This is the ninth in a series of examinations of basketball-related legends and whether they are true or false.
BASKETBALL LEGEND: The “Larry Bird exception” to the NBA salary cap got its name from the Celtics being the first team to go over the salary cap to re-sign one of their players, namely Larry Bird.
In 1983, the National Basketball Association (NBA) gained a great deal of attention due to their Collective Bargaining Agreement (CBA), which instituted a salary cap for player salaries. Neither the National Football League, National Hockey League or Major League Baseball had salary caps at the time.
The salary cap was set to kick in for the 1984-85 season. However, while the original intention was to create a so-called “hard cap” (where there was a set limit to how much teams could spend and they could not go over this limit), the NBA quickly adopted a “soft cap” instead. By a “soft cap,” I mean that teams could exceed the cap on how much they could spend on salaries (which was $3.6 million to start with, but otherwise 53% of league revenue) but only under certain circumstances.
One of the most famous examples is that teams were allowed to re-sign their own player, even if in doing so, they exceeded $3.6 million. They could do so by matching offer sheets given to the free agent player by another team or simply giving the player a new contract. This was to allow teams not to be forced to let their players leave simply to stay under the cap. The NBA figured that it would be better for the popular teams to retain their stars if they so chose.
This rule exists to this day, only further modifications have made it so that not only is it possible for teams to re-sign their own players, but it is actually in the financial best interests of players to not leave their original team, as they are limited to five-year contracts if they sign with other teams but can sign six-year contracts with their own team (and their own team can give their players larger yearly increases in salary than other teams can).
While technically called “Qualifying veteran free agents,” this exception has long since been referred to as the “Larry Bird Exception,” as it supposedly was developed so that Larry Bird, a free agent after the 1983-84 season, could be re-signed by his team, the Boston Celtics.
That might very well have been the intent of the rule (to specifically make sure that Larry Bird did not have to leave the Boston Celtics). However, the rule was not actually used on Bird! At least not back then!
Going into the 1983 offseason (the months preceding the 1983-84 season), the salary cap had not yet kicked in – except for the five teams who had already exceeded the $3.6 million cap the previous season, namely the Los Angeles Lakers, the New York Knicks, the New Jersey Nets, the Philadelphis 76ers and the Seattle Supersonics. These teams were locked in at whatever they spent the previous season (which was pretty silly as the Lakers were over $5 million and the Nets were just barely over $3.6 million). Every other team in the NBA had free reign to spend at will.
In fact, in a bizarre application of the rules, it actually benefited teams to spend a lot of money in the 1983 offseason, because whatever they spent in salary would therefore become their salary cap for the 1984-95 season the same way the other five teams were locked in at what they spent.
As you might imagine, this put those five locked-in teams at a bit of a disadvantage on the open market, and the New York Knicks, in particular, were put through the wringer by the Boston Celtics. The Knicks were interested in signing Boston Celtic free agent Kevin McHale. The Celtics, knowing of the Knicks’ interest, went out and signed three of the Knicks’ free agents, including popular guard Rory Sparrow, to offer sheets for significant bumps in salary. The Knicks had planned on first signing McHale and then re-signing their own free agents (using the exception to go over the cap). The Celtics’ maneuver forced the Knicks to re-sign their own free agents first, leaving them not enough room under the cap to sign McHale.
The Celtics then re-signed McHale for $4 million for four years (and later in the regular season renegotiated Robert Parish’s salary, as Parish was irked that he was now making less than McHale).
It was during this offseason that the Celtics signed Larry Bird to a then-historic contract – seven years and $12.6 million, thereby preventing Bird from becoming a free agent the next year. The contract was signed on September 28th, 1983. At the time, there was no salary cap, so the Celtics did not require an exception to re-sign Bird – they could sign him outright.
The Celtics’ deals with Bird and McHale, added to Parish’s new contract and contracts with other current players such as Dennis Johnson, Cedric Maxwell and Danny Ainge, put the Celtics well over $5 million in salary to just those six players, all before the $3.6 million salary cap ever went into effect!
After the 1983-84 season (which ended with the Celtics winning the NBA Championship), with their salary cap now locked in, the Celtics re-signed one of their own free agents, Cedric Maxwell, to a lucrative contract extension. Maxwell would be the first Celtic to be signed using the so-called “Bird exception.”
