We’re seeing a shift in how business is done in the NBA.
I’m not saying it’s good or bad, but it’s different, and we better get used to it. Especially in Boston.
With Stan Van Gundy out in New Orleans, another coach in his first year with the team has been cast aside. Zion Williamson will start his third season with his third NBA coach because Van Gundy’s fit with the Pelicans was never quite right on either side of the equation.
But what makes a coach fit with his players is evolving. A new world of social media stardom beginning at younger and younger ages for basketball players, along with the potential for almost unfathomable wealth, has created a new landscape for young NBA stars.
For example, take this passage from The Athletic about Williamson’s family being unhappy with the direction of the New Orleans Pelicans.
“Among the targets of the Williamsons' criticism was head coach Stan Van Gundy, who they felt was too rigid and demanding, but also the organization, which they claim did not live up to what they felt should be the standard for a star like Williamson.”
Williamson is the test case for a new standard of NBA business. He is a generational talent who walked into the NBA with power and prestige. An online phenom for years, Williamson’s star grew with each thunderous dunk at Duke. That has only grown as a pro, making him one of the most valuable assets in the league.
Williamson alone generates money for the Pelicans. More than a player, Williamson is a marketing force that fills the arena, drives memorabilia sales, and brings more exposure in the form of national television appearances. His family is not wrong to view him as a star who needs special attention.
He’s also not wrong to make certain demands in that regard. We think of basketball in a “players play, coaches coach” dynamic, but the NBA is a business, and players are both employees and the product. It’s a product that is making a lot of people very rich, and that money is changing a lot of dynamics in the league.
A few years ago, the league was turned on its head when it struck a $25 billion television deal. The sudden salary cap spike helped create the Golden State Warriors super team with Kevin Durant, and it created a new crop of $40 million superstars.
The wildly inflated contracts have created a situation where players are turning down super-max extensions designed to give teams leverage to keep players knowing that the smaller max deals are still very easily plenty of money. This has given players more power than ever in dictating their current circumstances and, should teams fall short of expectations, engineering trades to preferred destinations.
But a new TV deal is in the offing. The 2025-26 season, five seasons from now, will be the first of what’s believed to be a deal worth somewhere around $75 billion, triple the deal that sowed the seeds of the current chaos. It also happens to be the season that Jayson Tatum can opt out of his new extension, making him one of the first players eligible for a new deal based on whatever that new salary cap is.
While the TV deal potentially tripling doesn’t necessarily mean salaries will, we could be looking at Tatum’s next deal starting with an annual salary in the $50 million range or higher. A player will be able to spend five or six years in the league as a minimum salary player and make more than Larry Bird ever did.
Life is changing significantly. But the pipping that will hatch this new way of doing business begins with Williamson, who is still on a rookie deal.
Teams have been moving towards drafting young players knowing they have up to nine years of the player under their control virtually guaranteed by restricted free agency. Generally, an 18 or 19 year old spends four developmental years on a rookie deal before being offered a specific “qualifying offer” based on that rookie scale contract (the contracts for first round picks are pre-determined). That qualifying offer needs to be rejected by the player, which is almost always because it’s generally ridiculously low compared to what he could get on the open market (Tatum’s was $13 million), in order for the player to become a restricted free agent. Once that happens, the team can match any other offers the player gets.
However, if the player accepts that qualifying offer, he plays for one year on that contract and becomes unrestricted, meaning his team can’t match and he’s free to sign wherever he wants. Williamson’s qualifying offer will be $17.6 million, and it will be the year before the new TV deal hits.
That means he’ll almost certainly be accepting the offer so he can dive Scrooge McDuck-style into the new pool of TV money, ushering in an era of accepting qualifying offers that takes even more control out of the hands of teams.
Where qualifying offers were once small enough to obviously reject, it won’t be long before those become $30 million themselves, or basically what we see today as max contracts. They will fall just like super-max contracts did, and let players play a season as a lottery pick making lottery winner money and then picking where he wants to go as an unrestricted free agent.
This is where it gets interesting.
Players have earned the right to choose where they play. They are adults who do a certain job for a living, and rules state they can pick any team they want when they are free agents.
However, teams probably aren’t too keen on drafting college freshmen (or very likely high school seniors in the not-too-distant future), spending five years paying that player tens of millions of dollars while he’s developing, and then watch him blossom into a star somewhere else.
That will put pressure on teams to make sure players choose to say, which means bending more to their will. It could mean shorter coaching tenures, and shorter contracts for role players as teams constantly jockey for position to pounce at the next available superstar.
The NBA’s collective bargaining agreement was built around one foundational principle: money controls everything. We’ve seen the erosion of that as the biggest stars turn away more money from their own teams because the amount of money they’re making is plenty and their desire to play with a certain person or in a certain city is worth the sacrifice.
The business of the NBA is changing. Players need to be able to choose their place of employment when they're free agents, but fans also need to feel invested in something, and teams need to see some return on their player development. These are conflicting notions, but they need to coexist somehow.
There are two more NBA seasons before the current collective bargaining agreement expires. What we’re feeling right now in the league are the first gusts of the hurricane steaming along offshore. If the league doesn’t fundamentally change how it does business, the new windfall threatens to turn the league into something unrecognizable.
