Non-Quliafying Veteran Free Agents Exception

[James Kay]

The Case for a Non-Qualifying Veteran Free Agent Exception

I believe that D5 needs a Non-Qualifying Veteran Free Agent Exception that mirrors the exception in the NBA’s collective bargaining agreement.

The What

The CBA allows teams to exceed the salary cap to re-sign “Qualifying Veteran Free Agents” up to the maximum amount allowed under other provisions of the CBA (aka Bird Rights).

The CBA also allows teams to exceed the salary cap to resign “Non-Qualifying Veteran Free Agents” up to 120% of their previous season’s salary. Art. 7 § 6(b), NBA CBA. (page 220 of the pdf).

What I’m proposing is that we adopt a similar rule – to allow teams to re-sign their “Non-Qualifying Veteran Free Agents,” aka, players that do not have Bird Rights by playing three or more years with the same team.

The Who

Which players will this rule impact? Well, we already have tradable BRs on rookie contracts, so this will only impact players that are not on rookie salary contracts that would be willing to re-sign for similar amounts. This rule would not impact players like Christian Wood or any other players that are 1) not on rookie contracts, and 2) expect to be paid much higher salaries than they are currently receiving.

The How

This rule modification would be very easy to keep track of, because there is nothing to keep track of. All that PAs will need to know is whether or not a player was on the signing team – which is already noted on the rosters page.

The When

In my opinion, this should be implemented as soon as possible, perhaps even this upcoming off-season.

The Why

I believe that this rule will help foster trade and increased competition in D5. There may be critics, or perhaps just one very loud critic, that will brashly exclaim that this rule will solely and disproportionately advantage top tier contending teams. However, I do not believe that this is the case. In fact, I believe the opposite to be true.

In D5, teams who do not have Bird Rights cannot re-sign their expiring players. This means that players who have only one or two guaranteed years left on their contract lose a tremendous amount of trade value, because teams who are over, at, or close to the salary cap will be unable to re-sign them.

Here is a list of 47 players, rated 79 or over, who have two or less guaranteed years left on their contracts:

    Goran Dragic, Larry Nance Jr., Andre Drummond, DeMar DeRozan, Victor Oladipo, Jonas Valanciunas, Kentavious C.         Pope, Kyle Lowry, Dwight Howard, Steven Adams, Dennis Schroder , Rudy Gobert, Derrick Favors, Otto Porter, Jordan Clarkson, Evan Fournier, Gordon Hayward, Clint Capela, Blake Griffin, John Wall, Anthony Davis, Robert Covington, Bradley Beal, Jrue Holiday, James Harden, Nikola Jokic, Chris Paul, Kevin Love, Paul Millsap, Eric Bledsoe, Giannis Antetokounmpo, Joe Ingles, CJ McCollum, Julius Randle, JJ Redick, Kemba Walker, Serge Ibaka, Kevin Durant, Klay Thompson, Al Horford, Mike Conley, Damian Lillard, Nikola Vucevic, Montrezl Harrel, Kyrie Irving, Derrick Rose, Jimmy Butler.

This is not to say that these players have no value – but the inability to re-sign these players without being under the salary cap drastically restricts the pool of potential trade partners. There are therefore only two types of teams that might trade for a non-rookie free agent – 1) Those that believe this player will help them compete/contend, even though they will likely be unable to re-sign them in one or two years; and 2) Those teams that believe they will be underneath the salary cap by enough to afford to re-sign the player without exceeding the salary cap.

However, this second type of team doesn’t truly exist – and if it does, it’s rare enough to not be a factor in our discussion of this rule. This team doesn’t exist because if a team will have enough cap space to re-sign a player without going over the salary cap, they are surely either outright tanking or at least treading water and will not be interested in trading away assets in order to take on a player to help them win games. Of the top 5 teams in each conference, there is one single team that will not be over the cap next off-season – the Atlanta Hawks, who will have about 19M in cap space, and 6 players on their roster.

So, the only market for these players are contenders, and only to the extent that acquiring one of these players would put them over the top for a championship, which restricts the return value the contenders are willing to send out.

This is important for two reasons – 1) It highlights the incredibly restricted market for these players, and 2) opposition to this rule will claim that this rule will shepherd these players to contending teams – but they’re already going there.

