Why the Conversation about Increasing Investment in the Developmental League has to Include Resolution of the CBA’s Minimum Age Restriction

The NBA Developmental League, known as the NBADL or “D-League”, is professional basketball’s minor league. Its inaugural season was 2001-02. It barely got a mention in the two CBA negotiations that followed its creation. Over the past 15 years it has often been neglected in favor of debate over trending topics such as the age minimum restriction of 19 which the NBA insisted on in the 2005 CBA. NBA Commissioner Adam Silver and NBPA Executive Director Michele Roberts have both identified adjusting the age minimum as a potential issue for CBA negotiations this time around. However, neither Silver or Roberts has commented to a significant degree on the interconnectedness of the age minimum and the future of the D-League. Perhaps there are strategic reasons for keeping the two subjects separate in their public discourse; beyond that there is common ground. Recognizing their mutual interests in player development, the League and the Players’ Union should approach these discussions as equal partners; both sides can demonstrate leadership in the way they choose to create opportunities for individual players that define the future structure of professional basketball.

Other professional sports leagues have a longer history of dealing with the issues of minor league systems and age restrictions. For example, both the NHL and MLB, which draw from a pool of international, NCAA and minor league players, have well established “farm systems” in the American Hockey League and Minor League Baseball. Both professional hockey and baseball allow 18 year olds to be drafted.

By contrast, the NFL relies primarily, but not exclusively, on college football to supply its player stream. The NFL has had some sort of age limit in place since 1921. The biggest change came in 1990, when the NFL made college juniors or those who had been out of high school for three years draft eligible. (see NFL Collective Bargaining Agreement Article 6 Section 2(b)). The rationale underlying this rule is that it prevents players who are not fully physically developed from being injured.  Other professional sports that are arguably at least as dangerous as football, such as hockey or boxing, allow young athletes to compete at 18, as do professional golf, tennis and baseball. The counter-argument to the NFL injury concern is that college players risk career ending injuries without receiving a salary.

Generally speaking at 21, the NFL has the highest age minimum of all professional sports leagues in America, but it does not have the only one.  The National Basketball Association requires that players be at least 19 years old and 1 year removed from high school.  While Major League Baseball allows players to be drafted right out of high school it does require players attending 4-year colleges to complete their junior year or be 21 years old, while allowing Junior College players to enter the draft without restriction.

The NFL age restriction was challenged in the highly publicized case of Clarett v. National Football League. In 2003, Ohio State University running back, Maurice Clarett, was suspended for the season after a string of off field incidences.  Clarett was only a sophomore but decided to attempt to enter the NFL Draft.  Clarett filed suit in federal court in the Southern District of New York, claiming that the NFL’s age restriction was a violation of antitrust laws.  Clarett was initially successful forcing the NFL to appeal to the United States Court of Appeals for the Second Circuit. The Second Circuit reversed the district court’s decision and determined that the NFL’s age minimum was enforceable. The Court held that since the provision had been the subject of collective bargaining between a union and employer it was beyond the reach of antitrust legislation. Further, the Court rejected Clarett’s argument that the restriction places a hardship on prospective employees who were not part of the collective bargaining process. See “Why the NFL Age Minimum is Likely Here to Stay, Chuck Haven, February 24, 2013 (http://lawweb2009.law.villanova.edu/sportslaw/)

Based on legal precedents, as long as age restrictions are the product of collective bargaining they will likely continue to be upheld.

NBA Commissioner Adam Silver has gone on-the-record as favoring three related but potentially conflicting goals of (1) raising the NBA age minimum from 19 to 20 years old, (2) expanding the D-League, and (3) working with the NCAA on draft eligibility issues.

Right now expanding the D-League doesn’t cost the owners much at all so there is little reason Commissioner Silver would not be in favor of it. The D-League provides the benefit of being able to test some younger players without having to make any real financial commitment to them. Some D-League teams are owned directly by the parent club. Some are hybrids with the D-League team being owned separately but the affiliated parent team paying for basketball expenses. The salary cap is $173,000 per D-League team compared to the NBA salary cap of $70 million dollars for the 2015-16 season and almost $90 million dollars in 2016-17.

