The NBA Must Abolish The Stepien Rule

Just for a little while.

Photo by Jakub Petro on Unsplash

In February of 1980, the Cleveland Cavaliers wanted to get better. They traded their future first rounder in 1982 to the Lakers for forward Don Ford and the Lakers’ 1980 first-round pick.

They selected Chad Kinch, who would play only a season. One pick later, the Warriors selected Larry Smith, who averaged 9.2 rebounds in his career, was nicknamed “Mr. Mean” and filled in for Olajuwon in Houston at one point. If the Cavs had just picked Larry Smith, maybe none of this would have happened.

Two years later, the Lakers would use the Cavs’ 1982 pick to select James Worthy.

Back to 1980, in April Ted Stepien bought a controlling interest in the Cavs. Over the next three short years, here’s a recap of what he did:

• Traded their 1984 first-round pick for a journeyman point guard who played one season for Cleveland.

• Traded the Cavs’ 1983 and 1986 picks for two journeymen.¹

• Traded a 1985 pick for another roleplayer.²

• Fired six coaches, including four in one season (!!!)

• Traded away both a young Bill Laimbeer and a second-rounder that would become Dennis Rodman³

By the time he was done, he had traded every pick the team had between 1982 and 1986. Oh, and the Cavs had already traded the 1981 pick away before he got there.

Things were so bad that the league office stepped in and barred the team from making any more trades without league approval.⁴

It was so bad that other executives actually supported the idea because things were so bad.

The resulting seasons were so bad, and the media and fan furor⁵ were so extreme, that Stepien was forced out. He sold in 1983, with three more horrible seasons to come.

The situation was so dire that the league awarded extra picks to the Cavaliers at the ends of the first and second rounds. ⁶

Finally, the league implemented a rule in the bylaws that states:

“No Member may sell its rights to select a player in the first round of any NBA Draft for cash or its equivalent, or trade or exchange its right to select a player in the first round of any NBA Draft if the result of such trade or exchange may be to leave the Member without first-round picks in any two (2) consecutive future NBA Drafts.”

The rule is known colloquially as The Stepien Rule.

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THE SCREWED

The Milwaukee Bucks are screwed. The Denver Nuggets are screwed. The Boston Celtics are screwed. The Memphis Grizzlies, soon, will be screwed. The Thunder, eventually, will be screwed.⁷

There is thought in some quarters that there’s nothing particularly novel or new with this CBA, that teams always faced tough decisions with the luxury tax and keeping teams together.

However, the new CBA added punitive terms that went beyond the money. They restrict

Teams in the second apron…

• Can’t sign buyout players who made over the mid-level salary

• Can’t trade for a player making more money than they send out

• Can’t use the mid-level exception to add free agents

• Can’t send out cash in trades

• Can’t make aggregated trades (combining multiple salaries)

Really think about those last two. If you are trying to reshape your roster, and you’re above the second apron, you have to find a matching salary for a contract that large. You can’t throw in a young prospect to sweeten the deal. You can’t add an expiring contract to ease the other team’s long-term financial obligations.

You can’t add cash to help a front office convince ownership of what it gives them and add to their bottom line in a losing season. You can’t just pay for a second-round pick from some team that doesn’t need it and wants to buffer its books.

This means that if your team runs out of runway with a huge salary load, which is typically what comes with good teams, and you need to pivot, you can’t. You just run off the runway, hit a fuel truck, and explode.

There should be tough decisions for teams trying to compete. There should be tough decisions for teams trying not to compete, like the flattened lottery odds. It’s good that the league has installed a system that prevents the haves from dominating the have-nots, which levels the playing field and rewards teams that build in the smartest way possible.

The issue is that some teams mortgaged their future under the prior CBA in order to win now with a salary construction that is no longer viable.

Teams built rosters where even if they had to pivot or reshape their team in a contention window, they could do so with current, veteran, ready talent. That so many have tried the wildly unsuccessful “Two Timelines” approach shows the desperation this construct puts on them.

They tried to work around it and found out that the approach might actually be worse than just cycling through bad veterans.