Benefit to Contenders or Rebuilders

I anticipate that this will be the greatest source of contention regarding this rule. However, as I said above, I believe that this rule will actually provide a greater positive impact for rebuilding teams.

The opposition will take the position that this rule will allow contending teams to trade away assets for non-BRs players, and re-sign them, remaining in contention perpetually.

Firstly, contenders trading for these players would be a good thing. Non-contending teams are already trying to trade away these players, but as discussed above, players with two or less guaranteed years left on their contracts have an incredibly small trade market. Therefore, rebuilding teams with one or more of these players have very little options for them. Trading them away is difficult, and the return will be small. This rule will incentivize contending teams to 1) actually trade for these players; and 2) give up greater assets in return.

Secondly, these players are already going to the contending teams. They go to these teams either 1) because, as discussed above, that’s the only trade market for them, or 2) because our free agency system greatly favors contending teams. Rather than seeing rebuilding teams lose these players in free agency, this rule will allow rebuilding teams to generate significant assets from these players.

Further, it will allow semi-contenders or quasi-contenders to trade their stars away. By allowing teams to exceed the salary cap to re-sign their Non-Qualifying Veteran Players, the pool of available players for teams trying to “jump” into contention is suddenly that much wider – because players with two or less years on their contracts are suddenly a possibility.

Lastly, even if this rule does disproportionately advantage contending teams, which I do not believe it does, it will allow for increased trade possibilities, which is always a good thing. It’s easy to implement, will help us better mirror the NBA’s rules, and, in my opinion, will benefit the league.
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[Andrei Kirilenko]

So basically the proposal is that you can re-sign a player up to 120% of his previous salary, even if you don't have bird rights?

[Jared Montini]

I like

[James Kay]

Feb 26, 2021 16:50:16 GMT Andrei Kirilenko said:

So basically the proposal is that you can re-sign a player up to 120% of his previous salary, even if you don't have bird rights?

Yup. Yet although the NBA uses 120%, we might find that 115% or even 110% is more appropriate for us, but I think that will probably just deflate player salaries without having any other impact.

[Brian Scalabrine]

I want to reiterate my opposition to this.

This would be a disaster for bad teams and only strengthen good teams so that it will be almost impossible for anyone to catch up to them.

The most valuable asset bad teams have is cap space, this rule change makes cap space much less valuable.

This would be a huge mistake and I am completely opposed to this.

Our rules are fine how they are now.

[George Gervin]

Logistically, I know it’s the first year that is required to meet that 120% of prior year amount for this exception— but are you proposing, if a player was acquired on a 1+1, that if they opt out of their PO, they could sign a two year extension with the team that traded for him to get BRs? I’m not as well versed if this exception is for just one year scenarios OR if it allows for multi year extensions off of that 120% first year sum

[Brian Scalabrine]

Feb 26, 2021 17:03:59 GMT George Gervin said:

Logistically, I know it’s the first year that is required to meet that 120% of prior year amount for this exception— but are you proposing, if a player was acquired on a 1+1, that if they opt out of their PO, they could sign a two year extension with the team that traded for him to get BRs? I’m not as well versed if this exception is for just one year scenarios OR if it allows for multi year extensions off of that 120% first year sum

This rule change would end bird rights. They would no longer matter as every team could keep every player they wanted to, even if they only traded for them a week before the end of the season.

Only the hard cap would matter

[George Gervin]

Feb 26, 2021 17:06:14 GMT Brian Scalabrine said:

Feb 26, 2021 17:03:59 GMT George Gervin said:

Logistically, I know it’s the first year that is required to meet that 120% of prior year amount for this exception— but are you proposing, if a player was acquired on a 1+1, that if they opt out of their PO, they could sign a two year extension with the team that traded for him to get BRs? I’m not as well versed if this exception is for just one year scenarios OR if it allows for multi year extensions off of that 120% first year sum

This rule change would end bird rights. They would no longer matter as every team could keep every player they wanted to, even if they only traded for them a week before the end of the season.

