Friday, June 21, 2013

Why Max Contracts Need to Go

The Heat won their second straight title last night, eking out a series against the old-ass Spurs in which they did not lead until after Game 7. LeBron James was the MVP of the league this year, and he was the MVP of the Finals. And as the Heat celebrated their championship (very much deserved, I might add), all I could think of was this: Joe Johnson makes more money than LeBron James. Max contracts are really stupid.

If you'd like to read the basic rules for max contracts under the NBA CBA, you can read them here. Essentially, these rules limit the amount of money that individual players can earn. Players with LeBron James's experience level when he signed his contract with Miami in 2010 can earn 30% of the salary cap, or about $17.5 million. LeBron James made $17.5 million this year, and Joe Johnson made $19.8 million. In fact, 9 active players made as much as or more than LeBron this year. LeBron is currently not really able to negotiate for a higher salary than what he earns from the Heat, which means Pau Gasol and Amar'e Stoudemire make more than he does.*

This is, of course, crazy. LeBron James is worth significantly more to an NBA team than anyone else in the league. This was absolutely true when he signed with Miami coming off an MVP season in Cleveland. He has been in the NBA for 10 years and has won 4 MVPs. He should be able to earn as much money as an NBA team wants to give him under the salary cap.

Essentially, this is why max contracts are stupid: any player that is worth 30% of a team's salary cap (or 35% if he has more than 10 years in the league) is paid a  relatively predetermined amount. For instance, let's look at a guy like Chris Paul. Paul is an excellent player who has had a very impactful 7 years in the league. He is worth 30% of a team's salary cap because he is a premier player, and he has the potential to make a team way better. It's worth giving 30% of your payroll (remember, there are only 15 players on an NBA roster) to a guy who is going to play 36 minutes per game and improve your team tremendously. The same is true for LeBron James. However, LeBron's positive impact is far greater than Paul's, but that cannot be reflected in his salary. Both are worth at least 30% of a team's salary cap, but if Paul is worth 30% and LeBron is worth 55%, they must be paid about the same amount under the current CBA.

This is not the case in any other sport. In baseball, a team can pay whatever it wants and spend however much it wants on its payroll. In football, each team has a hard salary cap, but a team can pay whatever it wants to individual players. Basketball is the only major sport that prescribes a limit to how much teams can pay individual players. And that's what allows a superteam like Miami to happen.

The Miami Heat essentially carry 3 (more or less) max contracts: James, Dwyane Wade, and Chris Bosh.** Each player makes between $17M and $18M. Let's just think about that for a second. Chris Bosh makes the exact same salary as LeBron James. Miami can afford to carry a player who scored 0 points in Game 7 of the NBA Finals for the same price as the best player in the world.

Looking at the Heat's roster, it just kind of seems unfair for them to be able to have the players they have. And in a very fundamental way, it is unfair. It's unfair that LeBron James can't make the money he deserves. It's unfair that he just cannot make a higher salary than Dirk Nowitzki or Kobe Bryant. It's unfair to him as the best player in the world, and it's unfair to the league. If LeBron were on the open market, no restrictions on what he could make (other than an NBA team's salary cap), he could probably make at least double what he made this year. He should make that money because a team with LeBron is automatically a contender, even if he eats up 60% of your cap room. And if a team is willing to pay him something like $35 million, they will not be able to afford a guy like Dwyane Wade or Chris Bosh or Dwight Howard on top of that. In this world, Joe Johnson might still make $19 million, but that's okay because LeBron James is making $35M and Kevin Durant is making $30M (instead of $16.7M).

Such a system would ensure more parity in the NBA. Having all the superstars being able to team up just isn't fair, especially when one of those superstars is far and away the best in the world. Everyone knew that Miami was going to win the title this year, and by golly, they did. The movie was over before it even began. Max contracts are dumb.

*I know there are exceptions to these rules that allow people like Melo to make $19 million in certain instances, but for LeBron, we're not talking about a difference of more than a couple million dollars. In the grand scheme of things, LeBron will trade an extra million a year to be in a great position to win multiple championships. However, if we're talking about doubling his salary (or more), that's a game changer.

**So do the Lakers, and they actually pay each of their max players more than the Heat's players. But it turns out that Pau Gasol kind of sucks now, D-Howard had his worst year in forever, and Kobe ain't LeBron. Also, this salary cap stuff has a bit more nuance than I'm explaining, WHICH YOU CAN RESEARCH YOUR OWN DAMN SELF.

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