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Post Lockout Day 1: The road to Groundhog Day

Note: This could end up being one of the craziest months in NBA history. To celebrate the signings, trades, rumors, roster shuffling, insanity, and the hilarity/incredulity/incompetence that can only ensue, I’m unleashing a special series called “The 12 Days of NBA Christmas.” Starting today and finishing on Monday the 19th, I will be writing once a day (Monday through Friday) about this unexpected NBA Christmas. If you’re looking for my Week 13 NFL Picks, they’re crammed in a little sidebar below.

Let’s say one of your old college buddies separated from his wife. You take him out for drinks and ask him what happened. He says, “She thinks I’m working too hard, she never sees me, she’s alone all the time, she wanted me to cut back, I couldn’t do it.” Since the guy runs a hedge fund and travels constantly, this makes sense. You say all the right things, make him feel better, listen to him vent for two hours, even pick up the check. You don’t see him for another five months, and when you do, you have the following exchange.

–You: How’s it going with the divorce, is it official yet?
–Him: Nah, it never happened, I moved back in.
–You: Really? I thought she gave you an ultimatum about working less?
–Him: Nah, it’s totally fine now. So, how ’bout the Packers?

You would think this was weird, right? Welcome to the 2011 NBA lockout. We just wasted five months preparing for the NBA’s first nuclear winter … and not-so-astoundingly, the two sides ended up exactly where everyone thought they’d end up last June.1 When they finally settled, much was made of the players “giving back” $3 billion over the next 10 years, which may have broken the “lazy analysis” benchmark because both sides have a six-year out.

Repeat: Either side can extricate itself from this deal after six years.

One more time, in case you missed it: After six years, either side can say, “We’re out of this deal.”

You seem pretty smart since you were able to log onto a computer, click on this link and read this far, so I’ll ask you: What are the odds that both sides will be totally, 100 percent, “Let’s keep this baby going!” happy with this labor deal in 2017? Especially with the league’s new television deal expiring one year earlier? (And remember, that next TV deal will almost definitely be more lucrative because of this decade’s talent boom and the ongoing gravitation of fans from arenas to TVs.) Saying this was a “10-year deal” is like saying that Kevin Kolb is going to really make $65 million over the next six years. In other words, it ain’t happening.

Throwing in the first year’s BRI (51.2 percent for the players, not a 50/50 split), the players will probably be giving back as little as $225 million and as much as $300 million for each of these next six years, except for the part where they didn’t actually “give back” anything. Their deal had expired. The new deal was renewed for less money. Sorry, that’s life. If the fourth Mission Impossible movie doesn’t make as much money as everyone expects, Tom Cruise isn’t “giving back” his salary quote to make his next movie. He’s just making less money, because he’s worth less. That’s what happened here.

Before this current labor deal, NBA players were always the highest-paid athletes, on average, in the history of American sports. This remains true. Collectively, they were overpaid — repeat: overpaid — and now, they’re a little less overpaid. They worked for a group of owners who were dissatisfied enough with their current business that, eventually, they didn’t care if that business stopped or not. The owners had more leverage for the simple reason that an owner can “own” for decades, whereas a player can “play” for years. Shit happens. The owners (and David Stern) handled the entire process callously, with little to no warmth at all; even they would admit that mistake now. You can’t coddle a group of athletes for years and years — chartered planes, hotel suites, personal chefs, state-of-the-art practice facilities, endless ass-kissing — then suddenly start acting like the Shawshank warden. It was an insane way to negotiate, and, really, it almost cost them the entire season.

The players could exact their revenge six years from now, if the league is booming and the owners have a vested interest in NOT missing a single game. Hmmmm … guess who will have the leverage at that point? I could see the players threatening to strike before the 2017 playoffs unless they get a better deal. I could also see the owners quickly caving — because again, you never want things to stop when you’re making money — with everything getting briskly resolved and the players gaining an appropriate raise. That’s how big business works. It’s all about the leverage. This time around, the players didn’t have enough of it.