Only the hard cap would matter

Then if that’s the case, the HC needs to be reduced from 150% of the salary cap to something closer to 130%

[James Kay]

Feb 26, 2021 17:03:59 GMT George Gervin said:

Logistically, I know it’s the first year that is required to meet that 120% of prior year amount for this exception— but are you proposing, if a player was acquired on a 1+1, that if they opt out of their PO, they could sign a two year extension with the team that traded for him to get BRs? I’m not as well versed if this exception is for just one year scenarios OR if it allows for multi year extensions off of that 120% first year sum

It simply allows you to exceed the cap to re-sign a player. You can offer 4 years. You can only offer 5 with BRs.

[Brian Scalabrine]

4 versus 5 years is completely marginal. For all intents and purposes this would end bird rights

[Arvydas Sabonis]

If we want to follow NBA more closely I think it would make sense to first implement transfer of (full) Bird Rights when player is traded.
So meaning that as long as the player originally had 3 year contract the team acquiring that player via trade would get their BR and could go over the salary cap to resign them with any amount (and also not be limited to 120% or other percentage)

I think having the early Bird right exception, which I think is same as James is referring here, that team can offer 120% higher salary than previous year is making this more complex.

Personally I would love to have the rules as close as possible to NBA even if it gets complex, and both of those rules implemented here. But going for what James is describing here, before having transfer of full BR via trade, would not make sense to me.

[James Kay]

Feb 26, 2021 17:35:29 GMT Arvydas Sabonis said:

I think having the early Bird right exception, which I think is same as James is referring here, that team can offer 120% higher salary than previous year is making this more complex.

Just an FYI that's not what this is

[Arvydas Sabonis]

Feb 26, 2021 17:42:30 GMT James Kay said:

Feb 26, 2021 17:35:29 GMT Arvydas Sabonis said:

I think having the early Bird right exception, which I think is same as James is referring here, that team can offer 120% higher salary than previous year is making this more complex.

Just an FYI that's not what this is

Yeah you are right. It's similar but not same

Early Qualifying Veteran Free Agent (aka “Early Bird”) Exception:

A team may re-sign its own free agent to a contract with a first-year salary of up to the greater of (a) 175% of the player’s salary in the last season of his prior contract, or (b) 105% of the average player salary for the prior season, if he played for the team for some or all of each of the prior two consecutive seasons (or, if he changed teams, he did so by trade or by assignment via the NBA’s waiver procedures). A contract signed using the Early Bird Exception must be for at least two seasons (not including any option year).

Non-Qualifying Veteran Free Agent (aka “Non-Bird”) Exception:

A team may re-sign its own free agent who is neither a “Bird” nor an “Early Bird” player to a contract with a first-year salary of up to the greater of (a) 120% of the player’s salary in the last season of his prior contract, (b) 120% of the player’s applicable minimum salary for the current season, or (c) if the player is a Restricted Free Agent, his Qualifying Offer amount.

[Tom Izzo]

Bird right changes are much needed.

As well as reducing rookie contracts by one year.

[Alex English]

I am in favour of this change at 110% of previous salary, just to limit the power it would have, but also along with lowering the hard cap to 140%.

My take on the hard cap has always been to keep lowering it until we get the competitive balance we want. The hard cap has started to affect teams at 150%, but those are basically just the super teams that are already so much better that competing with them is impossible. It affects the longevity of a super team, but it hasn't really affected the creating of them.

There is still only one way to win in D5. Draft a superstar, or two, then build up your team as quickly as possible while they're still on rookie contracts. There is just no other way to acquire the number of stars needed to compete for a championship.

I guess my point is that if the hard cap is low enough to be effective, then we should give teams more freedom with rules like this to build their teams. If the hard cap keeps competitive balance in check, and if this helps make player movement easier, then it should make building a championship contender more realistic for everyone. If the hard cap doesn't prove to be effective, then Brian is probably right that this will just make things worse.

We should have more than one way to compete though. Hana's strategy should be a viable strategy. If it was, then more teams would do it. It would help prevent half of D5 from tanking with maybe 5 to 8 teams having a real chance and the rest in a weird limbo where they'll never accomplish anything.

So I think this rule change could help so long as our competitive balance is kept in check, which imo should be the job of the hard cap.

