The New CBA is Here: The Highlights

This past week, the NBA and the NBPA officially agreed on and announced a new CBA. This article will briefly summarize and evaluate some of the most important highlights of the 7-year agreement.

The Designated Veteran Player Exception:

Perhaps the most important change was the value of an extension, notably the Designated Veteran Player Exception. This will help a team keep a star player it has drafted or acquired on a rookie contract. This has been referenced as the Durant Rule, given the events that unfolded last off-season. It is easier to qualify for this extension than the Rose Rule and allows players to earn max money that only 10 year veterans could earn.

It used to be that a player could sign an extension for 5 seasons and earn 30% of the salary cap. Now, a player can sign for 5 seasons at 35% of the salary cap, so long as they meet the performance criteria outlined int he agreement. The Kings recently made this offer to DeMarcus Cousins and he has the opportunity to make an extra $35-40 million a year because of this designation. In the prior CBA, the extension was not this valuable and did not create much of an economic incentive for the player to stay with his current team. A team can designate up to 2 players for this exception. As you can see, this is meant to discourage super teams and is my favorite point of the  new CBA. In the end, only time will tell if this truly increases parity in the League.

Luxury Apron Tax

The tax apron has been increased from $4 million to $6 million. This means that there is more room for a team to operate over the cap and not exceed the luxury tax level.

Increase of Rookie and Exception Contracts:

Players will take a greater percentage of a greater pie. Specifically, the rookie scale and exception contracts (mid-level and bi-annual) will be increased to reflect the influx of revenue stemming from the new TV deal.

Cap Hold Increases:

Rookies coming of their initial deals must be paid somewhere between 250% and 300% of their previous year’s salary. The effect of this is to stop a team from waiting to resign its young players until it has signed other players in the interim. The Detroit Pistons and Washington Wizards took advantage of this strategy last season with Andre Drummond and Bradley Beal.

2-Way Contracts:

2-way contracts are now a part of the League. This means that a player can earn more money by playing in the D-League and that NBA teams can retain more control of players it sends to the D-League. The vision of this is to have a minor league that attracts a better talent base and have more of a system that mimics Major League Baseball. 

No More Over-36 Rule: 

The Over 36-Rule will be modified to be an Over-38 Rule. The over-36 rule prevented teams from signing players to four- or five-year deals if they would turn 36 or older over the course of the contract. This was heavily lobbied for by the League’s aging stars

Other Notable Changes:

• Teams will be required to have 14 players on the roster.
• The Moratorium Period is shorter, ending on July 6th at noon. 

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