Cuban: Ending max contracts would come with a price

By Jeff Caplan, NBA.com

Mark Cuban says if players want to nix max deals, they're going to have to give up guaranteed contracts.

Mark Cuban says if players want to nix max deals, they’re going to have to give up guaranteed contracts.

DALLAS — Could the days of the max contract be coming to an end? Dallas Mavericks owner Mark Cuban said he and the league would be willing to listen, but it would come with a price.

“If you give up guarantees,” Cuban said. “It’s a trade-off.”

Oklahoma City Thunder star Kevin Durant suggested there should no longer be a restriction on how much the league’s top talent can earn because those players generate significant revenue and can’t be paid what they’re worth under the current collective bargaining agreement.

Durant, who can become a free agent in 2016, made the suggestion to do away with max deals in the wake of the NBA announcing a nine-year TV and digital rights extension that the New York Times reported is worth $2.66 billion annually.

Cuban said owners discussed doing away with max contracts during labor negotiations in 2011 and would be willing to do so again, but players would have to be willing to give up fully guaranteed contracts. When an NBA player signs their contract, he is guaranteed the full amount even if he is eventually cut by the team or injured.

Doing away with guaranteed contracts would move the NBA to more of an NFL model where guaranteed money is only a portion of the total stated value of the contract.

“It was discussed during the lockout time among owners, but never got anywhere. So it was just one of those trial balloons,” Cuban said. “I’m not offering this as a negotiation, I’m not suggesting it, all I’m saying is that was something we discussed before, and max contracts are always big question, guarantees are always a big question. But we have two years before that’s even an issue, so no point discussing it now.”

Players, however, are talking about what they don’t want to hear from owners when the two sides approach the next labor negotiation which can come as soon as the end of the 2016-17 season when both sides can opt out of the current deal.

Durant, LeBron James and Kobe Bryant have been quick to point to the new TV deal, plus unprecedented sale prices of several franchises including the Los Angeles Clippers for $2 billion, as further evidence that team owners can no longer claim they’re losing money.

During the last negotiations, the league said 22 of the 30 teams were operating at a loss. The players eventually agreed to a CBA in which their take of the league’s annual basketball-related income (BRI) was cut from 57 percent to 50 percent.

Cuban, however, essentially told the players to slow down.

“It’ll be the first time our TV money comes in above our ticket revenue,” Cuban said of the new deal. “It’s a lot of money, don’t get me wrong, and I’m grateful, but it’s not going to create so much incremental revenue after you pay out the percentages to the players that it’s going to be a shocking windfall. It’ll be good, but not shocking.”

The new TV deal virtually triples the $930 million per year the league takes in from its current TV deal. It takes effect for the 2016-17 season, and the salary cap is expected to rise with it to unprecedented levels, which will also raise player salaries across the board.

“Our net effect of impact per team is significant, but it’s not like, ‘Oh my gosh, we’re just going to be making $50 million apiece,” Cuban said. “We haven’t gotten NFL money.”

Cuban wouldn’t discuss how the new TV deal might affect the next round of negotiations and if it could steer the league clear of another work stoppage.

“I have no idea, it’s too early,” Cuban sad. “Who knows? Things change so rapidly in business that you can’t predict two years from now.”

As for owners crying poverty, Cuban, a willing luxury-tax payer during his entire ownership under the previous CBA, said he’s never cried poor, even when “I was losing $40 million. I’m not going to cry poor now.”

As for the owners who did, Cuban said “most of those guys are gone.”

Asked if he expects players entering free agency next summer to seek one-year deals so they can become free agents in the summer of 2016 when the salary cap is expected to go way up, Cuban said, “That would be suggesting they don’t like guarantees in contracts and they’d be willing to do year-to-year.

“Maybe that happens with a couple guys, but I don’t see it.”

