The New NBA Collective Bargaining Agreement: A Blow to Free Agency?
The 2023 NBA offseason had barely concluded, and the new collective bargaining agreement was already at the center of criticism. The reason? The restrictions imposed on teams with high spending and the impact on free agency.The 2024 offseason brought with it the “second apron” of the salary cap, limiting teams with large investments from adding players from outside their own ranks. Draymond Green, a player for the Golden State Warriors, fueled the debate by stating that the new agreement had ruined the excitement of the annual free agency.“You either make 50 million or 2 million,” commented former player Austin Rivers. “It’s a joke, bro. I can’t tell you how many mid-level players are signing for the veteran minimum in the NBA.”
Austin Rivers
Draymond Green’s post on Threads
Is Green right? Are the new offseason trends here to stay? We analyze the situation to determine if the middle class of players is being marginalized and the state of restricted free agency.
Analysis: Reality vs. Fiction
The second shelf has ruined free agency.
Verdict: Fiction (for now) Draymond Green has a point. NBA free agency isn’t what it used to be. The anticipation and drama that used to accompany the decisions of players like LeBron James, Chris Bosh, Dwyane Wade, Joe Johnson, Amar’e Stoudemire and Carlos Boozer in 2010, or later Kevin Durant (2016) and Kawhi Leonard (2019), have been diluted. Two additions to the current collective agreement haven’t completely killed that level of anticipation, although they have noticeably weakened it. From the day after the Finals, teams can negotiate new contracts with their own free agents. This means that players like Kyrie Irving, James Harden, Julius Randle, Naz Reid, Fred VanVleet, Sam Merrill, and Bobby Portis renewed and secured their future before June 30th. Last year, Pascal Siakam and Malik Monk were some of the most important targets to renew early. The revised rules for rookie and veteran extensions are also to blame. The possibility of extending contracts for more money and years has caused players to prioritize guarantees over the risks of entering free agency.A player in the final year of their first-round contract can now extend it for five seasons instead of four, even if the first-year salary is less than 25% of the salary cap. Jabari Smith signed such an extension in June, and Jalen Johnson, Trey Murphy III, Alperen Sengun, and Jalen Suggs did so in 2024. In the first year under the current collective bargaining agreement, a record 14 players signed rookie extensions.
This summer, Jalen Brunson, Giannis Antetokounmpo, Lauri Markkanen, Donovan Mitchell, Anthony Davis, Damian Lillard, Jimmy Butler, Rudy Gobert, Brandon Ingram, Derrick White, Ivica Zubac, and Alex Caruso could have been free agents. Instead, each one signed long-term extensions.In the last three years, 51 veterans have signed extensions (that number will increase to 53 if Luka Doncic and De’Aaron Fox sign extensions this month), including 26 during the 2024-25 season. In comparison, 74 players signed veteran extensions from 2017 to 2023.Teams are taking advantage of the “stretch provision”.“The collective bargaining mechanism was very clear: we are trying to give current teams an advantage to recruit, develop, and retain players,” said NBA commissioner Adam Silver during the summer league. “It doesn’t mean there isn’t free agency, but in many cases, you have situations where players choose to stay in those markets. So, I don’t necessarily think that’s a bad thing.”
