Why the Future of NBA Contracts Might Ruin the League | The Bill Simmons Podcast

[GSWFan1994]

Eventually you'd figure guys that could get the supermax won't. There won't be enough free agent money to go around. When the dust settles, those kind of huge contracts should really be going to Top 5 players in the league but at first there will be a lot of guys that eat more money than they should.

In theory, you're absolutely right.

In practice, you and I and everybody knows that those crazy GMs will outbid themselves and throw insane ammounts of money to many players.

This is not a critic to you (love your posts), but people have got to understand that the way the free market operates in the NBA is NOT an exact science... the decision making guys oftentimes don't follow rational rules in evaluating talent, for a variety of reasons (external influence of agents, owners is just a quick one to cite).

[Capn'O]

Eventually you'd figure guys that could get the supermax won't. There won't be enough free agent money to go around. When the dust settles, those kind of huge contracts should really be going to Top 5 players in the league but at first there will be a lot of guys that eat more money than they should.

In theory, you're absolutely right.

In practice, you and I and everybody knows that those crazy GMs will outbid themselves and throw insane ammounts of money to many players.

This is not a critic to you (love your posts), but people have got to understand that the way the free market operates in the NBA is NOT an exact science... the decision making guys oftentimes don't follow rational rules in evaluating talent, for a variety of reasons (external influence of agents, owners is just a quick one to cite).

Oh, in the near term it's gonna be 2015 summer on steroids. We're going to see some wild contracts in the next few years with a spike to where the Allen Crabbes of the world will only wish they played now. My longer view rationale is that at a certain point, the owners will have all have already spent like drunken sailors and be forced into more tiered allotments because they're out of cap. A more patient franchise might have the opportunity to absolutely clean up.

[xdrta+]

Oh, in the near term it's gonna be 2015 summer on steroids. We're going to see some wild contracts in the next few years with a spike to where the Allen Crabbes of the world will only wish they played now. My longer view rationale is that at a certain point, the owners will have all have already spent like drunken sailors and be forced into more tiered allotments because they're out of cap. A more patient franchise might have the opportunity to absolutely clean up.

I'm not sure why this will be the case since the new CBA, in order to avoid the large spike of 2016, limits the cap to a 10% rise per year.

[celtxman]

Hopefully, there's going to be so much talent to go around that it doesn't become a huge problem.

Bill is probably right, and it doesn't seem good for fans. Putting together enough talent to win a title, or getting a top 5 player happens once in a long time. Those teams deserve to extend their title windows and compete for as long as they can.

But which fans is it good for?

The Bird right rule from the 80s led to the Celtics and Lakers being able to keep their stacked teams and dominate the league. It was good for Celtics and Lakers fans. Was it good for fans of small market teams?

I don’t think the average fan cares that if the Celtics have Tatum and Brown they won’t be able to add as many good players around them, and the Celtics will be worse next year. For fans of other teams in the East, they prefer that the Celtics are worse next year.

What this is really in place to prevent is superteams, like the big 3 in Miami or KD in Golden State, and I think that’s good for most fans.

So who opposes the Bird Rule? Are we really talking about this as some kind of mechanism that favored just the Lakers and Celtics or did it also keep Isaiah Thomas in Detroit, Dominique Wilkens in Atlanta and Michael Jordan in Chicago. It is the backbone of keeping small market teams competitive. In 1985/86 the Celtics had the 5th highest payroll in the NBA . Their core of Ainge, DJ, Parish, McHale and Bird had played together since 1981/82.
I don't think people have a problem with the Bucks keeping Giannis, Holiday and Middleton together. But the NBA with all their accountants couldn't figure out that KD could be added to the Warriors in 2016 and we are now trying to correct letting the horse out of the barn.

[The Hypnotoad]

Bill loves and wants dynasties. This change hopefully promoted more parity, because if you are a top 2 heavy team then if you have a bad year filling out the rest you can be beaten. More parity brings more fans as different markets will be able to win championships which brings in more fans.

