The signing of a new TV rights deal for the NBA will have a major effect on all future contracts, with LeBron James reportedly leading the push to end max contracts, a move that is likely to be the first shot in what could be a heated labor war with players.
Based on new TV deal projections, max contract for 10-yr vets to increase by more than $6M per year starting in ’16. 7-yr vets increase $4M+
— Brian Windhorst (@WindhorstESPN) October 6, 2014
This is why LeBron only signed for 2 years and why max free agents to be like Love, Aldridge, Gasol etc. may sign short next summer. — Brian Windhorst (@WindhorstESPN) October 6, 2014
With LeBron pushing for it & Chris Paul as head of union, players could also move for increase or even removal of max contract in 2017 CBA. — Brian Windhorst (@WindhorstESPN) October 6, 2014
And that possibility could affect how LeBron & Durant view their joint free agencies that come at same time in 2016. — Brian Windhorst (@WindhorstESPN) October 6, 2014
When James returned to the Cavaliers in July, he signed only a two-year deal with the team, causing some fans to panic that he would bolt the franchise again. However, the strategy behind that deal was based on this pending broadcast contract.
That’s because revenue from television and digital properties, which is tied to the salary cap, will virtually triple for the league, from $930 million to $2.67 billion. That will give each team slightly under $89 million per year, as opposed to the $31 million they had been receiving.
The current salary cap is set at $63 million this year, but is expected to jump to as much as $94 million when the new deal goes into effect for the 2016-17 season.
James’ disdain for the max contract is clear, since even with the salary cap boost, he would be limited to 35 percent of that, or $31 million with 7.5 percent raises each year—based on his re-signing with the Cavaliers after two years. His current two-year deal, will pay him $42.1 million over the next two seasons.
Removing the maximum will allow James to earn even more, but that concept is expected to get a cold shoulder from NBA owners, who fought a 161-day lockout with the players in 2011 that delayed the start of the season until Christmas Day.
Due to the fact that either side can reopen the 10-year labor deal in 2017, the issue of max contracts is likely to be a contentious issue in July of that year, which could lead to another lockout.
James is good friends with Chris Paul, the president of the NBA players union, and will no doubt closely confer with him as to what approach the players as a whole will take.
While speaking with the media today, James denied he was behind any such push to eliminate the max contract, but essentially confirmed that he would speak with Paul about it at some point.
“There will come a point in time when I sit down with my team and some of the guys … from a Players Association perspective, how we go about this with this new deal,” said James.