If you want to consume the gory details about where we landed, check out our man Vishnu’s breakdown of the new CBA on Grantland earlier Friday. From a “big picture” standpoint, these were the seven things that fascinated me about last weekend’s agreement (and the lockout in general):

1. The NBA season starts on Christmas Day
Literally and figuratively. We just learned that nothing from Halloween through Christmas Eve really matters for anyone except the junkiest of NBA junkies. Sports followers, media members, talking heads, columnists, bloggers, groupies, and even many NBA die-hards seamlessly replaced six weeks of canceled games with pro football, college football, hockey, college basketball, fantasy football or whatever else floated their boat. Season-ticket holders didn’t miss paying full price for a month of preseason games — or as they’re identified on your credit card’s summary, “Highway Robbery” — nor were they broken up about getting refunded for eight regular-season games.2 Even players and owners didn’t really care. Doesn’t it mean something that they started seriously negotiating/compromising/bending only during the days leading up to that unequivocal, “if we don’t settle it now, we’ll lose Christmas Day” deadline?

So either …

A. They knew Christmas was the first day of the NBA season that, from a pure impact standpoint, truly matters to sports fans (not just basketball fans).

B. They knew this all along (and this process threw a giant spotlight on that dirty little secret).

… but now we know. It’s a little liberating. Where do we go from here? We can’t just run things back, right? Starting with the 2012-13 season, can’t we blow things up and create a schedule that reflects the reality of the situation — that right now, the NBA only matters for six months from Christmas Day through the NBA draft in late-June, with two general interest swoons during the NFL playoffs and March Madness — and make the appropriate fixes?

• The players and coaches always tell us that the ideal regular season should be between 72 and 74 games — shouldn’t we finally listen to them?

• Should we start the season later and end it later?

• Should we stack the first few weeks of November/December games during the week (and avoid football on the weekends completely) for maximum impact?

• Should we dump All-Star Weekend in lieu of a midseason, single-elimination, sponsored tournament that lasts for nine or 10 days, guarantees the winning team a no. 1 seed and a first-round playoff bye (regardless of its record) and gets called something like “The Miller Lite Red Auerbach Cup?”

• Should we just have that tournament in November to kick off the season instead?

• Should we end the regular season one week early, guarantee playoff spots for the top seven seeds in each conference, then have the remaining 16 teams play another single elimination tournament for the right to become our two no. 8 seeds (my Entertaining As Hell Tournament idea)?

Here’s what I would do: Start the season two weeks later (mid-November), chop the regular season to 70 games and create the midseason tournament (starting three days after the Super Bowl) AND the Entertaining As Hell Tournament, then move everything back so the playoffs go from late April through May and June (with the finals ending in the June 23-24 range), then the NBA draft gets moves to the Wednesday before July 4th weekend … and then, the free-agency process gets shifted back to July 15 (instead of July 1). So you’d use those first five regular-season weeks to set up a series of beats: Christmas Day, the midseason tournament (with the finals played one day before the All-Star Game, on All-Star Saturday), the trade deadline (late February), the 8-Seed Tournament (mid-April), the playoffs (start late-April), the Finals, the draft, free agency. Boom, now I’m engaged the whole time.

(Please, tell me they are thinking about this stuff. Please.)

2. Shorter contracts
Five years for your own guys; four years if you’re signing someone else’s guy. Beautiful. We just moved one step closer to a world in which most NBA transactions don’t make you say, “Wait, they did WHAT????” It’s also harder for one guy to destroy your team’s cap for years and years on end — don’t worry, it can still happen, just not as easily. And we’ll have more expiring contracts every year, which means we’ll have more expiring contracts to throw in fake trades.

Actually, I’m sad and happy about this: Happy because we’ll never see the likes of a 35-year-old Joe Johnson making $24.9 million in the last year of a six-year deal, or someone like Al Harrington quietly draining someone’s cap for a seemingly harmless $35 million deal that lasts for half a decade. And sad because this will make my job slightly harder. Three or four years from now, I won’t have as many insanely dumb contracts for comedy fodder.