[Chinook]

People are overlooking that you might see more Spurs-esque teams where the stars agree to take less money to stay together. Lebron normalized putting the onus on team continuity on the owners paying whatever it took. I don't think this was a horrible thing for the league, since players shouldn't feel bad about chasing money. But with these constraints, it'll become more of a choice players make. In that way, small-market teams will have an advantage in that they exist in markets that can offer endorsement deals to off-set giving up salary. That would be especially true for buyout players, but the CBA specifically limits their movement.

But yes, players get the same money. They have to. That money will not disproportionally go to the stars. We don't know yet if teams will be more successful paying just stars or having a well-rounded team. That we don't know -- that there might be multiple valid ways to build a team -- is really cool. Add in the increased player movement, including actual max players, and you allow free agency and trades to be a viable way of building a team for clubs in all markets rather than just the major ones.

I really hate the idea that this punishes teams who build through the draft. It doesn't. It limits the ability for a team to catch lightning in a bottle over the course of a couple of years and then keep it together forever without any sacrifice from the players. In reality "building through the draft" in other leagues involve losing guys and being able to replace them with draft picks -- not just drafting stars. The teams that can lose their 3-10 guys every couple of years but have prospects who can come up and replace them are the ones who are built through the draft. That's going to mean teams have to draft multiple types of players at every point in their trajectory, rather than drafting prospects early on and role-players later. The Celtics are currently burning firsts they should be (under this new model) be using to draft guys to replace guys like Horford or Brogdan.

They might need to tweak the draft system to allow for talent to go to all teams more evenly, as well for having a better developmental system (including a third round and an RFA system for prospects to allow for multiple years of team control over guys who need to develop for a couple of years). But "building through the draft" is a long and continuous process, and Boston is going to have to get good at it again if it wants to survive. They shouldn't get to just sit on their laurels from getting lucky almost a decade ago.

[D.Brasco]

I think the new contracts will have players retiring early, which is good for them.

Take a guy like Wemby for example, after his rookie deal he's probably making 60-80M/year in his mid-late twenties. By the time he's like 30 he'll have almost half a billion in career earnings.

Whose playing basketball into their mid-late 30s if they've already clinched that kind of money? Some definitely will but I feel like others will just say hey its been great.

LeBron had a 100 million dollar Nike contract at 18 before he officially entered the league and he's been in the league 20 years now. Some players are built different, those are the ones who end up as the legends.

Those few will always exist.

[VanWest82]

I seriously question the 10% BRI growth projections. We've already seen a pinch in ad sales related businesses, but for some reason we think struggling networks are going to want to go bankrupt bidding on this next round of sports deals. Streaming models are sucking wind too. Netflix and Amazon aren't going to bail out all these leagues.

TV revenue growth has been a bonanza for sports leagues over the past decade+. At some point, the growth is going to stagnate.

Not disagreeing with your logic there, but I think, from their point of view, they think the streaming revenue is going to explode in the next few years.

I don't know if it will work out in the end, I haven't studied this segment properly, it's just an educated guess.

Not the same sport, it's a local network, they mismanaged their business, etc., etc....but....

https://www.espn.com/mlb/story/_/id/37763270/mlb-san-diego-padres-tv-rights-bally-sports-diamond

Ultimately, this was a situation where the Padres got over their skiis on payroll while Bally Sports (formerly Fox Sports) also got over their skiis, and now Padres are stuck footing some of the bill. It's the kind of thing that can happen when everyone just assumes there will always be growth. So even if someone like TNT stupidly overbids, there's no guarantee of NBA collecting if ad sales continues to stagnate.

Streaming $$ via league pass may continue to grow but even that feels dubious given how many services have split off as a result of cord cutting. It costs so much more now that channels aren't bundled. Is the idea that all the increase is supposed to come from international audience? Why now? I don't see it, at least not on the straight upward trajectory it's been on.

[garrick]

People are overlooking that you might see more Spurs-esque teams where the stars agree to take less money to stay together. Lebron normalized putting the onus on team continuity on the owners paying whatever it took. I don't think this was a horrible thing for the league, since players shouldn't feel bad about chasing money. But with these constraints, it'll become more of a choice players make. In that way, small-market teams will have an advantage in that they exist in markets that can offer endorsement deals to off-set giving up salary. That would be especially true for buyout players, but the CBA specifically limits their movement.