Other thoughts:

• Helps end the huge gap in trade value for players with 3 vs 2 years left on their contract.
• Helps end the awkward conflict many players with player options have where they have to opt in to stay with their current team, even when opting in might not be right in an ideal scenario. They could now opt out knowing they still have the chance to stay, but if they get a big offer that can't me matched, they can sign that instead.
• Gives other bidding teams a clear line of what they'd need to pay to steal a player in free agency. Re-signing team is limited to 110% of last year? Offer just enough above that to make the difference.
• Could help make good but not great players more valuable. Currently only players on their rookie deals and stars worth a max contract have real value. All other players end up with zero trade value because they're paid too much, or get no interest resulting in serious low ball contracts being signed. If the stakes aren't so high that every dollar must go towards superstars and building through the draft, then teams will be more willing to spend in free agency because it's now a viable way to compete (I guess this would more be from lowering the hard cap though, not this rule change).
• Not completely related, but I agree with Tom that rookie contracts should be reduced to 4 years. 5 years is so long in a sim league. This would also help reduce the insanely high value rookie contracts have right now, which helps all of the other points made in this post.
• All of these changes make D5 more in line with the NBA.

[George Gervin]

Feb 26, 2021 19:50:23 GMT Alex English said:

I am in favour of this change at 110% of previous salary, just to limit the power it would have, but also along with lowering the hard cap to 140%.

My take on the hard cap has always been to keep lowering it until we get the competitive balance we want. The hard cap has started to affect teams at 150%, but those are basically just the super teams that are already so much better that competing with them is impossible. It affects the longevity of a super team, but it hasn't really affected the creating of them.

I echo all your points but where I disagree is the HC level at 140%. The salary cap— despite the pandemic— will still likely to continue to climb, especially with live sports being one of the few avenues drawing ratings for normal Cable/Satellite TV providers, therefore coming with higher rates to secure. 130% should be more than fine as an HC level to work off of. I do like the 110% idea for the previous salary, but the HC needs to have real bite. 130% of our current cap puts it in a range ($149 MM) where it can do that. 

[Tom Izzo]

My fear of reducing the hard cap is that it will increase the value of superstar rookie contracts and serve your point that the only way to compete is to load up on cheap rookie contract talent.

[George Gervin]

Feb 26, 2021 20:14:55 GMT Tom Izzo said:

My fear of reducing the hard cap is that it will increase the value of superstar rookie contracts and serve your point that the only way to compete is to load up on cheap rookie contract talent.

That’s a fair point, but on the flip side, if it is not punitive enough, it may have the opposite effect of widening the gap between the best teams and the rest of D5, as they can just trade guys for other players as they see fit and not have to make a hard choice with their cap management. The goal should be not to induce chaos where the HC is so low that teams can’t form except under the scenario you’ve laid out with the super rookies, but to recognize that NBA teams don’t have four guys or more on max level salaries. It’s usually 2 at most, maybe 3, that meet that criteria due to both the luxury tax and HC implications for IRL teams.


Plus the HC is not a static figure; it fluctuates with the cap, which has trended up every year except last season for over a decade on the backs of increased popularity and viewership on TV. That likely will continue to be the case in the future. 

[Brian Scalabrine]

If the hard cap was set at 120% of the cap I would support this proposal.

140% or even 130% is simply too big and would result in the super teams loading up on even more talent and wouldn't give the leagues lower and middle class a chance

[Alex English]

Feb 26, 2021 20:36:57 GMT Brian Scalabrine said:

If the hard cap was set at 120% of the cap I would support this proposal.

140% or even 130% is simply too big and would result in the super teams loading up on even more talent and wouldn't give the leagues lower and middle class a chance

I think 120% is a bit drastic. 14 teams currently exceed that number and it basically just means you're allowed to go over the cap to re-sign one player. Assuming Ian Noble wanted to implement any of this I think we'd obviously do it like in the past where we lower it slowly over many years. So we'd know at 140% if it's enough and could then decide once we see the results if more is needed.

[Hanamichi Sakuragi]

Any rules in favor of those who are trying to compete, I am all for it.

Take note that our last two big rule changes (Hard Cap and the Rookie BR trade) all leans for the tankers.

Thanks.

I support this.

[Glenn Robinson]

Feb 26, 2021 16:59:07 GMT Brian Scalabrine said:

I want to reiterate my opposition to this.

