Blog Entry

Sources: Owners drop insistence on hard cap

Posted on: September 27, 2011 10:11 pm
Edited on: September 27, 2011 11:10 pm
NEW YORK -- Owners have indicated a willingness to drop their insistence on a hard team salary cap in exchange for adjustments to the luxury tax system and key spending exceptions, two people with knowledge of the negotiations told Tuesday night.

The offer by league negotiators came Tuesday in a brief, two-hour bargaining session that set the stage for what one source described as "an important day" on Wednesday.

"It's put up or shut up time," said the person, who is connected to the talks but spoke on condition of anonymity due to the sensitivity of the negotiations.

The flexibility in the owners' longstanding insistence on a hard team-by-team cap, first reported by Yahoo Sports, comes with significant strings attached. Among the many concepts league negotiators proposed Tuesday were a more punitive luxury tax and adjustments to two key spending exceptions that teams had under previous agreements: the Larry Bird exception and the mid-level exception. Both would have been eliminated under the owners' original proposal from two years ago, with many of those dramatic systemic changes living on in subsequent proposals until Tuesday.

There is a feeling among two people who have been briefed on the talks that the owners will come forward Wednesday with an enhanced version of the concepts proposed Tuesday. According to the sources, among the additions could be a proposed 50-50 revenue split, which to this point the league has not reached in terms of the players' average share over the life of a new CBA in its previous proposals.

As for the system changes the owners proposed Tuesday in exchange for relaxing their stance on the hard team salary cap, one of the people briefed on the talks said union officials regarded them as "alarming."

Billy Hunter, executive director of the National Basketball Players Association, has often referred to a hard team salary cap as a "blood issue." Union president Derek Fisher scoffed at the owners' June proposal of a "flex cap" with a spending midpoint and a range as being, for all intents and purposes, a hard cap. Paramount in the players' opposition to a hard team cap is that the NBA already has a spending cap in the aggregate; under the previous CBA, the players were limited to 57 percent of basketball-related income (BRI), with an escrow system in place to guarantee they'd get no more and no less.

Even if the owners improved their economic proposal to 50-50 on Wednesday -- up from the 46 percent average share sources said they offered last week -- it seems unlikely that union officials would accept that without significant pushback on the system adjustments that are tied to it. And it is even less likely that Hunter and Fisher, under pressure from powerful agents pushing to dissolve the union through decertification or a disclaimer of interest, would be able to garner support for such a deal in the face of such opposition.

"We already have a hard salary cap," one person connected to the talks told Tuesday night. "That train left the station in the last collective bargaining. If you accept that as an important victory point, then we've been bamboozled."

Whether viewed as a meaningful concession or not, the revelation from the owners Tuesday set the stage for an absolutely critical day of negotiating on Wednesday. With more preseason games on the chopping block next week and with an on-time start to the regular season unlikely if there's no deal, this is the moment of truth these negotiations began inching toward last week when league negotiators made a specific proposal on the BRI split for the first time since they offered a flat $2 billion-a-year over the first eight years of a 10-year deal back in June.

Though a person with knowledge of the talks said the union deemed the owners' 46 percent offer "unacceptable," Hunter and Fisher believed it was the starting point in the real negotiations to save the season. 

In another wrinkle that could be key to the talks, the NBPA's unfair labor practices charge against the league has been transferred from the National Labor Relations Board's regional office in New York to the general counsel in Washington, D.C., a person with knowledge of the situation told The case file includes the regional director's recommendation about whether a complaint should be issued against the NBA, but the file is sealed, the person said.

After what is expected to be an exhaustive review of the case by the NLRB's Washington-based legal staff, a decision will be rendered on whether a complaint should be filed. Though Hunter is feeling pressure from agents who are pushing for the union to decertify -- a tactic that the NFLPA used, to little effect, in its bargaining talks with the NFL -- a person with knowledge of his thinking said Hunter is determined to keep the union together until the NLRB rules. A favorable ruling for the NBPA could result in a federal injunction lifting the lockout, thus shifting significant leverage to the players.

