The Truth About “Parity” in the NBA
May 8th, 2014

[Originally posted on Hoopsworld, 5th November 2013.] In February 2010, NBA commissioner David Stern spoke ominously of the league’s forecasted $400 million loss that financial year, as well as hundreds of millions more in losses over the previous few seasons. His words were one of the earliest warnings of an impending lockout, a threat that became a reality 16 months later. Financial inequalities and a broken system supposedly saw 22 out of the 30 NBA franchises losing money, and something had to be done to install some parity. Three months after Stern spoke, the NBA ratified the sale of the New Jersey Nets to Mikhail Prokhorov. Parity, it is said, is supposed to level the playing field between the large- and small-market teams. The reality of this market inequality is an unavoidable one, founded in socioeconomic factors far outside of the NBA’s control. It is what it is. The NBA’s self-imposed duty is to level the playing field within its control as much as possible. They do this in various ways. The draft, of course, is one – parity is not just financial remuneration, but also the opportunity for all teams to compete on the court. There is also, as of the new CBA, a new revenue sharing system ostensibly designed to make big brother pay for little brother, a significant development in the NBA’s hitherto limited revenue sharing history. And there’s the concept’s most public weapon – the luxury tax. Since its inception in 2001, $923 million has been spent in luxury tax by 24 franchises. Of that $923 million, some $568 million has been spent by only four of those franchises – the Dallas Mavericks, New York Knicks, Portland Trail Blazers and Los Angeles Lakers. That is one seventh of the teams spending three fifths of the money, […]

Posted by at 7:45 PM

Why NBA Teams Sign Players They Don’t Want
May 8th, 2014

[Originally posted on Hoopsworld, 29th October 2013.] The vast majority of players signed for training camp are signed to contracts without any guaranteed compensation on them. This, certainly, is no surprise, as it has long been known that most players signed for training camp are not expected to make the team. A few players have fairly nominal guaranteed portions – for example, Dee Bost received $50,000 from Portland, Dewayne Dedmon $25,000 from Golden State, and Trent Lockett $35,000 from Sacramento. Most, however, do not. Teams are not involved in bidding wars for the Trey McKinney-Jones and Carlos Morais types, and thus there is no incentive to give any guaranteed money away. Not all unguaranteed contracts are the same, however. Some utilize a contract provision called Exhibit 9. Unless you’re an agent, it is a little known device of potentially huge importance. Exhibit 9 of the Uniform Player Contract is applicable only to those summer contracts fully unguaranteed and for only one season in length. Its purpose is to reduce a team’s liability in event of injury to a player it intended to sign only for training camp. It states thusly: if the player is injured as a direct result of playing for the team and, accordingly, would have been entitled but for this Exhibit 9 to compensation, the team’s sole liability shall be to pay the Player $6,000 upon termination of the Player’s Contract. The operator ‘sole liability’ is vital here. Without an Exhibit 9, the Uniform Player Contract normally calls for teams to pay any ‘reasonable hospitalization and medical expenses’ for players injured whilst directly participating in team activity, whilst also guaranteeing the payment of their compensation, however unguaranteed it was, until such time as they are fit to return to play, up to a maximum of the end […]

Posted by at 7:43 PM