Good morning. Let’s basketball.

The Big Fish Eat the Little Fish, Pieter Bruegel the Elder, 1556

The biggest modern inflection point in the business of the NBA is the 1998-99 lockout and the new collective bargaining agreement that stemmed from it. The entire NBA season nearly got cancelled by team owners who wanted to keep more revenue from themselves and put stricter limits on the salaries of individual players and team payrolls. They got their wish immediately on the former goal and set the stage for a continual hardening of the team cap over the next two decades.

The individual player cap really sticks with me as having an enormous impact on … basically everything about teams are constructed in the modern era.

Here’s an example.

In 1998, per Patricia Bender’s NBA history site, total NBA players salaries were $948 million. Michael Jordan’s salary that season (his last in Chicago) was $33 million, itself over the team salary cap. The Bulls could sign the deal under the Bird rights exception because there was no individual player maximum salary. Jordan’s salary for that season was higher than the total team payroll for 19 teams. So in 1997-98, Michael Jordan individually earned 3.5% of all NBA player salary paid out.

Part of the drive of the lockout was to tamp down individual salaries — not necessarily because of Jordan, who was worth every penny, but because of less proven players signing (then-)enormous deals. Think Juwan Howard. The upshot is that the 1999 NBA collective bargaining agreement and its similar successor in 2005 fully developed a strong NBA middle class at the expense of superstars. This plus increases in basketball-related revenue for the league led to exploding contracts for role players while it took until 2013-14 for another individual player to have a contract that paid out more than $30 million.

Kobe Bryant was the player who finally hit the Jordan salary mark of more than $30 million in the twilight of his illustrious Lakers career. This is ironic, considering that a young Kobe Bryant was one of the holdouts from the 1999 CBA primarily arguing against the individual max. He saw what it would do to players of his caliber.

And what exactly did it do to players of his caliber in real dollars? Consider this: Jordan in ‘98 made $33 million, or 3.5% of the league’s total player payroll. For the 2022-23 season, total NBA player payroll should land somewhere around $3.3 billion. If a player were able to take 3.5% of total player payroll as Jordan did in ‘98, their 1-year salary would be …

$115.5 million.

Instead, the top salary in the league this season is Stephen Curry’s $48 million, which equates to 1.5% of total player payroll. No one is crying for Steph’s bank account, but this is a reflection of the real impact of the individual player max on the salaries of the league’s best players. In the ‘90s, when the salary cap was soft, the luxury tax wasn’t in play and there was no individual max, you had a player making more than half the league’s rosters.

Now, even if the NBA agreed to eliminate the individual player max tomorrow, you wouldn’t likely get a $115 million player because the team payroll cap has been hardened significantly, especially with the escalating luxury tax (as Curry’s paycheck signer Joe Lacob has noted). It was not all that painful for the Bulls to sign a $33 million check for Jordan in ‘98 — you were just paying the salary, no extra penalties for obscenely exceeding the team salary cap. Now signing a player for $115 million, were it legal, would cost at least twice that since a team doing so would obviously be over the tax threshold.

Now what’s the upshot for team-building? Well, the individual max lessened the power of incumbency for one, given how Bird rights impact the ability of teams to exceed cap rules to keep their own players. Imagine no individual cap in 2010, when the Heat cleared the decks to add Chris Bosh and LeBron James to Dwyane Wade. Without the individual max, the Cavaliers could theoretically have paid LeBron whatever he wanted under Bird rights, as long as Dan Gilbert was willing to pay the luxury tax penalties for exceeding the threshold. Miami would have been limited in how much they could pay Bosh and LeBron due to not having Bird rights. The league capped LeBron and Bosh’s salaries allowed the Heat to add them in free agency. And ever since, NBA franchisees have been trying to find ways to limit or discourage player movement like that without giving superstars their freedom to sign unrestricted contracts. Welcome to the land of unintended consequences.

Some players and the last players’ union head have mentioned the individual player max as an unfair limit on superstar earnings, but there was no apparent effort to remove the clause in the collective bargaining agreements negotiated when true-blue superstars Chris Paul and LeBron James led the union. So the rule is almost assuredly here to stay. It’s worth occasionally looking back at how we got here and wondering if NBA team owners could do it all again, would they? (Most current NBA franchisees have bought into the league since that lockout, of course.) Was the trade-off — the superteam era, superstar empowerment via transiency, a massive NBA middle class — worth preventing $100 million players?...