Since the NBA adopted a rookie pay scale in 1995, the salaries of first-round picks have hinged on the order of their selection. Teams can offer salaries up to 120 percent of the player's slotted figure. "The process is relatively simple, and teams routinely offer the 20 percent maximum," reported The New York Times last week. "Because of this practice, the NBA has few rookie holdouts and the team signs the player for less than he would have earned on an open market."
In the first 14 years of this arrangement, 420 players were drafted in the first-round. Of them, not one signed on the condition that he meet a performance-based bonus to earn the full 120 percent. But last year Ty Lawson, the point guard on North Carolina's national championship team, agreed to performance bonuses with the Denver Nuggets and became the first high-profile rookie to take less than the max. Lawson was the 18th pick of the 2009 draft.
This year James Anderson, a shooting guard from Oklahoma State, was picked No. 20 by the San Antonio Spurs. He, too, accepted performance bonuses.
These concessions set a terrible precedent. Shortly after Lawson signed, I was asked what, as a player agent, I might have done differently. I said: "You don't really think I would have accepted less than 120 percent, do you?"
Less than a year later, I found myself in that very position. In June, the Memphis Grizzlies made my client, Xavier Henry, the 12th pick of the draft. But the team wasn't willing to guarantee the maximum, which this season amounted to about approximately two million.
Memphis insisted on tying the extra 20 percent to incentive-laced bonuses, which included making the rookie/sophomore challenge at All-Star weekend, being named to one of the all-rookie teams and averaging 15 minutes in at least 70 games.
The demand was patently outrageous. After all, none of the team's previous first-rounders had been asked to meet those requirements. I told the Grizzlies that basic fairness and equality are fundamental aspects of every positive organization-player relationship, and that those concepts were totally absent from their proposal.
I also told them that Xavier had no problem with bonuses that were within his control, such as participating in conditioning programs or playing in the summer league. These are customarily used to reach the 120 percent. At the same time, I pointed out that no other team in this draft had asked a lottery pick to accept a performance incentive.
Xavier, I said, had done nothing to merit disparate treatment, and shouldn't be singled out. All he wanted was to be treated in a manner commensurate with his peers and the value the Grizzlies bequeathed him as the No. 12 pick. No better, no worse.
To me and to Xavier, this was a matter of principle, and principle is something I never compromise. I assured the Grizzlies that I wouldn't yield to pressure. I also informed them that to take any pressure off Xavier, I would pay his salary myself if a deal couldn't be reached.
Fortunately, after a three-month standoff, Michael Heisley, the Grizzlies' majority owner, told me he would look into the propriety of the performance bonus. He did and, to his great credit, he dropped the demand.
Which is why Xavier is signing a contract today.
The impasse exposed one of the league's most glaring anachronisms. As spelled out in the NBA's collective bargaining agreement, players who don't sign with the teams that picked them can sit out the season and reenter the next year's draft. This longstanding rule allows players to negotiate more acceptable terms.
Unfortunately, in the case of draftees who aren't college seniors or have exhausted their eligibility, the provision is subsumed by another little known one that applies to "Early Entry" draftees. Those players are barred from reentering the draft for the duration of their remaining eligibility - up to three years. Which means that Xavier, who declared for the draft after his freshman season at Kansas, would have been indentured to the Grizzlies until the summer of 2013.
The rule has been on the books for at least 25 years. Back then, an underclassman could declare for the draft without having to lose his eligibility. If he didn't sign within a year, the team that drafted him would lose the pick. The rule was designed to ensure that the team retained its signing rights.
Times have changed, the Collective Bargaining Agreement has been modified and the provision is no longer necessary. If anything, it puts underclassmen at a serious disadvantage. This inequitable rule has outlived its usefulness and should be struck from the next CBA.