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Chris Paul won the NBA labor deal because of 1 weird rule change

The players’ union president could become the NBA’s first $200 million man thanks to an arcane rule being tweaked in the new labor deal.

Chris Paul is shocked, too. Jayne Kamin-Oncea-USA TODAY Sports

As president of the NBA players’ union, Chris Paul helped negotiate a new labor deal with the league. That deal, reached Thursday, will go into effect on July 1, 2017, the same day Chris Paul becomes a free agent.

Given that, it’s pretty darned interesting that Chris Paul stands to be one of the biggest individual beneficiaries of a subtle rule change on deck for the new collective bargaining agreement.

Meet the Over-36 Rule

The Over-36 Rule is an arcane piece of NBA contract law that essentially prevents players who are 32 or older from easily signing five-year deals and makes it more difficult for players 33 or older to sign four-year deals. The rule doesn’t flat out ban such deals. It simply creates salary cap sheet hell by assigning one or more years as deferred compensation, thus limiting how teams can use cap space up front and preventing maximum-salary contracts.

Let’s use CP3 as an example. Let’s assume the Over-36 Rule survived the labor negotiations intact. Paul will turn 32 in May. As such, he would turn 36 during the course of a five-year contract signed with the Clippers (the only club that can offer him five years). That would trigger the Over-36 Rule.

Because of the rule, the fifth year of the five-year contract would count as $0 on the salary cap sheet because it is considered deferred compensation. Larry Coon has the nitty gritty details, but essentially the cap hit for the salary due to CP3 in that fifth year would be spread over the previous four years.

That would increase Paul’s cap number in the first season of the contract. But that cap number cannot exceed the individual player maximum salary, which is 35 percent of the salary cap (or roughly $35 million next year). So CP3 would be forced to take way less than the individual max to fit in the deferred comp adjustment under salary cap rules.

Based on rough numbers, instead of $35 million in actual salary, under the Over-36 Rule, CP3’s Year 1 salary would be $24 million (with a $35 million cap hit).

You can see why the Over-36 Rule would be considered onerous to superstars in their early 30s. Instead of mixing it up, stars typically take shorter deals at that stage of their careers.

Enter the Over-38 Rule

Based on early reports of the new labor deal, the Over-36 Rule has become the Over-38 Rule. We don’t know just yet whether the rule will be tweaked in any other way than bump up the age threshold that triggers the deferred comp cap rules.

Assuming no other major tweaks, this pays immediate dividends for 32- and 33-year-old free agents. The new trigger age for more difficult five-year deals is 34, the new trigger age for more difficult four-year deals is 35.

The benefit to CP3

The dividends for CP3 — assuming he wants to remain with the Clippers, and the Clippers want to keep him — are immediately evident. For all practical purposes, under the Over-36 Rule Paul would have been looking at a max contract of four years, $156 million.

Under the Over-38 Rule, he’s looking at a max contract of five years, $201 million.

In other words, because of this one simple rule change, this summer Chris Paul can potentially lock in $45 million in guaranteed salary for the season in which he turns 37 years old.

Who else wins here?

The two other players who immediately jump out as beneficiaries of this rule change happen to be close CP3 friends and fellow union leaders LeBron James and Carmelo Anthony. Both can become free agents in 2018. Both will be able to sign longer max salary deals than would previously have been possible.

J.J. Redick (who is shockingly already 32 years old) could benefit this summer. Paul Millsap is a potential beneficiary in 2018 when he hits free agency. Other players currently in their mid- to late-20s will no doubt benefit as well. Writ large, it’s a great rule change for the players.

But in the immediate term, it looks like a gift for CP3 and his friends.