Mori Chu wrote: ↑Sun Dec 29, 2024 9:26 am
Okay, now that the holidays have settled down I have finally had some time to read and ponder this interesting set of ideas. Thanks for writing this up, Cap! Here are some of my thoughts. You're much more of a, well, capologist than I am, so these are just the responses of a dumb layperson.
Yay!
Cap wrote: ↑Tue Dec 17, 2024 10:24 pm
Each team contributes a certain percentage of its BRI to a Player Compensation Treasury.
The PCT administers a bank where each team has a checking account into which is paid a standard annual allowance, say 100M scrip. The players are paid with checks on these accounts. How much a scrip is worth depends on the amount of money coming into the PCT (and how many scrip are issued, which shouldn’t change much from year to year), so when more money comes into the PCT, everybody gets paid in more valuable script. It’s like a profit sharing system that benefits everyone, not just players signing new contracts. (Similarly, if BRI increases more slowly than expected, it’s everyone who feels the squeeze, not just new contracts.)
The PCT will also operate as a lender of last resort if a team overdraws its checking account. The interest rate will be sufficiently punitive (say, 50% per year) to strongly discourage taking advantage of it to any large degree. Furthermore, when a team’s account is in the red, all transactions (trades or signings) are reviewed by the league and anything that worsens the debt situation is disallowed.
Instead of exceptions and arbitrary thresholds, there are various subsidies and taxes that perform similar functions.
This is a very interesting idea. I like the idea of pooled resources and sharing between teams. I know they already do a bit of this, but IMO the current way is not very effective. And I like the way it makes all contracts elastic to the rise and fall of the success of the league, so nobody gets caught holding the bag on a past contract.
Cap wrote: ↑Tue Dec 17, 2024 10:24 pm
General Subsidy
There is no minimum salary exception. The minimum salary is zero.
Each player on an active roster or inactive list or with a guaranteed contract receives, in addition to his salary, a per-game payment directly from the PCT. (The amount of the subsidy may depend on experience.)
There would be a limit of 16 players collecting subsidies from a single team. If you have 15 on your roster, you can have one player out there collecting subsidies due to a guaranteed contract with you and not on any team. If you have two such players out there, you’re limited to 14 on your roster.
I'm not sure I like eliminating the minimum salary. Players are desperate, and I worry that some team will start offering WNBA wages to their end of the roster guys. I do think that given the short career length of these players, there should be some kind of minimum salary that is generally calculated to be enough that, if you made it for 10 years, you could pocket / invest that money and live a reasonable life on it.
I do like the idea that the PCT directly pays every player regardless of salary; that's an interesting level-setter.
The General Subsidy is a substitute for the minimum salary. If a player gets “WNBA wages,” or even zero wages from his team, he’s still making the equivalent of minimum salary under the current system.
Numbers might work something like this: General Subsidy is $2M/yr. Each scrip is worth $1.50. A team’s 100M scrip are worth about $150M and their players are collectively receiving $30M in General Subsidies, for a total of about $180M
Think of it this way: the General Subsidy is the base pay every NBA player gets for finding a spot on a roster. Your salary is the extra your team is willing to pay you to play for them instead of another team. If no other team is interested your salary may be zero, but you’re still getting your $2M/yr.
Cap wrote: ↑Tue Dec 17, 2024 10:24 pm
Continuity Subsidy
(This will perform a function similar to that intended by the Bird exception.)
When a player has a certain tenure with a team, the PCT pays a subsidy, partly to the team and partly to the player. The larger share goes to the team (since the team has more control over whether they stay together). To pull a formula out of my, uh, my hat, a player with one year experience with his team gets a subsidy of 2%/1%, increasing by 2/1 every year to a maximum of 20/10. This will incentivize teams and players to stay together. (Tinker with the formula until the desired level of player mobility is achieved.)
If we go with my hub idea, part of the team continuity subsidy can be a hub continuity subsidy. This will incentivize teams who do trade to look for a trading partner in their hub instead of sending players across the country. This will be less disruptive to the lives of players and their families, and to fans who still get to see old favorites five times a year.
Note: a free agent who remains unsigned for more than 30 days (not including the moratorium, etc.) loses his continuity with his team. If we have a hub continuity subsidy, that can remain on the table for another 15 days after the team continuity subsidy. This is necessary to maintain fluidity in the market.
Suppose a player has ten years of continuity with a team, so he has a subsidy of 20/10. Suppose this player is “worth” 20M scrip.
