-long random drug tests; the ‘Tyreke Evans Rule’), giving G League/developmental players greater opportunities or adding some excitement to the regular season (see: tournament, in-season).
That’s all fine and dandy, but one of the issues a majority of teams complained about was parity, giving all teams an equal opportunity at winning an NBA championship.
Right now, the best way to win an NBA championship is to collect championship-calibre players, either through the draft or free agency, and pair them with an elite coaching staff. From an NBA point of view, there’s not much you can do outside of that.
This new CBA (namely, the second tax apron) should really put the burner on teams who are trying to find the right pieces to put around an established core. For the Warriors, they wouldn’t have been able to sign Donte DiVincenzo in free agency in 2022 or trade cash for Jordan Bell in 2017.
In recent seasons, the Milwaukee Bucks have been filling out the bottom end of its roster with cheap late draftees. To do this, they have snapped up some late second-round picks for cash. They’d now have to outright sign a veteran for the minimum.
But the mid-level exception isn’t a foolproof system and sometimes it doesn’t even have an impact on teams that are above that line. This season alone, John Wall for the LA Clippers and Danilo Gallinari for the Boston Celtics will end up playing zero minutes for those teams in the playoffs.
But then there’s the actual argument: why are we punishing the teams that are most willing to spend? Yes, the Warriors and Clippers are spending more money than other teams in the league, but every NBA team is allowed to spend that much.
If another team drafts a big three like Steph Curry, Klay Thompson and Draymond Green, they’d probably want to spend a lot of money to keep the team together while still competing for titles.
Are we asking the next Bob Myers to decide between keeping the core together and hitting the second tax apron or letting the third guy walk and using those teambuilding apparatuses elsewhere? If so, that third player will have to sign with another team (losing money since your current team can offer an additional year and higher raises in an extension) or the role players will have to look for a new contract (maybe Andre Iguodala leaves after the Warriors signed Kevin Durant).
As Draymond Green tweeted right after the news dropped (for those playing along at home, it was when I was at the pub with Leandro): “Players lose again…. Smh! Middle and Lower spectrum teams don’t spend because they don’t want to. They want to lose. So increase their spending capabilities, just to increase them. They continue to cut out the middle. And this is what we rushed into a deal for? Smdh! Never fails.”
On Ep. 191 of The Deep Two NBA Podcast, my colleague and co-host Dante Boffa pushed back against Draymond’s point, arguing that other teams simply can’t afford to go as far into the luxury tax. Teams like the Indiana Pacers and Denver Nuggets, for example, teams who are allergic to spending deep into the luxury tax aren’t making as much on ticket revenue. Additionally, the Warriors own their new stadium and are able to print money throughout the calendar year, not just during the NBA season, something the smaller market teams can’t do.
A lot of this wasn’t possible until a new ownership team took over Golden State, invested in the right people and created a dynasty. The basketball lead the change for the Warriors, it wasn’t the weather or tech bros hanging out in Silicon Valley.
If the Pacers (I’ll be using them as a punching bag for much of this article, thanks for being a shining example of scant Herb Simon x) get lucky in the lottery, draft that French kid (what’s his name again?), Tyrese Haliburton continues to grow and becomes a bona fide All-NBA talent and find their third banana in [insert Pacers player you like], the NBA world will turn its attention to Indiana.
And following on from that analogy, if that team makes the Finals five years in a row, I’m sure the Pacers will be one of the hottest commodities in the league. You might argue that Indiana’s weather or location isn’t as nice as San Francisco but I’m the wrong person to have that chat with.
If the Pacers narrowly lose the 2029 NBA Finals to the Seattle Swamp Dragons, the front office might look to free agency as a place to get one final piece to make it all work. Under the NBA CBA, they might not be able to find their P.J. Tucker, their do-it-all role player who pushes them over the line. And that’s what the league seems to want.
Before the Indiana Pacers can build themselves into an NBA superpower, the front office might project out their contracts, just as the Memphis Grizzlies would be right now.
