NBA proposes unique ‘franchise tag’ to union

The NBA proposed to the players’ union last month a version of the “franchise tag” that it wants to include in the next collective bargaining agreement, according to sources familiar with the matter.

The tag, however, would be very different from the NFL’s version, which allows a team to essentially block one of its free agents from entering the market by binding him to his incumbent team with a one-year contract that carries a high salary based on various parameters.

The system the league has presented would not work this way, according to sources. Instead, a team would be allowed to designate one player for preferential contractual treatment, including more overall money, more guaranteed money and at least one extra year on his contract. A player would have to agree to such a designation. It is designed to work as an incentive to get a player to remain with his team rather than as a roadblock to free agency, the sources said.

Take the situation between the Cavaliers and LeBron James one year ago. Under the league’s proposal, the Cavaliers would not have been able to unilaterally “tag” James a franchise player and bind him to the team for one more season. The Cavaliers would have been able to offer James various enticements he may not have been able to get from other teams, the sources said.

The NBA’s current collective bargaining agreement already gives incumbent teams such advantages when it comes to re-signing their own players. James and Chris Bosh both took less money to sign with the Heat than they could have received from the Cavs and Raptors, respectively. The idea behind the league’s new proposal would be to increase the gap between what teams can offer a “designated player” and what non-designated players can get on the open market.

Two caveats here:

1) Though the CBA expires on June 30, negotiations are really only starting to pick up. SI.com’s Sam Amick confirmed a report that commissioner David Stern and union executive director Billy Hunter have been meeting in person recently, and added that the two have more sit-downs scheduled over the next couple of weeks. That is a good sign, but we’re early in the process, and there are still many details to work out on how the “designated player” system would work.

2) The designated player is one small part of a larger proposal and must be considered as such, sources said. It exists within an overall plan that key members of the players’ union have said they do not like. It has been widely reported that the league wants to reduce the amount of revenue players receive (currently 57 percent of all basketball-related income); trim player salaries by as much as $800 million per year; cut the length and maximum value of player contracts; and slash the amount of money guaranteed to players in each contract.

Sources also said the league’s proposal would ban fully guaranteed contracts. All contracts would have limits on the amount of money a player would be guaranteed to receive, and those guarantees would decline during the life of each contract. In other words, a player making, say, $5 million per season over four years would actually be guaranteed less than $5 million in each of those four seasons — and the amount guaranteed would drop each season. The idea is for teams to be able to get out of undesirable contacts more easily and avoid ugly, Eddy Curry-style buyout talks.

It is within that kind of system in which you have to consider the league’s designated player idea. By cutting guaranteed money and contract lengths leaguewide, the overall proposal would make the benefits the designated player would receive more meaningful.

Would that be enough to keep free agents tied to small-market teams? It’s too early to say, just as it’s too early to say exactly what sort of “franchise tag”-style system, if any, the league will adopt. But this is the starting point, at least on paper, and it’s different in one crucial way from the NFL’s well-known system.