Lockout Over!!! Principal Agreement Reached on 11/26

[mkwest]

NBA proposes unique ‘franchise tag’ to union

The system the league has presented would not work this way, according to sources. Instead, a team would be allowed to designate one player for preferential contractual treatment, including more overall money, more guaranteed money and at least one extra year on his contract. A player would have to agree to such a designation. It is designed to work as an incentive to get a player to remain with his team rather than as a roadblock to free agency, the sources said.

The NBA’s current collective bargaining agreement already gives incumbent teams such advantages when it comes to re-signing their own players. James and Chris Bosh both took less money to sign with the Heat than they could have received from the Cavs and Raptors, respectively. The idea behind the league’s new proposal would be to increase the gap between what teams can offer a “designated player” and what non-designated players can get on the open market.

Sources also said the league’s proposal would ban fully guaranteed contracts. All contracts would have limits on the amount of money a player would be guaranteed to receive, and those guarantees would decline during the life of each contract. In other words, a player making, say, $5 million per season over four years would actually be guaranteed less than $5 million in each of those four seasons — and the amount guaranteed would drop each season. The idea is for teams to be able to get out of undesirable contacts more easily and avoid ugly, Eddy Curry-style buyout talks.

It is within that kind of system in which you have to consider the league’s designated player idea. By cutting guaranteed money and contract lengths leaguewide, the overall proposal would make the benefits the designated player would receive more meaningful.

Zach Low, SI.com

[mkwest]

I'm all for added incentives to keep franchise players with their original teams. I doubt that the players' union is going to want to reduce the guaranteed salary on the contracts. One thing that I think would help small market teams is eliminating the added benefits (extra year and higher increases) to free-agents in S&T deals. If the player wants to leave the team, then he shouldn't be allowed to have the same benefits as he would if he re-signed with the current team.

[thanumba2clippersfan]

I like the idea of a franchise tag, but like MK said I don't believe the players would go for having less guaranteed money. However I do think this would help the NBA cut its losses. Seems like we are probably headed towards a lock out

[mkwest]

Sources: NBA delayed hard cap in offer

The proposal from NBA owners that the NBA Players Association rejected last week called for the implementation of a hard salary cap at a figure lower than the league's current cap, but not until the 2013-14 season, according to sources familiar with the offer.

Sources said the owners' latest proposal, however, does still call for immediate rollbacks of 15 percent, 20 percent or 25 percent to current contracts depending on salary levels, as part of the league's oft-stated desire to reduce payroll by roughly $800 million leaguewide on an annual basis.

Another key wrinkle from the rejected proposal, sources said, called for the ability for each team to shed one contract outright before next season through a one-time amnesty provision that wipes that contract off a team's books -- even though the player must still be paid -- reminiscent of a similar provision in the summer of 2005.

The league recently announced that, in addition to soaring TV ratings this season, 2010-2011 ticket sales were up roughly one percent. The union contends that the league's recent surge in popularity might have wiped out the losses caused by the recent recession, but league officials say that their overall loss has been reduced only from $340 million last season to $300 million this season, asserting that 22 of the NBA's 30 teams are losing money.

Marc Stein, ESPN

[mkwest]

SBJ: NBA proposes $45 million hard salary cap

The memo was sent to all NBA players and was dated just days prior to the league delivering to the union a new labor proposal, which a source said still included the $45 million hard cap but added a phase-in of the cap over a few years. Union president Derek Fisher publicly dismissed the latest proposal as too similar to the original proposal.

The memo’s most eye-popping element is the league’s proposed $45 million hard cap, which cuts the current $58 million soft cap by nearly 25 percent.

Hunter said in the memo that the NBA projects the $45 million hard cap number with a team’s total salary not to exceed the cap for any reason. The proposed hard cap as outlined by Hunter also would eliminate the current luxury tax provision, which penalizes teams with a dollar-for-dollar tax for the amount spent on player payroll exceeding the salary cap.