On the bright side …

3. The 150 percent trade rule
A minor tweak that makes the Trade Machine 100 times more fun. In the old days, when we were making up fake deals, you had to make sure collective salaries came within 125 percent of each other. So if your fake trade had the Celtics sending $10 million of players to the Clippers, the Clippers could send only $12.5 million of players back. In the new deal? They could send $15 million back. They just gave the self-proclaimed Picasso of the Trade Machine (FYI: That’s me) a better studio, better paint and better brushes. Beyond that, they made it easier to trade (and as mentioned above, we’ll have more expiring contracts to trade), easier for losing teams to dump their best players, easier for potential playoff teams to roll the dice with monster moves, easier for unhappy stars to push for trades, and easier for media members to tweet or report trade rumors that probably aren’t real. Sources say I will enjoy the new 150 percent trade rule.

4. Another rule named after a player!
From the producers of “Larry Bird Rights” and “The Allan Houston Rule,” it’s the “Derrick Rose Rule!” If a player overachieves during his rookie contract — defined as either winning the MVP, making an All-NBA team twice (first, second or third, doesn’t matter) or getting voted into two All-Star games during his first four seasons — his first contract extension can be worth up to 30 percent of the cap (instead of 25 percent). Only Rose qualifies this time around: Instead of signing an extension starting at $14.5 million per year, now he’s eligible for one starting at $17.4 million. Three things I love about this …

A. Rewarding players for OVERachieving? Wow, that actually makes sense! Who knew the NBA could ever make sense?

B. Instead of running MVP campaigns for their own players, we might see teams go the other way and run undercover MVP smear campaigns. Imagine Blake Griffin cruising toward an MVP next April … and then getting submarined after Donald Sterling roofies him, throws him in a hot tub with five transvestites, snaps a few photos and e-mails them to the Sportsbybrooks dude just to save $20 million on Blake’s next extension. Hey Blake? If the Donald ever hands you a drink, don’t drink it. Just trust me.

C. Now that MVP votes and All-NBA votes actually matter and there’s real accountability here, we could be headed for the ugliest feud ever between a player and media member. Imagine Marc Stein costing John Wall an extra $20 million just because Steiny Mo put four Mavericks on the three All-NBA teams and cut Wall out completely? And how can I wager on this?3

5. Sign-and-trades are still allowed for these first two seasons.
Which is funny because … you know … I thought this was one of the reasons we were having a lockout. Within five days of an agreement being reached, we already had our first “REPORT: Chris Paul demands trade to the Knicks” story (and you know Dwight Howard and the Lakers will be next). If this lockout was happening partly because we were trying to protect small-market teams from being unable to compete, mission unaccomplished.

On the other hand, I always thought this point was overrated. The two-year “Where are LeBron/Wade/Carmelo going?” storyline helped give the NBA its best momentum since MJ’s second Bulls run; looking back, The Decision was one of the most important moments in the history of the league. Yeah, it’s a little tougher for small markets to keep their best guys, but it’s not impossible: Either you build something meaningful that makes them want to stay (see: San Antonio and Oklahoma City), or you fail to build a good enough foundation and they leave (see: Cleveland and Orlando). It’s really that simple.

Besides, it’s not a bad thing for basketball fans and media members to obsessively wonder about the next destinations for Howard, Paul, Deron Williams and everyone else — it only sucks for their current teams (and their fans), and it’s not like they still don’t have trading leverage during the season. (Look no further than the Nuggets, who turned the depressing Carmelo saga into one of the better trade hauls of the past 10 years. They effectively reinvented their team.) And by the way, the new agreement gives incumbents extra advantages like a fifth year (suitors can only offer four) and the same “Bird Rights” (they can offer more per year than anyone else). By Year 3 of the new labor deal, it will be harder for a star to leave his old team without sacrificing something. If he still wants to leave? It’s a free country. So be it.