Adam Silver
Verdict: Done
A prominent agent posed the question in the early morning before the start of a summer league series in Las Vegas: “How many teams are projected to have cap space in the 2026 offseason?” In normal circumstances, the answer would have been eight: Brooklyn Nets, Charlotte Hornets, Chicago Bulls, Los Angeles Lakers, LA Clippers, Portland Trail Blazers, Utah Jazz, and Washington Wizards. But, as the Milwaukee Bucks demonstrated on July 1st, projecting teams with available cap space can be a futile exercise.The Bucks would also buy out the $8.1 million owed to guard Vasilije Micic. Like Lillard, his $2 million salary was also extended, but for two fewer seasons. Those decisions helped Milwaukee open up the space needed to sign Myles Turner to a four-year, $108 million contract. The Bucks weren’t the only team that created cap space this way. The Memphis Grizzlies extended the $11.1 million salary after the Cole Anthony buyout over the next three seasons. Instead of signing a free agent with the space created, they opted to renegotiate and extend forward Jaren Jackson Jr.’s contract. The willingness to create financial flexibility by waiving and then extending the salary owed to a player is not a new rule in the collective bargaining agreement. Since 2013 and until last offseason, 54 players and a total of $320 million in salaries have been waived and extended. Before Lillard, Nicolas Batum in Charlotte had the biggest impact on the salary cap per year, with $8.9 million from an extended player. But in the last month alone, $223 million in salaries have been extended, $100 million less than the total amount from 2013 to 2024. Teams are willing to absorb eight-figure charges in the foreseeable future in order to create salary space now, or in the case of the Phoenix Suns, escape financial purgatory. Two weeks after Lillard was waived, the Suns acquired Bradley Beal and will likely extend the $97 million owed to him over the next five seasons. (Teams have until August 29 to use the provision, provided the extended amount of all players does not exceed 15% of the salary cap). In this scenario, Phoenix will have a $19.4 million cap hit over the next five seasons, but most importantly, it will be below the first and second apron. Now it will have access to aggregated contracts sent in a trade and the ability to use more than 100% of the traded player exception. Phoenix’s 2033 first-round pick is no longer at risk of being frozen, and the “stretch provision” will save the Suns more than $200 million in salaries and luxury tax penalties this season.“Maximizing Giannis’ prime, our opportunities to win, I feel like that’s always our responsibility. So it was really a decision of now versus the future,” Bucks general manager Jon Horst told The Athletic in July, referring to the waiver and then the extension of the $113 million owed to star Damian Lillard over the next five seasons.
Jon Horst
The middle class of free agents has been marginalized from the market.
Verdict: Fiction
Silver was referring to the 84% of players who signed rookie contracts that are not the veteran minimum and first round, whose first-year salary ranged from $4 to $20 million. That’s an 8% increase from last offseason. Of the 31 players mentioned, 19 changed teams in free agency. That 32% increase from last summer is the result of teams signing players using the non-taxpayer mid-level exception (an increase from five to 10), expanded trade rules, and the acquisition of free agents with a previous trade exception. For example, Atlanta acquired Nickeil Alexander-Walker in a sign-and-trade deal using a previous trade exception, and then used part of its $14.1 million non-taxpayer mid-level exception to sign Luke Kennard.“The data doesn’t support this idea,” Silver said during the summer league. “If you look at players with minimum salaries, lower salaries, players with high salaries, and there’s an intermediate group that you call the middle class, if anything, it’s slightly above where we were in the last years of the old collective bargaining agreement.”
Adam Silver
Since the 2017-18 season, the salary cap has grown from 99 to 154.7 million dollars, while the total salaries of the players have increased from 3.3 billion to 5.4 billion dollars.Restricted free agents Josh Giddey, Jonathan Kuminga, Quentin Grimes, and Cam Thomas are at a disadvantage.“There is a misconception that players are not being compensated in the same way as in the past. That is not true,” said former Players Association president CJ McCollum. “Guys are making more money than ever. The middle class is making more money than ever.”
