The NBA Rule Change that Would Make Trades Even Better
The NBA has had an incredible week, but a big portion of their business could get a major boost by copying a rule from the NHL.
The NBA has had a huge week. In fact, you could argue that this is their best week of business ever. To recap:
Their most lucrative franchise, the Los Angeles, Lakers, just sold for $10 billion to an owner who has a history of being a good owner with deep pockets for the Los Angeles Dodgers. I’m not focusing a ton on that today because you’ve likely heard a ton about it, but this is an amazing feat for the NBA and the Lakers. Coming of the Boston Celtics sale of $6.6 billion (after a blended valuation), the health of NBA franchises has never been better.
The Indiana Pacers forced a Game 7 of the NBA Finals last night against the Oklahoma City Thunder. This will be the first Game 7 of the Finals since 2016, which was regarded as one of the greatest games of all time when LeBron James’ Cleveland Cavaliers defeated Stephen Curry’s Golden State Warriors in Oakland. This Sunday’s Game 7 will also quell much of the worry about bad ratings. As I wrote two weeks ago (though I didn’t state it this directly), it almost seems like a lot of NBA media wants the ratings to be lower so they have something to complain about, so I hope they’ll be able to manage when this Sunday becomes one of the most watched basketball games in a while.
The NBA has continued to benefit from potential trade talk. Kevin Durant is likely to be traded from the Phoenix Suns within the next two weeks, and it’ll likely be less than two. And this has generated a ton of buzz for NBA media and fans, as potential high-profile transactions always do.
And that third part is what I wanted to focus on today. The NBA makes a ton of money from all of its off-the-court happenings, as well as on-the-court. Discussing potential transactions has become a business in and of itself. So many “diehard basketball fans” really don’t watch that many games anymore, especially not in the regular season. But they’ll have a strong opinion on four different potential trade partners for one superstar who has been rumored to be on the move.
For NBA fans reading this, that last sentence was not shocking to you at all. The NBA’s transactions rumor mill is a major part of its business now. And that isn’t slowing down anytime soon.
But here’s the thing: The NBA is missing out on a major rule tweak that would massively improve the transactions part of their business. For the life of me, I can’t figure out why they haven’t done it yet, especially when the NHL figured it out 12 years ago.
In the NHL, when teams trade a player, they are allowed to retain up to 50% of the trading team’s salary. This means that a) they will pay 50% of the remaining salary on the contract, and b) they will be responsible for 50% of that player’s salary on their salary cap books moving forward. This second part is often more important, especially in a league with a hard salary cap, meaning that teams cannot spend above the cap under any circumstances (other than having a player on Long Term Injured Reserve). The NHL implemented this rule in 2013 to help facilitate more trades, and it’s worked.
The NBA has a soft salary cap, which means that teams can go over the cap for exceptions (such as re-signing one of their own players). However, the NBA has recently agreed to a “second apron” of the luxury tax, meaning that teams cross a second threshold of a luxury tax level in terms of their player salaries, then they have severe restrictions on acquiring new players. The most notable is that they cannot make a trade that takes on much more salary than they are sending out in the trade, which can really hamper their ability to improve the team.
If all that sounded confusing for you, then just know this: The NBA’s new rules for high-spending teams now cause teams to operate more like an NHL team in terms of a hard salary cap. Therefore, the NBA adopting this NHL player salary retention rule would be all the most important.
For instance, Kevin Durant will count $54.7 million against the salary cap during the next league year, which starts on July 1. Because of this second apron rule, certain teams are unable to even attempt to acquire Durant, since they can’t take on all of his salary.
But what if the Phoenix Suns announced that they were willing to keep $27.35 million of his salary for next year on their books, meaning that Durant only counts for $27.35 million for the new team? Immediately, many more potential suitors arise to the table. And this would be the most obvious case during which to use this rule. Durant only has one year left on his contract, and they Suns already know they will not be a contender next year (at least, i hope they know that), so they would only be sacrificing cap space in a year where they’ll be bad anyway.
And given the fact that they’re decreasing Durant’s cap hit and increasing the potential suitors for his services, they will be able to recoup way more in trade value than they otherwise would.
If this seems like a no-brainer, it is! I simply cannot figure out why the NBA has not adopted this rule, given how much their fans and media partners love to talk about potential trades. Of course, it would be somewhat arrogant of me to assume that nobody in the NBA – whose owners are some of the smartest businesspeople in the world – has ever considered it (especially when many NBA owners also own NHL teams). Maybe they do have a legit reason to go against this.
But for the life of me, i can’t figure it out. Imagine just how much more content that the NBA would get out of potential trades if fans and media could propose fake trades that also involve money being kept on the books. It would open up a whole new world of trade talk surrounding the Association. And with the NBA’s new second apron rules, now is the perfect time for it.