In a recent appearance on his podcast, Gil’s Arena, former NBA player Gilbert Arenas suggested on his podcast that the Los Angeles Lakers should pay LeBron James via a “backdoor”, if it means being able to tie him down for as long as he wants to continue his career. And in doing so, he effectively encouraged salary cap circumvention.
Speaking about James’s longevity and value to the NBA, Arena mused that the Lakers, or even the league itself, ought to find creative ways to compensate LeBron beyond the limitations of the NBA’s arcane yet overarching salary cap. Arenas, clearly, believes James is worth breaking the rules for.
“If I were the owner, I would have made a deal with him,” said Arenas. “Ask him what he wanted. If I can backdoor another $50 [million] to him, like invest in his school or whatever, something he’s going to capitalize on later in life to save me $50 [million] today where I can build, I would have done it.”
The Hot Topic Of NBA Cap Circumvention
“Cap circumvention” is a very hot topic of conversation in the NBA right now. The other Los Angeles team, the Clippers, are having their feet held to the fire regarding a no-show endorsement contract by Kawhi Leonard, the specifics of which are currently being dissected on both sides of the media/team divide to see if any circumvention violation has occurred.
A generous interpretation of Arenas’s comment might say that he was making a point about how, because of the confines of the cap, the NBA’s biggest stars are underpaid relative to their true economic value. LeBron James generates hundreds of millions annually in ticket sales, merchandise, television ratings, sponsorship exposure and other unquantifiable benefits, for both the Lakers and the NBA. Yet due to the NBA’s salary cap, the maximum contract he can sign, while still sizeable, is a fraction of his market value.
However, Arenas’ proposed workaround of essentially just side-stepping the cap is, to give him an even more generous interpretation, ill-timed.
Precisely because of the Leonard situation, awareness of cap circumvention, its prohibitions and its punishments are at their highest for the first time in 25 years, since the Minnesota Timberwolves were fined $3.5 million and lost multiple first-round picks after an investigation revealed they had arranged a secret future contract with Joe Smith to skirt the cap. Against that backdrop, Arenas’ comments land less as his typical fearless banter, and more as a dangerous flirtation with a concept the league treats as radioactive. Not that he likely much minds either way.
Lakers And LeBron Not Extending Together
The discussion of how to pay LeBron more is derived from recent reports that, for whatever reason, the Lakers and LeBron have been unable to come to terms on a contract extension.
At 40 years old and entering his record-setting 23rd NBA season, LeBron continues to perform at a level that defies logic and convention. Yet in being by far the oldest player in the NBA means the Lakers have to operate on multiple timelines. They can only spend so much on a player who will only be around for so long.
By any measure, LeBron – who is set to earn $52,627,153 in NBA player salary this season – is underpaid compared to his impact. For the Lakers, the value he provides in ticket business, jersey sales and sponsorships far exceeds his annual salary. For the NBA, his presence boosts television deals and international reach to an unfathomable degree. Even my mother has heard of LeBron James. In that sense, Arenas’ point – that LeBron is worth more than the system allows – reflects a real imbalance. Yet the suggestion of paying LeBron off the books only causes problems, rather than fixes them.
Gilbert Arenas, Noted CBA Analyst
What Arenas (probably unintentionally) has touched upon is a conversation about whether the NBA’s salary cap rules should evolve.
Some have long argued for a “franchise exception”, a mechanism allowing teams to pay any once-in-a-generation stars outside of the usual confines the cap, funded directly by ownership or even league-wide revenue, akin to the NFL’s current system This would acknowledge the disproportionate value of players like James while keeping financial transactions transparent, and is a logical extension from the “super max” style extensions currently in force.
Such proposals have never gained all that much traction, in part because they threaten the competitive balance that the NBA so badly seeks. Nevertheless, Arenas could be onto something there. Unless, of course, he was wanting to be taken entirely at face value.
Gilbert Arenas is no stranger to hot takes, and these LeBron comments may simply be another example of his – once again, generously-described – flair for provocation. It is not as if he is likely to have studied the Collective Bargaining Agreement’s particulars before reaching this position. Still, the idea of paying anyone via a backdoor strikes a sensitive chord in a league that right now would rather we all stop talking about the possibility even existing. Arenas may have been speaking tongue-in-cheek, as his his wont. The NBA, however, won’t be laughing.