CJ McCollum
Verdict: Fact and fiction
Yes, Chicago, Golden State, Philadelphia, and Brooklyn currently have influence in contract negotiations. But the reality is that no team outside of Brooklyn (Thomas’s current team) has more than $14.1 million to sign any of those four players with an offer. Even if the market were flooded with cap space, there have only been two restricted free agents (Deandre Ayton and Matisse Thybulle) who have signed offer sheets since 2022. Kuminga and Grimes’ prospects are also affected due to the first apron concerns if a sign-and-trade deal materializes. Because their outgoing salary only counts as 50%, the Warriors and 76ers are likely to be hard-capped in a sign-and-trade deal. But restricted free agency is not new. For years, players who didn’t sign rookie extensions have navigated the strict rule, but only if they were willing to commit to their next contract. Of the 14 former first-round picks who received a qualifying offer since 2023 and then signed a contract, only three (Tyrese Maxey, Immanuel Quickley, and Cameron Johnson) had a starting salary above $20 million in the first season. Kuminga would have been the fourth, but, according to Shams Charania and Anthony Slater of ESPN, Kuminga rejected a two-year, $45 million contract with the Warriors that would have included a team option.The second shelf has deterred teams from including bonuses in contracts.
Verdict: Done
Remember in March, when the decimated Dallas Mavericks couldn’t sign a 15th player because they were $50,000 below the first apron? That was because $4 million in bonuses for Kyrie Irving, Caleb Martin, and P.J. Washington counted towards the salary cap.
The Dallas dilemma put teams on alert this offseason. Of the more than 150 players who signed a contract this offseason, none have negotiated bonuses in their contract. The list includes Irving and Minnesota Timberwolves forward Julius Randle, who received bonuses in their previous contracts that are not included in their current deals. In comparison, 23 free agents signed contracts in 2023 and 2024 with incentives included. The decrease in incentives has also affected first-round extensions. In the 2022 and 2023 offseasons, 11 of the 26 players who signed extensions had a bonus in their contract. Since then, only Moses Moody, of the Warriors, has one. The Miami Heat guard Tyler Herro’s extension, signed before the 2023 collective bargaining agreement took effect, is a strong reminder of why teams have taken a stance against negotiating bonuses. Herro has five, including those for being named MVP, All-NBA, and Defensive Player of the Year, and Miami receives a $2.5 million charge against both the first and second aprons.The current collective agreement penalizes teams that recruit well.
Verdict: Done, unless you plan in advance
McCollum made an interesting comment recently when discussing the impact of the new collective bargaining agreement on the draft.McCollum’s comment leaves much to be analyzed. First, the statement is correct if we base it on the financial disadvantage that teams face when players with maximum rookie extensions are named All-NBA, Defensive Player of the Year, or MVP in their fourth season. The Cleveland Cavaliers and the Detroit Pistons took on an additional $8 million in salary this season ($45 million over the life of the contract) when Evan Mobley was selected Defensive Player of the Year and Cade Cunningham was named All-NBA. The counterargument is to address those extensions as Oklahoma City has done with Chet Holmgren and Jalen Williams. The Thunder has protected itself in case either player earns regular season honors. Unlike Paolo Banchero’s extension with the Orlando Magic, which includes a 30% escalator (his $239 million extension increases to $287 million), if he is named All-NBA, MVP, or Defensive Player of the Year, Holmgren does not have it in his contract. Williams’ salary next season increases to the same amount as Banchero, but only if he is named MVP, Defensive Player of the Year, or first-team All-NBA. There are escalators for being named second and third team, but at a lower percentage. General manager Sam Presti and the Thunder also had the foresight to weigh future extensions in how they aligned their finances and built draft assets. In the last two seasons, OKC has signed Isaiah Hartenstein, Isaiah Joe, Aaron Wiggins, Jaylin Williams, and Ajay Mitchell to contracts that decrease, have team options, or are partially guaranteed. And the champions won’t be finishing that plan anytime soon. The Thunder have a surplus of 13 first-round picks and 16 second-round picks in the next seven years, with up to four first-round picks in the 2026 draft alone.“You shouldn’t be penalized for recruiting well,” McCollum said. “Oklahoma City is going through this now, where you have to pay a lot of players who are really good. And recruits, you shouldn’t be penalized for recruiting well. You should be able to pay and keep the players you’ve recruited. And when you have those windows where you really have a chance to compete and win a championship, you shouldn’t have such severe restrictions.”
CJ McCollum