Commissioner Silver has also been vocal about his desire to see the age minimum restriction increased to 20 years of age. Currently, the age minimum for the NBA draft is 19 but the age minimum for the NBADL is only 18. So for those players who forego college they are eligible for the D-League draft right out of high school. It doesn’t make any sense that a player can be drafted by a league with teams affiliated with NBA teams but the same player cannot play in the NBA. One explanation for Silver’s position is that at 19 the owners have the benefit of seeing how a prospect performs for a year in college before making a decision about whether to draft him.

The rationale for the NFL’s minimum age restriction is at least colorable in light of the serious life-threatening injuries, including head injuries, that have been the subject of intense scrutiny of late. The NBA’s minimum age rule and the rationale for it are a little less clear. At the time of the 2005 NBA CBA negotiation, the popularity of professional basketball was declining. As discussed in my post comparing player discipline provisions in the NBA and NFL CBA’s (www.courtsidelawyer.com, Sept.2015) on November 19, 2004 the Detroit Pistons played the Indiana Pacers and the game ended in a melee where players on the Indiana Pacers (notably Ron Artest) rushed into the stands of the arena to fight fans. The NBA handed out some of the harshest penalties in league history.

In further response to this incident, the NBA adopted Article X into the 2005 Collective Bargaining Agreement. That section addressed the issue of high school graduates foregoing college by restricting eligible NBA draftees to those at least nineteen years of age during the calendar year in which the Draft is held [Section 1(b)(i)] and any player who is not an “international player”, as defined in the CBA, must be at least one year removed from the graduation of his high school class [Section 1(b)(ii)]. See “Article X of 2005 NBA CBA”, Kyle Shneider April 21, 2011 (http://prezi.com/user/yjqrdb5hptpu/) It was widely reported at the time that then-Commissioner David Stern insisted on the inclusion of this provision or threatened to walk away from negotiations.

The apparent rationale for Article X was the League’s belief that these incidents hurt the League’s image and were directly related to the players’ lack of maturity and college experience.  However, since the formation of the NBA in 1949 and prior to the 2005 CBA effective date, there were 45 players that skipped college and entered the NBA draft right out of high school; some have failed, but notable success stories include Moses Malone , Kevin Garnett, Kobe Bryant, Tracy McGrady, Amare Stoudemire, LeBron James, and Dwight Howard.

“LeBron James could have gone to Ohio State for one season. He could have brought in millions of dollars in revenue for The Ohio State University (OSU) Athletic Department, the National Collegiate Athletic Association (NCAA), television networks, and OSU sponsors. However, LeBron presumably would not have seen a single penny of the profits he produced. After one year as a Buckeye, having grown from an immature eighteen-year-old child to a nineteen-year-old man, equipped with one year of college education under his belt, he would have been allowed to enter the National Basketball Association (NBA) Draft. This, of course, was not the fate of LeBron James. Instead, in 2003, he went straight from high school to the NBA, where he signed a lucrative contract with the Cleveland Cavaliers at the youthful age of eighteen. In 2005, the NBA began barring high school players from participating in its draft. Had LeBron been born just two years later, he likely would have spent his first year after high school in a dorm room in Columbus rather than a mansion in Cleveland”. “CAN I SEE SOME ID?: AN ANTITRUST ANALYSIS OF NBA AND NFL DRAFT ELIGIBILITY RULES”, Steve E. Cavezza, 2009 University of Denver Sports and Entertainment Law Journal (https://www.law.du.edu/documents/sports-and-entertainment-law-journal/issues/09/Article2.pdf)

With very few alternatives available other than attending college, Article X has essentially forced many players to continue their education for at least a year. Many of the players who choose to go to college view it as an unnecessary step needed to gain access into the NBA. Some are not academically inclined. Poor classroom performance may discourage or disqualify them from ever obtaining a degree. Some may engage in conduct that hurts their university’s basketball program or jeopardizes its funding or future with the NCAA (for example, by committing recruiting violations or engaging in serious criminal conduct). Some may want to maximize the economic opportunities presented by the NBA draft at a young age. Some may not want to risk injury before they can start their pro careers. A “one-and-done” (one year in college until the player turns 19 and then entry into the NBA draft) player may scare away other valuable prospects at the same position that intend to spend more than one year in school.