These teams by and large traded their future draft picks on the idea that sure, those future years would suck and be lean, but they would have a multi-year title window. “We’ll pay later to win now.”

Except they also can’t compete now because the second apron restricts their ability to pivot.

Some of this is bad luck. Dame and Tatum suffered torn Achilles tendons. Ja Morant lost his mind for about six months on Instagram.

Some of this is bad planning. The Nuggets gave MPJ a huge contract because it was better than losing him, and they didn’t foresee how giving that contract to a player with multiple back surgeries and a new CBA on the horizon might bite them. The Bucks traded for Kyle Kuzma willingly. The Suns decided to trade for Bradley Beal with a no-trade clause instead of adding depth.

Those are all fair points. However, we need to judge decisions based on the circumstances at the time they were made. I don’t believe teams trying to win a championship should have worried that ownership would put in what is effectively a hard cap and force them into a position where they can have spent to have good players or be able to improve, but not both.

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IN THE ABSENCE OF BETTER OPTIONS

The easy answer here would be to just pull back on the second apron a bit. You can only include two players in trades instead of just one. You can add buyout players, but not if they made X amount on the previous contract. You can’t send cash in trades unless it’s just for a second-round pick in return. Etc.

But there’s no way to do that without opening the CBA back up for negotiation, and neither side is going to want to do that. It’s a can of worms neither side would want to consider.

(Also, the owners, by and large, literally wanted this and built it on purpose for this exact result. The objective was to make it impossible to win if you spent more so that teams could not spend and win. They’re not going to want any changes.)

So that’s off the table.

The other provision would have been an amnesty clause, something the NBA has used twice when adopting radical changes to the CBA that helped teams rebalance their books. If these teams could just clear a chunk of change off their books, even if it meant losing a good player for nothing, they could at least reset to a place they could maneuver again for contention.

But that would again mean opening the CBA back up. No go.

Which leaves us with the Stepien Rule.

The Stepien Rule is in the NBA’s bylaws, which can be changed by a vote of the Board of Governors and does not require CBA negotiation.

If you remove the Stepien Rule, you open up the ability of these teams to dig themselves out of the hole they willingly entered into during the previous CBA. These teams dug a hole in the previous CBA, based on the treasure (a title) they were digging for, and the previous CBA allowed spending as a ladder to climb out.

The new CBA basically dumped the dirt on top of those teams. Removing the Stepien Rule provides them with a little shovel to dig their way out.

If you open up the ability to trade back-to-back seasons, you allow for:

• Milwaukee to use multiple picks as sweeteners to add to a deal to build around Giannis, helping them keep their franchise star.

• Teams trying to trade for Giannis should he want to leave to trade more picks, which will get Milwaukee back to a full reset quicker than the current “worst of both worlds” they are facing.

• Denver to move difficult contracts to put a winning team around a 3-time MVP.

• Boston to more easily move salary in this transitional period and to also add more players so they can compete again in 2026 when Tatum is healthy.

• Phoenix to be able to move Bradley Beal more easily to try and capitalize on the remaining window of Kevin Durant, who, by all accounts, still wants to stay at least a little, and Matt Ishbia still wants to contend with him.

• Teams like the Spurs, Rockets, and Thunder with so many picks to consolidate into more immediate help in their current window, rather than having to wait for various picks to convey.⁸

The NBA instituted a CBA that radically alters the ability of teams to remain in contention if they committed to builds prior to the institution of that new CBA. And while those owners are partially responsible for not convincing their fellow owners of a more forgiving system, these teams should be granted some forward path without just having to give up on championship windows.

BUT WHAT ABOUT THE SMART TEAMS?

That gnashing of teeth you hear is from OKC, Houston, and Spurs fans in particular, as they each have significant investments in future draft capital.

Those teams made smart decisions, capitalizing on desperate teams and setting themselves up specifically for this window. Those teams should not be punished for the other teams having to face the consequences of their decisions.

Which is why the league needs to reinstate the ability to trade back-to-back seasons, but not for three more seasons. If you traded your 2028 away, you have to keep the 2029. But after that, you can trade the 2030. If you traded the 2027 away, you can trade the 2028.