There are two Nene stories for the upcoming Rockets season.
One, is the story of Nene the wise, aging, yet still youthfully intimidating, backup center for the Houston Rockets.
Two is the story of Nene the Contract. From a Rockets point of view, that’s an annoying story, indeed. The story of how a loyal organizational soldier took a deal to benefit his team, and ended up hurting himself to an extent.
First let’s a cover Nene the Player. First, it’s just Nene. That’s it. Not solely in a Brazilian nickname sense, but in a legally binding, contractual sense. Maybyner Rodney Hilario legally changed his name to simply Nene in 2003.
Right now it looks like Nene is limited to ten games for the Rockets (more below). Even if he could play more, he might not, given health concerns. Nene debuted in the NBA back in 2002, and is 37. His rate stats (per 36) showed a player aging very gracefully until last season. In 2017/18 his Per36 showed 16.1 points, 8.3 rebounds and a .594 TS%. He was even better in the previous year, demonstrating that when Nene took the court, he was effective.
Last season the points dropped to 10.1 points, rebounds stayed flat at 8.4 Per36 and TS% dropped to .552. He didn’t look the same as in previous years. He did, at least, retain the very strong sense that no one wanted a piece of Nene on the court. I think if he were to play much, Rockets fans should expect something more like last season, rather than the two previous to it.
Now we come to Nene The Contract. The Rockets have been known to find, and exploit,
loopholes nuances in the NBA and NBA Player’s Association’s Collective Bargaining Agreement for quite some time. There was the “poison pill” deal that brought the Rockets Jeremy Lin and Omer Asik. There was the masterful use of purchased non-guaranteed contracts that made the Chris Paul deal possible.
With Nene there was the use of “likely bonuses” that...blew up in the Rockets face
when David Stern ruled Ex Cathedra. Sorry, blew up when Adam Silver and the NBA Players Association collaboratively declared a seemingly legal use of NBA rules “Salary Cap Circumvention”.
What the Rockets did with Nene’s deal was offer him the Veteran’s Minimum in guaranteed salary with a bunch of “likely bonuses” that would increase his salary when and if they were met. For example, “10+ Games Played” and “52+ team wins.” trigger a bonus salary payments.
These bonuses brought Nene’s salary plus bonuses to around $10 million. The Rockets could trade $10 million worth of salary, the other side would only be obligated for the veteran’s minimum. Brilliant, in that it would allow the Rockets to trade for a higher value contract, while providing salary relief to the other team in return.
It’s easy to see why the Players Association said no, besides Possibly Bitter Chris Paul being President of the NBAPA. Such deals, with high bonuses that evaporate into minimum salaries are in the end bad for the players. Players, understandably, seek guaranteed money, not vanishing bonuses. There’s no need to find a conspiracy with Chris Paul. It’s simply the NBAPA’s job to object, the fact that Nene and his representatives negotiated the deal with their eyes open notwithstanding.
In this case though, the league office stepped in to void the transferability of “likely bonuses” as salary to another team in a deal. Yes, the guaranteed salary counts, yes, the Rockets are on the hook for the likely bonuses, no, the likely bonuses do not transfer at their full value, despite the Rockets being on the hook for their full value if the conditions are met. Heads I win, tails you lose.
Some have suggested that the Rockets, aware of the possibly borderline nature of the contract, should have sent it for review to the NBA league office. This makes the Rockets using what they (and likely every other team) thought was “black letter” NBA law somehow their fault. I honestly don’t know how many contracts are sent to the league office for prior review. Maybe it’s a lot. My sense is that most deals are just sent in for approval, and are routinely approved with little league office comment, let alone adverse rulings.
How many deals have had terms struck or altered by the league with no possibility of renegotiation or recission?
Here’s another problem. Salary cap circumvention seems more commonly understood in cases like: “Thanks for taking a lower salary this season, Franchise Icon! We appreciate it. What, you’ve always wanted to make a documentary about a topic dear to your heart? Well, here’s a pile of money, we’ll buy it! We do finance and buy all sorts of movies and whatnot, so that should be fine.” Or “We can’t pay you much this season, but you know, you’ll always have a job here. As will your wife, your cousin, your friends, and your pets. And we’ll invest in your new business when you retire.”
The Rockets didn’t do that. They used existing rules in a clever way, that yes, produced a result they wanted but the league didn’t like. To me the proper action from the league is to say “This passes, but the loophole will surely be closed next meeting, so don’t do it in the meantime.”
That is similar to what happened with the non-guaranteed deals used to acquire the services of Chris Paul. Teams were about to lose the ability to do that, by agreement between the league, team owners, and the NBAPA. Daryl Morey got that move in just under the wire. By the Nene standard that deal might have been rescinded anyhow (though I’d imagine over the objection of the NBAPA).
Now NBA franchises are all left with a question. Do likely bonuses count as salary in deals? Which ones? The deals the NBA passed? What about future incentive-laden deals? What’s “circumvention” and what isn’t? Could the bonus be struck upon a trade? What’s the rule now? Is the rule basically “Don’t be the Rockets”? Do all contracts need thorough prior league vetting? Or just Rockets contracts?
The NBAPA probably did right, here. The Rockets want to pay Nene bonuses? Good news, they still can! Nene isn’t any worse off in salary terms, though he is in playing time terms, most likely.
Overall though, I see the league office overstepping. I am not aware of too terribly many contracts treated this way, voided in part, kept in part, in the way most damaging to both the team involved and, in many respects, the player. I’ve looked and can’t find any. Perhaps the NBA wanted to send a message.
Send a message it did. Creative rule interpretations can be construed against teams with no possibility of correction or alteration if Adam Silver and Co see fit.
It’s like David Stern never left.
The Nene Deal.
This poll is closed
The NBA/NBAPA handled it perfectly.
The deal should have stood.
The Rockets should have been allowed to amend the deal after key components were voided.
That Dirk movie was awesome, and totally legit.