By advocating raising the age minimum for the NBA draft, the Commissioner is trying to address “one and done” by forcing players to spend two years in college before they are eligible to play in the NBA. However, there is an inherent bias in Commissioner Silver’s paternalistic plan to raise the age minimum in favor of forcing players to attend college. A belief that the players are an interchangeable product that will all benefit from the seasoning college offers; that the League will be strengthened by a more mature and wholesome family image (one need only recall how the NBA media fell over itself during the 2015 playoffs to catch the ever-cuter chronicles of Riley Curry); not to mention the financial benefit to the owners by starting older players at base level compensation and, presumably, paying them for shorter periods of time (by at least two years).

Since the adoption of Article X in the 2005 CBA the NBA has enacted other regulations governing player conduct. These efforts to improve the League’s image have helped to increase the popularity of professional basketball. For example, the League imposed a Dress Code at the start of the 2005-06 season. The incorporation of tighter technical foul rules have caused the players to cut down on demonstrative, offensive and immature behavior on the court helping to clean-up the NBA’s image. [i]

The relationship between the D-League and the age minimum was summed up in an article penned by famous NBA player agent Arn Tellem. Tellem, who recently took a job as Vice Chairman of Palace Sports and Entertainment which owns the Detroit Pistons, wrote “D-League Deconstruction: The Necessary Plan to Fix the NBA’s Farm System” (http://grantland.com/the-triangle/d-league-deconstruction-the-necessary-plan-to-fix-the-nbas-farm-system/) In the March 2015 article, Tellem identified the problem and interrelationship of D-League neglect and the League age minimum as follows:

“The D-League rebranded itself and made its first major expansion in 2005, the same year the NBA and the players’ union agreed upon an age minimum of 19 years and one year removed from high school graduation. Any player who skips college is eligible to sign wih a D-League team. But the league’s salaries range from $13,000 to $25,500 – barely a liveable wage – which partly explains why no prospect would ever voluntarily choose the D-League over college.”

Commissioner Silver has stated one of his goals is to strengthen college basketball. He has been quoted as saying that the NBA bears some responsibility for the continued health of college basketball.[ii] By raising the age minimum he presumes players will stay in college. But it could also mean playing in the D-League or Europe for 2 years. He presumes by staying in college both the player and the college team will benefit. As discussed above, forcing players to stay in college along with the pressures of meeting eligibility requirements might actually hurt college basketball as a whole.[iii] The other option is to send these presumably “too immature for prime time” players across the ocean to play in foreign countries without family or other support. Or they can stay at home and play for the D-League[iv] at unreasonably low wages, assuming players could afford to do so and still be around for the NBA draft when they turn 20.

As one author has interpreted both Commissioner Silver’s remarks and those of his predecessor David Stern

“The true motivation behind the age rule is likely the use of the NCAA as a free farm system. The NBA does not have a minor league system like Major League Baseball because the NCAA acts as the NBA’s minor league. Best of all for the NBA, this farm system comes at no cost to the league. The NBA tries to hide this under the guise of “enhancing college basketball.”The NFL made a similar argument in Clarett when it argued that, by excluding the most talented college players from the NFL, it was sustaining “the NCAA’s ability to compete in the entertainment market.” This justification did not succeed because it was simply sacrificing competition in one market, the NFL, for the sake of increased competition in another market, the NCAA. The current NBA age restriction merely allows the league’s teams to watch a player and see how he competes at the college level and develops over his freshman season. This is to the detriment of the player who is not eligible to make a living and is essentially forced to work for nothing, all while risking injury and a drop in draft stock”. “CAN I SEE SOME ID?: AN ANTITRUST ANALYSIS OF NBA AND NFL DRAFT ELIGIBILITY RULES”, Steve E. Cavezza, 2009 University of Denver Sports and Entertainment Law Journal (https://www.law.du.edu/documents/sports-and-entertainment-law-journal/issues/09/Article2.pdf)

