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Posts Tagged ‘James Harden’

The Death of The Free Agency Rebuilding Plan?

December 21st, 2016 2 comments
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The NBA and the National Basketball Players Association announced last week that they have reached agreement on a new Collective Bargaining Agreement. If the deal is ratified by both sides, which is a formality, the league will be assured of labor peace for at least the next six years.

At the highest of levels, not much would change in the new deal.

The split of league-wide revenues will remain the same – the players will be virtually assured to receive a 51 percent share (as they are in the current agreement). The salary cap will be calculated the exact same way. The luxury tax will be calculated the exact same way, and teams will be penalized just as severely for crossing it.

Rather than pushing for sweeping changes, the NBA was clearly focused on one thing — stopping superstar players from leaving their teams in free agency. Since 2010, several top-tier players have left as free agents, including LeBron James and Chris Bosh (2010), Dwight Howard (2013), and Kevin Durant (2016). Carmelo Anthony (2011), Chris Paul (2011) and Kevin Love (2014) also forced trades under the threat of leaving their teams with nothing in free agency.

To stop the flow, the league created new rules that provide huge financial incentives for a select group of top-tier players to stay with their existing teams – rules with which the players (the union for whom was led by the players who would benefit the most) were more than happy to oblige.   Read more…

Breaking Down James Harden’s Renegotiation and Extension

July 19th, 2016 No comments
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Heading into the 2016-17 NBA season, extensions for veteran players had all but vanished for several years — the result of changes to the league’s Collective Bargaining Agreement that make it more beneficial for players to finish out their existing contracts and enter free agency thereafter, even if they plan to re-sign with their prior teams.

The rapidly rising salary cap – which has reached an all-time record $94.1 million this season, a whopping 34.5 percent increase from $70 million in 2015-16 – has, however, created a short-term opportunity for teams to leverage intricate salary cap rules to offer key players extensions that, in some cases, can be too tempting to pass up.

Many teams are finding themselves with more salary cap space than quality free agents on which to spend it. For these teams, that cap space can be used to simultaneously renegotiate and extend the contracts of its key players, giving them more up-front money in exchange for more seasons under team control.

This is exactly what the Houston Rockets elected to do with its key player, James Harden, in what to this point has been the most intriguing utilization of cap space thus far this summer.

Contract renegotiation is a concept largely attributed to various other sports. Only very rarely do they occur in the NBA. They can only occur on or after the third anniversary of the original signing date of a contract (or extension or renegotiation), and they can only increase a player’s salary. To do so, a player’s team must have salary cap space to cover the full amount of the proposed increase.

Heading into this season, Harden had two seasons remaining on his contract — $16,784,032 for this season, and $17,811,626 for next.

Though he signed a “maximum” five-year rookie-scale contract extension in October 2012 that ran through the 2017-18 season, the subsequent jump in the salary cap meant that he was set to earn far less than his current maximum salary for this season.  Read more…