28 Comments

  1. philme says:

    Cuban needs to be kick out of the NBA and there are a lot of players that are over payed NFL is only 16 games

  2. Kenneth Williams says:

    Its gona end up in a lockout and if that happens I don’t think the nba would be able to stay afloat especially with fans cause we pay ridiculous prices for everything in the nba and for the lack of talent on the court for all teams but maybe 3 people will not pay more fans are tired of being the ones paying for everything but yet the athletes go on Twitter or whatever social media they do and take pictures of there Rolex or big roll of cash and all there bling after they get there butts kicked on the court. Tyreke Evans use to do this all the time after losses take pictures of his material things like he didnt care about he just lost big jason thompson is being the same way almost 3/4 of all the athletes do just proves love for the game is gone now its business and I won’t watch a bunch of money grubers ruin the game I once loved and now its a hate hate relationship

  3. Kenneth Williams says:

    I just went and got some tickets today and theprices are already hitting deep in pocket so if they get rid of the the salary cap its just gona mean everything that has nba on it is gona cost even more and since lebron isn’t paying attention to what is going on in the world like people getting pink slips or having to work 2-3 jobs just to make bills and food on the table people WILL NOT PAY ANYMORE than we do already and thats already a steep price at $300 for 2 to go to a game for upper level. If I was a owner I’d let him walk cause I would find plenty of people to play a game for 1/10th of what he makes and start giving breaks to the fans then maybe all teams could fill out the arenas.Athletes now days are way over paid and it is ruining the sports especially basketball just no love for the game anymore.

    • wingman says:

      Do you understand how the salary cap and salary floor work? That Lebron, or Durant, make more means jack to your ticket price. It means to Matthew Delladedova and Steve Adams new contracts: The Cavs and the Thunders still have a salary cap, and a salary floor, and luxury taxes. Eliminating the max only means that if the thunders have 100 millions to spend up to the luxury level, they can offer Durant 40, 50 or 75 of those millions. But if they do so, then they have 60, 40 or 25 millions to spend in the rest of the roster.

  4. c-dub says:

    The owners and players make plenty of money. Why not take this extra money from the TV deal and give back to the fans by reducing costs on tickets, parking, concessions, etc. In some of the smaller markets, reducing cost might actually drive up revenue since more fans will be coming to the games.

  5. Nick says:

    I would not be an NBA team owner even if I had billions. I’d be damned if I’d be the one putting up all the money and taking all the risk and then have players become 50% partners on all of the revenue?!! Franchises HAVE failed, and just like in any business, the owners who risked their capital take the losses. The “workers” just go somewhere else. Capitalism is great. It’s what has brought us innovation, technology, etc., but it only works properly when the one taking all the risk has the sky as the limit for earnings on the capital put forth. When that equation is tampered with, things begin to decay because the risk of loss never really declines, only the potential gain.

    • Jet Savage says:

      Uh…you’re a complete idiot.
      No players = No NBA. The owners are lucky to get 50%! Wouldn’t give them more than 40%. Fans don’t spend a mint on courtside tickets to see Dan Gilbert or Jim Buss. 2.5 Billion…and thats just from one channel. Pay players like Kobe, Durant, and LeBron what they are worth….case closed.

      • Kenneth Williams says:

        Seems like young people get this whole thing backwards. Here’s a free lesson to the young athletes owners are suppose to make more than there employees they’re suppose to make a lot more not half or 49-51percent. I think athletes should get only $10-$20 million dollar 5 year contracts and if you are that good then you will make the rest of your money with nike or under armour adidas Reebok which ever you sign with if you cant live off of #5 million a year then you have issues. One more thing lebron you shouldnt be close to what jordan made in his career EVER Jordan played when the nba was great almost every team superstars on every team night in night out no super teams like how you got your rings and they actually played defense and didn’t favor players like nowdays