The Grizz have a potential MVP in Ja Morant and a defensive lynchpin in Jaren Jackson Jr. as a second option. Throw in Desmond Bane and it’s looking like Memphis has its own core to compete for a title together. If they use their future picks to trade for [player] this offseason, they might be in the driver’s seat for the foreseeable future.
But with the second tax apron about to kick in, would the Grizz be offering Bane and any role player below him less money than they would’ve before?
In March 2022, Brian Windhorst published a puff piece for ESPN on Grizzlies’ owner Robert Pera. It talked about how Pera’s business has boomed in recent years, making him the third-richest owner in the league.
As Windhorst writes: “With Pera’s wealth, the Grizzlies may be able to be a luxury tax-paying team despite their small market status. The franchise hasn’t paid the luxury tax since 2005. Sources tell ESPN that the Grizzlies have been sending signals they intend to be aggressive in retaining and acquiring talent.”
Even with Pera doing the right thing, saying he’s happy to dig deep into his pockets to support a contender, it might not be the best thing for the organisation. Zach Kleiman, the Grizzlies’ general manager and executive vice president of basketball operations (GMAEVPOBO for short) might see it better to play hardball with his players, cutting the salaries of lower-paid guys in order to stay under the second luxury tax line.
For the teams who have the time to plan it out, it might make sense to lowball players and stick below the second tax apron for as long as they can.
With teams currently over the number, like the Warriors and Clippers, they might want to re-sign their own players to above-market-level salaries since there’s little-to-no way of replacing their production. That could mean re-signing Draymond Green despite his age and penchant to throw fists at teammates. And it could also mean the Clippers overpay lacklustre role players like Marcus Morris Sr. just to hold onto salaries that can be used in a trade.
A counter-argument there is that some players might get an inflated salary simply because of their situation, isn’t that nifty? Not really, the Clippers could fully non-guarantee Morris’ salary, hold onto him for as long as possible and when he gets moved for [playoff rotation piece] at the deadline, his new team could just waive him without taking on a single dollar of long-term salary.
Why is the new CBA bad for basketball?
Is this really the outcome the NBA and the NBAPA wanted?
If the second tax apron was never introduced in the CBA and the league just signed a new seven-year deal with little-to-no changes, is the NBA in a bad place? In my opinion, not at all. This season, we have one of the tightest title races in NBA history and while the Boston Celtics, Milwaukee Bucks and whatever team Kevin Durant plays for nowadays are favourites, there are about eight teams you could realistically envision winning it all.
We have parity in the league right now. The longest playoff drought is the Charlotte Hornets at six seasons but with LaMelo Ball, a high lottery pick and no more Mason Plumlee, it’s not impossible that this team makes the playoffs again very soon.
All of these title teams were built under the current CBA, and it’s fair. If you draft well, sign the right role players and sprinkle in a bit of luck, you’ll be in a great position. There are no teams who look like they’re in a disastrous situation. To prove the point that we’re in a great situation, the league is probably going to expand in the coming seasons and there’s more than enough talent to go around.
If this CBA is a knee-jerk reaction to Durant signing with the Warriors, the governors should have thought about that when they decided not to smooth the new TV money (something they’re now doing). I’m physically shaking my head while typing this because it’d be such stupid reasoning.
Instead, we’re about to start a new seven-year deal where a young team like the Grizzlies are second-guessing whether it’s worth investing in all of their players. For the owners and front offices, it’ll be a business decision but if the decision isn’t to keep a young core together due to financial reasons, fans and players are losing out.
Let me rephrase the opening question of this section: is this really the outcome the NBAPA wanted? Or even, is this the outcome that fans would want?
This new CBA will only hurt the NBA and disincentivise people from doing the right thing. This CBA says to Steve Ballmer; “hey, thanks for spending as much money as you possibly can to put the best product on the court for your fans, we’ve had enough”.