A contract question involving a lost season.

[evildallas]

It's already been established in the media that if the entire season is lost that contracts that are due to expire next summer will or those that have early terminate options can be exercised. The most common example is that if the season is lost that Dwight Howard may have already played his last game for Orlando.

My question concerns Joe Johnson's contract (well everyone's except Al Horford). If the entire season is lost what does Joe make the following year? Is year 2 just removed from the contract in dollars or does he lose a year of compound raises meaning that essentially year 6 is the amount removed (the length would be same, it would just be the total value that would fluctuate). I could see it working either way and don't know what would happen. The difference would be 7M in real cap money over the last 4 years of the deal.

To state it another way NBA contracts are normally stated with annual raises over the previous level. If an entire year is lost is the basis of the next season the last paid year (a 10.5% raise) or is does it calculate from what they would have received (10.5% and then 10.5% raise again)?

They've never lost a whole season so I doubt anyone has a definitive answer, but still what do you think?

[MaceCase]

My belief based on basically nothing being mentioned to say otherwise is that players under contract will simply lose that whole year so Joe will have basically made his money in year one of his deal, loses all of year 2 and then jumps right into the amount he was already set to make in year three. The contract length stays the same so whatever amount they were scheduled to make remains the same......that is unless the owners turn around and manage to pressure the players into taking the contract roll back provisions.

But right now Joe is set to make 19.8 mil in 2012-13' so I believe that will remain no matter what. It would be a nightmare if contracts were all set back due to the missed year and instead of Joe being off the books 5 years from now it would be 6 again.

[theatlfan]

I guess this boils down to the question of how is the CBA referenced in the contract we give out. I know that each team can have different contracts, but how different is a key question here. Is there a standard boiler plate for all teams and the team can just add some riders for specific clauses or does the league leave it up to each team to write the contract and then review it to ensure that it fits into league policy? And if it's the ladder, then how stringent are they in the wording?

My guess (and this is just a SWAG) would be that the league has some standard boilerplate specifically in regards to the financial terms of the deal that tie these terms closely to the CBA. The league wouldn't want to "win" a CBA negotiation but then have a bunch of contracts that couldn't be changed to match the terms of the new CBA. Also, the league office also wouldn't want to tie up a legion of lawyers to simply review contracts that are slightly different amoung all the teams on top of the legion they'd already have to tie up to ensure whatever riders or clauses that any individual team could put into a contract wouldn't violate the terms of the current CBA.

Because of this, I'd assume that this would mean that the contract would "skip" a year in terms of salary but not service time. Any time these contracts would be rewritten would be right after a new CBA has been negotiated so the prospect of a lost season would be fresh in the minds of those who pen these contracts and the league would want to protect themselves appropriately. I guess the players could object through the union, but I wouldn't think it'd be a tough argument for the league to win. An athlete's worth is tied to his age and a raise (as any raise regardless of profession) is tied to his previous salary. If you want the money then negotiate a new CBA and it won't be an issue.


Even so, I can't think that the league wouldn't go through with the threat of terminating all player contract if the season is lost. The perceived infighting (at least as far as the articles on the front pages here) amoungst the owners would be enough that the league office would simply throw their hands up and say "let's give the players what they want so they can see where this all leads". The obvious assumption being that we'll see several teams in the NBA's lower tier talk of simply folding with maybe 5-6 teams with the resources and the willpower to put a team on the court that could contend for a title. It would also allow the NBA to rebuild the ownership groups since the most highly leveraged groups would be the 1st to fall. This would align the owners into a group that would have more willpower to sit through a negotiation instead of putting more and more demands on Stern and his negotiation committee.