capologist
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- Oct 8, 2002
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CBA Proposal
Each team contributes a certain percentage of its BRI to a Player Compensation Treasury.
The PCT administers a bank where each team has a checking account into which is paid a standard annual allowance, say 100M scrip. The players are paid with checks on these accounts. How much a scrip is worth depends on the amount of money coming into the PCT (and how many scrip are issued, which shouldn’t change much from year to year), so when more money comes into the PCT, everybody gets paid in more valuable script. It’s like a profit sharing system that benefits everyone, not just players signing new contracts. (Similarly, if BRI increases more slowly than expected, it’s everyone who feels the squeeze, not just new contracts.)
The PCT will also operate as a lender of last resort if a team overdraws its checking account. The interest rate will be sufficiently punitive (say, 50% per year) to strongly discourage taking advantage of it to any large degree. Furthermore, when a team’s account is in the red, all transactions (trades or signings) are reviewed by the league and anything that worsens the debt situation is disallowed.
Instead of exceptions and arbitrary thresholds, there are various subsidies and taxes that perform similar functions.
General Subsidy
There is no minimum salary exception. The minimum salary is zero.
Each player on an active roster or inactive list or with a guaranteed contract receives, in addition to his salary, a per-game payment directly from the PCT. (The amount of the subsidy may depend on experience.)
[There would be a limit of 16 players collecting subsidies from a single team. If you have 15 on your roster, you can have one player out there collecting subsidies due to a guaranteed contract with you and not on any team. If you have two such players out there, you’re limited to 14 on your roster.]
Continuity Subsidy
(This will perform a function similar to that intended by the Bird exception.)
When a player has a certain tenure with a team, the PCT pays a subsidy, partly to the team and partly to the player. The larger share goes to the team (since the team has more control over whether they stay together). To pull a formula out of my, uh, my hat, a player with one year experience with his team gets a subsidy of 2%/1%, increasing by 2/1 every year to a maximum of 20/10. This will incentivize teams and players to stay together. (Tinker with the formula until the desired level of player mobility is achieved.)
If we go with my hub idea, part of the team continuity subsidy can be a hub continuity subsidy. This will incentivize teams who do trade to look for a trading partner in their hub instead of sending players across the country. This will be less disruptive to the lives of players and their families, and to fans who still get to see old favorites five times a year.
Note: a free agent who remains unsigned for more than 30 days (not including the moratorium, etc.) loses his continuity with his team. If we have a hub continuity subsidy, that can remain on the table for another 15 days after the team continuity subsidy. This is necessary to maintain fluidity in the market.
[Suppose a player has ten years of continuity with a team, so he has a subsidy of 20/10. Suppose this player is “worth” 20M scrip.
The player asks for a nominal salary of 24M, so he’ll get 26.4 and will cost the team 19.2. The team offers 19(+NTC), so he’ll get 20.9 and cost the team 15.2. While they’re haggling about how to split the benefit of the subsidy, another team offering 20 isn’t matching the team’s offer, the player’s request, or anything in between. So you give them the moratorium plus 30 days to work it out, then take the continuity subsidy off the table and let all teams bid on an equal footing.]
Account Maintenance Fee
We don’t want teams to hoard scrip in their accounts. We want them to spend it or trade it to teams who will.
So we charge a heft fee (say, 50% of the balance) to teams that still have scrip in their account at the end of the season.
Player Insurance
No injured player exception. Instead we work with insurers to cover players. When a player is injured, some or all of his salary is paid by insurance, freeing the team’s scrip for other players. The portion of the premium that covers expected payouts is paid out of the team’s PCT account; the overhead is paid for directly by teams or the league. Whether some level of insurance should be mandatory or it should be entirely up to the discretion of the teams is an open issue.
Progressive Income Tax
Caps on individual player salaries distort the market in a bad way. If a player is worth 60M but capped at 30M, whoever gets him gets 30M of free talent. Furthermore, these better-than-max players, who can pretty much write their own tickets, are incentivized to congregate and take advantage of that free talent.
Instead we’ll let teams bid whatever a player is worth. However, the top players don’t need to take all that home. We implement a progressive tax on salaries, so that those with very large salaries kick a portion of it back into the PCT whence it eventually finds its way to other players.
Rookie Auction
The draft is replaced with an auction-like system where the top pick goes to whoever is willing and able to pay him the most. The way you get a coveted rookie isn’t by losing, it’s by not committing your scrip to other high-priced talent. If you can win with the players you find in the bargain bin, more power to you! It won’t cost you your rookie.
