More green, or greener pastures?
When it comes to signing free agents, NBA teams receive homecourt advantage. It literally exists in the fine print, codified in a rule commonly referred to as "Bird rights." After three years' tenure, Bird rights allow teams to disregard the cap and sign their own free agents to any salary up to the maximum. They can also give longer contracts and larger raises than other teams can offer.
If other teams are chasing another team's free agent, they have their work cut out for them. They first have to create the cap room, which can take years of careful planning; just ask Knicks president Donnie Walsh. Then they get to swoop in with a smaller offer and hope the player really likes their weather.
Bird rights exist because it is universally recognized that continuity is good. If the NBA was a league of superstar journeymen, fans' allegiances might shift whenever players changed addresses (which would be often), and team marketing campaigns would fall flat. It's hard for fans to be loyal to teams when they don't recognize the players leading the team. So Bird rights exist to give the player a financial incentive to stay put.
Bird rights will be front and center in this summer's free-agent-palooza. All eyes will be on LeBron James in July as he hums "Should I Stay or Should I Go" to himself, perusing identical offers from a third of the league -- and weighing them against a larger offer to stay home.
Six years with Cleveland, or five from anywhere else? Should he settle for 8 percent raises with another team when he can get 10.5 percent raises from the Cavs? The dollars add up quickly.
There's more security in that extra year. What if he's injured before he hits free agency again? What if the next collective bargaining agreement is really bad for the players? Should he lock in that extra year while he can, under the purview of the current agreement?
Decisions, decisions but Cleveland definitely has the edge here.
But is it a lock? Not necessarily -- there's a flip side to this coin.
The advantage to Bird rights can be overstated. You'll commonly see comparisons like "$125 million with Cleveland, or $96 million anywhere else." That's a no-brainer. But it's also misleading; it doesn't compare apples to apples.
For instance, if James signs a five-year deal to leave the Cavs, in all likelihood he'll eventually sign for that sixth season (and beyond) somewhere down the line. So let's compare deals of equal length -- over five years, it's $100 million with Cleveland versus $96 million anywhere else.
Now we're in the same ballpark, just 4 percent less. Close enough that other factors start to make a big difference, such as the tax situation. If he signs in Florida, for instance, he'll be playing more games in a state with no income tax. Is that enough to overcome the smaller raises? Time to call H&R Block.
James is among a new breed of superstar that has taken a savvier approach to negotiating contracts. He doesn't look at it in terms of "How much can I lock in right now?" He sees it as a balance between current earnings, career earnings and flexibility. If he's careful, he might parlay that into two or three more maximum contracts down the line before he hangs up his sneakers for good. And by signing shorter deals, he maintains the ability to re-enter the free-agent market sooner. So even though the Cavs can offer a longer deal, is that what LeBron wants?
Bottom line: It's no lock that he stays. Bird rights give the Cavs an advantage, but not a compelling one. The advantage isn't as great as commonly believed. His ultimate choice probably will be based on other factors.
In a league of jaded superstars, LeBron James' decision might be based on the noblest of reasons: the number of trophies -- not the number of dollars.