So while I will certainly allow that there is a very good chance that the “Bird exception” was, in fact, designed to allow the Celtics to re-sign Larry Bird, it was not actually used to re-sign Larry Bird.
Amusingly enough, a similar situation occurred years later when the NBA signed a new CBA in 2005. This new CBA included a one-time rule allowing teams to waive a player and have that player’s salary no longer charged to their luxury tax (in the NBA, every dollar spent over a certain “luxury tax threshold” is charged to the team twice – so if the threshold is $68 million and the team spends $70 million, the team has to pay an additional $2 million in luxury tax payments for a total of $72 million – for teams well over the threshold, it certainly adds up).
This new one-time rule was called the “Allan Houston Rule,” because of the New York Knicks guard who was owed $40 million by the team over the next two years, which would mean that the Knicks would have to kick in another $40 million in luxury taxes (since they were well over the luxury tax threshold). However, the Knicks ended up not using the opportunity to waive Houston, as they correctly predicted he would retire, and therefore insurance would pay for his contract. They instead waived forward Jerome Williams.
I think I see a pattern!
Do note, though, that in 1988, the Celtics finally did end up using the “Bird Exception” on Bird himself, as they signed him to another contract extension.
BASKETBALL LEGEND: While in the NBA, Dave Bing went to work for the same bank that denied him a mortgage for a house.
The NBA in the 1960s was a lot different than it is today, with one of the most important differences coming in the salary department. Players did not make nearly as much money then as they do now (even in context and with inflation taken into account).
However, even for the NBA of the 1960s, Dave Bing had a unique work ethic.
A star guard for the Detroit Pistons (he won the NBA Rookie of the Year in 1967), the future Basketball Hall of Famer attempted to get a mortgage for a home in 1968.
They turned him down, primarily because he had no credit history.
Bing was interested in banking, though, so the next offseason he took a job at the very same bank, the National Bank of Detroit, that turned him down for a loan the previous year!
He worked at the bank for the next seven offseasons, working in a variety of jobs, including bank teller!
In 1979, upon retiring from the NBA (and with a little more change in his pocket), Bing took a job working at Paragon Steel.
He left after a year to form his OWN steel company, Bing Steel. The manufacturing business quickly went under, but Bing was able to turn it into a middle man company between the auto industry and OTHER steel manufacturers. Soon the company was making millions! The company would eventually become known as the Bing Group and expand past just metal deals.
In 2008, Bing announced that he would run for Mayor of Detroit, to take the place of the disgraced and ousted Mayor Kwame Kilpatrick (one of Bing’s campaign promises is that he will work only $1). In May of 2009, Bing won the special election to finish out Kilpatrick’s term. In November of 2009, he won election to his own term in office.
As the 70th Mayor of Detroit, Bing faces an uphill battle with a city that has tons of problems, but for a man as dedicated as Bing is, I have faith that he will be able to pull it off.
BASKETBALL LEGEND: An NBA player tried to get a triple double though a somewhat…odd fashion.
On March 16, 2003, the Cleveland Cavaliers were hosting the Utah Jazz. The Cavs were in the midst of a pretty terrible season (which paid off in the long run as they had the best odds at getting the #1 pick in the 2004 NBA Lottery, and once they did get the pick, they took Lebron James who has done pretty well for them so far, I’d say) but in this game they were creaming the Jazz, up about thirty points with only a few seconds left.
Cavs player Ricky Davis was having the game of his career, 26 points, 13 assists and 9 rebounds. Davis, though, wanted the “triple double,” which is what you call it when a basketball player reaches double figures in three statistical categories.
With the Cavs inbounding near their own basket with six seconds left, Davis got the inbounds and went to his OWN basket and took a shot, with the hope of gaining the rebound from the miss and thereby getting the triple double.
As you might imagine, the Jazz did not like this, and player DeShawn Stevenson vociferously shoved Davis, leading to two more free throws for Davis, as he finished with 28 points.
After the game, Jazz coach Jerry Sloan said, “Let him try to get it when the game means something. I was proud of DeShawn and I would have knocked him down harder. They can put me in jail for saying that, but that’s the way it is.”
In the end, though, the NBA ruled that the rebound did not count, so Davis made a fool of himself for no real reason (he was also fined by the Cavs for unsportsmanlike conduct).
Okay, that’s it for this week!
Feel free (heck, I implore you!) to write in with your suggestions for future installments! My e-mail address is email@example.com