Report: Max salaries to be set at higher percentage of salary cap under new CBA

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Chris Paul serves at the National Basketball Players Association’s president, and the union’s vice presidents include LeBron James, Carmelo Anthony and Stephen Curry.

Think the new Collective Bargaining Agreement benefits those max players? You bet it does.

The current CBA sets max salaries as a percentage of the salary cap based on years of experience, and the tiers were commonly described as:

  • 0-6 years experience: 25% of the cap
  • 7-9 years experience: 30% of the cap
  • 10+ years experience: 35% of the cap

But that wasn’t quite accurate.

Max salaries were based on a percentage of an altered cap calculation, one used two CBAs ago and kept just for max salaries. That altered calculation produced a lower cap number, so max salaries were a lower percentage of the actual cap than advertised.

The system was needlessly complicated. Thankfully, the new CBA will render it obsolete.

Brian Windhorst of ESPN:

How big a deal is this? The old max-salary calculation often trimmed more than $1 million from what a straightforward calculation would’ve produced.

Here’s a history of the max salary under the current CBA. The simple max shows the straight 25/30/35 percentages of the actual salary cap. The true max shows the actual max salary, as determined by the more complex calculation. For 2017-18, I used the projected $103 million cap and estimated what the “true max” would’ve been had the current system remained.

Year Experience Simple max True max Difference
2011-12
0-6 years $14,511,000 $12,922,194 $1,588,806
7-9 years $17,413,200 $15,506,632 $1,906,568
10+ years $20,315,400 $18,091,071 $2,224,329
2012-13
0-6 years $14,511,000 $13,668,750 $842,250
7-9 years $17,413,200 $16,402,500 $1,010,700
10+ years $20,315,400 $19,136,250 $1,179,150
2013-14
0-6 years $14,669,750 $13,701,250 $968,500
7-9 years $17,603,700 $16,441,500 $1,162,200
10+ years $20,537,650 $19,181,750 $1,355,900
2014-15
0-6 years $15,766,250 $14,746,000 $1,020,250
7-9 years $18,919,500 $17,695,200 $1,224,300
10+ years $22,072,750 $20,644,400 $1,428,350
2015-16
0-6 years $17,500,000 $16,407,500 $1,092,500
7-9 years $21,000,000 $19,689,000 $1,311,000
10+ years $24,500,000 $22,970,500 $1,529,500
2016-17
0-6 years $23,535,750 $22,116,750 $1,419,000
7-9 years $28,242,900 $26,540,100 $1,702,800
10+ years $32,950,050 $30,963,450 $1,986,600
2017-18
0-6 years $25,750,000 $24,235,294 $1,514,706
7-9 years $30,900,000 $29,082,353 $1,817,647
10+ years $36,050,000 $33,828,431 $2,221,569

Considering annual raises in a multi-year contract are based on the first-year salary, these differences add up.

For example – coupled with the new over-38 rule making a five-year, rather than a four-year, deal tenable – if he re-signs with the Clippers, Chris Paul can earn about $57 million more on his next contract under new CBA than if the current system continued. It’s good to be president.

But before any cries of self-dealing, consider that superstars are probably still underpaid given what they provide their teams. Any max salary still limits earnings at the top and leaves more money for lesser players. The max salary increasing slightly is a step toward fairness.

The league’s middle class of players might lose slightly here. But a big hit goes to the lawyers and accountants who were paid to handle two salary-cap calculations, one for the actual cap and one for the max. I think we can appreciate the step toward simplicity with only one calculation necessary going forward.