I want to sell you a cable TV package.
At first it's going to be decently priced, and have all of the channels that you want.
Then the subscription price is going to get a little higher every year, but it is ok at first since you still have all of your favorite channels.
After a few years though I am going to take away some of your favorite channels, charge you much more than I did at first, and offer the old channels in an expensive premium package.
You will only have enough money left over to buy a TV Guide and read about your favorite shows.
So, are you interested?
Evidently NBA General Managers are interested in such a deal, as it is the type that they make all of the time. NBA contracts are almost uniformily backloaded, as yearly salaries for players jump up from a few hundred thousand each year to a few million each year. Now, in a league such as the NFL where the only money a player is sure to get is in signing bonuses and gaurantees, these type of backloaded contracts are not that big of a problem. The Redskins and others in the NFL make outrageously backloaded deals every offseason, with no intention of ever letting those contracts reach their overly expensive base salary peaks. In the NBA however, a team is stuck with the contract in full after it is signed. This creates some very NBA specific player phenomena, such as teams often having their highest paid players sitting on the end of their bench by the end of their contracts and the ever-present discussions of "expiring contracts" in NBA trade talk. Just take a look around the NBA landscape. You have Grant Hill being paid $16.9 million this year. Jamal Mashburn was paid $10.8 million. Alan Houston got $20.7 million. All three of these examples are players that arguably were worth that kind of money at the front end of their contracts, but have over time had their skills and playing time decrease to a point where their current level of compensation is laughable. Going hand in hand with this is the fact that these ever increasing salaries cause their teams to have less and less cap space to bring in complimentary players as their aging star sees their skills decline.
So why don't NBA teams frontload contracts? In a league where the money is is coming to a player whether he produces or not (See: Jerome James, Jalen Rose, Derek Anderson,...) why would a player care if he was getting $16 million as oppsosed to $13 million in the first year of his contract, as long as he was still getting the same money in the end? Well, there are a couple of reasons why this may be, first being the cultural reality of the United States where people across the nation are crippled by credit card debt. "We want to pay later. Gimme gimme now, consequences be damned." The other factor is that NBA GMs know that according to the collective bargaining agreement the salary cap is going to be tied to league revenue, meaning that for the foreseeable future the cap is going to rise a bit every season and provide teams with that extra room to compensate for their star's incrementaly rising salary.
Now this is all heading towards the potential benefits of front loading contracts. First off, it will prevent teams (See: Knicks) from being saddled with albatross contracts for players that are not even playing. They will still be bad contracts, but not so bad that it will prevent the team from bringing in a player to help. This is where the true benefit lies: with the salary cap looking to continue increasing, a lower contract number for a star in the future, combined with a larger cap, will make for an even greater ability for that team to sign a player that could make said team playoff or championship caliber. In other words, players should desire this type of deal since it would help them be able to pursue a championship later in their careers.
Looking across the NBA landscape, it is hard to find examples of how this would manifest itself. Mainly, this is because there are very few frontloaded contracts in the NBA. In fact, there are only four players in the entire league that are signed to long term contracts that are front loaded, Speedy Claxton of the Hawks, David West of the Hornets, and Ben Wallace and Kirk Hinrich of the Bulls. Now, lets look to how the case of the Bulls would be different depending on how Wallace and Hinrich had their contracts constructed. Hinrich and Wallace are slated to make a combined $26.5 million next season, as opposed to $23.5 million in the final year of Wallace's contract three seasons from now. The NBA cap has been rising steadily lately, so assuming that the cap goes up $5 million in the next three years (to be conservative), the backloading of Wallace and Hinrich's contracts will provide the Bulls with about $8 million of space against the cap to bring in help.
While it would take a collosal change in philosophy for the frontloading of contracts in the NBA to ever become commonplace, the ability of the Bulls to continue building their squad in the upcoming years could serve as a test case for the wisdom of such a practice. I know I'll be watching. As long as I still have ESPN on my cable package by then.