6. The Amnesty Clause
You know this one by now: Every team can wipe off one contract (as long as it was signed before this season) at any point from its salary cap AND its luxury tax number. Once that happens, every team under the cap can bid on those players, auction-style, with the highest bid winning out.4 If nobody bids, anyone can claim that player. (More on this on Monday — the rules haven’t been totally figured out yet. It’s going to be immensely fun.) That the Amnesty Clause even happened tells you everything you need to know about this lockout — both why it happened, and why there’s been such a disparity between what the players argued (“It’s not our fault you kept giving us such dumb contracts”) and what the owners argued (“We know it’s not your fault, it’s just that we don’t want to keep wasting our money on players who don’t deserve it”).

Let’s go back to the concept of the players “giving back” $225 million to $300 million for each of the next six years. The owners “give back” at least $300 million of absurd contracts every single year. Could we finally be even??? (That’s right, that parallel demanded three question marks.) Just look at what teams could potentially wipe off by “amnesty-ing” what’s left of what can only be called a Bad Contract Shitshow. (And by the way, these are the numbers of what’s left of these bad contracts. The total value was probably twice as high.) Our 22 potential amnesty guys this month …

Marvin Williams ($23.9 million remaining); Jermaine O’Neal ($6.3m); Baron Davis ($28.7m); Brendan Haywood ($35m); Al Harrington ($27.7m); Charlie Villanueva ($24.2m); Andris Biedrins ($27m); James Posey ($7.6m); Ron Artest ($21.7m); Mike Miller ($24m); DeSagana Diop ($14.7m); Beno Udrih ($14.2m); Martell Webster ($10.9m); Gilbert Arenas ($62.4); Travis Outlaw ($28m); Josh Childress ($27m); Brandon Roy ($68.7m); Richard Jefferson ($30.5m); Jose Calderon ($20.3m); Memo Okur ($10.9m); Andres Nocioni ($6.7m); Rashard Lewis ($43.8m).

That’s $564.2 million dollars of contracts that, at this very moment, are making 22 of the 30 NBA franchises wonder, “I’m probably better off paying this guy off than spending more money to replace him, over just having his contract count against my salary cap and luxury tax number.”

Assuming everyone on that list is overpaid by an average of 300 percent (my conservative estimate), let’s pretend their actual collective value is around $175 million, so we’ll say they’re overpaid by about $390 million total. And that’s before including 20 other players who range from “overpaid” (they make at least 150 percent of what they’re actually worth) and “frightfully overpaid” (they make at least 200 percent of what they’re actually worth):

Joe Johnson (5 years, $107.3m remaining), Corey Maggette (2 years, $21.8m), Carlos Boozer (4 years, $60.6m), Antwan Jamison (1 year, $15.1m), Rip Hamilton (2 years, about $19m left because of his buyout), Ben Gordon (3 years, $37m), Jason Maxiell (2 years, $10m), David Lee (4 years, $68.7m), Luke Walton (2 years, $11.5m), Ty Thomas (4 years, $33.4m), Drew Gooden (4 years, $26.2m), Johan Petro (2 years, $6.75m), Hedo Turkoglu (3 years, about $30m left with his buyout), Elton Brand (2 years, $35.2m), Channing Frye (4 years, $24.8m), John Salmons (4 years, $31.2m), Francisco Garcia (3 years, 18.3m), Linas Kleiza (3 years, $13.8m), Al Jefferson (2 years, $29m), Andray Blatche (4 years, $29.8m).

Total value of those 20 contracts? Something in the vicinity of $620 million … which means that, if everyone’s overpaid by an average of 175 percent, maybe we’re looking at another $250 million of salary fat from the Not Quite Disastrous Enough To Be Amnesty Guys group. Adding the aforementioned $390 million of Amnesty Fat, that’s $640 million of overpaid salary fat coming from only 42 NBA players.

Yes, less than 10 percent of the entire league.

Don’t get me wrong — I love salary fat! It’s endless fodder for my columns. Unfortunately, that salary fat nearly cost us the 2011-12 season: Owners were tired of getting roped into gruesome contracts and wanted, going forward, to prevent themselves from doing so (even if they tried to accomplish this in a hideously obstinate way, with no accountability whatsoever). In theory, their intentions were noble — they wanted to create a smarter financial model so they could run better businesses.

