NBA pay limits a first

Unprecedented deal lets owners put cap of $14M on top salaries

`Major coup for the NBA'

Re-signed free agents only exceptions to cap

January 07, 1999|By Jon Morgan | Jon Morgan,SUN STAFF

True to its tradition of trailblazing labor deals, the NBA has achieved something that the other pro leagues have only dreamed about: a limit on how much a veteran player can be paid.

The tentative agreement the league reached with its players yesterday still contains exceptions for certain players -- chiefly the so-called Larry Bird exemption for re-signed free agents -- but the appearance of individual salary limits is a first for modern sports.

"It's a very important event in the field of sports labor," said Roger I. Abrams, a law professor at Rutgers University and an expert in collective bargaining.

No professional sports union has agreed to a maximum salary for its senior players before, something the NBA insisted on throughout the negotiations. The National Basketball Players Association first said no, then counterproposed a luxury tax be charged to any owner who signed a player for more than $15 million.

But the owners rejected that plan and the union relented in a counterproposal earlier this week. The agreement calls for a $14 million maximum salary for players with 10 years' experience. Those with one to five years' experience can get a maximum of $9 million, and players with six to nine years' experience can get $11 million.

The NBA had previously won the first cap in sports on rookie pay. In the previous agreement, rookies were limited to certain benchmarks of pay for their first three seasons. That will continue, with a few new restrictions, in the new deal.

Although porous -- Michael Jordan, for example, will be eligible to earn nearly $35 million -- the cap is the most restrictive in sports in terms what most individual players can earn. The previous NBA system capped a team's payroll as a whole but left each athlete free to seek as large a portion of that payroll as a team was willing to pay.

"In all my years in this business, never have I seen management demand that individual salaries of senior, experienced players should be capped. This is a watershed," said Abrams, who also is a baseball salary arbitrator and author of two books on baseball economics.

Sports labor attorney Ellen M. Zavian, who has worked on behalf of various players unions, including the NFL Players Association, predicted that loopholes and gaps will be found to weaken the NBA's new controls.

"I don't think the $14 million cap is as hard as it is made out to be," Zavian said.

NBA players, who voted overwhelmingly yesterday to accept the deal, seemed to accept the new pay ceilings as a cost of salvaging the season.

"There's some good things about this deal and with the caps on salaries there are some bad things about it. I'm just pleased that we came together and were very intelligent about this whole situation," said Jayson Williams, a forward for the New Jersey Nets.

The deal is certain to be studied by other sports as a harbinger. It wouldn't be the first time the NBA has played that role.

In 1983, as part of a deal that saved the then-struggling league, the union and team owners agreed to an innovative revenue-sharing system. Under that plan, the owners annually total up the money they make from TV, ticket sales and other agreed-upon sources. A payroll cap is then established for all the teams based on a percentage of the revenue, with the percentage set in the collective bargaining agreement.

The structure served the league well, and was copied by the NFL in 1993. Baseball owners tried to achieve similar controls on salary growth, but with less success. After a disastrous strike in 1994 and 1995, they settled for a luxury tax that penalizes the biggest spending teams.

The NHL owners endured a 103-day lockout in 1995 chiefly in pursuit of a comprehensive salary cap, but settled for a rookie scale limiting pay in a player's first three years -- significant in a sport with so many young players.

The players achieved limited free agency in that deal, completing a revolution in American sports labor in which players in all four major leagues won some freedom of movement between teams. In exchange, however, they had to concede limits on salaries that have skyrocketed in the past decade.

"Many would say the NBA blazed this trail, and maybe this [the new agreement] represents the next step," said William B. Briggs, an adjunct professor of law at Cornell University and an assistant general counsel to the NFL's management council.

Baseball's contract is the next to expire, in 2000. But that union, the strongest in sports, has steadfastly refused to accept such restrictions.

Dean Bonham, former president of the Denver Nuggets and head of The Bonham Group, a Denver-based sports marketing firm, called the new salary limits "a major coup for the NBA."

"What it says to an owner or potential owner is, `I have some idea of what my cost will be over the next few years.' That increases the value of a franchise," he said.

Sun staff writer Jerry Bembry contributed to this article.

Pub Date: 1/07/99

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