But yes, players get the same money. They have to. That money will not disproportionally go to the stars. We don't know yet if teams will be more successful paying just stars or having a well-rounded team. That we don't know -- that there might be multiple valid ways to build a team -- is really cool. Add in the increased player movement, including actual max players, and you allow free agency and trades to be a viable way of building a team for clubs in all markets rather than just the major ones.

I really hate the idea that this punishes teams who build through the draft. It doesn't. It limits the ability for a team to catch lightning in a bottle over the course of a couple of years and then keep it together forever without any sacrifice from the players. In reality "building through the draft" in other leagues involve losing guys and being able to replace them with draft picks -- not just drafting stars. The teams that can lose their 3-10 guys every couple of years but have prospects who can come up and replace them are the ones who are built through the draft. That's going to mean teams have to draft multiple types of players at every point in their trajectory, rather than drafting prospects early on and role-players later. The Celtics are currently burning firsts they should be (under this new model) be using to draft guys to replace guys like Horford or Brogdan.

They might need to tweak the draft system to allow for talent to go to all teams more evenly, as well for having a better developmental system (including a third round and an RFA system for prospects to allow for multiple years of team control over guys who need to develop for a couple of years). But "building through the draft" is a long and continuous process, and Boston is going to have to get good at it again if it wants to survive. They shouldn't get to just sit on their laurels from getting lucky almost a decade ago.

Tim Duncan was a rare breed who was willing to sacrifice millions of dollars to stick with his team but the majority of superstars are not turning down a significant amount of money just to win.

Also it's not easy finding stars in the draft let alone a star so teams are still going to offer the supermax for an all star level type of player like Mitchell or Brown, finding elite talent in the draft is not easy if you're drafting outside the top 5 picks and even then teams make the wrong pick pretty frequently.

[Chinook]

Tim Duncan was a rare breed who was willing to sacrifice millions of dollars to stick with his team but the majority of superstars are not turning down a significant amount of money just to win.

Tim wasn't the only max-level player on that team. Each of the three made a choice to stay together rather than try to get more elsewhere. Parker was only a free agent before his final year in the league. He just kept taking extensions before that. I don't disagree that modern players wouldn't take less -- as I said in the previous post, Lebron had a big effect on changing that mindset. I'm saying that players who do agree to that will have a huge competitive advantage over teams with players who don't. Players in the Lebron era got to have the best of both worlds. Now they'll have to pick. Most will go for the money. Some won't, especially if they have other avenues to get paid.

Also it's not easy finding stars in the draft let alone a star so teams are still going to offer the supermax for an all star level type of player like Mitchell or Brown, finding elite talent in the draft is not easy if you're drafting outside the top 5 picks and even then teams make the wrong pick pretty frequently.

This is true, which is why teams with a drafted core puffing up their chests as if they "did things the right way" are full of it. Those teams got really lucky multiple years in a row. That's nice, and they should take advantage of it while they have it. But they don't get to just keep those guys together forever. That's not doing things the right way -- it's striking gold and then trying to hoard it forever.

[Gusto1903]

Back in the day, when max contracts wouldnt be given out to anybody having a solid backup season. When the Salary Cap actually mattered.

[Ryoga Hibiki]

Back in the day, when max contracts wouldnt be given out to anybody having a solid backup season. When the Salary Cap actually mattered.

back in the day (I assume you mean after 99, though) the salary cap meant much less as the LT way less punitive

[baldur]

I dont understand the logic and benefit of giving 75 percent of the salary cap to two players and expecting that team to be competitive.

[baldur]

I think the new contracts will have players retiring early, which is good for them.

Take a guy like Wemby for example, after his rookie deal he's probably making 60-80M/year in his mid-late twenties. By the time he's like 30 he'll have almost half a billion in career earnings.
on
Whose playing basketball into their mid-late 30s if they've already clinched that kind of money? Some definitely will but I feel like others will just say hey its been great.

only wemby or a few more will be making that money though. not the borderline stars, role players or bench players.