But here’s where the lockout totally fell apart for them. See …

7. The NBA: Where Groundhog Day happens.
Despite the lockout, despite all the bad blood that was shed … there’s a good chance we’re about to break the record for “most dumb contracts handed out in one month.” Yeah, the harsh luxury tax rules will scare off the Mavericks and Lakers from rolling out recklessly expensive rosters again. Yeah, new contracts will be one year shorter for the most part. And yeah, there aren’t as many full-boat mid-level exceptions to stupidly hand out like car wash flyers anymore. But there WILL be dumb contracts. Ohhhhhhhhh … yes. There will be dumb contracts. Many of them. Consider …

• The new salary floor guarantees that cheaper teams have to spend money. Every team HAS to spend 85 percent of the salary cap for the 2011-12 and 2012-13 seasons (it’s $49.3 million this season), then 90 percent for every season after that.

• By caving on mid-level exceptions (and if they hadn’t, we wouldn’t have had a season), the owners kept the overpaid middle class intact. They won’t be quite as overpaid — not just because of the new restrictions,5 but because BRI dropped the cap ($58 million this season) and the tax line ($70 million this season), and because the luxury tax rules are so much more severe — but still, if you were worried about not seeing overpaid role players anymore, you’ll be fine.

• Your amnesty guy can potentially count against your salary floor (85 percent, as mentioned above), if you choose. For example, the Wizards have $44.7 million of guaranteed 2011-12 contracts right now. Once Lewis gets amnestied, they’ll suddenly have $23.6 million counting against their cap — putting them $34.4 million under it — but they’ll only have to spend another $4.6 million to hit that $49.3 million salary floor, because, again, Lewis counts for that (if they want).

Now here’s where it gets really, really good. We just entered a new era for NBA fiscal responsibility, right? Check out the potential spenders this month.

The following teams are waaaaaaaaaaaaaaaaaaaaaay under the 2011-12 salary cap:

1. Washington: $34.4 million (including Lewis’ amnesty clause)
2. Denver: $33 million (including Harrington’s A.C.)
3. Indiana: $28.5 million (including Posey’s A.C.)
4. Sacramento: $26.2 million
5. New Jersey: $23.1 million (including Outlaw’s A.C.)
6. Toronto: $17.7 million (including Calderon’s A.C.)
7. Golden State: $16 million (including Biedrins’ A.C.)
8. Detroit: $14-$19 million (depends on Villanueva, Gordon or Hamilton for its A.C.)
9. L.A. Clippers: $13.1 million
10. Charlotte: $13 million (including Diop’s A.C.)
11. New Orleans: $12.6 million
12. Milwaukee: $12.2 million (including Udrih’s A.C.)
13. Minnesota: $11.4 million (including Webster’s A.C.)

The following teams are just far enough under the cap that, assuming they get a little creative (dump a contract on someone, use their amnesty on a lesser guy, etc.), they could splurge for a pricey free agent if they really wanted:

14. Houston: $6.8 million
15. Memphis: $5.1 million
16. Phoenix: $3.25 million (not including Childress’ A.C.)
17. Oklahoma City: $3.1 million
18. Philly: 2.65 million (not including Nocioni’s A.C.)

The following eight teams are currently over the cap ($58 million) but under the tax line ($70 million) before making a single transaction (or re-signing a restricted free agent), making them natural candidates for the full mid-level …

19. Atlanta
20. Boston
21. Chicago
22. Cleveland
23. Dallas
24. Miami
25. New York
26. Utah

The four remaining teams and their payrolls at this moment: the Lakers ($92 million); Spurs ($75.4 million, although Jefferson’s A.C. could drop them to $66.2 million); Blazers ($70.75 million with Roy, $55.75 million without him); and Magic ($57.3 million with Arenas’ A.C.).

