“Salaries and wages must reflect the reality of the enterprise’s economic performance; deviations from the planned performance should be reflected in pay.”
On the Fourth of July, Kevin Durant announced that he was going to sign with the Golden State Warriors, thus creating the newest “super team” in the NBA. In some people minds, these teams are detrimental to teams who aren’t in the top tier; others consider it to be positive for the league to share a common enemy. Whether either of these scenarios are the case, the reasons the Warriors are able to have four of the league’s top player’s break down to a sinister mixture of luck, the fact that the NBA has max contracts, and the state of Curry’s ankles.
The NBA has the highest odds differential to win a championship in all of the four major sports – and it’s by a long shot. Every year in the NBA, you have 3-5 teams (if we’re lucky) with an actual shot to win the title. Contrastingly, the MLB, NFL, and NHL have numerous teams with a chance, which makes the season more unpredictable and exciting for more fans in different cities. In all likelihood, we will watch the Golden State Warriors play the Cleveland Cavaliers for the third straight year.
The above graph shows the standardized win percentages among NBA, NFL, and MBA. You can see the correlation between past and future successes. The NBA, with the highest year-to-year consistency, shows the lowest parity. Moreover, NBA teams’ performances from one year to the next appear to be growing more consistent in recent seasons. The winners keep winning and the losers keep losing — and where does that leave the losers and their fans?
Let’s start with the assumption that superstars like Durant mean more to his team’s success in basketball than a star baseball player, like Bryce Harper, does for his team – the Nationals. In the MLB there is no max contract and players are allowed to sign as lucrative and as long of deals as they are able to leverage. Meanwhile, In the NBA, players like LeBron James are only able to be paid 25-35% of their teams salary cap, depending on how long you have been in the league, when they would yield a much higher percent than that based on performance and revenue they provide. Durant left the Oklahoma City Thunder, a team he played 9 seasons with (8 if you don’t count the teams year in Seattle), which means the max deal he was allowed to sign upon joining a new team was correlated with 4 years. He opted for a 2 year deal with a player option because the salary cap is going to go up once again – all these factors limit the number of years and the amount of money that a player can sign for. If Durant had stayed in OKC he would have been allowed to sign a 5 year deal, which is designed as such to allow teams to keep their own free agents. But lately, the mega stars have been opting for single year deals so that they can milk as much money as possible each time the salary cap goes up, giving them options as free agents to look elsewhere.
With the Warriors joining the teams the like of the 2008 Celtics, the 2011-2015 Miami Heat, and the 2016 Cleveland Cavaliers, it begs the questions: how does the NBA fix this problem and is it even a problem?
One potential option that would keep star players on their current teams is to remove the max limit on contracts. Now, some might say, “Look at the MLB! They don’t have max contracts and they still have some of the best players on the same team!” (Yankees Money), which is true; however, they also don’t have a hard cap. If the NBA eliminated the rule of max contracts, and set a hard cap, it would prevent these supernovas from forming.
For the sake of this hypothetical proposal, let’s say every team has 100 million dollars and every player is a free agent. The Cavs call LeBron and offer him 85 million a year for X amount of years; LeBron signs with the Cavs leaving them with only 15 million left to fill out the other 11 spots on their roster. So then another team calls and offers Kyrie Irving a similar deal, keeping the two superstars from signing on the same team. This spreads out the talent throughout the league and creates a more balanced league where every team could compete most years until someone makes a bad deal or takes an intentional pay cut, both of which we have seen in the current system. This would be instantly rejected by the NBA players association, but shows a more accurate projection of Lebron’s massive worth to the Cavs.
A more likely scenario is the allowance of one almost uncapped super max per team, which would still allow players who are not quite superstars to reap an adequate rewards that reflects their value on the court. The concept would need to be structured in a way that was fair for markets of all revenues, and fair for players of all talents. However, such an extreme conceptual restructuring of contracts would never happen without a lockout and extensive deliberations and a new CBA.
When LeBron and Chris Bosh joined the Miami Heat in the summer of 2010, they both took less money to make it happen, so you could make the argument that players would choose to sacrifice to continue forming super teams, however, in 2010 LeBron and Bosh took 2-3 million less for a year. The lack of a max contract pushes the price of their pay cuts into the tens of millions – hardly chump change, even for those guys. If a team like the Bucks could offer 30 million more than the Warriors per year, would Kevin Durant turn down an extra 150 million? Durant would take that money and run with it because, as much as every player says they want to win titles, money talks. If the money didn’t matter, we’d see teams of All-Star buddies flocking together, taking a couple million each, and dominating the league. To attract star players, speak their language.
The NBA is a star driven league, a league where LeBron James, a three time NBA champion, a four time MVP, a 12 time all-star, and a 5 time All NBA 1st team defensive player, makes less that Mike Conley (for now). One might argue that the current format is unfair to the players who drive their cities economies and Vegas’ odds in the way that LeBron or Durant can. These players end up making more money off the court than they do on it.
There are other solutions to the super team dilemma; a long-term goal for the league will involve bringing the fans back to the arenas in markets like Philly, Sacramento, and New Orleans. Perhaps the NBA’s highest echelon of players are always so far above the field that parity is impossible – this is often true for other sports with smaller teams: Barcelona and Real Madrid for example. The NBA will surely work towards using the variables that are within its control to make an impact on parity. The league doesn’t need to accept a league in which super teams like the Cavs and Warriors have such talented teams that they play on a different plane of existence (For reference the Warriors sit at 2/3 odds to win a championship Patriots are at 15/2). The CBA is a complex and political matter that take teams of specialists to figure out, but looking at removing or restructuring the max deal could be a path to different odds and different teams.