Hunter also alerts players to the league’s effort to alter the structure of current contracts while detailing the owners’ proposal that no player contract be guaranteed for more than 50 percent for the first $8 million in salary and 25 percent for any amount above $8 million.

The memo also explains that players would be put into one of four categories under a hard cap system, namely, Category A: a minimum salary player; Category B: a rookie wage scale player; Category C: a maximum salary player; and Category D: a player “fighting for whatever room remains under the new hard salary cap after the three above categories are accounted for.”

John Lombardo, SportsBusiness Journal

[mkwest]

I like the idea of a franchise tag, but like MK said I don't believe the players would go for having less guaranteed money. However I do think this would help the NBA cut its losses. Seems like we are probably headed towards a lock out

There's a huge gap between the players and the owners. I still don't think that we'll miss the entire season, but it's not looking too promising at the moment. Players are going to take a hit, but not to this extent.

[mkwest]

Gary Hall, lawyer for National Basketball Players Association, dies in New York

Washington, D.C. -- Gary Hall, a prominent Syracuse attorney who went on to become the top lawyer for the National Basketball Association’s players union, died suddenly today in New York City.

Hall, 67, was found unconscious this morning in his New York apartment, according to Billy Hunter, his longtime friend and executive director of the National Basketball Players Association.

Hunter said when he had an opening for the NBA union’s general counsel about five years ago, he immediately thought of Hall.

“We were longtime friends and he was an excellent attorney,” Hunter said when reached tonight in Manhattan. “He was an outstanding lawyer, and he was extremely bright.”

Hall took the NBA union job in November 2005, leaving his job as a partner in the Syracuse law firm of Blitman & King. Hall specialized in labor and employment law.

Hall would have played a key role in negotiations between NBA players and owners during the offseason. The NBA's collective bargaining agreement expires in less than two months.

Mark Weiner, Syracuse.com

[supfoo]

i read about that initial proposal from the league and i was kind of shocked. 45 million? the average payroll for the nba is 67 million-ish and there's a few teams well into the luxury tax bracket. even if that's an initial lowball offer to get negotiations started, it's insulting and shows a lack of respect to the players' union. there was poster in the general nba forum that suggested the offer was a leave-it-or-take-it because the league wanted to force a lockout. and now that they see how bad the litigation process has been for the nfl owners, they realize they don't quite have the leverage they thought they did and they want to negotiate again. given everything i've read on the web about this topic, i'm inclined to agree with him.

the league seems really adamant in implementing a hard cap and non-guaranteed contracts in the next cba and aren't budging from this position. they still maintain that this is a necessary precaution because of rising expenses and the so-called 400 million dollar losses but it's hard to believe them when forbes reported that the nba actually did great with jersey sales and ticket revenue at an all time high. that's just one report out of many that instantly calls into question the credibility of the league's public statements on their financial books.

[mkwest]

Hall's death to impact NBA labor talks

But to look at how this deal will finally get settled, it is best to look at it in two parts: The financial negotiation, and the negotiation over the operating system with its current "soft" salary cap. And if the players give on the financial end (and they have already offered to eliminate their guarantee of 57 percent of net revenues), the owners will likely need to give on the other end, resulting in a salary cap system that will likely bear a resemblance to the current model.

These are reasonable men negotiating this deal, and there is too much damage to be done by being unyieldingly unreasonable in negotiations. Stern even acknowledged that the sides are at a better point with six weeks left until the deal expires than they were at a similar point in negotiations in 1998, in part because the union does not have the same type of strong personalities in its leadership ranks as it did back in 1998 when Patrick Ewing was the union president and Alonzo Mourning and Dikembe Mutombo were on the executive council.

I have predicted -- a prediction shared by very few -- that this negotiation will end with a settlement in the first few days of July, without a lockout being imposed.

Or to put it as bluntly, as Gary Hall might have: These guys are not nuts, and this is not the time to punish the product, demonize the players and dynamite the goodwill and broad interest the sport has generated.

