Some Thoughts on Kevin Durant’s Pay Cut

(Full Disclosure: I’m a Warriors fan.)

1. The best thing I’ve read about Durant’s decision to take a 2-year, $53-million contract, about 25-30% less than what he could have earned with his “max” contract, is this comment on a Deadspin article:

“Choice is not the same as freedom. The league presents superstars with two garbage choices. Take an already below market value max contract and play on a shitty team or take an extra pay cut on top of that and play on a championship caliber team.”

What Kevin Durant is “worth” isn’t currently reflected in the marketplace. Nor is LeBron James’ worth or Steph Curry’s worth–the same Curry who signed a 5-year, $201m contract that is a massive discount. The NBA’s undervaluation of the best of the best, because of both the salary cap and the max contract system capping players’ individual earnings, proves that these players are not operating in a fair marketplace.

When viewed from a behavioral perspective, any contract Durant signs will be inadequate (that is, less than what he ought to get, which is in the ballpark of $40m per year), and there’s a diminishing pain with each subsequent dollar sacrificed: As Kahneman and Tversky would explain, the first million he sacrifices is much more emotionally resonant than the ninth million. If Durant is resigned to making less money than he should–which, given that the NBA’s collective bargaining agreement (CBA) won’t get rejiggered until at least 2023–then it can be rational, from a personal utility standpoint, to try to maximize his team’s likelihood of winning by taking less money. But he is, of course, under no obligation to do so.

What matters is what Kevin Durant wants. His decision last 4th of July cemented that his focus was on winning, at the modest expense of higher (yet still unfair) paychecks. (He has the luxury, at this point in his career, to not need to demand the most robust contract.) By moving from Oklahoma City to Golden State, he took an initial pay cut  and, knowingly, set himself up for less impressive sums in the future, as subsequent raises would be based on his first-year salary with the Warriors. What he’s doing now is consistent with that decision last year: His focus remains on winning. If he’s okay with it–which he apparently is, given that he took a much larger pay cut than expected–then it’s totally fine. He’s a grown man; he can decide for himself what he wants to do.

2. The worst thing, as always with these contracts, is the arrival of comments from mouth-breathers about how either A) an annual pay cut from $34m to $25m is inconsequential, as Durant’s still a millionaire regardless or how B) they, the mouth-breathers, would be willing to play NBA basketball for free. After all, it’s just a game.

Both of these points are never not funny to me, and I always want to know who is making this argument. I bet they are fascinating individuals, and I would love to know how they see the rest of the world.

3. The second-worst thing about Durant’s decision, though, was the pearl-clutching from The Ringer and Yahoo! Sports about the precedent this sets for other players.

There’s an idea that now, because of Durant’s pay cut, other owners will expect this behavior out of their star players in order to save them, the owners, massive luxury tax payments. From The Ringer:

“It’s noble in a way, but taking demonstrably less than his full market value hurts the players union as a whole (since most players don’t have the same access to alternative avenues of income that Durant does). Durant’s decision makes it painfully clear that it will always be the players who have to make ‘sacrifices,’ never the owners.”

Some temperance is required. Call me crazy, but I’m not too concerned about a precedent set by a player on a team that boasts, well, an unprecedented collection of talent. For a player like Durant to be able to join an already-historically great team like the Warriors required an incredible confluence of events–most notably, Curry signing a 4-year extension that paid him like Corey Maggette just before Curry blossomed into a top-3 player in the league; the salary cap exploding just when Durant became available; in the 2016 playoffs, both Durant losing to the Warriors and then the Warriors losing to the Cavs in heartbreaking fashion to make such a move feasible for both sides; the one weak spot for the Warriors being occupied by a perpetually disappointing Harrison Barnes, who happened to play the same position as Kevin Durant, etc. etc. Point is, the slippery slope fallacy is always worth questioning, doubly so when the ground appears, beyond a doubt, flat.

Moreover, the idea that Durant’s decision affects the players in future CBA negotiations in a negative way, six years out, or even down the line as some sort of top-tier trust-busting is ludicrously preemptive. (That Ringer line about “Will always be”? Good lord, that’s a stretch.) If anything, I predict the opposite result (a version of the Streisand effect) will come into play–by highlighting how even players of his caliber can end up grotesquely underpaid, and how restrictive the current cap / max salary system is, Durant may have brought overdue attention to the inequity of the battle between players and owners.