  6. Ty Smack from Delaware. says:

    people who gets paid… players, coaches, training staff, facility maintenance concesions team brand marketing everyone is taking in account of ownrs being greedy and players are crying foul the ones that I commend the most are the coaches and management.. dont they get paid as well? all this is taking into account while still having a salary cap. what got players riled up is new tv agreement that $2.66 billion a year for 9 year and they want a piece. what got owners is if you guarantee money to players whats not to say that you wouldnt end up as a kwame brown drako milicic drafted so high but product is not even all star level thats wh the cut off drafting out of high school and opened the development league (owners have to pay for that too. and players in the d league get paid as well just not as much or like lawyer money i would say) No one wants players who are in high regard out of college then still ended up as a bust. some teams should be happy that you got players for a steal they were as great in college but superstars now. owners expect that if i draft you at #1 2 3 4 5 6 7 that you are going to be an all star one day but its stupid to pay a bust that amount of money it hinders the rest of the franchise. high school player avg. 34 pts. 15 rbs goes to college avg 22 pts 8.6 rbs then ends up in the NBA 6.6 pts. 3.4rbs 0.1 blks but hes drafted at #1 overall and hes been in this league already 3-5 yrs and thats the best he can muster up. owners dont want that scenario that why they are hesistant about paying guarantee money to an non- allstar now if he was drafted at #1 over and came out the gate avg 20.1pts 7.2 rbs he has alot of up side not taking in account of how well he takes with injuries. cant make him the face of a franchise but your having a brandon roy body or be like tracy mcgrady when the injuries set in overall play is affected which equals your talent price. and stop blaming owners they dont make the decisions alone its a board of people when it comes to picking a player. Scouts? they get paid too. if owners picked who they liked seeing play they were more of a fan and just wanted to see that guy on their team outside the fact that you might not can paid what he is worth or if he turns out being a all star etc. to sum up everything, there is alot that goes on than just money. players play coaches coach owners own management manages everyone gets hire/fired everyday stictly business!

  7. jOLAN says:

    keep it 50/50, raise the max level deals, add more team opt outs or non-guaranteed contracts, and raise the cap. Teams who complain that they are losing money can sell the team. I get people who want to own teams to make money from it, but there are plenty of super rich people out there willing to buy the team because they want to be an owner and win, not just make money.

    • andy says:

      The nba needs the guys who want to make money to run the franchises. If all the teams are losing money, the nba will lose money.

  8. Chris C says:

    The NBA is my favorite sport, but I hope there is a lockout, a long one. These owners and player’s need to realize how important fans are to this sport and a long lockout will hurt fan support.

  9. Hawks4eva says:

    @NORE
    Value and worth are two completely different things.
    Sure, a firefighter or a police officer has more VALUE to the community, but they don’t generate money. No one goes to an arena to watch a fireman fight fires. No one pays money to watch a police officer fight crime. As soon as firefighters and police officers start selling out arenas, and dominating TV ratings then they would be worth more and deserve to get paid more.
    It’s simple economics.
    NBA players are WORTH more because they generate more money.
    People pay money to see them play.
    Why should the owners of the teams get to keep all the extra money from the new TV deal when the fans don’t go to games to watch an owner own?
    Why do you call the players greedy, yet you don’t call the owners greedy?
    Most of the owners are billionaires. You don’t become a billionaire by not being greedy.
    Why would you rather see a billionaire add more money to his already obscene bank account, and then become offended that a millionaire gets more money?
    Sure, an NBA player’s salary may dwarf what you, I, or any common person may make, BUT the difference between what a team owner and a player makes is even bigger.
    The players are entertainers like musicians, TV stars, and movie stars. They are big draws.
    No one says Tom Cruise makes too much. No one says Celine Dion makes too much.
    Jerry Seinfeld was making $1 million per episode…..no one said he was making too much.
    Or how about Floyd Mayweather? He makes an insane amount of money for ONE boxing match.
    But all those people are worth the money they receive because the market can sustain it.
    We, the people, pay money to see talented people perform.
    If you have a VALUE issue with basketball players being paid a fair split of the revenues that they help generate, then you should not watch NBA games on TV or at the arena. You should not read articles about it on NBA.com or any other news outlet. Your very interest in the players is why they get paid the way they do. If no one cared about them or the game they played, then they would not be worth what they are worth.
    BUT people do care. The TV networks couldn’t wait to give the league billions of dollars just to show the games on TV because the networks know that they will get paid off the advertising they get. The advertisers in turn know that the viewers will become consumers of whatever products that are marketing.
    It’s just economics.
    Why should everybody get a pay raise except for the players who happen to be the main generators of a multi billion dollar industry?