Michele Roberts, Executive Director of the NBPA, and the union’s chief CBA negotiator have both spoken out against raising the age minimum. In the next round of CBA negotiations they may advocate in favor of lowering the age minimum to 18. “It offends me that there should be some artificial limits set on seomeone’s ability to make a living. It doesn’t make sense to me that you’re suddenly eligible and ready to make money when you’re 20, but not when you’re 19, not when you’re 18. In my opinion—and we have yet to get official word from the players association—but I suspect that the association will agree that this is not going to be one that they will agree to easily.” See “The Woman who will Change Sports”, Pablo Torre, 11/16/14 (http://espn.go.com/nba/story/_/id/11874609/woman-change-sports)

Beyond the age minimum rule the parties to the CBA have to define the purpose of the D-League. If the age restriction continues and prevents players from being drafted into the NBA until age 19 or 20, but they can be drafted by the NBADL at age 18, in theory this could present a viable option for players who want to forego college. Except that the maximum D-League salary is $25,500 (plus room and food allowance during the season) so it is in effect financially preclusive.

The D-League began as a place where NBA caliber players who were too green to see regular play could grow and develop. Many would say it has evolved into a league of last resort for aspiring NBA players. If it is truly a system to develop future NBA players then the NBA would presumably want to exercise more control over the players they are investing in. Right now the NBA teams don’t make a big investment in the D-League but that situation is changing.

NBADL President Malcolm Turner and some D-League team owners have predicted D-League expansion in 2016-17. Charlotte and New Jersey are two teams who are actively searching for a D-League team. The League’s new television deal with ESPN and Turner Broadcasting will accelerate growth. Previously, direct streaming on youtube or special tv coverage of some games was the primary way of watching D-League teams. Some commentators have predicted that the 11 NBA teams without an affiliated D-League squad would create demand for new D-League teams so that in the next 7-8 years there would be a one-to-one affiliation between each NBA team and its D-League counterpart.[v]

Once investment in the D-League increases, the teams will want control over how players are developed. The NBA does not have control over college players, or the systems they play in, or their workout regimens, on-court playing habits, diet, etc. Playing against sub-par competition for too long may also hurt a prospect’s chances. The NBA likewise does not control development of a player who is shipped off to Europe. “Over the last two years, 40 percent of the NBA’s second round draft picks never actually signed NBA rookie contracts. Thirty-eight percent of those 60 players went overseas; only 8 percent wound up in the D-League. [vi]

In an excellent article recently published by NBA expert Chris Reichert, he offers a statistical study to show the correlation between a team’s success and its use of player assignments to its D-League affiliate. (See “Does D-League usage translate into more wins for NBA teams”, Reichert, July 28, 2015, http://upsidemotor.com/2015/07/28/d-league-assignments-call-ups-translate-success-nba/) Reichert’s findings are significant in two areas: First, for teams that rarely use the D-League there is no provable relation to on-court success; however, for teams that make frequent assignments, there is a real correlation between assignments and wins.[vii] Second, teams that frequently use their D-League affiliate are more successful on average than those teams that do not use the D-League. Based on these numbers, Reichert forecasts that there will be an accelerated trend toward evolving the D-League into a true minor league system where each parent club has a farm team.

If its purpose is truly developmental, keep the players home and pay them on a more fair scale, something more commensurate with what they could expect in the NBA. NBA team owners might not like the increased costs associated with higher salaries but the return on investment would, in theory, make it worthwhile. Make up for higher salaries with better basketball product, higher ticket sales and joint marketing efforts. Fans could see future NBA stars at the beginning of their careers, or those already established stars who need rehab time. Either way there is a potential to expand the pro basketball market. With the farm teams adopting the names of the parent team, there is a merchandising opportunity; by re-locating minor league teams closer to the parent the geographic market drives interest in both the parent and farm club and makes travel between the two easier for fans and players. Strengthening the D-League could help develop players, create or increase basketball markets in smaller cities where the D-League clubs play and ultimately strengthen interest in the NBA.

