Do You Understand the N.B.A. Salary Cap? Imagine Enforcing It.

To be even a casual N.B.A. fan in 2019 means having to become a quasi-accountant or a lawyer to decipher how the league’s salary cap works. It means understanding the difference between a soft cap and a hard cap, or the mid-level exception vs. the biannual exception. There’s the Gilbert Arenas Provision, which is not to be confused with the Derrick Rose Rule, and definitely not the Allan Houston Rule.

The league’s collective bargaining agreement is arguably the most complex in professional American sports, and it spurs the most movement of elite players between teams. So if you have trouble understanding how it all happens, imagine what it’s like being in the N.B.A.’s salary cap group, the division of roughly 10 staffers who make sure the teams follow the rules. (To that end, the N.B.A. began investigating whether teams broke rules this summer with perks offered to free agents.)

The lawyers, former consultants and data analysts who enforce the intricate system serve as a continual resource for teams looking at their own cap situation: Do we have the space to sign X player? Or trade for Y? How many picks are needed? Can we sign Z without trading X first? This pod does the front office equivalent of setting screens: their plays don’t show up on the stat sheets but are crucial to the league’s results.

“It’s a 650-page agreement, and you have 30 teams who are thinking about new and interesting ways to do things,” said Katelyn Cannella West, the senior director and associate counsel for player matters.

ImageKatelyn Cannella West, an N.B.A. senior director and associate counsel for player matters, said the league’s salary cap group helps interpret the collective bargaining agreement with players. 
CreditTony Cenicola/The New York Times

Some teams rely on the group more than others. Many used to relegate cap duties to their chief financial officer.

“I felt like I had a really good grasp of the cap back in 1996, when I was still coaching the Phoenix Suns,” said Danny Ainge, the president of basketball operations for the Boston Celtics. “Obviously, a lot of rules have changed so we consult with the league periodically.”

A big misconception, members of the league’s cap group said, is that when news of a trade breaks, the transaction is complete. For a trade to be official, there must be a trade call, a conference call between the involved teams and the cap group. Sometimes, the group learns about deals weeks ahead of time as they are consulted about possible structures.

“That’s unusual, but it happens,” said David Weiss, a vice president and assistant general counsel for the group.

The day of the trade deadline is “a higher stress day than most days,” said Andy Taub, who has helped lead the cap group for more than two decades.

Few league officials have been with the N.B.A. as long as Taub, who is unknown to many fans but crucial in shaping how they experience the game. Having an encyclopedic knowledge of the collective bargaining agreement is less important than attention to detail, Taub said. (He happens to have both.)

“If we gave the wrong advice to a team and a team acted on it, it would be on ESPN fast,” Taub said.

CreditTony Cenicola/The New York Times

Much of the group’s tasks delve into minutiae. For example, Tony Leotti, a senior director and lawyer for the group, tracks days off for players, who are entitled to 18 during each regular season. Leotti helps teams decide what constitutes a day off: Can a player who sits out a practice show up to the facility to shoot around on his own? Can he sit with the team on the bench?

With great minutiae comes great responsibility. The cap group must police front offices trying to game the system, while at the same time making sure the league’s decisions don’t run afoul of the players’ union.

“They’ve done a very good job of it. But then people like me come along and start bunking with it because my job is different,” said Rafael Stone, the executive vice president of basketball operations for the Houston Rockets. “My job is to try and take advantage of the loopholes.” The league’s salary cap group prompted the Rockets to change how they maneuvered to bring star point guard Chris Paul to their team in 2017.

The team wanted to sign Paul as a free agent, but didn’t have the cap space. One option to get it was waiving the sharpshooting big man Ryan Anderson and spreading the impact of his contract over several years, called stretching or using the stretch provision.

But the Rockets wanted to keep Anderson. So the front office, primarily Stone and Eli Witus, an assistant general manager, found a loophole in the collective bargaining agreement. The Rockets could stretch Anderson immediately, sign Paul when free agency began and then re-sign Anderson. A new rule barred the move, but it wasn’t set to take effect for at least a couple days.

Stone said the league argued that the team’s plan violated the collective bargaining agreement in spirit. (A league spokesman said that even without the new rule, the N.B.A.’s position was that the maneuver would have violated other regulations .)

Ultimately, Houston traded for Paul instead of signing him as a free agent, and kept Anderson.

Mark Cuban, who owns the Dallas Mavericks, said in an email that his disagreements with the cap group have been mostly limited to defining “likely” bonuses — payments to players based on thresholds that have a high probability of occurring. Likely bonuses count against the cap immediately, affecting how much teams can spend elsewhere.

If a player disagrees with how the cap group interprets the collective bargaining agreement, there is an arbitration process.

“We’ve had a fair amount of fights,” said Ron Klempner, the senior counsel for the players union, who also said the relationship between the two factions was cordial.

One dispute came during the 2011-12 season, when several prospective free agents, including Jeremy Lin and Chauncey Billups, were claimed off waivers. Under the collective bargaining agreement, teams can go over the salary cap to re-sign and give raises to their own players if the player has been on the team for three years, a cap exception known as “Bird Rights,” named after Larry Bird. If a player gets traded, he keeps those rights. The union argued the exception extended to players claimed off waivers. The league disagreed. The union won in arbitration.

Player agents, who have quickly become a powerful force in shaping league dynamics, typically consult the players’ union and their own staffers rather than the cap group.

Perhaps the most ironic part of all this is that the stakeholders who pay the least attention to salary cap machinations, especially during the regular season, are the players themselves, according to Richard Jefferson, who played for eight teams and was traded six times. Teammates didn’t talk much about salaries, trades or free agent possibilities until the summer, and even then, he said, most of the details were left to agents. “It’s different now, but in general, players don’t pay attention to the cap,” Jefferson said.

More on the N.B.A.

Source: NYT

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