DeMarcus Cousins and Competitive Balance: Should the NBA Act?

Competitive balance is one of the most important factors in the health of the NBA. With the Warriors stockpiling All-Stars like DeMarcus Cousins, is that essential ingredient in jeopardy?

With the Golden State Warriors signing DeMarcus Cousins to a one-year, $5.3 million contract, some fear that the conclusion of the ‘18–‘19 NBA season has already been scripted: the Warriors, with All-Star players at all five starting positions and with a deep bench, are poised to easily repeat as NBA champs. That’s not to say they’ll win every game. The Houston Rockets, Boston Celtics, Los Angeles Lakers and Philadelphia 76ers will all put up a fight. They may even defeat the Warriors in a game or two during the 2019 playoffs. None, though, seems likely to outlast the Warriors over a seven-game series. And should the Warriors secure another title, they will have won four of the last five NBA finals.

A logical case can be made that competitive balance—an essential ingredient for the long-term health of the NBA—is compromised by the creation of what seems more like an All-Star team than an NBA franchise. Kevin Durant, Stephen Curry, Draymond Green, Klay Thompson and, when he returns from injury, Cousins will constitute one of the most talented starting lineups in the NBA’s 72-year history. In fact, upon learning of the Cousins signing, one unnamed player went so far as to joke to HoopsHype writer Alex Kennedy that, “They might as well cancel the NBA season. Can we just get our paychecks for the year now?”

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Expressing a similar sentiment, Los Angeles Clippers guard Lou Williams suggested the NBA change its playoff format so that the top 16 teams overall, and not the top eight teams from each conference, earn playoff bids.

It goes without saying, but sometimes even the best-laid plans fail. The Warriors could encounter injuries to multiple star players—look at the Celtics last season in losing Kyrie Irving and Gordon Hayward. Cousins, for his part, must also recover from a torn left Achilles and then fit into Steve Kerr’s offense.  

Still, the odds heavily favor the Warriors. So if the Warriors effectively become the NBA’s Harlem Globetrotters while the 29 other teams morph into various incarcerations of the Washington Generals, should the NBA take action to shore up rival teams so that fans don’t tune out?

The answer is no, and there are several reasons why.

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• First, Article XIV of the collective bargaining agreement between the NBA and the National Basketball Players’ Association prevents the NBA from conspiring with any team to direct players to that team. Article XIV is the league’s anti-collusion provision. It forbids agreements between multiple teams, or between the NBA and at least one team, to negotiate or not negotiate with a player. Article XIV also prohibits the NBA’s league office from knowingly communicating or disclosing to any team that another team is negotiating with a free agent. Stated differently, the league office can’t act “in cahoots” with any one team when it comes to player movement.

• Second, the NBA’s constitution makes clear that the league and the commissioner are expected to be fair and impartial in regards to team matters. Article 24 of the constitution stresses that the commissioner is “charged with protecting the integrity of the game of professional basketball and preserving public confidence in the League.” If the public believed that Silver was orchestrating player transactions behind the scenes at the same time he assured the public that teams have complete autonomy in making trades and signing players within the parameters of the CBA, public confidence in the league would erode. Broadcast and corporate sponsors would also raise concerns.

Silver surely recalls the criticisms his predecessor, David Stern, faced when the NBA purchased the New Orleans Hornets in 2010 and ran the franchise until it was sold to Tom Benson (who renamed the team the Pelicans). While acting as both NBA commissioner and de facto Hornets general manager, Stern nixed a proposed trade involving Chris Paul and the Lakers. Stern was criticized for having a conflict of interest: he was expected to look out for the best interests of the NBA and the best interests of one team at a time when those two sets of best interests were not entirely congruent.

Also consider recent league history on the pursuit of fair play. The NBA has periodically battled questions of integrity—including in regards to concerns about NBA teams “tanking” for better draft position and resting healthy players prior to the playoffs, as well as in regards to one NBA referee (Tim Donaghy) calling fouls to impact point spreads. The league has aggressively undertaken steps to combat activities that are both anti-competitive and inconsistent with how the NBA markets games to consumers. To that end, the NBA has incorporated instant replay and fined owners and teams for advocating tanking and sitting star players. These steps were all designed to promote fair play and real competition. The NBA would not want to undermine those efforts by sparking new questions about integrity.