The NBA subsequently filed its own unfair labor practices charge against the NBPA, and it is possible that the NLRB may not rule on either case in time for the two sides to negotiate a settlement that would save the season.

Amid the divided opinions on decertification, Fisher sent a second letter to union members this week in which he again urged unity and tried to reassure players that he and Hunter would not sell them out just to get a deal. Fisher reiterated the union's resistance to a hard team salary cap and promised to fight for players to share fairly in the league's revenue growth -- which is expected to continue rising at a 4 percent-a-year clip, plus the possibility of massive gains in the NBA's broadcast rights deals when they expire after the 2015-16 season.

"We’ve been clear from Day 1 of this process that we cannot sign off on a deal that attempts in any way to include a hard salary cap for our teams. That has not changed,” Fisher said in the letter. “Unless you, the group we represent, tell us otherwise, we are prepared to hold the line for as long as it takes to preserve the system we’ve worked so hard to build.”

After Tuesday's meeting, Fisher emerged in a far more upbeat mood than he and commissioner David Stern had exhibited following last week's meeting. The two sides broke off talks about three hours shy of a typical session and said they needed to retreat to their own offices for private meetings before reconvening on Wednesday.

"We’ve talked extensively about ideas and concepts," Fisher said. "These are things that, if we could get into the range or get into the zone, maybe we can put a deal together."

Time, and new ideas, are running short.

Since: Dec 12, 2009
Posted on: September 28, 2011 12:19 am

Sources: Owners drop insistence on hard cap

....Players = winning....

Since: Apr 15, 2008
Posted on: September 28, 2011 12:18 am

Sources: Owners drop insistence on hard cap

Hate him or love him Berger is a great source for anything NBA, finally at least a bit of good news..though you should never count your chickens before there hatched.

Just before i read this I was thinking uhh last day of baseball tomorrow, this sucks. Saturdays and Sunday are football then hockey is coming up, I need my NBA fix though!!! Get a deal done folks!!! I don't want to be stuck with just the NHL 7 days a week.

Since: Jan 22, 2007
Posted on: September 28, 2011 12:14 am

Sources: Owners drop insistence on hard cap

Shame; that means the NBA is going to remain a broken product.  Oh, well.

Since: Sep 13, 2011
Posted on: September 27, 2011 11:44 pm

Sources: Owners drop insistence on hard cap

July of 2010 huh bclautz, you became disinterested when LeBron left cleveland it looks like and your probably still bitter. But I'm sure when he was there and your team was in the playoffs you had an interest. The same teams don't really win every year, the Knicks finally made the playoffs, the Grizzlies finally made the playoffs and played very well, the pacers were back in the playoffs and are upcoming, the lakers were easily swept, and the heat the team picked to win it all lost 4-2. Last year was pretty unpredictable. The Cavs just picked up some good players outta the draft and could once again be playoff contendors when they develope. If you have no interest anymore then stay off here. The game does need some tweaking I do agree but right now I just want basketball back.

Since: Oct 25, 2007
Posted on: September 27, 2011 11:18 pm

Sources: Owners drop insistence on hard cap

Weak, owners, weak.

Fix the system, institute a hard cap. A soft cap is the dumbest thing in sports. That's how the Mavs won the title - pissing on the cap and spending way over. Who cares about a little tax as long as you win a championship?

Since: May 23, 2008
Posted on: September 27, 2011 11:14 pm

Sources: Owners drop insistence on hard cap

all right. i guess they want the status quo. This game needs fix I guess the same teams will win every year. I totally came totalty disinterested in July 2010.

Since: Sep 13, 2011
Posted on: September 27, 2011 10:35 pm

Sources: Owners drop insistence on hard cap

Well it looks like a deal could be in place in time for the season. Now they are both starting to bend a little bit on what they wanted. The agents need to just get out of it.

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