This would be a disaster for bad teams and only strengthen good teams so that it will be almost impossible for anyone to catch up to them.

This is totally just my anecdotal evidence, so take it with a grain of salt, but as this league has aged, the more teams are tanking and overvaluing picks and rookies. How many teams do you think are even trying to win anymore? Maybe a handful now? Heck, I even considered tearing it down and every team with assets to trade for stars would rather keep the assets and continue to tank or keep cap space, than get a star player to help them compete. I'm curious if other teams that aren't tanking have found this to be true. There seems to be way less trade activity than what I remember it being and I wonder how much of that is due to teams just hording assets, half of which end up being bust picks anyways lol.

[Hanamichi Sakuragi]

Feb 27, 2021 0:32:19 GMT Glenn Robinson said:

Feb 26, 2021 16:59:07 GMT Brian Scalabrine said:

I want to reiterate my opposition to this.

This would be a disaster for bad teams and only strengthen good teams so that it will be almost impossible for anyone to catch up to them.

This is totally just my anecdotal evidence, so take it with a grain of salt, but as this league has aged, the more teams are tanking and overvaluing picks and rookies. How many teams do you think are even trying to win anymore? Maybe a handful now? Heck, I even considered tearing it down and every team with assets to trade for stars would rather keep the assets and continue to tank or keep cap space, than get a star player to help them compete. I'm curious if other teams that aren't tanking have found this to be true. There seems to be way less trade activity than what I remember it being and I wonder how much of that is due to teams just hording assets, half of which end up being bust picks anyways lol.

I feel the same. Thanks for stating it the best possible way, Glenn.

[Arvydas Sabonis]

Bringing down HC to 140% could be a good idea, but I think having it down to 120-130% would limit too much and be too much away from what NBA does. I think it would lead to some players getting max contracts as normal, but the mid-tier guys would just keep getting lower contracts as teams are restricted too much


In D720 we have also 150% Hard Cap, but have implemented a 125% "luxury tax" line few years back. If you are between 125-150% you will get 10% of the salary cap as "penalty" that is added to your team salaries. Being second year in a row above 125% gives you repeater 20% penalty, 3rd year 30% and so on. This basically makes it impossible to stay close to the hard cap for more than two years. It still gives you flexibility to go all in for few years, but makes harder to keep superstar teams together long for many years. I think it has worked pretty well, as only handful of teams are over the 125% line each year and you see lot of trade activity before deadline for teams trying to get under the 125% line. So in that sense it imitates pretty well the real NBA teams avoiding staying in luxury tax and paying penalty.

Just an idea. Maybe something similar could work here.

[Tom Izzo]

Feb 27, 2021 0:32:19 GMT Glenn Robinson said:

Feb 26, 2021 16:59:07 GMT Brian Scalabrine said:

I want to reiterate my opposition to this.

This would be a disaster for bad teams and only strengthen good teams so that it will be almost impossible for anyone to catch up to them.

This is totally just my anecdotal evidence, so take it with a grain of salt, but as this league has aged, the more teams are tanking and overvaluing picks and rookies. How many teams do you think are even trying to win anymore? Maybe a handful now? Heck, I even considered tearing it down and every team with assets to trade for stars would rather keep the assets and continue to tank or keep cap space, than get a star player to help them compete. I'm curious if other teams that aren't tanking have found this to be true. There seems to be way less trade activity than what I remember it being and I wonder how much of that is due to teams just hording assets, half of which end up being bust picks anyways lol.

Spot on. D5 supremely over values youth and rookie contracts. The strategy is to load up young guys and exploit their 5 year rookie contracts. And young players are very over hyped in addition to no trade able BRs except for Rookies

[Ian Noble]

Apologies with moving house this week I haven't had time to read this yet. I'll get around to it eventually

[Ian Noble]

James Kay I agree with your sentiments here, something does need to change, but I think we need to get the balance right.

I don't have any answers just yet but I've had plenty of thoughts!


Comments

- It's a big problem that Giannis and Harden have almost no trade value. Rookies have almost all the trade value and it presents itself as pretty much the only way to build, causing too many teams to tank.

- "Re-tooling" (ie. not tanking) should also be a viable method of building a contender and it's currently a big uphill task compared to tanking.

