NBA buyout market rejuvenation identified as a significant unforeseen outcome of the Collective Bargaining Agreement (CBA)
In the ever-changing landscape of the National Basketball Association (NBA), the Los Angeles Clippers have proven to be a team that adapts and thrives. The team's recent success can be attributed to their strategic use of buyouts and financial flexibility in the Collective Bargaining Agreement (CBA) era.
Last summer, the Clippers capitalised on the salary space created by Paul George's departure, signing multiple valuable role players such as Derrick Jones Jr., Kris Dunn, and Nic Batum. This approach significantly enhanced their roster depth while maintaining enough cap flexibility to sign Brook Lopez and trade for John Collins. In essence, the Clippers chose depth over a three-star model, leveraging the buyout market and salary cap rules to avoid bulky contracts and build a more flexible roster.
The CBA has inadvertently made it challenging to construct competitive teams around aging stars making around $50 million per year. Players like Bradley Beal, who is coming off a season in which he averaged 17 points on roughly 50-39-80 shooting, are not commanding the same $50 million salary anymore, but are still an outright steal at a discount. The Clippers, for instance, signed Beal for a fraction of his estimated $20-25 million value.
Similarly, the Bucks waived-and-stretched the entirety of the two years and nearly $113 million left on Damian Lillard's contract to create cap space. Reports indicate that Lillard may sit out the season while he recovers from his torn Achilles tendon, but the revamped buyout market has presented unexpected opportunities. The Suns bought out Lillard, making him a free agent, as cap flexibility is at a premium nowadays.
The 2023 CBA's luxury tax restrictions played a role in the Thunder hesitating to offer James Harden the max and ultimately trading him. Every CBA finds ways to create as many problems as it solves. The 2011 CBA's incredibly punitive luxury tax, for example, played a role in the LeBron James-era Heat not forming, but it also played a role in the Thunder losing Kevin Durant in free agency in 2016.
The NBA's CBA allows teams above the first apron to sign players during the offseason who were previously waived with salaries above the non-taxpayer mid-level exception. This rule has contributed to the evolving buyout market, as players like Beal, Lillard, and Deandre Ayton have become free agents unexpectedly due to the cap environment this CBA created.
In the case of Ayton, his availability benefited the Lakers, who were struggling to find a starting-caliber center. Ayton, theoretically at his athletic peak and coming off of a max deal for less money than the Clippers will pay Brook Lopez this season, has the potential to significantly boost the Lakers' roster.
The Clippers' strategic approach to team construction reflects a shift towards balance and financial prudence in the current NBA landscape. By leveraging the CBA's financial framework and the evolving buyout market, the Clippers have transformed large, expensive contracts into multiple affordable additions, thereby maximising roster versatility and maintaining competitiveness.
[1] Source: NBA analysis and reporting by various sports media outlets.
- The Clippers' Signing of Bradley Beal, despite his still impressive statistics, was a cost-effective move due to the CBA's impact on player salaries.
- The Phoenix Suns capitalized on the revamped buyout market created by the CBA and the Bucks' decision to waive-and-stretch Damian Lillard's contract, making Lillard a free agent.
- The 2023 CBA's luxury tax restrictions played a role in the Oklahoma City Thunder's decision not to offer James Harden a max contract, leading to his trade.
- The rule in the NBA's CBA that allows teams above the first apron to sign players during the offseason who were previously waived with salaries above the non-taxpayer mid-level exception has contributed to the growth of the buyout market, as seen with Deandre Ayton.
- The Los Angeles Lakers, in their search for a starting-caliber center, have potentially found a boost with the availability of the affordable Deandre Ayton, who is theoretically at his athletic peak and coming off of a max deal for less money than the Clippers will pay Brook Lopez this season.
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