Details of latest NBA negotiating session shed light on status of deal
SI.com obtained details of Friday's labor negotiations in New York
Sources say the NBA, players will likely meet again later next week
The revenue split, salary increases, CBA length are still unresolved
With NBA labor negotiations at an impasse yet again and no further meetings scheduled between players and owners, there's no better time for a status update than the present.
Of course, therein lies the most maddening part: The sides are "within striking distance" of reaching a deal, according to union executive director Billy Hunter.
SI.com obtained details of Friday's negotiations from the players' side, and they're worth examining to get a better look at how far the two sides truly have to go before an agreement can be reached. The league continues to claim it needs more concessions from the players as part of its system overhaul to cover losses that totaled $300 million last season and $1.6 billion over the life of the last collective bargaining agreement, while the players say the many concessions they've made should already be enough.
Sources close to the situation say it's likely the two sides will meet in the latter part of next week, but nothing is known to have been scheduled. And as NBA commissioner David Stern also said on Thursday in a moment of truth, "There's no deal on anything unless there's a deal on everything."
So here's a look at the issues on the table, broken down by their status in the negotiations:
Player contract length: Contracts will be shortened from six years to five years for players who have "Bird" rights (which allow teams to exceed the salary cap to re-sign their own free agents) and from five years to four years for non-Bird contracts.
Amnesty clause: Each team will be able to waive one player with a previously existing contract without it counting against the salary cap, but it will be available only once per team during the life of the new CBA. While the player will still be paid his full salary, this would allow teams to get rid of a contract that is weighing them down.
Teams will want to use this sooner rather than later since it cannot be used on new contracts that are signed. It can be used during any year of the player's deal, but must be announced at the start of the season.
Luxury tax: The previous agreement penalized teams on a dollar-for-dollar basis when they went above the luxury tax threshold ($70.3 million last season), but the owners have been adamant about wanting a new system in which the highest-spending teams are reined in. The league's latest proposal on this issue looks like this and has been agreed to by the players:
Teams are penalized $1.50 for every dollar they spend in the first $5 million above the tax level; $1.75 for every dollar spent between $5 million and $10 million above; $2.50 for every dollar spent between $10 million to $15 million above; and $3.25 for every dollar spent $15 million and above.
There is still haggling to be done here, though, as the league is still pushing for additional penalties for teams that repeatedly pay the tax.
Mid-level exception: The value of the mid-level, which allows teams to sign players even when they're over the salary cap, will be reduced from $5.8 million to $5 million. The NBPA has offered to shorten the length of the contracts from five years to four years, while the league is still pushing for a maximum of three years. There is also disagreement regarding luxury tax-paying teams and their ability to sign players using the mid-level.
Escrow: In the previous deal, the escrow tax (a percentage of players' salaries that is put into interest-bearing accounts by the league) was 8 percent. The NBPA has offered to raise it to 10 percent. The owners have been pushing for an unlimited escrow that would provide them with more cost certainty while also rendering the true value of a player's contract undefined on a yearly basis. While this issue is not settled, it's likely to land at the 10 percent mark.
"Stretch" exception: This exception would allow teams to waive a player and stretch his pay (and salary cap hit) over an extended period of time. The agreed-upon formula is as such: double the number of years left on the player's deal, plus one (so Player X who has two seasons remaining on his deal would be paid over five seasons). It's unclear how often this would be available to teams, but it's likely to be at least once per season.
Basketball-related income split: Players received 57 percent of BRI in the previous deal and have offered to reduce their share to 52.5 percent, while the owners are seeking a 50-50 split. Each percentage point of BRI is worth about $40 million, so the NBPA has agreed to transfer $180 million annually from the players to the owners, or a minimum of $1.08 billion over the course of a six-year agreement.
Annual increases: Previously, Bird players were given 10.5 percent annual raises while non-Bird players were given 8 percent raises. The NBPA has proposed annual increases of 7.5 percent and 6 percent, while the NBA is proposing annual increases of 5.5 percent and 3.5 percent.
Early termination options: These options are negotiated into player contracts on an individual basis and allow them to opt out of their deals after an agreed-upon year(s). The NBA, however, has proposed eliminating ETOs, as well as player options that essentially serve the same purpose by giving the player a choice on whether to opt-in to a particular year of his deal or become a free agent.
Sign-and-trades: The sign-and-trade was previously an option for all teams, but the NBA is pushing to prohibit tax-paying teams from being able to do so in the new deal. What's more, sign-and-trade contracts will likely be for no more than four years.
CBA length: The NBA is proposing a 10-year agreement with an option to terminate after the seventh year. The NPBA has accepted the 10-year term, so long as the players have an option to terminate the agreement following Year No. 6 and No. 8.
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