"I think the loss of Gary gives us all a sense of perspective, as well, in these negotiations, and I think it will cause us to redouble our efforts in terms of trying to get a deal done by the deadline," Silver said.

The NBA is on an upward, worldwide growth spurt that shows no signs of abating. It would be stupid to harm it, and the men negotiating this deal are not stupid. Eventually, they have to settle, and it just makes too much sense to settle sooner rather than later.

Chris Sheridan, ESPN

I agree that it would be unwise to have a long drawn out battle at this time when there's a lot of excitement and renewed interest in the NBA. Attendances are rising again and the viewership is putting up record-breaking numbers. A nasty lockout just harms the image of the league and its players. There are some serious kinks that need to be worked out, but an early resolution would be best for all parties in involved.

[mkwest]

Players union files claim against owners

The union for NBA players filed an unfair labor practices complaint with the National Labor Relations Board Tuesday, on seeking an injunction that would prevent owners from imposing a lockout when the current collective bargaining agreement expires June 30.

The players' union, less than a month after receiving the latest formal proposal from the owners, is accusing the owners of negotiating in bad faith.

The complaint, in part, alleges the NBA is "making harsh, inflexible, and grossly regressive 'takeaway' demands that the NBA knows are not acceptable to the Union."

The complaint further alleges the NBA is engaging in "classic 'take it or leave it' and surface bargaining" with the intent of running out the clock on the CBA, "until the NBA locks out the represented employees in order to coerce them into accepting the NBA's harsh and regressive demands."

Sources have told ESPN.com that the players were so infuriated by the owners' latest proposal, which seeks a nearly 40 percent rollback in existing contracts over three years and a hard salary cap, that the union would explore a variety of legal options before presenting another formal counterproposal.

Chris Sheridan, ESPN

[mkwest]

Hunter: 'Hopeful' new CBA deal can be reached

So why the reason for hope? Two subtle, but potentially important things. First, the bargaining session added to the schedule Wednesday during the Finals was in addition to two meetings previously scheduled for next Tuesday and Wednesday in Dallas. After a smaller session in New York last week in which the players proposed some new “concepts” for bridging the enormous gap between the two sides, the dialogue was deemed positive enough to accelerate the talks. Hunter even hinted Wednesday that another session could be added next week if the progress continues.

Second, the substance of what the players proposed – though closely guarded by the two sides – may have opened the door for a breakthrough in the talks. Only vague details of the players’ new proposed ideas have been revealed, but sources say their approach was designed as a two-pronged solution: 1) an alternative to a hard-cap system that would give the owners another path to reach their goals while maintaining some elements of the current soft-cap system; and 2) a revised split of basketball-related income that would do the same.

Said Hunter: “We know that the pressure’s building and if anything’s going to happen, it’s going to happen between now and (June) 30. We’re going to make every effort to see if we can reach a deal. If we don’t, we don’t. But it’s not going to be for a lack of trying.”

Stern said the players’ revised concept “gave us some ideas,” but did not result in any discussion about whether owners were willing to move off their insistence on a $45 million hard cap. There remains a “very substantial gap” between the two negotiation positions, Stern said.

“It’s still our hope that there may be a deal here to be done,” Stern said. “We’re going to test it to the limits. If we’re wrong, we’re wrong. But I think Billy feels the same way.”

Ken Berger, CBS SPorts

[mkwest]

Agreement before July 1st is looking very unlikely. Owners have not budged on hard cap, shorter contracts, and no/few guarantees. The union is not going to agree to those.

[mkwest]

David Stern: Sides 'very far apart' on NBA labor deal

The NBA Commissioner used the term "far apart" five times in about 8 minutes Wednesday to describe where owners and players stand with a June 30 deadline before the expiration of the current collective bargaining agreement.


The sides agreed to meet twice more next week, Tuesday in Miami if there is a Game 7 of the NBA finals or in New York, and then again Friday in New York.