In his article, Tellem advocates for what he calls a “reorganization” of the D-League ; others might say all that is needed is a re-prioritization and re-commitment to the D-League. He suggests six main changes to the current system: (1) roll back the age minimum to 18 with prospects being “asked to sign a ‘memorandum of understanding’ as a condition for consideration, whereby they would agree to forgo college if drafted. If they declined to sign, they would effectively be choosing college over pro ball and could not be drafted for two more years. If they declare but never get drafted, they should be allowed to retain their elgibility and attend school.”; (2) All early entry players, both American and foreign prospects, should have the same declaration date instead of giving foreign players two extra months as is the case under the current system; (3) All first round picks should get rookie scale regardless of whether they play for the parent or farm team. The parent team should get 1 year of cap relief if they assign the player to the farm team (rather than having the player sign a D-League contract with the current lower pay scale); (4) Currently NBA teams are only required to offer minimum non-guaranteed contracts. Teams can decline to sign second round picks but still retain their draft rights so they are not guaranteed a salary. There should be a requirement that the parent team offer second round picks a guaranteed split contract ($253,500) or forfeit the player’s draft rights. Teams could send a player to the minors without the salary counting against the cap for two years. The theory being teams would pick the best available players in round 2 and have a real incentive to develop them in the U.S. ; (5) For players who have been released or for free agents the minimum salary in the D-League should be raised to a more respectable $50,000. (6) cap management should be treated separately from player development. The salary cap for D-League teams should be increased to $2 million (not counting salary for first rounders) but not count against the cap so that teams are more likely to take a chance on player development.

These seem like common sense changes. Perhaps this “reorganization” scheme will seem less radical now that Tellem is on the management side of things. Nevertheless, the NBA and NBPA should both acknowledge the importance of making the D-League the subject of negotiation in the next round of CBA talks. This is an issue that potentially benefits both the owners and players. Its not just an expansion issue, or an age restriction issue or a question of whether to give priority to the NCAA as a recruitment vehicle over the D-League; rather, it is an issue of how to structurally support the NBA and give players the best opportunity to succeed in the long run.

ENDNOTES

  [i] “According to a 2005 study, of the eighty-four total NBA players who had ever been arrested, forty-eight had gone to college for four years, while only four of those arrests were of players who had not gone to college. In other words, over forty- one percent of NBA players went to college for four years, and over fifty-seven percent of those players were arrested.”See Michael McCann, NBA Players That Get In Trouble With the Law: Do Age and Education Level Matter?, SPORTS LAW BLOG (July, 20, 2005), http://sports-law.blogspot.com/2005/07/nba-players-that-get- in-trouble-with_20.html.

[ii] See “Ball Don’t Lie”, Dan Devine, 3/1/14

[iii] Associated Press, Knight rips NBA’s minimum-age rule, NBC SPORTS (Feb. 19, 2007), http://nbcsports. msnbc.com /id/17231772/. Indiana Coach Bob Knight opines that the minimum age rule is the “worst thing that’s ever happened to college basketball” in that a player can remain eligible for a full year of basketball without attending a single class in his second semester.

[iv] D-League salaries are in 3 tiers. $25,500, $19,000 and $13,000. Team salary cap is $173,000. Although they get room and board paid for by the team as well as a $40/day travel per diem.

[v] See “Where will NBA D-League expansion Head Next?”, Adam Johnson 5/4/2015 http://dleaguedigest.com/2015/05/04/where-will-nba-d-league-expansion-head-next/ Cf. The American Hockey League (AHL) has been in existence in one form or another since the 1930’s. It is a 30-team professional hockey league based in the United States and Canada that serves as the primary developmental league for the NHL. Since the 2010–11 season, every team in the AHL has an affiliation agreement with an NHL team; before then, one or two NHL teams would not have an AHL affiliate and so assigned players to AHL teams affiliated with other NHL teams. In 2015 there was a relocation of several AHL teams so they were closer to their NHL affiliate to facilitate bringing players up from the minor leagues. www.wikipedia.com

[vi] Since 2005, only four players have spent time in the D-League before their draft class became eligible: Mike Taylor, PJ Hairston, Latavious Williams, and Glenn Rice Jr – all of whom were either stripped of their NCAA eligibility or kicked off their college teams.” [tellem supra] In 2008, Mike Taylor of the Idaho Stampede became the first player to be drafted by an NBA team (Portland Trailblazers). Taylor had attended junior college and one year at Iowa State before entering the DLeague. [check 6/26/08 nbadl.com]

[vii] 2014-15 saw a record number of assignments with 195 assignments made in a single season. Each team can have 3 NBA players assigned at one time under the current rules.

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