The NBA has a new collective bargaining agreement and the biggest change is how superstars can be paid in free agency. With the change, the NBA has seemingly put an end — for now — to superstars jumping ship like the way Kevin Durant abandoned the Oklahoma City Thunder to sign with the Golden State Warriors this past summer.
Similar to the old CBA, superstar players who meet certain criteria (e.g. being named
MVP) are eligible for larger contracts. But unlike the old CBA, there is now a much larger incentive for these superstars to re-sign with their current teams.
Under the new CBA, these so-called “designated players” are eligible to sign new contracts with a first-year salary equal to 35% of the salary cap, but only if they re-sign with their current team. That drops to 30% if they sign with a new team. In other words, based on next season’s projected salary cap of $102 million, a superstar free agent like Stephen Curry would be choosing between a first-year salary of $35.7 million by re-signing with the Warriors or a $30.6 million first-year salary with another team.
This is huge, because in the past, the difference between re-signing and leaving was negligible in the long run. Re-signing players could sign a longer contract (five years for re-signing players and four years for players on new teams), but players could make up that difference in their next contract. In addition, players staying with a team got slightly larger annual raises (7.5% annually for re-signing and 4.5% on a new team). However, that difference might be only a few million dollars over four seasons, something that could easily be overcome by a team playing in a more tax-friendly state.
While the lengths of the contracts and the annual raises have remained the same, the new starting salary levels makes those other differences much more effective. Not only would Curry make nearly $5 million more in the first season, he would make nearly $30 million more in the first four seasons by re-signing with the Warriors and $76 million more over the life of the contracts. In other words, players like Curry aren’t going anywhere anytime soon.
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