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NBA Lockout: It's Time For Players To Sign

The NBA lockout has been a roller coaster for fans and certainly the players as well. Most, like Phoenix Suns Channing Frye, have been sitting on the sidelines waiting for a deal to emerge from hundreds of hours of negotiations between the union and owners.

Even though the slightly revised proposal that came out of the latest (and possibly last) negotiating session might not be everything they want, the point has come for the players to sign and get back on the court.

Let me be clear, the owners are responsible for this lockout.

They started the process two-years ago with a laughable proposal so far away from reality that it wasted valuable time getting to this point. 

They pleaded poverty using losses inflated by accounting tricks, didn't share enough revenue between teams and repeatedly made bad business decisions.

That's their problem and shouldn't be solved on the backs of the players.

The players are the talent. They are the product. No one pays to see Robert Sarver play basketball. NBA players are the 450 best individuals in the world at what they do and it's their talent that generates the revenue to begin with.

They deserve to be WELL paid.

But here we are with an agreement to split the revenue pie 50/50 and an apparent disagreement over two fundamental issues: How big of slice each of the 450 players get and how much control players have over where they will play.

On both issues, the hard-line players and their agents pushing for the nuclear option (decertifcation of the union) are wrong.

Losers and winners under new system

Under the proposed new system the combination of increased penalties and restricted access to free agents via the mid-level exception for luxury tax paying teams has the effect of driving down the market value for SOME free agents. (The details about the revised deal can be found here.)

Consider the case of Channing Frye last summer. Frye was a free agent and clearly had value in the market. The Suns wanted to pay him $16m but other teams were able to offer him the MLE which drove up his contract value to $30m over five years. 

Under the new rules a veteran mid-tier free agent like Frye would be able to get the MLE from non-luxury tax paying teams and it would max out at about $15m for three years. Frye didn't take the MLE because he stayed in Phoenix but the MLE market clearly drove up his contract value and netted him an additional two-years of guaranteed money.

It's pretty obvious why a guy like Frye would prefer the old system. It's also pretty obvious from a fan perspective why having a shorter contract length on mid-tier players is beneficial. Max contract guys like Gilbert Arenas are often the poster boys for bad contracts but there are FAR more under-performing deals for these types of players.

(Btw, I'm not saying Frye is a bad contract, just using him as an example.)

But here's the thing -- just because Frye isn't getting that money doesn't mean it goes away. The owners will still be spending 50% of BRI on players. The new deal increases the minimum salary each team is required to carry from 75 percent of the salary cap to 85 percent.

The effect of shorter and smaller deals on mid-tier guys is more money available for lower tier-players. We would see a leveling out of the salary distribution within the band of players who are off their rookie deals but not in the "star" category.

That's not a bad thing for the game or for the lower-tier players looking to get paid more. It does have the effect of making like more competitive for those mid-tier contracts. While those guys might want to retain their hold on that money, they do so at the expense of other players.

Freedom (of movement) isn't free

The other point the players make is about freedom of movement. The restrictions on lux-tax paying teams shrinks the free agent market to some degree (how much, we don't know but 11 teams paid luxury tax last season under the older rules with a lower tax). 

The means that it would be harder for teams like the Lakers, MavericksHeat or Knicks to keep adding free agents each season. The league rightly calls this a competitive balance issue. If all the best free agents are continuously going to the top teams it becomes very difficult for the rest of the league to improve.

Some argue that super teams and dynasties are good for the sport. I disagree. While it generates more national hype, it dramatically reduces fan interest in local markets. No one wants to see their team mired in mediocrity for decades which has been exactly the case in many places.

The proposed new rules help prevent that.

The final point the players make is about their freedom to decide where they want to live and work. This is certainly something we can all appreciate. But as someone who spent eight years in the Army getting sent where ever Uncle Sam wanted me I have no sympathy. You can be damned sure I didn't choose to live in El Paso, TX for two years and spend six months of that time in a tent in Bosnia. 

NBA players are well paid and deservedly so. If they have to spend seven months of the year in Minnesota or Milwaukee instead of Miami or Los Angeles, that's too bad. Many people make difficult decisions about moving their families to places they don't want to go. Very few of them have the resources NBA players have to make the situation as comfortable as possible. 

You are not going to find any sympathy for the players on this one. If the hardship of having to play in one market over another is too difficult, feel free to go play in Europe, China or perhaps Iraq.

Player-friendly provisions

The deal also has player-friendly provisions like the amnesty clause and more importantly, the "stretch" provision that allows teams to waive players and spread out their cap hit over an extended period of time. The player still gets paid and gets to sign somewhere else and essentially be double-paid and a new roster slot is created. 

This will free up more opportunities for player movement as well.

Time to sign

So here we are. The players have a deal on the table that they clearly don't love. They've been forced into giving back at least $300 million per year in salary and they don't like the new rules. It's not ideal but it is certainly not worth blowing up the season and perhaps ending up with a lesser deal in the end.

It's time to suck it up, agree to the deal and play basketball.