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CBA Roundtable: Extensions

November 4, 2012; Los Angeles, CA, USA; Prominent extension recipient Kobe Bryant (24) fouls current extension candidate Greg Monroe (10). Mandatory Credit: Gary A. Vasquez-USA TODAY Sports

Extensions have played a pivotal role in the last few summers and we are seeing the impact of the 2011 Collective Bargaining Agreement in full force this year.

The quagmires affecting Eric Bledsoe and Greg Monroe show one part the issue while Kevin Love’s inability to make a long-term commitment to the Cleveland Cavaliers illustrates another.

What do you think of the current system and how would you change it?

 

Daniel Leroux (@DannyLeroux):

I love the fact that extensions always have to come from a position of mutual assent. That means each and every signed extension had both team support and the approval of the player. Unlike pieces of the CBA like the draft which have an imbalance of power, a process that requires the active agreement of both sides can justify plenty of flexibility.

The most important change I would make concerns the calculation of years on extensions. At present, years remaining on an existing contract count against the maximum duration. I support a change that only counts years on the existing agreement being extended if the new deal modifies any of those years (starting with the earliest modified, of course) and evaluates the maximums by the Bird rights the team will have when the extension kicks in. For example, a player could sign an extension on the third anniversary of a five-year contract but only add two years by the current rules while under my proposal they could add five additional seasons.

I have more trouble figuring out which contracts should be permitted to be extended but my current system would require a three year contract or three years of continual team service and the player could sign an extension on the second anniversary of signing that contract or a previous one in the case of continual service. That length of time would still prevent Bird rights trickery but also give teams and players additional flexibility in some important cases. For example, under the current system second round picks on three year contracts like Draymond Green are not allowed to sign extensions at any point. In my proposal they could come to an agreement after two seasons- this summer for Mr. Green and the Warriors.

This overall system (changing the years and evaluating a player’s Bird rights at the time the extension kicks in) still prevents teams from gaming the system by signing a guy to a cheap deal and then turning around to lock in big money sooner, potentially via an “understanding” at the signing of the first contract. It would just open up a few additional avenues for some situations that are unnecessarily closed right now.

 

Mark Evans (@JrMarkyMark):

I do like that NBA extensions seem to actually, you know, mean something. I’m a casual football fan and not much of a hockey fan but it seems like contracts in the NFL and NHL are more form than substance. I feel like I see NFL guys constantly getting cut because there is no guaranteed money left on their deals after signing a significant extension and I see NHL players signing ridiculously long deals that are manipulating the system.

One of my ideas for change is tweaking how Bird Rights affect an extension. As currently structured, the “hometown team” has an advantage in keeping a star as they can offer an extra year and a higher annual raise. I like the concept here but I think it goes a bit too far to reward franchises that probably do not deserve to keep a star. This offseason, we saw Kyrie Irving and Melo stay with their teams and a large factor in both situations was probably the extra year and the annual raise. Up to that point, the Cavs and Knicks had done nothing to keep their stars. I am fine with the “hometown team” having an advantage, I just do not think they should have both the higher raise and extra year in their back pocket. My vote is to keep the extra year; a year of guaranteed money down the road should be enough.

Danny alludes to another change that makes a lot of sense to me: the treatment of second round picks a la Draymond Green. It is not a huge deal in practice because second round picks don’t often have much of an immediate impact. In recent years, players like Green and Chandler Parsons are exceptions. However, just because second rounders on three year deals usually have a limited impact should not prevent them from being eligible for an extension at some point.

 

Jared Dubin (@JADubin5):

I do not have a new system but I think it is hilarious that the owners pushed for these extension rules so they could eliminate the ability for stars to force their way out of situations via extend-and-trades like the Melo deal but they effectively eliminated extensions as a way to keep their own stars. How so many rich dudes just did not consider the practical implications of the changes they wanted to make is theater of the absurd.

 

Bryan Toporek (@btoporek):

The current collective bargaining agreement all but defeats the purposes of extensions for players on veteran contracts, which is unfathomably stupid. Currently, the first year of an extension can represent no more than a 7.5-percent raise over the player’s salary in the last year covered by the original contract. They are also limited to a total of four years, including the seasons remaining on the current contract. Under this system, it makes no financial sense for players to sign an extension in the final year of their contracts as they are able to reap a far greater financial reward upon reaching unrestricted free agency the following summer.

This system creates unnecessary risk for both parties. For a guy like LaMarcus Aldridge, who clearly wants to remain with the Portland Trail Blazers long-term, a severe injury this season could wind up costing him tens of millions of dollars. (He reportedly turned down signing a three-year, $55 million extension this offseason, per The Oregonian’s Joe Freemanbecause he will be eligible for a five-year, $108 million deal next summer.) Likewise, a nuclear meltdown like the 2012-13 Los Angeles Lakers endured could cause Kevin Love to leave Cleveland after only one season, meaning the Cavs would have shipped out two No. 1 overall picks and a future first-rounder for a one-year rental.

I am completely in favor of Danny’s proposal regarding the calculation of years on extensions. There is no reason teams should not be allowed to offer five additional seasons, much like they can in free agency, if the league is serious about giving squads an edge in retaining their superstars. I would go one step further by allowing teams to offer maximum contracts to players whose extensions under the current system would not reach the max even after 7.5-percent raises. This way, there is no financial incentive for players to become free agents if they want to re-sign with their incumbent teams.

I also agree with Mark that guaranteed contract extensions are preferable to the NFL’s model—Andy Dalton signed a six-year deal worth upwards of $115 million! Except oh, wait, it is basically just a two-year, $25 million deal. Though many upper-tier NBA players have options (either team or player) in their contracts, they are by and large guaranteed. That places a greater emphasis on intelligent team management as one or two fully guaranteed deals that go south can set a franchise back for years. (See: Stoudemire, Amar’e.)

The tl;dr version: Extensions should mirror the deals teams can offer in free agency. Simple as that.

 

Thanks to everyone for their insight. Feel free to join the conversation in the comments or on Twitter.

 

 

Daniel Leroux

Daniel Leroux has covered the Golden State Warriors for five seasons for RealGM, starting during his final year of law school. He was born and raised in the Bay Area and has a bachelor's in Economics from UCLA (Go Bruins!) and a law degree from UC Hastings college of the law. He also hosts the RealGM Radio podcast.