Jul 19, 2013, 8:00 AM EDT
NBA teams were operating under uncertainty entering the 2010-11 season. The Collective Bargaining Agreement was scheduled to expire the next summer, and there was no telling what terms the new deal would include.
Teams might have to drastically shed salary to get under a hard cap. Trade exceptions could expire during a lockout. Existing contracts could change.
Besides the usual risks that come with transactions, there were plenty of ways teams’ decisions could backfire simply via the upcoming negotiating process between the owners and players.
But it seemed the Thunder signing Kevin Durant to a five-year, maximum contract extension in 2010 couldn’t go wrong. In his third year, Durant had just made the All-NBA first team, and his future seemed bright. Durant capitalized on that momentum, making another All-NBA first team in 2010-11 as the NBA headed into the lockout.
Durant’s extension didn’t call for a set dollar amount. Rather, it just specified he’d make a maximum salary. That max salary for players like Durant changed dramatically from the previous CBA to current edition thanks to what’s often called the Derrick Rose Rule. Durant, because he had made two All-NBA teams, was eligible for a larger extension than other players coming off their rookie-scale deal.
Suddenly, the Thunder were on the hook for $89,163,134 rather than $74,302,616 for the next five years based on the new rule structure, but still using the current Basketball Related Income split between players owners. The difference: $14,860,519.
Too late to change those outcomes, the Thunder had their protest answered by the NBA.
Zach Lowe of Grantland:
Owners today voted to reimburse Thunder "several million $" for rule change new CBA applied retroactively to Durant's contract, per sources.—
Zach Lowe (@ZachLowe_NBA) July 19, 2013
The vote took place at today's Board of Governors meeting, according to several league sources here in Vegas.—
Zach Lowe (@ZachLowe_NBA) July 19, 2013
Darnell Mayberry of The Oklahoman:
The Oklahoman also has learned the reimbursement will not alter OKC's team salary. All of Durant's "super" max deal still counts against cap—
Darnell Mayberry (@DarnellMayberry) July 19, 2013
The reimbursement OKC received also was not the full differential b/ween the 25% max & the 30% max (roughly $15M), The Oklahoman has learned—
Darnell Mayberry (@DarnellMayberry) July 19, 2013
This sets a dangerous precedent, and frankly, I’m surprised the owners approved it. The Thunder certainly weren’t the only team who made a decision the new CBA adversely affected. When do teams that paid a steeper luxury tax as specified by the new CBA get their handout?
Durant – whose take-home salary won’t be affected by this vote – will also be eligible to make more on his next contract because of this rule. Can Oklahoma City ask for money from the rest of the league then, too?
By not altering the Thunder’s team salary – i.e., not changing their luxury-tax bill – and not reimbursing the full $14,860,519, the other owners didn’t take as large as step as they could have. But they still took a huge leap. Probably too large of one.
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