Reasons to eliminate max contracts
Limits on NBA salaries create as many problems as they were meant to solve
- Steve Mitchell/US PresswireAllowing teams like the Heat to sign players at discounted rates has caused unforeseen problems.
The origin of the "need" for restrictions on the maximum allowable salary NBA players can make, or "max contracts," can be traced to the summer of 1996. It started with Michael Jordan, who, fresh off a dominant season in which he led the league in scoring and captured his fourth title, signed a one-year deal for an estimated $30 million. In the following days, three players would sign the first $100 million deals in NBA history: Shaquille O'Neal (seven years, $120 million), Alonzo Mourning (seven years, $112 million) and Juwan Howard (twice: a voided seven-year, $100 million deal with Miami, and then a seven-year, $105 million contract with Washington).
The straws that broke the camel's back came the following offseason, when Shawn Kemp (seven years, $107 million) and Kevin Garnett (seven years, $126 million) joined the $100 million club. Owners had seen enough, and cracking down on escalating player salaries -- particularly on the high end -- became a central theme of the 1998 NBA lockout.
When the dust settled, the new collective bargaining agreement included language that (A) set maximum limits players could make in a given season and (B) allowed a "grandfather clause" that would ensure players could make at least 105 percent of their previous year's salary. (According to the new CBA, a player on a max contract must be paid the higher amount between 105 percent of his previous year's salary or 35 percent of his team's total payroll.)
As the CBA and economics of the NBA have evolved, the max-deal clause has become outdated, and instead of protecting teams, it now does more to hurt them (and the league overall). Here are four reasons to do away with restrictive max deals in the next CBA:
1. Max deals result in unfair redistribution of wealth.
There is a rhyme and reason to the total salaries paid to players each season, represented by the percentage share of basketball-related income (BRI) they receive (this was an especially contentious point during lockout negotiations in 2011). As such, by limiting the amount of money players can make on the high end, the surplus is redistributed to lower-level players.
To read Amin Elhassan's complete article on why maximum contracts in the NBA should be eliminated, become and ESPN Insider today.
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