Finally, of course, there’s the implied yet comical idea that these analysts are impartial. (Again, see my disclosure at the top.) The NBA doesn’t know how to grapple with a superteam like the Warriors, both from a tactical perspective and an editorial one. Based on the finals, it seems like the gap between them and the rest of the league is further than the average fan would hope, and with both the Cavaliers and Warriors sprinting through these playoffs, the league risks becoming roundly uncompetitive. It’s in everyone’s best interest if that doesn’t happen; either the Warriors need to decline, or the rest of the league needs to catch up. (And despite the activity of free agency, it’s doubtful any moves amount to more than mere deck chairs on the Titanic.) Durant’s decision frustrated folks, in part because he alleviated the financial threat inevitably waiting for GM Bob Myers and, mostly, owner Joe Lacob: How far is Lacob willing to go into the luxury tax; how many of his many, many millions is he willing to spend to keep these guys together?

4. What we can all agree is that this favors Lacob (and Peter Guber, but mostly Lacob, who is annoying as hell and a totally valid reason to hate the Warriors), and that’s a bad thing.

Durant just saved him, likely, $30-40m in luxury tax payments this year alone.

To be clear, there’s nothing inherently noble about taking a pay cut. Durant’s move isn’t altruistic; it benefits Durant to make sure his teammates Andre Iguodala and Shaun Livingston get theirs and return to Golden State, which they did. But ultimately that pressure ought to be felt by the owners. Durant has made the life of Lacob, an egotistical billionaire who made the infamous “light years ahead” comment to The New York Times last year, easy. And Durant’s and the Warriors’ collective leverage to get Lacob to pay the check, coming off a dominant postseason, might never be higher; perhaps this is a mistake on Durant’s part.

But at worst, it’s a short-lived mistake–he takes a decreased salary for one year while locking Iguodala and Livingston up for three. Alternatively, maybe the hope is that Durant will bite the bullet this year, Lacob will do so next year when he pays Durant’s larger contract, and when Klay Thompson’s contract expires after 2019, then maybe he picks up the tab. In some sense, perhaps Durant is playing the long game here, as Tim Kawakami describes here: Durant’s making a small-ish sacrifice now to prove his long-term commitment and to keep the team together, and he’s signalling to Lacob and Myers that both had better be reciprocated in the years to come. No one really knows, which is why the rush to judge Durant–to excoriate him–is incredible.

Honestly, I think it’s great that a lot of fans are pro-player and anti-ownership, and that they claim to be in favor of players getting everything they can from teams in terms of salary. Beyond the proliferation of taxpayer-funded stadiums and excitement over fantasy sports–the commodification of players for the fans’ sake, not to mention the deification of general managers–it’s a viewpoint that seems fairly unique to the NBA. And yet, even these fans have a limit to their embracing of players’ actions: when it no longer suits the fans’ interests.

5. The larger, more interesting debate here is about player power. It’s been a simmering topic in the NBA sphere for most of the last decade, with the players holding the cards in free agency more so than the team ownership; it’s led to pushback, most notably from older generations of players and fans. After all, the only difference between the Warriors superteam and, say, the Bulls of the 90s is that Durant, the final puzzle piece, chose the Warriors in free agency. Had he been traded, it would’ve been heralded as a coup for the ownership, rather than a reason for seething claims of softness, inadequacy, and a dearth of self-reliance.

What Durant’s moves show, though, are that even when making his own decisions and being beholden to no one–the most definitive stake to power that a player can have–the NBA star will perpetually be perceived as lacking power or failing to wield it properly. Durant’s move to Golden State was regarded as weak, his pay cut last week seen as either a shortcut to domination or a betrayal of his NBA peers, rather than the reflection of the reality for NBA stars. Never mind that other players across other sports get regularly praised for this behavior–just search “Tom Brady pay cut” or “Dirk Nowitzki pay cut” and see the response. (Without diving too deep down this rabbit hole, race, just maybe, might be a factor here.) Never mind that the alternative–taking everything he could from Golden State–would kneecap his own goals and open himself up to claims of selfishness and greed. Even when the NBA star has power, he faces a chorus of paternalistic pitter-patter, a slew of “what-you-should-have-dones” from those with much less knowledge of the situation.

LeBron faced this chorus when he took a pay cut to go to Miami and play with his friends. Durant’s facing it for the foreseeable future. Now that these stars hold the cards, a lot of folks sure seem willing to tell them they’re playing their hands all wrong.


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