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• Third, the NBA is a joint venture of independently owned teams that all want to “win.” Winning, of course, does not always mean winning now: certain teams want to win now whereas others prefer “the process” of losing in the short-term in order to win more later. Either way, no team would support a commissioner who favors the competitive interests of one team and tries to manipulate player transactions in order to benefit that team. Along those lines, the NBA is not the WWE, where fights are scripted. Nor is it like either the XFL, which is a single entity sports league meaning the XFL owns all of the XFL teams and employs all of the XFL players, or Major League Soccer, which for years was a single entity sports league but has more recently resembled a traditional sports league. If owners of any league felt that their commissioner was not an honest broker, they would explore steps to remove him or her, or at least limit that person’s authority.

• Fourth, and perhaps most crucially, the Warriors’ historic roster for the ’18–’19 NBA season is not the product of nefarious doings or business tricks. It is the result of labor policies that were created through legal and transparent processes, shrewd management by the Warriors’ front office and the preferences of star players who value the chance to win above all else.

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Along those lines, NBA owners and players all agreed to play by numerous rules that impact earnings and that are expressed in the CBA. Those rules (as best explained by CBA expert Larry Coon) feature various limitations on how much money teams can spend on players’ salaries. The CBA also contains important exceptions to those limitations. For example, Article VII of the CBA features the “veteran free agent exception,” more popularly known as the “Larry Bird exception.” It allows teams to exceed the salary cap in order to re-sign players who meet certain criteria. Owners and players have also discussed changes to the CBA to account for unexpectedly high and erratic influxes of television revenue. A few years ago, for instance, the NBA proposed to players that annual increases in both the salary cap and salary floor occur in a “smooth” rather than uneven slope to account for dramatic surges in TV revenue (the players’ association rejected that proposal).

Rules impacting players’ NBA income also don’t require players to maximize their NBA income. Take LeBron James. By signing with the Lakers, James will be subject to California’s 13.3% income tax rate, the highest rate among the 50 states (California’s high rate is even more impactful under the new federal tax law, the Tax Cuts and Jobs Act, which caps at $10,000 the amount of money taxpayers who itemize their deductions can deduct from their federal income taxes on account of paying state and local taxes). Even if James does not offeset money lost to California’s treasury through greater endorsement income, his main goal in signing with the Lakers was probably not to maximize his NBA earnings. He obviously wants to win with the Lakers. Also, it seems James and his family are interested in relocating their lives to Los Angeles, where they own two mansions. Perhaps James also has an eye on post-career opportunities in the entertainment capital of the world. Regardless, the larger point is that it’s not always about money.

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Likewise, with Cousins, he may have been able to sign a far more lucrative contract had he waited out free agency a bit. To that point, Marc Stein of The New York Timeslearned that Cousins recently turned down a two-year, $40 million contract extension offer from the Pelicans. The offer, according to Stein, was made after Cousins suffered his Achilles injury but before the season ended. Although reports indicate that the Warriors were the only team that had offered Cousins a free-agent deal, he might have received longer and more financially remunerative offers in the days and weeks ahead. While Cousins is returning from a serious injury, he remains one of the league’s most dominant offensive players. Still only 27 years old, the 6’11" ex-Kentucky star averaged 25 points and 13 rebounds per game in the ’17–’18 season. Cousins signed with the Warriors presumably not because it would pay him the most amount of money (especially given California’s high taxes and cost-of-living). It was because he wants to win a title. It’s hard to fault a player for prioritizing winning over money.

Lastly, it’s not clear the NBA will lose any fans should the Warriors remain almost unbeatable. NBA television ratings were up last season at a time when the Warriors excelled. And in both the U.S. and across the globe the game appears as popular as ever.

Even if fans do tune out because of a perception that the ’18–’19 season will merely be a competition for the title of runner-up, the NBA and the NBPA will realize that and take action. They can bargain for economic adjustments to the CBA, either through amendments to the existing CBA or as part of a new CBA (the current CBA runs through the 2020–21 season). Such adjustments, such as those that produce a higher but harder salary cap, could make it more difficult for NBA general managers to assemble “super teams.” This is how labor negotiations ideally work: management and labor identify and adopt mutually beneficial solutions.

Michael McCann is SI’s legal analyst. He is also Associate Dean of the University of New Hampshire School of Law and editor and co-author of The Oxford Handbook of American Sports Law and Court Justice: The Inside Story of My Battle Against the NCAA.