In today’s NBA, we are seeing more often that players are very vocal about what team they want to play for. Star players are making it known who and where they want to play for and their not afraid to express it. Liam Plate sat down with former Executive Director of the NBA Players’ Association and current Seton Hall professor Charles Grantham to dive a little bit deeper into the topic.
Liam Plate: I know that you spent some time with the NBA Players’ Association, what was your exact role with the organization?
Charles Grantham: I was the Executive Director. I started off a consultant after graduate school in about 1976-77. In ’78, I joined full-time and by ’80 I was the Executive Vice President. Organizationally, we didn’t have an Executive Director at the time, so it was just me and the general council, and an administrative staff. I guess that went until ’88 and then I reorganized the Association, and the position of Executive Director was creator. Then, I became the Executive Director. I literally had been with them for 19 years.
LP: I know you still play a role in the league now. So, what role do you play in the league still?
CG: The role I play isn’t actually with the league. It’s with a couple of player-agents that represent players and I consult with the Unique Sports Management Group. I’m a consultant so the clients that they have, I help them in their contract negotiations in particular and in the general business of representation of players.
LP: Is there any type of program or anything that you tried to put into play while you were the Executive Director to give players more say in where they play?
CG: I think what we have to recognize is that the collectively bargained agreements are the ones that define the role that both management and labor play. In other words, the terms and conditions of employment are all spelled out in that collective bargaining agreement. And I think the point by which star players sort of gained a little more control was I guess maybe when they extended the contract in 2018. They increased the amount of, or the percentage any one player could negotiate with regard to his individual contract. So, I think at one point it was like 30%, but now I think it was increased to 35%. So, essentially a star player could get 35% of the salary cap and I think by doing that it gave some of the players a little bit more leverage. Because once you get into a maximum contract with that much income and the prospect of the team having to pay a luxury tax in addition to that, it kind of give the player a little bit more power, which is what I think you’ve witnessed over these last couple of years. But I should also caution to say that the journey to become that person whether it’s LeBron James or Anthony Davis or Steph Curry. I mean, think about that for a moment. There are only a handful of players that are able to obtain that status and the reason being quite frankly is that coming into the league, all the rookies sign a five-year wage scale. So, if you’re 20 or 21 coming in, you’re committed to that team for five more years. That’ll put you to 26 at which point you have the option of extending the contract or becoming a free agent. Most of those players by the time they get to that point, they may be in their middle to late 20s. They may or may not leave and so by the time that they may become a free agent, they could be almost 30 years old. Now what that does say is that the star players like LeBron, who if you recall decided to take advantage of free agency when he left Cleveland and went to Miami. Then subsequently began to sign one-year deals, which made him free every season or every other season if he signed for two years. Now, that would be optimal if you’re representing a player of that caliber, you would prefer to see him be a free agent more frequently therefore demanding and commanding a more lucrative salary. Also, by being in that position you automatically carry a little bit more of the clout and the leverage with you. So, that’s sort of how this has evolved once they went to a maximum salary cap and then moved that maximum 30% to 35%. Then that leverage shifted to the superstar players to some degree.
LP: Taking a look at the superstar players of the ‘80s and ‘90s, do you think there is a big difference between how the superstar players of today control compared to them?
CG: I guess you’ll get a debate about that. It appears that way, but I think if you go back and think about it, the swing is 5%. So those players could essentially negotiate for 5% more. If I go back and think about the ‘90s with Michael Jordan, go back to the Lakers with Magic Johnson, even if you go way back with the Lakers with Kareem Abdul-Jabbar or better yet Wilt Chamberlain. I just don’t think that it’s the evolving power per say, but I think the superstar players, to some degree, have always had some of that power that we associate with it. It’s just that you appear today that, some people say it’s because of the AAU programs, etc., players got to know each other earlier and then later in their careers they decided to pair up and become teammates. But even with that, I often go back and compare that Laker team of Elgin Baylor, Jerry West, and Wilt Chamberlain. People think that they won multiple championships. They did not. So, I’m not certain that, and I do hear the debate even form players, to say why is everyone going to play for the Nets. They want to win a championship. And I think that the idea that we sat down and negotiated an agreement with free agency and being able to choose your location of employment was a primary interest among the players. I think you’re starting to see more of that, but the reality is that’s the same freedom that you have, and I have. It’s taken a long time to get there so to speak.
