In the weeks leading up to the 2014 NBA Trade Deadline, reports were out that NBA insiders expected this to be one of the busiest trade deadlines in recent memory, or more specifically, since the 2011 lockout and the new Collective Bargaining Agreement that commenced.
As quickly as those reports leaked, they were contracted. And if last Thursday left your trade deadline fix unresolved and unfulfilled yet again, then you can look no further and blame that aforementioned 2011 lockout and more specifically, the new CBA.
Before the 2011 lockout, there was seemingly always at least one trade at the deadline, or near it, that caught your interest, made your head turn, caught you off guard or by surprise, or had some video game feel to it. Whether it was the 2003 trade which swapped Gary Payton and Ray Allen, or the 2005 trade that sent Chris Webber to the Philadelphia 76ers, giving Sixers fans false hope of a long awaited superstar to play alongside Allen Iverson for the first time in his career, it seemed as though every year we could count on some sort of blockbuster to analyze and debate. It was an NBA holiday, a day we all looked forward to as our own personal NBA Christmas, after Christmas itself had come and gone. But now, it is effectively over with, at least the blockbuster portion of it.
Obviously, there is still–and probably always will be–a trade deadline. It just isn’t the day we all grew up with and grew so fond of. And to blame, whether intentionally or not, we have the NBA’s new Collective Bargaining Agreement.
The new CBA, combined with general nanagers who are becoming more and more savvy in the advanced metrics era and who use advanced statistics more and more to calculate every move they intend to make, are effectively shutting the trade deadline down.
The GMs play a part, but don’t be fooled, these same general managers, in the old CBA, would still be making deals and trading picks and taking on expiring contracts like the good ol’ days if it weren’t for the new shape of the NBA. So, sure, the league-wide awareness of the importance of draft picks and good contracts has risen, but those same picks and good contracts matter more because of the new CBA. The fact is that the GMs are just smart enough to realize the implications, and therefore, there’s less room for error and careless mistakes, especially with owners looming over their shoulders who do not want to pay the fees that come with say, acquiring an expiring contract. In the old CBA, it was a non-issue, and in most cases, an asset.
The main issue? The luxury tax. And to perennial tax payers, the bigger issue is, the repeater tax.
In the new CBA, the luxury tax goes as follows:
- $O-5MM above tax line = $1.50 penalty per dollar
- $5-10MM above tax line = $1.75 penalty per dollar
- $1O-15MM above tax line = $2.50 penalty per dollar
- $15-20MM above tax line = $3.25 penalty per dollar
- For every additional $5MM above the tax line, rates increase at $0.50 per dollar, or in other words, they increase A LOT.
In past years, teams would pay $1.00 for every $1.00 above the tax line; therefore, if a team was $7 million over the tax line, they paid $14 million total. Under the new system, the team would pay $1.50 per dollar for the first $5 million, and then $1.75 per dollar on the remaining $2 million for a total of $10 million in penalties. Add that on to the $7 million that the team is already over the cap, and that $14 million turns into $17 million very quickly. You can see where this starts to get expensive. It’s exactly what makes expiring contracts, like Pau Gasol‘s $19 million one, which used to be desirable for a team who would want him for the stretch run, so undesirable and borderline untradeable anymore.
The repeater tax increases the rates listed above by $1 each. The repeater tax applies to teams who land themselves over the NBA’s luxury tax threshold any four years in any five-year period.