Stern says it's a positive they continue to meet and that "both sides have moved, but we're not anyplace close to a deal."

USA Today/AP

[Palma Dutch]

Thanks mkwest for all your insightful news updates. I hope the new CBA can settle on some sort of deal.

[thanumba2clippersfan]

I just hope that both sides can come to an agreement so none of next season is missed.

[madmaxmedia]

This is gonna be difficult even if both sides are negotiating in good faith.

It seems clear that the current system isn't working out for the owners, I would tend to believe that many teams are losing money (even if not as many as the NBA claims).

So the cap is going to have to come down, and/or with other adjustments- hard cap, reduction in guarantees, etc. It's going to be really difficult for both sides to project what kind of impact these things will have on salaries at the high and low ends, or what weird ramifications might results (such as last-contract-year players suddenly having significant trade value.)

I think they will ultimately compromise- there's no way the players will accept- 1) lower cap value, 2) changing from soft to hard cap, AND 3) reduced salary guarantees. More likely 1 or 2 out of 3.

I'm guessing a somewhat lower cap number, combined with a 'harder' cap than before. But not partially non-guaranteed contracts.

[mkwest]

Owners, players still hundreds of millions apart

A larger meeting including the owners' full labor relations committee and the players' executive committee is scheduled for Friday in Manhattan.

With the countdown under way to the expiration of the league's collective bargaining agreement on June 30, the two sides remain hundreds of millions of dollars apart, sources told CBSSports.com. The owners have twice offered to delay their vision of at least a 33 percent pay cut for the players, delivered through a hard salary cap with shorter and non-guaranteed contracts -- first through a two-year phase-in and then, in a verbal offer during the Finals, by adding at least one more year to "soften the landing," one of the people with knowledge of the talks said Tuesday. But once the phase-in period ends, the owners are still insistent on their original plan -- proposed in January 2010 -- to deduct approximately $900 million in expenses from the league's basketball-related income (BRI) and reduce the players' share of that from 57 percent to a 50-50 split, multiple sources told CBSSports.com.

Given that league revenues in 2009-10 -- the last season for which final numbers are available -- totaled about $3.6 billion, the players would get half of the $2.7 billion left after expenses, or $1.35 billion. That's $700 million less than the players' share under the current system, or a reduction of more than one-third.

Coming out of last week's full-scale bargaining session in Dallas, verbal proposals from both sides needed to be formalized in writing, and the union requested more extensive revenue projections from the league since the owners have proposed a 10-year CBA. After Stern expressed optimism following one of the bargaining sessions during the Finals, he said last week it would be a "challenge" to avoid a lockout. NBPA president Derek Fisher revealed the same day that there was "no change at all" in the owners' demands.

Ken Berger, CBS Sports

[mkwest]

Stern: Tuesday is turning point in labor talks

Stern touted what he described as a “very significant” concession that was proposed Tuesday in which owners backed off their insistence on eliminating fully guaranteed contracts. The players, however, did not view this as a major step forward in the negotiations, saying the owners remain entrenched in their position to slash player salaries by as much as $700 million annually – and that owners have the ability under the current system to offer contracts that are less than fully guaranteed.

“Of all the issues, the guarantee is one that is very, very important to individual players,” Stern said, describing what was conveyed to the owners and their lead negotiators during the presentation.

This must have been music to the owners’ ears, because their priority from the beginning has been to reduce player salaries by at least one-third. The method of delivery – via a hard cap with shorter and less guaranteed contracts – would seem to be a secondary issue to the overall dollars. Based on the players’ current 57 percent share of revenues, they would go from $2.1 billion to $1.35 billion under the owners’ original proposal – the basic structure of which remains in place, according to multiple sources familiar with the negotiations. That’s a reduction of about $750 million annually, regardless of whether the money is guaranteed or not.

