To Keep Kevin Durant from Joining the Golden State Warriors, Eliminate NBA Max Salaries

Kevin Durant is a former NBA MVP. He has led the league in scoring four times. He has produced more than 100 wins in his nine-year career. And he will be the best free agent available this summer, when multiple teams—flush with salary cap space thanks to a dramatic increase in NBA revenues—are expected to vie for his services.

So, where will he end up?

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Durant could stay in Oklahoma City, ink a one-year deal and re-enter free agency in the summer of 2017, a move that likely would net him an even bigger long-term payday. He could sign—out of a misguided sense of mercy, I suppose—with his hometown sad-sack Washington Wizards. He could land with the Miami Heat, or the Houston Rockets, or another unexpected suitor. Like San Antonio!

Currently, the hottest rumor is that Durant, now in his prime and hungry for his first title, is considering joining the Golden State Warriors. That’s right: the same championship team on pace to win more regular season games than any squad in NBA history might end up adding Kevin Freakin’ Durant.

If you listen to commissioner Adam Silver, though, this isn’t how the league’s economic structure is supposed to work.

For years, the NBA has maintained that it wants competitive balance. And that’s a perfectly reasonable goal: if fans know who is going to win (or lose) before the season even starts, interest in the sport might suffer. To promote said balance, the league has a host of player compensation limits: a cap on team payrolls, a luxury tax for teams that exceed that cap, a cap on rookie pay, and a cap on individual veteran salaries.

In theory, the above caps are supposed to give every team—rich and less so; bigger market and smaller—an equal opportunity to acquire talent, and prevent a handful of monied clubs from hoarding all of the best players. In practice, however, this goal could potentially be undermined by the league’s new $24 billion television deal, which is going to increase the team salary cap in sudden and unprecedented fashion.

During the All-Star break, Sliver said this sudden infusion of cash will produce an unintended consequence:

“That is not something that we modeled for. The intention wasn’t that in this system that teams could sign without going above the tax that many max player contracts and that many All-Stars.”

First things first: given that the NBA individual player salary ceiling was adopted way back in 1999—and that TV sports revenues have been rising fast ever since—it’s unlikely that the league hasn’t at least modeled for the possibility of a sudden cap spike. But let’s put that aside, and give Silver the benefit of the doubt. He’s correct that many of the particulars of the current league Collective Bargaining Agreement are intended to prevent superstars from clustering on the same team, like LeBron James, Dwyane Wade, and Chris Bosh in Miami. Pay for two superstars, and the team cap means you’ll have hard time fitting in a third; manage to make that work, and the rest of your supporting cast likely will be whatever you can scrape together on the cheap.

The upcoming cap spike throws this incentive system out of whack. Go back to Durant. More than 20 teams should have enough cap room to sign him this summer. The same can be said of pending free agents Al Horford, Mike Conley Jr., Nicolas Batum, and others expected to command veteran maximum salaries.

Because those players are all being offered the same amount of money, they will choose their new teams—or chose to stay where they are—based on some other reason. And the biggest, most obvious reason to sign somewhere is a chance to win. Which means winning teams with top players now have the inside track on adding more top players—exactly the scenario the NBA’s salary structure is designed to prevent.

So what can the NBA do? Here’s a suggestion: get rid of the limit on individual salaries. Let teams pay superstars whatever they can afford under the team cap.

To see why this would be helpful, let’s do some back-of-the envelope math. First, suppose players are hired to produce regular season wins—which is basically the case—and ballpark what that means. The league currently shares about 50 percent of its revenue with players. With revenues projected to be about $6.5 billion in 2016-17, this means about $3.25 billion will be paid to the players who will produce the 1,230 wins we’ll see in the regular season.

So, NBA teams are paying roughly $2.6 million per win.

Next, let’s imagine there’s no individual salary cap, making teams like the Warriors much more likely to pay elite players such as Durant in a manner that more closely dovetails with their outsized production. By my metrics, Durant is on pace this season to produce 17 wins. (Other statistical ratings may vary a bit, but everyone agrees that Durant is one of the most productive and valuable players in the NBA).

If the Warriors had to pay Durant per win, they’d need to give him nearly $45 million a season. With a team cap of $89 million—and luxury taxes kicking in at $108 million—adding Durant to a team of very productive players suddenly makes a whole lot less financial sense.

In fact, it likely would be prohibitively expensive. Which means Durant would simply have to play someplace else—someplace that didn’t already have a lot of money committed to other stars. The same would apply to other top free agents, too. In a NBA where a team payroll cap and luxury tax system remained in place, but individual salaries were not otherwise limited, teams would be forced to make some choices: Do you purchase a few major stars and complete your roster with minimum-wage players? Or do you forgo collecting star players and try and create a more balanced team?

Thing is, we don’t have to imagine what this would look like. Prior to 1999, the NBA had a cap on payroll but no cap on individual salaries. One team went all in on the idea you can win with just a few stars: the 1996-97 Houston Rockets spent $26.3 million on players, and about $20 million went to just three guys—Hakeem Olajuwon, Clyde Drexler, and Charles Barkley.

This approach has an obvious weakness. If a star gets hurt, the next player up is likely a minimum-wage player who won’t be nearly as productive. Guess what? That’s exactly what happened to Houston. Barkley was immensely productive when he played, but he missed 29 games. The Rockets won 57 games and lost in the Western Conference Finals to the Utah Jazz, a team that finished with a better record and employed hardly any minimum-wage players.

Such is the benefit of removing the individual player salary cap: it makes building a winner more challenging, and makes it all but impossible for a handful of teams to assemble all-star rosters over the summer, then fight for the title in May and June while everyone else watches from home, hopeless and helpless.

One more important note: while eliminating max salaries would make it very difficult for teams to collect and hoard top talents, that alone won’t create complete competitive balance. Relative to the other major sports leagues, the NBA has never been very balanced. This isn’t a matter of payroll structure; it’s simply a result of a short supply of tall people.

What do I mean? Well, the average height in the NBA is 6-foot-7. Because this height is very rare in the world, the NBA is drawing its talent from a very tiny population. (No irony intended!) Within this population, a few players—like Durant and James—are amazing. But many more players are somewhat less amazing, and 30 teams still need to fill out their rosters. When amazing players take on the less-amazing, the results tend to be predictable: amazing wins.

There really isn’t much the NBA can do to fix this larger problem. There simply never will be enough amazing talent to go around. Still, getting rid of the individual salary cap would help spread around what little talent there is a bit more evenly, and that would mean vastly reduced odds of seeing Durant join a team with multiple All-Stars, like the Warriors. Instead, teams would have to try just a bit harder to build a contender around him.