Obscure NBA Rule May Screw Lebron Out Of A Five-Year Max Deal
With superstars like Lebron James, Kevin Durant and Dwyane Wade all currently in free agency, the rules of contracts and cap space and other such thrilling topics have been on everyone's radar. It's not sexy and it's generally a horribly boring topic of conversation, except maybe for bros trying to show off for each other on sports trivia night. Nevertheless, they are important; and one little known caveat in the rule book may ruin Lebron James' chances at a $200 million mega deal.
Before we get to that though, there are few important things you should know if you're a beginner to discussing NBA salary caps. You know, like if you have a life and cool things to do other than sitting around figuring out how other people are going to make way more money than you'll see in a lifetime...
One of the most well known aspects of NBA contract negotiations for veteran players are the salary cap exceptions known as "Bird Rights" or the Larry Bird exception. Bird rights are so named because the Celtics were the first team ever permitted to exceed the salary cap in order to keep and pay a veteran player. That player being - you guessed it -Larry Bird.
Essentially, teams are allowed to exceed the salary cap to re-sign their own free agents at an amount up to the maximum salary and for up to five years. A player has to have played three seasons - without being placed on waivers or without changing teams as a free agent - in order to qualify as a Bird free agent. Under the current collective bargaining agreement, when a player is traded, his Bird rights are traded with him. So if you've been doing the math in your head then you'll have realized that a large majority of contracts in the league were signed using Bird Rights.
Okay so now that you're up to speed, let's loop back around to Lebron James. On Tuesday he opted out of the last year of his two-year contract with the Cavaliers, effectively becoming a free agent. According to some people who are far more schooled in the nuances of the CBA than I am, the NBA's salary cap is expected to be $107 million or higher after the 2016-2017 season. By then the Cavaliers will have James' full Bird Rights, meaning that Lebron could make an insane amount of money.
Don't believe me? Here's the math broken down per Scott Davis of Business Insider:
"[Lebron] can sign a max contract of five years, worth 35% of the cap, with 7.5% raises each season. With a $107 million cap projected for 2017, that means James could sign a five-year, $204 million deal."\
That all seems to make sense. EXCEPT FOR THAT ONE THING. There's always a thing, right?
Jeff Zilgitt of USA Today Sports spoke to three anonymous league executives who said that the above scenario may be impossible because of an obscure clause in the CBA known as the “over 36 rule.” There's a lot to the wording of the rule but put simply, it prevents teams from giving four or five-year deals to players who are "unlikely" to play the life of the deal. In this case, unlikely is defined as a player over the age of 36.
"For a player who is 36 years old in the last season of a five-year deal, his final annual salary is applied proportionally to previous seasons and counts toward the team’s cap," wrote Zilgett.
Lebron is 31 years old right now, which means that if he were to sign a five-year deal in 2017, he'd turn 36 years old during the fourth year of that contract. Womp womp.
So what are Lebron's other options?
- He could bank on the negotiation of a new CBA - which the players can opt out of as of Dec. 15th, 2016 - and hope that the over 36 clause is removed. Maybe they could make a new "Lebron clause" for players who are clearly going to be better at age 36 than most players even were in their 20's.
- He could sign a four-year deal worth about $140 million this summer (under a $96 million salary cap) rather than wait for the Cavs to own his full Bird Rights next year.
- He could sign another short contract this summer, opt out again next year and then sign a four-year contract that Zillgitt estimates would be worth about $157 million
No matter how you slice it, Lebron is going to make what some might refer to as a "buttload" of cash. So is it weird that I find myself hoping that he somehow figures out how to make $200 million over five years while I sit here eating Special K straight out of the box? Probably. But such is the life of a sportswriter. Maybe someday I'll graduate to having a desk that I'm allowed to put liquids on... but in the mean time, you get that money Lebron!
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