Max contracts link

I found Christopher Reina's article on max contracts to be a concise and informative link.

Rubio updates

Though I no longer have the Spanish skills to translate, apparently, this article states Rubio has accepted that if he plays in the NBA it will be with the Minnesota Timberwolves. Additionally, it is being reported that Rubio's issue is not so much playing in Minnesota, as it is about paying the Juventut buyout. Ric Bucher of ESPN is reporting Juventut wants no less than $4 million. Rubio will make about $600,000 less per year based on the slide from the third pick to fifth pick. Also, keep in mind the Wolves can pay up to $500,000 of the buyout. Rubio will have to pay a substantial amount of the buyout, but if he were picked higher in the draft, it would only make up a fraction of the difference.

Marbury update

Previously, I blogged about Stephon Marbury using the NBPA as his agent. Now, Marbury is looking at his options to play basketball overseas. It is not clear whether Hal Biagas is still helping him with this endeavor, but it seems odd that Marbury could use the NBPA to negotiate an overseas contract. Would the NBPA help Josh Childress negotiate an extension? You have to wonder where the NBPA will draw the line. 

For a contrarian view (to mine), see the Sports Law Blog. Michael McCann posts about Marbury's recent use of the players' union  and fellow blogger, Rick Karcher, has written a law review article advocating the use of the union as agents for the individual players. I always thought this was an interesting idea, but never thought it was realistic. I guess I will have to check out Karcher's article now.

Salary Cap for 09-10 set

The NBA is setting the 2009-2010 salary cap at $57.7 M. Of potentially bigger news, the NBA is forecasting next year's salary cap at between $50.4M and $53.6M.

Also, not surprisingly, the NBPA is upset. Of course, there is no reason why the players should not share in the economic downturn. With guaranteed contracts, they have supreme job security. Additionally, the NBPA negotiated the CBA.

For more reading see: http://sports.espn.go.com/nba/news/story?id=4312837.

This link did a good job of breaking down some of the effects of the lowered salary cap and escrowed funds. The owners hedged their exposure for what was probably a very unlikely condition. I know the first time I read about the escrow system I thought it would never apply.

Stephon Marbury

Apparently, Stephon Marbury will enter the free agent market this summer without an agent. Marbury used the services of the NBPA to negotiate his buyout from the New York Knicks last season. Satisfied with the previous services, he plans to use the NBPA services again this summer. It should be noted the NBPA is not charging a fee; I wonder how long such a practice would continue if more players try such an approach.  

Defining International players (Not Jennings or Calathes)

International players are defined as a player who has maintained a permanent residence outside of the US for at least three years prior to the Draft, who has never previously enrolled in a college in the US, and who did not complete high school in the US. Article X, Section 1(c).

Should the NBA consider expanding its definition of an international player? The current definition excludes players like Josh Childress (does not meet any of the three requirements), Brandon Jennings (he only meets the collegiate requirement), and Nick Calathes (does not met any of the three requirements). While, it has at least been rumored Childress was able to sign a contract without a buyout, it is widely rumored Jennings and Calathes had no such luck. Even worse, it appears that both were incorrectly advised an NBA team would pay the buyout or at least the first $500,000. Though Sonny Vaccaro was not the only person that thought an NBA team would pay the buyouts or at least part of the buyouts, it does not make the incorrect advice the players received less troubling.

As players struggle to gain leverage through lucrative offers from opposing NBA teams, they may look abroad for competing offers. Once scoffed at, Josh Childress, Earl Boykins, Nick Calathes, and others are bringing validity to this threat. It may become a particularly interesting option for players with limited options due to restricted free agency, like Josh Childress. Further, as team salary budgets are expected to decrease in the next two years, players are increasingly likely to be offered higher compensation abroad. The current narrow definition of an international player will offer these players no relief when faced with the buyout from their European team.

Who should bear this burden? Currently, the players (non-international players), even if they are incorrectly advised, must pay their entire buyout. While the players are highly compensated, and in some cases compensated so that they buyout may not be an issue, it will likely remain a factor in their decision to return to the NBA. The NBA's question is how much it desires to have these players in the NBA. Is David Stern as unconcerned as he claims or does the NBA seek to have the world's top players in its league?

Buyouts of European contracts (Ricky Rubio's burden)

The buyouts of European player services contracts are becoming increasingly important in the NBA. The NBA currently allows NBA teams to pay an amount not exceeding $500,000 to a basketball team other than an NBA team or to another entity to induce an international player to enter a contract with the NBA team. NBA CBA Article VII, Section 3(e)(1). Should the NBA consider increasing this amount in its next collective bargaining negotiation?

This low amount may raise issues relating to NBA prospect Ricky Rubio of Spain. Rubio is widely regarded as the second best prospect in this year’s NBA draft. However, Rubio’s buyout from DKV Juventut is rumored to be 4.75 million euros (approximately $6.6 million) and rises to 5.75 million euros ($8 million) after June 30. With NBA teams not allowed to pay an amount exceeding $500,000, Rubio will be individually responsible for the balance of the buyout.

Rubio has unsuccessfully attempted to negotiate a lower buyout with Juventut. The buyout is particularly burdensome for the young Rubio because he earned approximately $97,000 for his play this past season. Rubio's next step may be litigation, though it appears he will attempt to arbitrate the matter first. Because NBA teams may not contribute an amount exceeding $500,000, Rubio will be forced to almost solely to pay the buyout to Juventut. Should the NBA ease the path for talented players such as Rubio by raising the amount an NBA team may contribute to an international player's buyout, or would it weaken the league by making it easier to transfer team money abroad?

It is also rumored Rubio may attempt to use the liability as leverage. Rubio is not required to play in the NBA after being drafted and can continue to play for Juvenut in Spain. Rubio may claim he can not garner the endorsements necessary to pay for such a buyout in certain NBA markets. Rubio would attempt to parlay the buyout into selecting his own NBA team. However, this scenario appears to be conjecture that has not materialized.

Rubio's situation illustrates the need to increase the amount of a buyout which an NBA team may pay. Increasing the amount of a buyout may not give the NBA much leverage in future collective bargaining negotiations, however the league would be wise to ease the immigration of foreign basketball players to the league. The league should seek minimal barriers for the world's best players to participate in the NBA.