That’s a pretty fascinating landscape. Even if we write off 13 spenders (New Orleans, Milwaukee, Minnesota, Charlotte, Phoenix, Atlanta, San Antonio, Cleveland, Detroit, New York, Utah, the Lakers and Portland) from adding another major contract this month for a variety of reasons, we still have another seventeen potential suitors for free agents this month.

• Three teams (Denver, Indiana and Sacramento) definitely have to spend just to hit that $49 million floor (amnesty or no amnesty).

• Four teams (Washington, Golden State, New Jersey and Toronto) will almost definitely use their amnesty clauses to help them pursue marquee free agents.

• Four other teams will spend money on someone (or try): Houston will undoubtedly get creative to give itself a chance for one of the three quality centers (Marc Gasol, Nene or Tyson Chandler); and Memphis, Philly and the Clippers will almost definitely match any offer for their best restricted free agents (Gasol, Thaddeus Young and DeAndre Jordan), even if they have to overpay them a little (or in Jordan’s case, a lot).

• Boston, Dallas, Chicago, Oklahoma City and Orlando are all contenders; I can’t imagine them getting through this month without doing something.

• Miami will definitely use its full mid-level exception. And actually, this labor deal couldn’t have broken more perfectly for them: They can splurge for a crunch-time veteran swing guy (probably Shane Battier, Tayshaun Prince or Jason Richardson), sign a chasing-a-ring veteran for cheap (like Grant Hill or Kenyon Martin) AND gobble up one or two amnesty guys (say, Baron Davis and/or Travis Outlaw). I hate to say it, but Vegas is handing out free money right now in the form of a 2-to-1 future bet on Miami to win the 2012 NBA title. The deck couldn’t be stacked better for the Miami Heat right now. I’m not saying that to heap additional pressure on them,6 it’s just a fact.

Now, here’s where it gets really, really, REALLY good. You won’t see nearly as many teams use their amnesties — at least right away — as we initially expected when Jonathan Abrams and I had so much fun playing the Amnesty Guessing Game during the lockout. Why turn a serviceable body into a sunk cost unless it chops down your tax bill, gets you under the tax completely, opens up enough cap space to pursue a quality free agent, or, in Baron Davis’ case, gets Baron Davis off your team?

My prediction: Only Cleveland (Baron Davis), San Antonio (Richard Jefferson), Los Angeles (Ron Artest), Orlando (Gilbert Arenas), Golden State (Andris Biedrins) and Toronto (Jose Calderon) will use their amnesties this month. That’s it.

You know what that means? This year’s free-agent pool was already brutal. It stinks. Your three prizes are Nene, Chandler and Gasol (restricted). After that, everyone loves Arron Afflalo and Thaddeus Young (both restricted), and who wouldn’t want Shane Battier, Jamal Crawford or Jason Richardson on their team, and then … wait a second, we’re already in “DeAndre Jordan/Rodney Stuckey/Jeff Green” range? What the hell just happened???????

We’ll cover this motley list in detail on Monday (Day 2 of our NBA Christmas). In the meantime, here’s a little teaser: The amount of money every NBA team can and will spend far exceeds the collective talent (both for quantity and quality). In other words … gentleman, start your dumb contract engines!!!! Who’s ready to be overpaid??? Step right up! Who’s first?

(It’s almost like the lockout never happened. Almost.)

Bill Simmons is the Editor in Chief of Grantland and the author of the recent New York Times no. 1 best-seller The Book of Basketball, now out in paperback with new material and a revised Hall of Fame Pyramid. For every Simmons column and podcast, log on to Grantland. Follow him on Twitter and check out his new home on Facebook.


Previously from Bill Simmons:

It’s a Black Friday Half-Mailbag
The Sports Guy’s Thanksgiving Picks
Business Vs. Personal

Filed Under: Bill Simmons, NBA, People, Simmons, Sports

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Bill Simmons is the editor-in-chief of Grantland and the author of the New York Times no. 1 best seller The Book of Basketball. For every Simmons column and podcast, click here.

Archive @ BillSimmons

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