Part of the problem for the players, aside from how much of a pay cut they are willing to accept, is computing how the new structure would work out for them if revenues rise, as the NBA is predicting they will. When the two sides reconvene next week, the apparent willingness on the owners’ part to negotiate how rising revenues would affect player salaries in the final years of the deal could represent a far more significant development than their decision to back off on the idea of eliminating guarantees.

For example, owners could incentivize the players to accept a revised computation of BRI that increases the players’ share as revenues increase. But the owners’ projections of rising revenues are based on rules that have never been in place, making it difficult for the players to trust the projections.

Ken Berger, CBS Sports

NBA owners drop insistence on non-guaranteed contracts

The sides are still far apart on numerous financial issues, mainly the split in revenues. Players are currently guaranteed 57 percent, and owners have been seeking a swing of about $750 million annually in player salary costs.

Stern said the players made an economic offer Friday that even they would characterize as minor. He said both sides have now made three formal proposals.

Maurice Evans of Washington said both sides are frustrated, and the players "feel like they're trying to give us things that we already have." He added the owners are still working off their initial proposal from February 2010 that the players believe was rejected.

AP

[mkwest]

NBA relaxes stance on hard cap

Negotiations between NBA owners and players reached a critical juncture Tuesday when commissioner David Stern went public with the league’s offer to relax its stance on a hard salary cap and guarantee the players $2 billion a year in compensation as part of a 10-year collective bargaining proposal.

The essence of the system described by Stern was an NHL-style cap system with a targeted salary of $62 million per team and a to-be-negotiated range from a minimum to an amount above $62 million that teams could spend up to through various exceptions currently in place – such as the Larry Bird exception and mid-level exception. An escrow-like system would be used to adjust for teams coming in below and above the $62 million target. Unlike the current escrow system, through which 8 percent of players’ salaries is withheld and paid back if negotiated salaries fall short of 57 percent of revenues, Stern said owners would keep the escrow under the new system – making this, in effect, an 8 percent pay cut for the players in Year One.

After union officials and members of the executive committee meet with player representatives from all 30 teams Thursday in New York, the next step will be to come back Friday with a counterproposal. A proposal from each side Tuesday raised the total number of proposals exchanged to at least 10 since the two sides began negotiating more than two years ago. The NBA's Board of Governors -- with owners and executives from all 30 teams -- will meet Tuesday in Dallas, two days before the expiratation of the current CBA. That meeting could be the scene of anything from a strategy session for one more meeting with the players to a lockout vote.

Ken Berger, CBS Sports

[mkwest]

No counter from players; 'one more shot' at deal

NBA owners and players ended a contentious week of negotiations and rhetoric Friday without a counter-offer from the players, leaving a slim chance that a deal can be reached by the June 30 expiration of the current collective bargaining agreement.

Despite reaching a stalemate on economic issues and the split of the league’s $4 billion in annual revenues, the two sides agreed to meet again Wednesday in Manhattan for one, or possibly two more days of bargaining before the current CBA expires at 12:01 a.m. ET Friday.

"We think we’ll have one more shot at it," National Basketball Players Association executive director Billy Hunter said. "Obviously, we’ll have some idea as to where they are in terms of owners -- whether there’s a chance to make a deal or whether there isn't."

“There's still such a large gap,” said NBPA president Derek Fisher of the Lakers. “We feel that any move for us is real dollars we'd be giving back from where we currently stand, as opposed to where our owners have proposed numbers that in our estimation don’t exist right now. They're asking us to go to the place where they want us to go. We've expressed our reasons why we don't want to continue to move economically.”

The players and union officials have tried to get the owners to include their revenue-sharing plan as part of the new CBA, saying competitive balance could be improved through sharing more revenue – such as gate receipts and local broadcast revenues – without trying to solve the league’s stated annual losses of at least $300 million strictly through salary reductions.

“As we've said repeatedly, if we lose money on an aggregate basis, we can’t possibly revenue-share our way to profitability,” deputy commissioner Adam Silver said.

Ken Berger, CBS Sports