The player asks for a nominal salary of 24M, so he’ll get 26.4 and will cost the team 19.2. The team offers 19(+NTC), so he’ll get 20.9 and cost the team 15.2. While they’re haggling about how to split the benefit of the subsidy, another team offering 20 isn’t matching the team’s offer, the player’s request, or anything in between. So you give them the moratorium plus 30 days to work it out, then take the continuity subsidy off the table and let all teams bid on an equal footing.
I go back and forth on this. How much, if any, do we want to incentivize players staying on the same team for a long time? In theory we want this so that small-market teams don't lose all their players to the Lakers. But in practice, it's a drag when a team gets stuck unable to move a player or improve their roster, that isn't much fun either.
You have to find the right balance, and the 2/1 formula I gave may be too aggressive; I just threw it out for pedagogical purposes.
(Another issue with that percentage-based formula is that there’s no subsidy for zero-salary journeymen. We’d probably like an incentive to keep them around too. The simplest solution is probably to include the General Subsidy in the salary for Continuity Subsidy purposes.)
The thing I see that I really dislike is the following:
- team is allowed to re-sign its own player to a better contract than any other team could in free agency
- so the player, who wants to leave, re-signs with his current team (at the better contract) then demands a trade
The above is the worst of all worlds: the player forces his way out and gets rewarded for it with a bigger contract than he could get in free agency.
That’s why part of the subsidy is paid to the player. See, the subsidies aren’t paid out at signing, they are paid out as the wages are paid out.
Suppose I have a 10%/5% subsidy and a 10M nominal contract. As long as I’m with my team I’ll be taking home 10.5 and it will only be costing them 9. If I’m traded, I’m not getting my part of the subsidy any more, and my new team will have to cover the whole cost of the 10M. If I’m willing to accept 10M and they’re willing to pay 10M, I can just go there in the first place. Resigning and then immediately getting traded does nothing for me, my old team, or my new team.
It’s actually the current system, with the Bird Exception and RFA, that incentivizes
resigning rather than
keeping/staying.
What teams are “allowed” to pay is not meaningful in this system. It’s about what they can afford to pay. Big difference from the current system. If they have the scrip, they can spend it how they want. In the current system, it’s limits and exceptions built into the CBA that determines what players can get instead of the market.
One thing I like about your proposal is that (if I read it correctly) the continuity bonus wouldn't follow you if you switch teams. So you couldn't do the above by getting a bigger contract and then demanding a trade. I wonder if players would be mad if they get traded away from their team against their will and lost a large chunk of their salary through the continuity bonus. Maybe that's not such a big deal.
Correct, the Continuity Subsidy doesn’t follow you if you switch teams (although part of it may follow you if you switch within the hub).
You’re right that players who have been around a while may get upset about being traded. That’s by design. We want players to want to stay where they are, especially if they’ve been there a long time. You’re concerned about players forcing their way out; this gives them an incentive to do the opposite.
As for your ideas, I don't think I like the geographic "hub" idea. I don't see why I should care whether Brad Beal gets traded to, say, Utah vs. Charlotte.
The idea is that players and families might prefer to be traded locally, especially if their current team is somewhere they chose to go. And if it is something that players would like, it’s something that can be addressed during collective bargaining. If it’s not something that matters to the players, then the Hub Continuity Subsidy would be unnecessary.
BTW, Utah would not be in our hub. Beal would have to go to one of the L.A. teams for hub continuity. And Beal only being in his second year here, his Hub Continuity Subsidy would not be significant (relative to his salary). There would be a little incentive to move Booker to L.A. rather than Charlotte.
One thing not mentioned by your proposal is, I think any new CBA should completely do away with "no-trade" clauses. These just shouldn't be allowed. They give players an unusual and uneven power in trade negotiations. Not that I want to strip players of all their agency, but, I don't like that just a select few players can get this very powerful leverage while other players do not have any such leverage. It makes no sense that Brad Beal can completely block any trade out of Phoenix while KD or Book just have to grin and bear it.
I didn’t mention it, and it’s pretty much orthogonal to everything being discussed here. It’s something that can be addressed during collective bargaining. Or, we can just let market forces address it: If they’re too damaging to teams, then smart teams just have to be more conservative about giving them out. The system we’re discussing can work with or without them.
I think NTCs could be good in some situations. Let’s continue the 10%/5% example above. Another team offers me 10.25M. My current team says they can’t pay 10.25 M, but they can sign me to 10M and I’ll take home 10.5M as long as I’m with the team. I’ll accept that if I can get a NTC that guarantees I’ll get my 10.5 instead of being traded and getting only 10 when another team was offering me 10.25.
