The New CBA is Having Its Intended Consequences

Please excuse the stream-of-consciousness rant here...

Were it any other day, I probably would have just let the incredibly silly and misguided quote from Nuggets owner Josh Kroenke pass by without comment. But when it was followed hours later by the Celtics continuing to dismantle the team that won them a title just over 12 months earlier, I decided it was probably worth writing about.

From now through the end of free agency, all paid subscriptions to LNIB are 25% off. If you like my work and want to see more, please consider subscribing.

Here's the full quote and video:

"I think that for us, as an organization, going into that second apron is not necessarily something that we're scared of. I think that there are rules around it that we need to be very careful of with our injury history. The wrong person gets injured, and very quickly you're into a scenario that I never want to have to contemplate, and that's trading [Nikola Jokic]. We're very conscious of that, pushing forward and providing the resources that we can when the moment arrives. That second apron, is it a hard cap? I'm not 100% sure, but it's something that teams are obviously very aware of going forward."

If you're reading this newsletter/website, it's highly likely that you already know what the second apron is and how it functions, so I'm not going to bore you with the nitty-gritty details that would take forever to explain. There are plenty of resources available if you want to do a full-on deep dive, but suffice it to say that the penalties for spending a certain amount of money above the luxury tax line are extreme, both financially and in terms of the way doing so hamstrings your ability to add talent to your roster. But what it is, is beside the point here.

An NBA owner publicly musing about having to trade his team's franchise player out of fear of the second apron, even while claiming that his team is not scared of the second apron, is crazy enough. That owner being the owner of the Nuggets, and that player being the three-time MVP who just had arguably the best season of his career, is even crazier.

But what makes it absurdly crazy is that THE OWNERS ARE THE ONES WHO PUSHED FOR THIS SYSTEM! They are the ones who wanted the hard cap in the first place, and have been wanting it for years. They got what they wanted, and now one of them is out here bemoaning the potential consequences of their successful efforts.

In the past, I have often criticized NBA owners for their shortsightedness when it comes to creating new rules in collective bargaining negotiations. They have almost always come to the table with at least one demand that is designed to fix a "problem" that happened in the last year or two before the CBA was set to expire, and their hair-brained efforts to eliminate the potentiality of that problem ever occurring again have consistently had unintended consequences.

From now through the end of free agency, all paid subscriptions to LNIB are 25% off. If you like my work and want to see more, please consider subscribing.

After Carmelo Anthony forced his way to the Knicks in an extend-and-trade just prior to the expiration of the CBA in 2011, the owners set out to make sure nothing like that could ever happen again. But what they ended up doing instead with their solution was ensuring that superstars never wanted to sign extensions at all and thus would routinely get all the way to unrestricted free agency, allowing them to leave free-and-clear.

When this, and a once-in-a-lifetime salary cap spike, resulted in Kevin Durant leaving the Thunder in unrestricted free agency to head to the Warriors, the owners decided that "home" teams needed to be given a massive financial advantage in free-agency negotiations, affording them the opportunity to offer stars significantly more money in both extensions and free-agent contracts than could new teams. Within months, teams were balking at offering "super-max" deals to players that would seemingly be eligible for them, and you had the Kings trading Demarcus Cousins and the Bulls trading Jimmy Butler because they were scared of the price tags of those new contracts.

It's easy to look at what's happening in the world of the aprons and the functional hard cap and say that the same thing has happened again.

The Celtics have to trade Jrue Holiday and Kristaps Porzingis for not-close-to-equivalent on-court value in return because it would be too expensive, financially and flexibility-wise, to keep them on the team while Jayson Tatum rehabs from his devastating Achilles injury. The Grizzlies decide to trade Desmond Bane for mostly future-focused assets because fielding a team with him and Ja Morant and Jaren Jackson Jr. all on deals that pay them what they're worth would result in their not being able to build out the rest of the roster in a way that lifts them into actual title contention. The Timberwolves trade Karl-Anthony Towns for a pair of players whose contracts are smaller (one of whom might leave for nothing in return as soon as a year later) because they can't afford to keep him on a team where Anthony Edwards and Rudy Gobert are already being paid massive amounts of money. The list goes on and on.

But here's the thing: the consequences of the second apron and the other rules designed to curb spending this time around are not actually unintended. They are very much intended. Most of the owners, individually and collectively, did not want to spend as much as it would take to compete with the owners (mostly notably Steve Ballmer and Joe Lacob) that were willing to spend whatever it takes to win, and so they devised a system wherein spending whatever it takes to win could actually be detrimental to your team if you do it for too long. Like, longer than a year or maybe two.

The system is now designed so that there is a built-in reason not to spend too much money trying to win. And so that fans, who at this point have been conditioned to prioritize the chance at long-term success over the possibility of immediate pay-off, actually prefer that the team keep its payroll below a certain threshold so that its chances of competing in the future aren't too damaged. It's a brilliant gambit, really, at least in terms of accomplishing the goal of ensuring that nobody can outspend you because they are more willing to put their wallet to use to give themselves the best chance of winning, in a way that you aren't willing to do so.

When you think about it from the owners' perspective, or at least what should be their perspective, it is shortsighted on the surface. The Lakers just sold for $10 billion last week. The Celtics sold for $6.1 billion just a few months ago. The money for owners, now as ever, is in the valuation, not in year-to-year profit.

And the money, more often than not, comes from having the best players and doing the most winning. Just look at how much the value of the Warriors, who were a decrepit franchise for almost my entire lifetime, skyrocketed once they got Stephen Curry and Klay Thompson and Draymond Green and then Kevin Durant and started spending and winning more and more and more. Look at how the valuation of the Cavaliers has fluctuated based on whether or not they employed LeBron James at the time. Think about how much more money the Thunder are likely worth now, stocked with Shai Gilgeous-Alexander and Jalen Williams and Chet Holmgren and seemingly on the precipice of a dominant run, than they were two years ago when they were tearing down their team in hopes of landing guys like that. Think even about how much more the Clippers are worth than they were when Ballmer bought them, thanks to his willingness to invest in, well, anything at all, but especially in the money it takes to acquire star players and try to push your way into contention. The money is in the valuation.

And in a world where you have enough money to buy a professional basketball team, spending your way to acquiring the best players is the path of least resistance to winning enough to raise the valuation of your team. But the owners have made it so that the path of least resistance mostly isn't available to those who wish to take it, because the majority of them did not want to take it along with them, even if they clearly had the means to do so, given that they own professional basketball teams in the first place.

Now, instead of being rewarded for their willingness to do what it takes to win and then keep winning, the cost of building a team good enough to win in the first place is extremely high, the cost of keeping it together is even higher (due to the progressive luxury tax and especially the repeater tax), and the cost of trying to add to that team so that the teams chasing it can't catch up is higher still; and so after a very short period of a time, even the best teams need to be broken up because it's not feasible, financially or otherwise, within the current system, to keep them together without significantly hampering your ability to be good in the future. The path of least resistance is now putting in just enough effort to be competitive for long enough that you might crack the door open just enough once, and if you don't, well, at least you didn't have to spend too much along the way.

From now through the end of free agency, all paid subscriptions to LNIB are 25% off. If you like my work and want to see more, please consider subscribing.