Bring Back Restricted Free Agency

The "Basketball for Thought" is a commentary by Kris Gardner.

March 1998

The NBA's rookie wage scale created by the collective bargaining agreement (CBA) 3 years ago was supposed to limit huge contracts signed by rookie players. Milwaukee's Glenn Robinson(the top pick in the 1994 Draft) signed a 10 year, $68M contract in 1994 which was the last huge contract offered to a rookie. Owners and veteran players believed the rookie wage scale would eliminate paying high salaries to rookies beginning with the 1995 NBA Draft.

The wage scale was created to slot the salaries of first round picks based on their draft position. Each first round player signed a guaranteed 3 year contract which allowed him to become a free agent at the end of their contract. However, their current team had the ability to negotiate and sign them to a contract extension during a 3 month window during the summer before the start of their third season. The agreement seemed liked a good idea at the time. However, the idea has blown up in the owners' faces. Why? And what is a good solution?

The 1995 Draft class has seen only 5 teams sign players to contract extensions. Minnesota signed forward Kevin Garnett to a 6 year, $126M extension; Vancouver signed center Bryant Reeves to a 6 year, $68M extension; Cleveland signed guard Bob Surato a 6 year, $38M extension; Utah signed center Greg Ostertag to a 6 year, $40M extension, and Dallas signed Michael Finley to a 6 year, $42M extension. In fact, only 3 (Garnett, Reeves, and Sacramento's Corliss Williamson) of the top 13 picks are still with the team that selected him!

Teams complain they "groom" a young player for 3 years only to lose him and watch that player become a star for another team.

Consequently, teams have begun trading young players before they become free agents because many teams have been told they don't have a chance at re-signing a player they selected because the player will be asking for a new contract worth at least $12 M per year. Therefore, teams decide to receive some compensation in return through trade.

One proposed solution is to sign rookies to 5 year contracts which, in theory, would give a team enough time to determine if the player is worthy of a long term contract. I disagree. I think it would cause more problems.

If a young player has a guaranteed 5 year deal, where is the incentive to improve? In a perfect world, a player should be self motivated; but, as we know, this isn't a perfect world. A veteran player is surely going to have problems with a youngster who has a guaranteed 5 year deal "going through the motions" while he is working on a 1 year deal for the league minimum.

My solution is to re - institute the status of restricted free agency. Restricted free agency allows a team to match an offer a current player received from another team. However, players under the rookie wage scale would be the only players eligible for restricted free agency. A team may decide during the month of July to re - sign a restricted free agent for 2 more years with a salary increase of 20 percent each year. If the team decides not to re - sign the player, then the player can become an unrestricted free agent.

As a result, after the original 3 years of the rookie contract expire, a team may decide if the player is worthy of a new 2 year deal. If another team decides to make an offer to a restricted free agent during July, then the current team has the option to match the offer. If the current team declines to match the offer, 2 second round draft picks will be awarded to them.

If a restricted free agent is re - signed by his current team to a new 2 year contract, at the conclusion of his 5 years in the league, he would be eligible for unrestricted free agency meaning he may sign with any team. However, his current team would have the right to exceed the salary cap in order to re - sign him.

Allowing for restricted free agency would, hopefully, eliminate the lack of a player's motivation to improve since a team would have the ability to match any offer after the original 3 year contract expired. If a player proves unworthy of a new contract, a team may release itself of any further commitment after the original 3 year deal. However, after 5 years in the league, a player does prove worthy of a big contract, I believe fans wouldn't have too much of a problem with the contract. In fact, a player may be motivated to improve if he knows, after 5 years in the league, he can have the ability to sign with any team in the league for any amount of money.

In the end, my goal is to restore some sanity to players salaries and maintain (hopefully improve) the level of play which exists in the NBA. After all, whether the owners or players want to acknowledge this fact or not: if the fans stop spending their money, the NBA is going to suffer. It can happen. Look at Major League Baseball.