With All-NBA honors announced Thursday, The Vertical Front-Office Insider Bobby Marks breaks down one of the quirkiest aspects of the NBA’s Collective Bargaining Agreement, the Rose Rule, and the effect it had on Damian Lillard and Anthony Davis

The maximum salary rules

There are three designated slots the NBA defines as the maximum a player can earn. All three slots are based on years of service.



For players with zero-to-six years of service (Tier 1), the slot is 25 percent of the cap. Players with seven-to-nine years (Tier 2), the slot is 30 percent, and for players with 10-plus years (Tier 3), the slot is 35 percent.

Although the percent defined above is stated in the CBA, the league and players negotiated a lower percentage of basketball related income that would be used to define a maximum salary. If the league used the 25 percent Tier 1 max slot during this current season, the max number would have been $17.5 million; but the negotiated lower percentage is $16.4 million.

For cap purposes, the best way to calculate a max salary slot is 23.4 percent (Tier 1), 28.1 percent (Tier 2) and 32.8 percent (Tier 3).

The Rose Rule

When the NBA introduced a new collective bargaining agreement in 2011, it also introduced a little-known rule named after All-Star Derrick Rose. The rule was named after Rose because he earned first-team All-NBA honors in 2010-11 and was also selected by fans to play in the All-Star Game in 2011 and 2012 while still on his rookie contract.



View photos Derrick Rose reached staggering heights under his rookie deal. (AP) More

The league’s goal was to reward players operating under rookie-scale contracts who had signed a maximum salary extension but had outperformed the Tier 1 (25 percent) maximum salary slot.

If a player on his rookie contract accomplishes one of the following – (1) earns All-NBA first-, second- or third-team honors twice, (2) is voted an NBA All-Star starter by the fans twice, or (3) named NBA MVP – his salary slot will be eligible for the Tier 2 maximum salary (30 percent) when the extension begins in his fifth season.

Teams do have the right to negotiate the percentage of a max salary slot as long as it falls between 25 percent and 30 percent in the first year of the extension if the player reaches the criteria set forth above.

For example, the Pacers signed Paul George to a designated max salary extension in the 2014 summer. Because he earned third-team All-NBA honors in 2012-13 and 2013-14, George was eligible for an increased salary under the Rose Rule. However, the Pacers and George negotiated a 27 percent max salary slot, but allowed George to opt out of his contract after the 2017-18 season.

Problems with the rule

First, to have a possible salary increase dictated by a fan vote is absurd. All-Star fan voting has turned into a popularity contest instead of an exercise in rewarding a player for his performance.



Second, to have the media dictate financial consequences for a team and player should not be allowed. A player's contract should not be tied into a media vote.

There is also a wide discrepancy between being voted first-team All-NBA and third team. A player such as George shouldn’t be eligible for the same salary as LeBron James (first-team honors) just because he earned a lesser All-NBA honor in consecutive years.

Finally there is no room to negotiate or amend the criteria, only the percentage earned.

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