Tag:Bird Rights
Posted on: December 31, 2008 2:43 am
Edited on: December 31, 2008 2:44 am
 

Why the Cavs 'Bird Rights' to LeBron don't matter

Over in the CBS NBA forum, CBS user Feanor made a great post earlier this week about NBA cap space, and in it a lot of fans seemed to think that Cleveland, due to possessing Bird Rights to LeBron, can offer LeBron a deal that far far exceeds anything teams like Detroit or New Jersey or New York could offer LeBron. I thought that I would make a post about what "Bird Rights" really are and what they mean to superstars like LeBron for the upcoming 2010 free agent class for the Knicks instead of recaping a Bobcats game, since I am still waiting on the Knicks to show me what direction they are going in.

The most important draw about Bird Rights, and the real value they have, is getting to sign a free agent if you are over the cap when he is a free agent. However, you don't get to use the vast majority of the powers of Bird Rights on a player if you are under the cap (Like Cleveland will be in 2010).  Bird Rights are a salary cap EXCEPTION. Since the Cavs will be under the cap, they don't get execeptions from the cap, they don't need them. It would be like if your bank let you be exempt from one overdraft charge a year after you had 3 overdrafts. If you have just one overdraft, they don't give you an exception to the fees, because you were under the exception number. So for teams under the cap (over half the NBA in 2010 by current estimation) with big time free agents (like Cleveland), the concept of Bird Rights doesn't really apply.

Also, the max salary that any superstar will get in 2010 that signs as a free agent (extensions are slightly different, but then again if you extend your contract, you arn't a free agent) is well defined in the leagues collective barganing aggreement. No matter where LeBron signs in 2010, he is going to make 17.4 million in salary for the 2010 season (give or take a touch, it will be 30% of the salary cap, but it will be the same for every team). Many fans seem to think that while the Knicks can offer LeBron a max deal, that the Cavs could offer LeBron some super max deal with a salary that starts at something like 23 million and keeps going up. Not true. LeBron will make a total of $0 more in Cleveland then he will anywhere else in 2010.

Bird Rights do apply to free agents that re-sign with teams that are under the salary cap in 2 ways, those teams can offer their superstars a 6th year, and can give raises of 10.5 percent, instead of a raise of 8%. Many Cavs fans have pointed to the oft-reported fact that LeBron can get $33 million more from the Cavs then he could from other teams and seem to think that other teams have no way to compete with that huge raise. But did you know that over 96.4% of that $33 million figure will actually go to LeBron no matter what?

The lion's share of that $33 million figure comes from the fact the Cavs can offer that 6th year that other teams cannot offer on that first contract. But the $33 million calculation ignores the fact that LeBron won't be playing for free in his sixth year with another team! Over 28.5 million of that 33 million figure is derived from that extra 6th year, and LeBron will be making 27.4 million in year 6 without all the Bird Rights multipliers. That maens even that extra 6th year that Bird Rights offer LeBron is barely worth 1 million dollars more, and we can take 27.4 million off of that 33 million figure right off the bat. Bird Rights arn't looking that important now, are they?

And it gets worse! Because after 3 years, LeBron's new team will have Bird Rights on him, and can offer him the exact same percentage raise he would have got in years 4-6 of a max deal with the Cavs. So we already know that LeBron will make the same in year one of his 2010 deal, and I think we can all agree that every team in the NBA will happily extend LeBron's deal after 3 seasons to utilize his Bird Rights and pay him the new max allowed, so now LeBron will be getting the same raise in years 4, 5, and 6 of his next deal. So only in years 2 and 3 with Cleveland be able to offer an advantage.

How much is this advantage in years 2 and 3? Well, in Cleveland, LeBron will get a 10.5% raise in years 2 and 3 off his max deal of 17.4 million in 2010. In any other city, LeBron will only get  an 8% raise. So in 2011 Cleveland can offer LeBron a whopping $435k more. In 2012, that number goes to $950k more. So giving up his Bird Rights will cost LeBron a grand total of under 1.4 million until he regains them with a new team. And that is it! So we can chop more money off of the 6.4 million that is left from the initial $33 million that Cleveland is said to be the only team able to offer to LeBron. Do all the math and it comes out to Cleveland barely being able to offer just over 3.5% more then any other team can offer LeBron over the first 6 years after 2010, or the difference between making over 131 million and under 136 million on his NBA contract. It doesn't seem like 5 million and change over a 6 year period is going to keep LBJ in Cleveland, IMO.

So in conclusion, the idea that Cleveland owns Bird Rights on LeBron, or the idea that any free agent in 2010 will likely have it's Bird Rights held by the team they are playing for at the end of the 2010 season, means that the current team that the superstar is under contract for can offer crazy cash to keep it's player that other teams can't come close to matching is very wrong.

Superstars in 2010 will be signing contracts for a number of reasons, like rings, big markets, because Nike will pay you an extra $50 million to play somewhere, whatever. But hopefully this shows that Bird Rights are not going to be a significant factor to free agents when they sign deals in 2010, so long as they arn't the rare few that will be considering re-signing with teams that will be over the cap in 2010. The money is pretty much the same everywhere for everyone when it comes to your NBA contract. .
 
 
 
 
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