Cap wrote: ↑Tue Dec 17, 2024 10:24 pm
Account Maintenance Fee
We don’t want teams to hoard scrip in their accounts. We want them to spend it or trade it to teams who will.
So we charge a heft fee (say, 50% of the balance) to teams that still have scrip in their account at the end of the season.
This seems fine to me, though I admit I don't think I am able to anticipate all the ways that teams would try to manipulate the new system or weasel out of its rules. Perhaps even more such things need to be in place to prevent teams doing weasely things.
Player Insurance
No injured player exception. Instead we work with insurers to cover players. When a player is injured, some or all of his salary is paid by insurance, freeing the team’s scrip for other players. The portion of the premium that covers expected payouts is paid out of the team’s PCT account; the overhead is paid for directly by teams or the league. Whether some level of insurance should be mandatory or it should be entirely up to the discretion of the teams is an open issue.
I like this because it is simple and clear vs the existing system.
Cap wrote: ↑Tue Dec 17, 2024 10:24 pm
Progressive Income Tax
Caps on individual player salaries distort the market in a bad way. If a player is worth 60M but capped at 30M, whoever gets him gets 30M of free talent. Furthermore, these better-than-max players, who can pretty much write their own tickets, are incentivized to congregate and take advantage of that free talent.
Instead we’ll let teams bid whatever a player is worth. However, the top players don’t need to take all that home. We implement a progressive tax on salaries, so that those with very large salaries kick a portion of it back into the PCT whence it eventually finds its way to other players.
Mixed feelings on this one. I don't really agree with the general line of thinking that there should not be any maximum salary/contract amount. I worry that dumbass teams would just sign one player to $200m/year and destroy their cap for a decade to come. I don't know if such a relaxation is implied by your proposal, but that would worry me if so. Set a generous but reasonable max salary. If you want to tax more of the top income bracket and put it into the PCT, that seems fine with me.
$200M/yr would be more than 100M scrip. The team is not only spending all its scrip on this player, but borrowing scrip from other teams (or God forbid the bank at 50%) to pay one guy. And since they have no scrip for other players, they’re surrounding him with 14 players who are only collecting the General Subsidy because they can’t find a team to give them an actual salary. I can’t see any team, even a reckless one, going quite this far for any one player.
But honestly, if the way bad teams keep being bad teams is by overpaying for superstars and neglecting the role players, that’s fine with me. Then we get to see balanced team basketball advancing in the playoffs, and there’s still a reason to tune in when the bad teams play because that’s when you get to see the top players.
Cap wrote: ↑Tue Dec 17, 2024 10:24 pm
Rookie Auction
The draft is replaced with an auction-like system where the top pick goes to whoever is willing and able to pay him the most. The way you get a coveted rookie isn’t by losing, it’s by not committing your scrip to other high-priced talent. If you can win with the players you find in the bargain bin, more power to you! It won’t cost you your rookie.
Respectfully I don't like this at all. I actually think the current draft lottery system is pretty close to workable as it is. There aren't as many teams tanking due to the play-in and lottery factors; the team with the worst record usually doesn't get the #1 pick any more. I really don't want any sort of bidding war or feeding frenzy over incoming rookies. We know so little about these players due to the broken one-and-done format of college basketball.
I’m not sure what you mean by “war” or “frenzy.” The auction itself would be a quiet, orderly Vickrey auction.
(What’s a Vickrey auction?)
Each team quietly submits its best bid. Top bid wins the auction, second highest bid sets the price. (You never pay more than you have to to win the auction, so go ahead and submit your best bid.) Winning team decides which prospect comes to their team and gets that salary.
Repeat until there are no more bids.
(As with any bidding system with a small number of potential bidders, the biggest threat is collusion. The team that can afford the second most bids less than they otherwise might, getting the top team a better price and getting themselves a favor in return. You’d have to watch out for this.)
It’s true that it’s hard to know what these prospects are going to be worth. Teams that are fairly good at projecting this will do better than teams that are just guessing. That’s as it should be.
The auction system allows prospects to get their fair market value. Does it make sense that a “Throw a dart, no good prospects in this draft” #1 pick like Anthony Bennett should cost the same as a heralded #1 pick like Wemby?
“Are you crazy?! You think I’m going to go for seven years and try to get there? You enjoy the 2030 draft picks that we have holding? I want to try to see the game today.” — Ish 3/13/25