- Our superteams are unrealistically strong nowadays, although the Hard Cap is definitely giving my team problems for instance, but even if I trade away a starter my team is still unrealistically good.

- With this rule in place Bird Rights will still outrank the 120% re-signees in terms of re-signing value, meaning Bird Rights will still stop any possibilities of a rash of trading following this rule change.


Concerns

- Too much trading: I feel a pride that so many D5 teams stick with their players. Boston is Embiid, Brooklyn is Booker, San Antonio is Doncic, New Orleans is Trae, Milwaukee is AD, GSW is Steph etc.etc.etc. That's happened partly because we do not have this trade rule.

- it did concern me that this rule creates the weird situation where a different team can poach your player by offering over 120% of what you can offer (if that amount is lower than the max), but I suppose in instances where that can happen can be anticipated by the re-signing team long in advance.

- In a weird way it's a shame that good GMs cannot continue to accrue talent endlessly to showcase their skills, I feel a pride in having the highest rated team ever right now, but that's been hampered by the Hard Cap since we started introducing it.

- Will the way D720 handle the Luxury Tax create a situation where the only teams who win championships are those who are making a 3 year push into Luxury Tax territory? Perhaps Arvydas Sabonis can let us know! I don't follow D720 closely but they're doing this better than us.

- Complexity of administration.

- Complexity for new joiners to understand creating a barrier to interest and understanding.


Options

- Tinkering with (a) Hard Cap level and (b) 120% re-signing salary level.

- Luxury Tax as D720 do it.

- Making BRs tradeable (I've never really understood this though, I always thought the whole point of BRs is that you can't trade them)

[Tom Izzo]

The point of bird rights is to allow teams to exceed the salary cap to retain their own players. That's it. Their own players include players they traded for, no matter how many years were left on the contract when they traded for that player. By us eliminating that real life rule to bird rights, many of our players become virtually untradable. If a player has no bird rights (>3 years remaining), there is almost no value.

www.hoopsrumors.com/2020/03/hoops-rumors-glossary-bird-rights-3.html

[Tom Izzo]

We've literally created our own unique restriction and don't follow real life in this regard at all. It's why I think we need to do two things:

- bird rights are tradeable
- we track bird rights by a unique salary identifer on the salary page. Italics indicate the player has bird rights

[Arvydas Sabonis]

Mar 20, 2021 22:50:33 GMT Ian Noble said:

- Will the way D720 handle the Luxury Tax create a situation where the only teams who win championships are those who are making a 3 year push into Luxury Tax territory? Perhaps Arvydas Sabonis can let us know! I don't follow D720 closely but they're doing this better than us.

That is the situation also in real NBA. Typically around 3-4 teams are having salaries over the 125% salary line and are paying luxury tax. Last year only 3 teams did that

• GSW
• 76ers
  
• Celtics

This year currently 6 teams would be over the line

• GSW
• Nets
  
• 76ers
  
• Clippers
  
• Heat (they are less than 1M over so likely will make move to come below the 125% line)
  
• Bucks (only over with few hundred thousand so likely also make a move)

So it's only teams who want to win championships, who have high salaries.

In D720 the rule has had pretty much same effect. In first year when it was implemented, I think we had 4 or 5 teams over the luxury tax. All competing teams. In second year also maybe 3 teams did it, but only one team (GSW) was a repeater and received the 20% penalty. They were the league champions the year before. But last year GSW was projected to be a third year in a row over the tax line. That would have put them over the hard cap so they had to make some moves to come under 125% line. But it didn't mean they had to blow it up completely and trade away their top stars, but they had to get rid of some good but overpaid players like Lou Williams. They are still a good playoff team, but just had to retool due to the rule.

This year we have like 8 team currently with salaries between luxury tax and hard cap. Probably few can make some moves to come under the line, but 6 of the teams are definitely legit good teams with chance to win championship.

In my opinion the rule works to imitate the real NBA behavior. It does make running a team more challenging, but at least I think it's more fun that way.

I personally had to also give up a future second round pick to get rid of some salaries last year since I wanted to avoid the 10% salary penalty. It did suck, but in a way it's also realistic that is continuously happening in NBA.