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NBA Superstars: Out Negotiating the Owners

By Zach Epstein:

Last month, with the clock ticking on the final year of a contract that expires at the conclusion of the 2018-19 season, Jimmy Butler of the Minnesota Timberwolves became the latest NBA superstar to request a trade.[1] Butler only landed in Minnesota a season earlier, arriving in a 2017 draft night trade from the Chicago Bulls—whose motivation for a deal, undoubtedly, included foreseeing this exact situation and desiring to extract as much return as possible as leverage dwindled.[2]


Butler’s request is hardly a rarity these days. Fellow stars Kyrie Irving, Kawhi Leonard, and Paul George have all been traded over the past 14 months. While each player’s situation has been slightly different, they have all had one primary thing in common: using their final year (or in Irving’s case, two years) under contract to essentially force their teams to move them.

It was not long ago that six and seven-year contracts in the NBA were commonplace. In 2003, Jermaine O’Neal signed a seven-year deal to return to the Indiana Pacers. The Magic negotiated a 2007 sign-and-trade for Rashard Lewis, who was inked for six years.[2] Lewis was later traded for Gilbert Arenas, another player whose six-year contract lasted longer than the usefulness of the player who signed it.


Deals like these led to a change in the 2011 Collective Bargaining Agreement. Owners, perhaps in part recognizing a need to protect themselves from their own propensity to dole out big money contracts without the foresight as to how those contracts (and players) would age, limited the maximum length of contracts. Now, players who sign with a new team can agree to, at most, a four-year deal. Players re-signing with their current teams can go as many as five years. [3]


On some level, that plan worked. The Lakers famously signed Timofey Mozgov and Luol Deng to four-year deals during the cap-spike summer of 2016. When the front office regime that made those deals was removed, new executives Magic Johnson and Rob Pelinka were able to rid the team of those albatross contracts through a trade (Mozgov) and the waive-and-stretch provision (Deng). Those maneuvers would have been far more difficult if the Lakers were saddled with five or six-year deals for each player, making this summer’s acquisition of LeBron James through free agency a near impossibility.


Limiting the damage done by signing marginal players to long-term deals is one byproduct of having shorter overall contracts. But what owners clearly did not anticipate was the way shorter contracts would allow star players to facilitate their own movement throughout the league. By eliminating six and seven-year contracts, they removed some of the incentive on the players’ side to commit long term. For star players without a history of major injuries, there is minimal danger in signing a one or two-year deal as opposed to a four-year contract. While those shorter deals involve less immediate financial security, many players have decided the ability to exert pressure on their front offices outweighs any potential risk factors.


It was Lebron James who realized this dynamic first. During the four years he spent in Cleveland from 2014-2018, he signed three contracts—creating perpetual leverage and pressuring ownership to put a championship contender around him every year, or risk losing him.

Other players began to take James’ lead. Kevin Durant is about to begin his third season with the Golden State Warriors on his second contract, a one-year deal, and is already the subject of rumors about where he might end up next summer.[4]


This approach has seeped in for players who are still under contract, like Butler. As Irving, George, and Leonard did before him, Butler used the fact that he is a soon-to-be free agent to spur Minnesota into action. Better trade him now, the conventional wisdom says, or risk losing him for nothing. For a small market team like Minnesota without a track record of attracting high-profile free agents, letting a star leave without getting anything in return is a frightening proposition. And because the entire league knows Butler can sign anywhere come next summer, he is in position to greatly influence his potential destination.


While the situation has yet to be resolved, one thing is certain: NBA players possess a level of contractual leverage on a scale rarely seen in American sports. Team owners are on the clock earlier than ever to either build a contender around their resident superstar, or move them and obtain whatever value remains for a player who can decide, on his terms, where and when he lands next.

[1] Adrian Wojnarowski, Sources: Jimmy Butler most interested in joining Clippers, ESPN, (Sept. 20, 2018) http://www.espn.com/nba/story/_/id/24733577/jimmy-butler-minnesota-timberwolves-seeking-trade-brooklyn-nets-la-clippers-new-york-knicks

[2] Sonics, Magic complete sign-and-trade for Rashard Lewis, Associated Press, (July 12, 2007) http://www.espn.com/nba/news/story?id=2932827

[3] National Basketball Association, Highlights of the 2011 Collective Bargaining Agreement Between the National Basketball Association (NBA) and the National Basketball Players Association (NBPA) (Sept. 2014) https://www.nba.com/media/CBA101.pdf

[4] Nick Friedell, Kevin Durant plans to be transparent about free agency, ESPN, (Oct. 3, 2018) http://www.espn.com/nba/story/_/id/24872197/kevin-durant-plans-honest-pending-free-agency


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