February 20, 2008
N.B.A.’s Rules Provide a Payday for the Unretired
By HOWARD BECK
Keith Van Horn earned $4.3 million on Tuesday, for nothing more than a signature and a flight to New Jersey. Aaron McKie earned $750,000 a few weeks ago for a few pen strokes and a trip to Memphis.
Retirement from the N.B.A. has never been so profitable.
In a league with a salary cap, a luxury tax and a collective bargaining agreement as thick as a bank-vault door, general managers occasionally need extreme measures to make a trade. Two recent blockbuster deals illustrate the point.
The Dallas Mavericks could not have acquired Jason Kidd on Tuesday without Van Horn’s participation as a trading chip sent to the Nets to balance salaries, per N.B.A. rules. Van Horn last played in 2006. The Los Angeles Lakers could not have acquired Pau Gasol from Memphis on Feb. 1 without using McKie — who was working as a Philadelphia 76ers assistant coach — in a similar sign-and-trade arrangement.
McKie has yet to play a minute for the Grizzlies. It would be surprising if Van Horn plays for the Nets before his contract expires in June. They are virtual ghosts on their rosters, appearing in name only. (McKie’s official page on NBA.com still shows him in a Lakers jersey.)
To the general public, it looks like a shell game — a feat of economic gymnastics that has nothing to do with basketball or the wisdom of a particular trade. And that is essentially an accurate summation.
“It’s a legitimate method, allowed under the collective bargaining agreement,” said Mitch Kupchak, the Lakers’ general manager. “It’s been done for years. And it’s been done recently. So it’s not something that just came up.”
This is all made possible because of the N.B.A.’s arcane rules governing trades. Generally speaking, teams that are already over the salary cap have to balance salaries in a trade — taking back as much as they send away, give or take 25 percent.
McKie (a Laker from 2005 to 2007) and Van Horn (a Maverick from 2005 to 2006) became useful under another wrinkle. Neither ever filed retirement papers, and their respective teams never “renounced” their rights. That made them eligible to be used in sign-and-trade deals. The rules dictated they had to sign three-year deals, but only the first year is guaranteed, making them more like one-year deals. Or in this case, two-and-a-half-month deals.
N.B.A. officials were not thrilled with either trade. Before approving the deals, they sought assurances that McKie and Van Horn truly intended to resume their careers.
League officials were not available for comment, but Joel Litvin, the N.B.A.’s president of league and basketball operations, addressed the issue Saturday, saying: “You can’t discount players coming back.”
“Chris Webber came back midseason. It does happen,” Litvin said. “It has to be legit, it has to be a case where a player is really looking to resume his career. He might not expect to succeed in resuming his career. But at some point it doesn’t pass the smell test.”
But the smell test lacks specifics. How much time do McKie and Van Horn have to spend with their new teams before being waived? Do they have to play a game? N.B.A. officials have no easy answers to such questions, and acknowledge these situations are viewed the same way the Supremem Court views obscenity: it knows a salary-cap circumvention when it sees one.
“If the guy gets there and 20 seconds later he gets cut, and the guy is 55 years old, that’s not going to pass muster,” Litvin said.
The league could seek to close the loophole when the current labor deal expires. One possibility: a team’s right to a player could be automatically rescinded — removing the ability to do a sign-and-trade — after the player has been inactive and unsigned for a year.
But there is little incentive to draw up new rules. The loophole benefits general managers by giving them another tool to make complicated trades. It benefits players, their agents and the players association by putting more money in players’ hands.
And as one general manager said Tuesday, no one is hurt by the loophole, except maybe the league’s lawyers. Litvin verbally cringed at the suggestion of another rule.
“We have a C.B.A. that’s this thick, that is full of rules designed to address specific issues that come up and loopholes we decided to close,” he said.