[ArtMorte]

Simmons presumes that the middle class will get demolished while teams will almost automatically keep on handing out max deals...

But surely it's also possible that there will be fewer max contracts being offered and it's the middle class players who will get paid good money, just not max money?

Let's face it, it's probably been too easy to get a max contract lately. Your Goberts, Siakams, Middletons... Tobias Harris lmao. There are several max contracts in the league where the money could have probably been better spent.

The new CBA could make it easier to be successful with one star that's surrounded by an even roster of decent players and I'm all for that.

[Gusto1903]

Back in the day, when max contracts wouldnt be given out to anybody having a solid backup season. When the Salary Cap actually mattered.

back in the day (I assume you mean after 99, though) the salary cap meant much less as the LT way less punitive

Yeah ive meant the early to end of the 2000s.

[MagicMatic]

The middle class of the nba won’t go away if third options aren’t paid max money.

[Ryoga Hibiki]

Back in the day, when max contracts wouldnt be given out to anybody having a solid backup season. When the Salary Cap actually mattered.

back in the day (I assume you mean after 99, though) the salary cap meant much less as the LT way less punitive

Yeah ive meant the early to end of the 2000s.

well, at the time it was pretty normal to dish out 7y max offers to the likes of Antoine Walker or Bryant Reeves

[Gusto1903]

back in the day (I assume you mean after 99, though) the salary cap meant much less as the LT way less punitive

Yeah ive meant the early to end of the 2000s.

well, at the time it was pretty normal to dish out 7y max offers to the likes of Antoine Walker or Bryant Reeves

Bryant Reeves didnt even play in the time, im talking about lol

[ConSarnit]

Simmons presumes that the middle class will get demolished while teams will almost automatically keep on handing out max deals...

But surely it's also possible that there will be fewer max contracts being offered and it's the middle class players who will get paid good money, just not max money?

Let's face it, it's probably been too easy to get a max contract lately. Your Goberts, Siakams, Middletons... Tobias Harris lmao. There are several max contracts in the league where the money could have probably been better spent.

The new CBA could make it easier to be successful with one star that's surrounded by an even roster of decent players and I'm all for that.

People are over-estimating the effect of the 2nd tax apron. If it were in place this year there would be 7 teams over the 2nd apron. Total excess player salary spent (above the 2nd apron) between those 7 teams: ~$90m. That's nothing compared to total salary spent league-wide. We're talking about 2.5% of total league salary that would be eliminated if every team stayed under the 2nd apron. The apron rule is going to cut out 3% of salary dollars but the new tv deal is going to add 30%. The MLE will be $15m+ in 3-4 years. Even if the middle class guys get squeezed 20% (relative to the cap) they are still going to make more money because the cap will rise.

Let's take Gary Trent Jr for example as a "middle class player". This year he made $17.2m, that's 14% of the cap. If he gets squeezed by 20% that will drop him to around 11% of the cap. If Trent is making 11% of the cap in '26/27 that's going to be $20m. These guys aren't going to be hard up for money.

As for causing team building issues, here's who 5 of the 7 apron teams would need to get rid of to get under the 2nd apron (if it were in place):

LAL: Walker
PHX: Shammet
DAL: Powell or Bertans
BOS: Gallo + G Williams
MIL: Crowder + Ingles

Would any of these teams suffer huge losses in production if they were forced to get under the 2nd apron? Not really. For 90% of the league the most it will cost them talent-wise is an MLE level player at BEST. For 80% of the league it will change nothing.

The 2nd apron isn't going to change much of anything outside of LAC and GSW. Teams with two 35% max guys are all going to face the same 2nd apron restrictions, whereas currently the rich teams can just throw money at the problem. It's exceedingly rare to have three homegrown 30-35% max guys on the same team because someone's output always suffers from diminishing returns, someone signs a contract before they blow up or the ages misalign which impact max qualifications.