  10. hnic says:

    HA! Just HA! Both sides are greedy, may a strike happen that lasts two seasons.

  11. Daniel says:

    It completely makes sense to not have guaranteed contracts when there is no restriction on max contracts. Free agency competition will drive up players contracts above what they can realistically fulfill like it did in the past. Don’t people criticizing him here remember all those bloated guaranteed contracts players had who when later in the contract and making the most per year where no even shadow of themselves when they signed the deal. Players want guaranteed money but owners want guaranteed top level athletes. It is quite appropriate that they have to keep producing at a top tier level in order to keep getting top tier money. Allowing this too happen will negatively effect the contracts of their peers as well in both the short term and long term. The team that just won the championship didn’t have a player who was anywhere close to being a league MVP but they were the most valuable team anyways. It will also hurt competition between small and large market teams and shrink the fan base of the league. Milwaukee should just decide to not build that arena to stay in the league and Kevin Durant is is basically saying he isn’t resigning in OKC. Without a max contract deal structure those are at least a couple things that couldn’t happen.

  12. bodjee says:

    It’s all about a fair share of the pie for those who has the power to make the claim.

  13. NORE says:

    And now they say 120 Mill isn’t enough to put a Ball into the hoop … I don’t understand these “kids” anymore and i am only 29 myself …

    I know – they don’t argue out of common sense but out of greediness because they smell the new TV-Deal and take the deal for the Clippers into consideration logical or unlogical BUT still i don’t understand THIS sort of greediness – they already have enough to take care of GENERATIONS to come and others suffer from hunger and they want more …

    For real i don’t think that Mr. Durant or Mr. James is stupid but this kind claim in their situation – thats just plain stupid!

  14. NORE says:

    Ridiculous – as if for example 120 Mil over 6 Years wouldn’t be enough – TO PLAY BALL!!!

    If Durant and LeBron think that under the current CBA they could never be paid what they are worth then Mr. Durant and Mr. James should explain me how it is possible that a Firman or a Police Officer earn a fraction of what they are earning right now!

    To my mind EVERY Police Officer and EVERY Fireman are MUCH more worth than Durant and LeBron IN TERMS OF WHAT THEY DO!!! (In generall every human being is worth equal)

    • jason says:

      It has nothing to do with what their job is, but what the owners are making off of the work and skill of the players. Did you read the article??

  15. JBR says:

    Players talk as though profit-sharing is something the NBA is obliged to do with it’s players.

    How about the players do some profit-sharing of their own and donate some of their millions to the fans, without whom they would not exist.

    I guess Durant’s $300million-plus shoe deal just isn’t enough to make end meet in his part of the world.

  16. ExilD says:

    When he paid a role player a max just to upset other GM, now he is crying about the new max era that is just starting ,am I missing something here?

  17. harriethehawk says:

    It’s all about the Benjamin’s…

  18. Chris says:

    I agree. 20-30mil per year guaranteed + endorsements for the nbas cream of the crop is pretty damn good as it is. If it’s gonna raise it shouldn’t be guaranteed. That’s a lot of money being given away if a max contract player is just sitting on the couch due to being cut from the team. I believe Gilbert Arenas was still making money for like the last two seasons, and a lot of money at that. Anyone see him on the court lately?

  19. jake s. says:

    we’ll do it live

  20. jake s. says:

    Let Cuban and Bill O’reilly be commentators for ESPN