Hardening the NBA salary cap is anti-labor

Hottest subject line of the year, right?

Good morning. Apologies for the lack of a Wednesday newsletter. Not feeling my best. Let’s basketball.

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Large Piece of Turf; Albrecht Durer; 1503

Every time the NBA tweaks a rule to make the salary cap tighter, some fans and analysts grouse about the anti-labor nature of the change. The apron saga is a good example. It significantly hardens the team salary cap. This is pro-capital, anti-labor. But the smart set of fans and analysts will invariably and instantly point out that, actually, it’s not anti-labor because the collective player salary pool is set elsewhere in the collective bargaining agreement and unchanged since 2011. (It’s set at basically half of all basketball-related income.)

This argument ignores a key point: collective salary is not the only important consideration for labor, and there are certainly more and less pro-labor ways to divvy that salary up both on an annual basis and over time.

By hardening the cap in small ways consistently over time, the NBA has continued to weaken labor’s position relative to the past, even as gross salaries have rocketed upwards. It’s been a trade that labor has taken without much apparent pushback: there have been no player-led work stoppages since the 1990s; there have been only minor concessions won by the labor union in the past few negotiating cycles despite major cap hardening gains won by the league; and the rhetoric has been concilliatory and friendly since the last lockout in 2011.

Freedom of movement is a crucial labor right won through incredibly difficult battles in the 1960s and 1970s across American pro sports. Capital will never claw the right of free agency back in the NBA. But there have been some ways in which the right of free agency has been reined in. For example, the NBA — with labor union sign-off — has built a system of incentives for players to re-sign with their incumbent teams and reduced some transactions involving trades followed by immediate contract extensions. These rules serve to reduce freedom of movement by systemizing norms of players staying with their incumbent teams. Sure, players could take less money to leave earlier. But the system is built to punish them for exercising their freedom of movement: free agent contracts are smaller, shorter and increase at smaller rates than incumbent deals. The right of free agency is thus reined in. This particular ruleset, developed over multiple collective bargaining agreements since 2011, has served to increase the incidents of star players requesting or demanding trades after signing long-term extensions. The players thus become public villains to some extent — Nets-era Kevin Durant took more heat than, say, Blazers-era Damian Lillard, based on perceived dues paid and rationality of the timing of the demands. In previous NBA regimes, these players may not have signed the more lucrative extensions to stick around and just left via free agency.

The slow death of free agency in the NBA is evident in the lists of high-impact free agents available in any given year. Klay Thompson, Kentavious Caldwell-Pope, Isaiah Hartenstein and Jonas Valanciunas were four of the six highest-impact free agents to change teams this summer (after Paul George and DeMar DeRozan). Back in the 2000s and 2010s, I used to write big “top XX free agents of 20XX” pieces for SB Nation. Dudes like this — at this stage of their careers — would have been in the 30s some summers.

The NBA has also effectively negotiated away the existence of the no-trade clause. In the past, the clause was an important tool to attempt to equalize power between the league’s elite players and their teams. In exchange for committing to a long-term contract extension — often amid sustained increases in the salary cap, thus locking in below-market salary increases for the stars — players could negotiate for a no-trade clause. This protected players, who were giving up their right of free movement by committing long-term, from undesired movement. “I can’t leave, but you can’t make me leave. We’re in this together.” It is now so onerous to earn the right to negotiate a no-trade clause that almost no one does it. In a stroke of restrictionist genius, the NBA made adding no-trade clause in extension talks illegal. Thus, the preference for contract extensions in lieu of free agency not just reduced the allure and power of free agency by incentivizing incumbent teams, but that made getting a no-trade clause more difficult. Plus, even when players are eligible for a no-trade clause, teams resist the urge to grant it. This was reportedly a sticking point between the Clippers and Paul George this summer. And players are smart enough to know now that if a team is telling you how committed it is to keeping you in their future but won’t give you a no-trade? They know that commitment is totally provisional. Consider it the Law of Blake Griffin.

Back to the aprons, and everything that has come with it. This harder cap is clearly restrictionist. It hems in team behavior specifically, but this serves to restrict player freedom as well. It minimizes the market for talent by essentially preventing high-payroll teams from making certain trades, signing players in certain ways and using certain team-building tools. This has already forced some high-payroll teams to make decisions that decreases the level of demand for quality players. Because so many contenders are hemmed in by aprons and the repeater tax and everything that makes up the harder cap, Tyus Jones had to go take $3 million from the Suns.

Now, you can absolutely accurately say that Tyus Jones having to take a well (WELL) below-market contract due to cap space scarcity among teams interested in winning in 2024-25 doesn’t matter in the grand scheme of labor’s earning power, because the players are going to collectively make 50% of revenue regardless. That’s fair. But that collective salary is just one piece of the puzzle. A large piece, to be sure. The most important piece. But it’s not everything.

The league’s goals are centered around overall growth, competitive balance and creating a level playing field for the majority, which is made up of lower-revenue markets. Part of that level playing field is restricting the power of high-revenue markets — or deeper-pocketed owners, in some cases — from “buying championships.” No longer can ringers outspend every opponent. The luxury tax is way more punitive now; on its own, that just separates out the rich from the wealthy in the ownership club. With transaction restrictions in place through the apron system, it’s quite likely impossible to maintain a functional roster that’s too expensive over multiple years.

This creates new emphasis on spending precious cap space efficiently. Over time, this will mean teams want to commit less in future guaranteed salary to non-superstar players. Flexibility is vital to sustaining a competitive roster. More players then end up with a somewhat more tenuous existence in the NBA. The trade-off for team flexibility is player career security. Sure, this works counter to the league’s moves to reduce player movement. But the players whose movement the league wants most to restrict are stars. Lock them in, and make the lesser players scramble for contracts as the teams are empowered and encouraged to spend their precious cap space efficiently.

The total pot going to players remains the same. The hustle to grab and retain some of it gets more competitive, and building a long-term career becomes a little more difficult if you aren’t a star.

These all are important labor considerations. These rules absolutely matter to the rank-and-file, to the stars, to the future membership of the union. Waving them away as irrelevant to balance between labor and management in the NBA because the collective revenue share is set in stone — that’s not an accurate reflection of reality. No one will cry for workers in a league where the minimum salary for veterans is in the seven digits and the average salary is in the eight digits. But that doesn’t make any more correct to say that persistent hardening of the NBA salary cap is not deletorious to the interests of labor in the league. It is, and the further the league tries to go, the harder the union should push back.

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Be excellent to each other.