LP: In the future instead of it just being these superstar players who control where they go, do you see that opening up to the guys who aren’t maybe on superstar level but are still on an All-Star level?
CG: At a certain point, every player gets that choice. Meaning that if the team really wants you badly…Think about this. If you sign a five-year contract as a rookie, within five years that team is going to know whether or not you’re going to be good enough to play in the NBA. Those first two years are guaranteed dollars. The third year: they have the option of extending you. Well after two years you might say I want to go elsewhere, but you have also played very well. And the team, then, offers you an extension and the question is then do you turn that extension down recognizing that it does mean a substantial increase. That’s where the players today have that choice. That they can either extend the contract or play out the extra year and become totally free. And I often talk about Tobias Harris because he was a young person that I helped with his father, who is the agent, to negotiate that deal. When he was with the Clippers, he was offered an extension of $80 million. If you think about a young person, being 26 or 27, being in the league six years and that kind of money is offered, it takes quite a bit of confidence in yourself and your ability to turn that down. So sometimes you see players staying because the money is comfortable, and many don’t want to take the risk of losing that. Tobias did have confidence in himself, got traded, played well and then commanded an even greater salary. So, when you think about the freedom and the freedom of choosing and the choice, etc., you really do have to understand the terms and conditions of the collectively bargained agreement. If you’re really a good player, it’s going to be a very difficult time for you to continue to turn down a substantial offer financially.
LP: In your experience, have you noticed in today’s NBA that players are a little bit more vocal about how they don’t want to play where they are anymore compared to the past say in the ‘80s and ‘90s?
CG: I think that they feel a sense of a little bit more freedom, but as long as you have the restricted free agency, which you still do have. It becomes very difficult to move until you reach a certain level of status in the league because if you think about the five-year deal again. If you’re 21 or 20, you’re going to be 24 or 25 which is prime time in the league at that time. If you’re restricted, typically the restricted free agents category doesn’t work for the player because typically what happens is that the teams may in some way announce or in some way leak the information that no matter what another team offers you, they’ll match it. And once that word is out, they’re going to match then guess what? It decreases the number of teams that may have interest in you because no one wants to again establish a market price for that restricted free agent.
LP: Is there anything I didn’t touch on that you wanted to include?
CG: Well, I think today’s business obviously is generating substantial revenue and it’s this next television broadcast deal after watching the NFL’s negotiated television contract, the next one up seems to be the NBA. And what I think you should look for is these carve outs in the contract and the reason the carve outs are important is because if you look at the stage of the negotiations, the collective bargaining agreement if signed and then the television deal is up for negotiation. So typically, management has in their pocket, a signed deal with the players that they’re able to go to the broadcast partners and sell that stability just as they did in football. We had a 10-year collective bargaining agreement. Does that make your TV deal more valuable? Yes, but since the players and the owners have this thing called a revenue sharing agreement, the definition of revenue is in that agreement. So, you can see where the challenge lies. Once you agree to a collectively bargained agreement and you agree to a definition of revenue then, what’s to stop the management from negotiated a new television deal to carve out different pieces of this new deal that will not meet the definition of sharing revenue with the players. Since typically the rights fees are certainly what everybody talks about in terms of the share, but if you took notice of the last football contract, they had carved outs in there for screening and for this and that. Well, you can sit back and think about it. Is that included in the definition? Does that escape the share or the tax for the players’ share? So, it becomes very delicate at management or better yet laboring to anticipate these carve outs and negotiate in the agreement should these carve outs occur that it will be included in the definition of revenue, which they share. It’s a little complicated, but I think that it’s worthy for you to know and understand that because this nature of this business is all about maximizing revenue while minimizing costs. And the vision of that revenue is a function of that collectively bargained negotiation.