Each team contributes a certain percentage of its BRI to a Player Compensation Treasury.
The PCT administers a bank where each team has a checking account into which is paid a standard annual allowance, say 100M scrip. The players are paid with checks on these accounts. How much a scrip is worth depends on the amount of money coming into the PCT (and how many scrip are issued, which shouldn’t change much from year to year), so when more money comes into the PCT, everybody gets paid in more valuable script. It’s like a profit sharing system that benefits everyone, not just players signing new contracts. (Similarly, if BRI increases more slowly than expected, it’s everyone who feels the squeeze, not just new contracts.)
The PCT will also operate as a lender of last resort if a team overdraws its checking account. The interest rate will be sufficiently punitive (say, 50% per year) to strongly discourage taking advantage of it to any large degree. Furthermore, when a team’s account is in the red, all transactions (trades or signings) are reviewed by the league and anything that worsens the debt situation is disallowed.
Instead of exceptions and arbitrary thresholds, there are various subsidies and taxes that perform similar functions.
General Subsidy
There is no minimum salary exception. The minimum salary is zero.
Each player on an active roster or inactive list or with a guaranteed contract receives, in addition to his salary, a per-game payment directly from the PCT. (The amount of the subsidy may depend on experience.)
[There would be a limit of 16 players collecting subsidies from a single team. If you have 15 on your roster, you can have one player out there collecting subsidies due to a guaranteed contract with you and not on any team. If you have two such players out there, you’re limited to 14 on your roster.]
Continuity Subsidy
(This will perform a function similar to that intended by the Bird exception.)
When a player has a certain tenure with a team, the PCT pays a subsidy, partly to the team and partly to the player. The larger share goes to the team (since the team has more control over whether they stay together). To pull a formula out of my, uh, my hat, a player with one year experience with his team gets a subsidy of 2%/1%, increasing by 2/1 every year to a maximum of 20/10. This will incentivize teams and players to stay together. (Tinker with the formula until the desired level of player mobility is achieved.)
If we go with my hub idea, part of the team continuity subsidy can be a hub continuity subsidy. This will incentivize teams who do trade to look for a trading partner in their hub instead of sending players across the country. This will be less disruptive to the lives of players and their families, and to fans who still get to see old favorites five times a year.
Note: a free agent who remains unsigned for more than 30 days (not including the moratorium, etc.) loses his continuity with his team. If we have a hub continuity subsidy, that can remain on the table for another 15 days after the team continuity subsidy. This is necessary to maintain fluidity in the market.
[Suppose a player has ten years of continuity with a team, so he has a subsidy of 20/10. Suppose this player is “worth” 20M scrip.
The player asks for a nominal salary of 24M, so he’ll get 26.4 and will cost the team 19.2. The team offers 19(+NTC), so he’ll get 20.9 and cost the team 15.2. While they’re haggling about how to split the benefit of the subsidy, another team offering 20 isn’t matching the team’s offer, the player’s request, or anything in between. So you give them the moratorium plus 30 days to work it out, then take the continuity subsidy off the table and let all teams bid on an equal footing.]
Account Maintenance Fee
We don’t want teams to hoard scrip in their accounts. We want them to spend it or trade it to teams who will.
So we charge a heft fee (say, 50% of the balance) to teams that still have scrip in their account at the end of the season.
Player Insurance
No injured player exception. Instead we work with insurers to cover players. When a player is injured, some or all of his salary is paid by insurance, freeing the team’s scrip for other players. The portion of the premium that covers expected payouts is paid out of the team’s PCT account; the overhead is paid for directly by teams or the league. Whether some level of insurance should be mandatory or it should be entirely up to the discretion of the teams is an open issue.
Progressive Income Tax
Caps on individual player salaries distort the market in a bad way. If a player is worth 60M but capped at 30M, whoever gets him gets 30M of free talent. Furthermore, these better-than-max players, who can pretty much write their own tickets, are incentivized to congregate and take advantage of that free talent.
Instead we’ll let teams bid whatever a player is worth. However, the top players don’t need to take all that home. We implement a progressive tax on salaries, so that those with very large salaries kick a portion of it back into the PCT whence it eventually finds its way to other players.
Rookie Auction
The draft is replaced with an auction-like system where the top pick goes to whoever is willing and able to pay him the most. The way you get a coveted rookie isn’t by losing, it’s by not committing your scrip to other high-priced talent. If you can win with the players you find in the bargain bin, more power to you! It won’t cost you your rookie.
