Since Saturday’s announcement of a tentative labor agreement between the NBA owners and players, details of the new Collective Bargaining Agreement have begun to surface. To save you from searching for the important details yourself and to hopefully reduce the number of CBA tweets that @LarryCoon has to respond to, I’ll list what I consider to be the five most significant points in this agreement, in terms of what you should care about as an NBA fan. These points are taken from this eight-page “Summary of Principal Deal Terms”, which you can view as a Google Doc.
1. The Amnesty Provision – Each team is permitted to waive one player prior to any season of the CBA (only for contracts in place at the inception of the CBA) and have 100 percent of the player’s salary removed from team salary for Cap and Tax purposes. A modified waiver process will be utilized for players waived pursuant to the Amnesty rule, under which teams with Room under the Cap can submit competing offers to assume some but not all of the player’s remaining contract. If a player’s contract is claimed in this manner, the remaining portion of the player’s salary will continue to be paid by the team that waived him.
What this means: Teams over the cap won’t be able to snatch up waived players with minimum contracts if another team with cap room bids on that player with a higher offer. You can safely assume that the Miami Heat are not a fan of this rule.
2. Traded Player Exception – The Traded Player Exception has been increased for non-taxpayers such that the amount a non-taxpaying team has available to replace a traded player or players equals the lesser of (i) 150 percent of salaries of players being traded plus $100,000, or (ii) the salaries of players being traded plus $5M. (For purposes of this rule, team is a non-taxpayer if its post-trade team salary is below the Tax level.) Traded Player Exception for taxpayers equals 125 percent of the salaries of players being traded plus $100,000 (same as under 2005 CBA).
What this means: For non-taxpaying teams, this exception has increased from 125 percent plus $100,000, which gives them a lot more flexibility in workable trades. Future trade deadline days should be more exciting than ever, and we’ll be less likely to see players included in trades strictly to make the contracts fit within the exception.
3. Mid-level exceptions – Non-taxpaying teams can offer $5 million in years one and two, growing three percent annually thereafter, with a maximum contract length of four years. Taxpaying teams can offer $3 million in year one, growing three percent annually thereafter, with maximum contract length of three years. A new exception is available for teams that use room under the salary cap (and therefore forfeit their Non-Taxpayer Mid-Level and Bi-Annual Exceptions). This exception allows a team using cap room to thereafter sign one or more free agents to a contract with a total first-year salary up to $2.5 million, growing three percent in the second and final year.
What this means: The maximum size and length of these contracts has been reduced from the previous agreement, which hurts “middle class players” while it reduces the potential damage that General Managers tend to inflict on their teams with these deals.
4. Restrictions on re-signing traded players – The waiting period for a trading team to re-sign a traded player who is waived by the recipient team is extended until the earlier of one year from the date of the trade, or the July 1 following the last season of player’s contract.
What this means: Remember how pissed off you used to get when two teams would agree to trade a player with the understanding that the player would be waived so he could re-sign with his original team 30 days later? This rule prevents that from happening anymore. This is a good rule.
5. Term of Agreement – Ten years, with mutual NBA and Players Association opt-outs after year six.
What this means: We won’t have to face another NBA lockout until 2017. Hooray!