A Grizzlies fan’s guide to the new NBA Collective Bargaining Agreement

At 12:01 a.m. on July 1, the NBA owners officially locked out the players and started the 2011 NBA Lockout, the first since the 1998-99 labor dispute. 149 days later, on November 25, the players and owners finally reached an informal agreement to end the lockout. Both sides followed through and ratified the new Collective Bargaining Agreement (CBA) on Dec. 8 (161 days after July 1), which allowed training camps and the free agency period for the 2011-12 season to begin on Friday, Dec. 9 at 2 p.m. ET.

Owners seemingly walked away the clear winner in the deal, negotiating the split of Basketball Related Income (BRI) from 57 percent going to the players in the last deal to 51.5 percent in 2011-12. The players will see even less, as little as 49 percent of the BRI, in the waning years of the new CBA. But, in the days since the lockout has ended, we’ve seen players like Chris Paul and Dwight Howard attempt to position and almost force themselves into bigger markets, something the owners wanted to prevent.

So, what are some of the changes in the newest CBA and what impact will those changes have on the Grizzlies?

Luxury Tax:

  • The dollar-for-dollar system will remain in place this season and 2012-13 before moving to an incremental tax that rises with every $5 million above the tax threshold.
  • The NBA owners went into the lockout intending to negotiate a hard salary cap that simply wouldn’t let teams spend above a certain amount. When it became clear that wasn’t going to work, the owners settled on a much harsher version of the luxury tax for franchises and owners that go over the cap.
  • Essentially, franchises that exceed the luxury tax threshold will have to pay a much higher fee under the new CBA, which in turn means that smaller teams collecting the tax money would receive more revenue. The new CBA also contains a repeat-offender clause that will hit teams that go over for four-of-five seasons even harder.
  • Grizzlies’ impact: Memphis currently has a payroll of just over $37 million, though that will increase by a considerable margin after Heisley (hopefully) resigns Marc Gasol and then pursues others in free agency. Still, the team will be under the tax threshold and therefore receive additional dollars from teams that do spend more.

Additional limits for teams over the luxury tax:

  • As stated above, the owners originally wanted a hard cap. When it became clear that wouldn’t work, they advocated a “flex” cap before finally setting on a more punitive luxury tax. Teams going over the tax threshold will have significantly more to think about this time around.
  • Those teams that do exceed the tax threshold will have a smaller mid-level exception, acquire less salary in trades and cannot use the biannual exception. Once the 2013-14 season gets here, teams more than $4 million above the threshold cannot complete a sign-and-trade deal of any kind.
  • Grizzlies’ impact: Because teams that pay the luxury tax will now have less access to exceptions, free agents might be looking at having to take less money to play in the bigger markets. This means Memphis could potentially offer more money to a free agent than say, the Lakers, who consistently operate above the tax threshold.

Minimum Team Salary:

  • Just as there is a provision to discourage team from spending too much, there is also one to prevent teams from spending too little. In the previous CBA, teams were required to spend at least 75 percent of the current cap limit.
  • In the new CBA, teams will have to spend at least 85 percent of the cap in 2011-12 and 2012-13 and at least 90 percent in the years after that.
  • Grizzlies’ impact: This point is somewhat moot for the Grizzlies, though it does ensure Heisley and general manager Chris Wallace don’t try to go the cheap route in years to come. Overall, this rule is in place to help maintain competitive balance and prevent owners from choosing profit over competitiveness.

Revenue Sharing:

  • The new CBA nearly triples the amount of money that will be revenue shared, which is a definite positive for the Grizzlies and other small market franchises.

Amnesty Provision:

  • The new CBA allows teams to essentially get rid of one bad contract currently on the books with the amnesty provision. The salary of the player that was waived would not count against the cap for the team, and other teams in the league under the cap would have a chance to make qualifying offers to the player before he hit the open free agent market.
  • Memphis Tiger basketball fans may have heard of this rule because it was widely thought the Lakers may decide to dump Luke Walton (an assistant coach for the Tigers for about six months). That did not happen and Walton is headed back to suit up alongside Kobe and new head coach Mike Brown.
  • Grizzlies’ impact: It’s unlikely that the Grizzlies will use this on anyone because they don’t have any bad contracts on the books for the first time in a long time. This is something Heisley would have loved a few years ago in order to get rid of Brian Cardinal’s ridiculous contract.

The Grizzlies have two preseason matchups against New Orleans, hosting the Hornets on Dec. 16 at FedExForum and traveling to the Big Easy on Dec. 21 for the last tune-up before the regular season. Memphis then opens its season with back-to-back playoff rematches, first traveling to San Antonio for a battle with the Spurs before returning to the Bluff City for a showdown with the Oklahoma City Thunder.

Click here to read what Rudy Gay, Zach Randolph and Mike Conley have to say about the 2011-2012 NBA season.

Preston McClellan covers the Grizzlies for MemphiSport. Follow him on Twitter @p_mcclellan.

Photo by Chase Gustafson.

 

 

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