Blog Entry

What's in the deal and how it got done

Posted on: November 26, 2011 6:54 pm
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NEW YORK -- After weeks of stubbornness, posturing, white-knuckle negotiating tactics and finally lawsuits, the NBA labor dispute finally came down to something that had been sorely lacking.

Compromise.

Imagine that.

Instead of losing an entire season and immersing the sport in a debilitating legal battle that would've squandered all its momentum, the NBA is back with a deal that neither side loves, but both sides can live with. In other words, the best kind of deal -- one that both sides walk away from a little disappointed. Based on conversations with officials from both sides, here are the broad strokes of the agreement, with emphasis on elements that had been unresolved when the National Basketball Players Association rejected the owners' latest offer, dissolved and filed antitrust lawsuits that soon will be withdrawn:

* BRI: The players will receive between 49-51 percent of basketball-related income based on the extent of revenue growth. But whereas under the owners' prior proposals, the players felt it would've been nearly impossible to achieve the 51 percent ceiling, sources said they'll have a realistic chance of hitting it by the fifth or sixth year of the deal with robust revenue growth. The players will receive 60.5 percent of incremental revenues beyond projections each season, up to 51 percent in aggregate. Previously, the owners were offering only 57 percent of marginal revenues up to a total of 51.

* Mid-level exception: For non-tax-paying teams, they're four-year deals starting at $5 million in the first two years, with the starting point increasing by 3 percent in subsequent years. Owners had been pushing for alternating 3- and 4-year deals for non-taxpayers. For tax-payers, the so-called "mini" mid-level will be for three years starting at $3 million in the first two years, with the starting point increasing 3 percent in subsequent years. This is an enhancement of the owners' previous offer of a two-year "mini" mid-level starting at $2.5 million.

* Room exception: Teams under the cap get an additional two-year exception starting at $2.5 million (same as previous offer).

* Luxury tax rates: The same dollar-for-dollar as in the previous CBA for the first two years. Starting in Year 3, the rates increase to $1.50 for the first $5 million over; $1.75 for $5-$10 million over; $2.50 for $10-$15 million over; $3.25 for $15-$25 million over; and an additional 50 cents for each additional $5 million (same as previous proposal).

* Repeater Tax: A dollar-for-dollar additional tax for teams that are above the tax line for a fourth time in five years (same as previous proposal). Owners at one time had been pushing for a $1.50 repeater rate, while the players wanted 50 cents. Voila, compromise.

* Sign-and-trades: Available to all teams in the first two years of the agreement. Starting in Year 3, teams that are close to the tax line would only be able to acquire a free agent via a sign-and-trade transaction to the extent that it put the team no more than $4 million over the tax. The maximum length of such contracts will be four years with 4.5 percent annual increases. Previously, the owners had been seeking to eliminate sign-and-trades for all tax teams or teams that would exceed the tax after the transaction. This was a key issue for the players, and the more player-friendly definition of a tax-paying team also applies to use of the mid-level exception. So, if a team is $500,000 under the tax, it could use $4.5 million of the full mid-level. If a team already is over the tax, it would be restricted to the "mini" mid-level.

* Extend-and-trades: With the so-called Carmelo Anthony rule, owners were trying to take away a player's ability to force a trade to a team and sign an extension. The compromise is that teams can acquire player via an extend-and-trade but can only offer a three-year deal (including whatever is left on the player's contract) with 4.5 percent increases.

* Qualifying offers: The players feel they made significant gains here for restricted free agents. Qualifying offers will be guaranteed with the potential to be significantly enhanced based on performance. So for example, a first-round pick between picks 10-30 would be eligible to receive a qualifying offer as high as the ninth pick's if he's a starter for half the regular season games or 2,000 minutes. Second-round picks and undrafted players could be eligible for QO’s as high as the 21st pick based on the same criteria. Similarly, picks 1-14 could have their qualifying offers reduced if they don't meet the criteria. It's a nice compromise that provides opportunities for players who perform and gives owners protection against having to overpay players who don't.

* Escrow: Withholding from player paychecks to account for a potential overage in their BRI share is capped at 10 percent. Owners dropped their demand for an escrow carryover from season to season.

* New player benefits pool: One percent of BRI will be used for annuities and welfare benefits (such as health, life and disability insurance, long-term care and education expenses for themselves and their children). In the unlikely event that 10 percent doesn't cover the players' BRI overage, up to 1 percent of the pool could be used to account for that.

* Contract lengths: All the same as in the previous proposal. Bird free agents can get five-year deals with their own teams, with other deals being capped at four years. Each team can designate one player eligible for a five-year extension of his rookie contract with his own team. A team can have only one player so designated on the roster at a time. The owners had been pushing for four- and three-year contract lengths until recently.

* Annual increases: 7.5 percent for Bird players, 4.5 percent for others. This is up from 6.5 percent and 3.5 percent, respectively, in the owners' prior proposal.

* Minimum salaries and rookie scale: Frozen for the first two years and then will begin growing consistent with BRI growth. Previously, owners were seeking to cut both by 12 percent -- another win for the players.

* Maximum salaries: Same formula as in the previous CBA, with this exception in the players' favor: Star players who outperform their rookie contracts will be eligible to extend with their teams at 30 percent of the cap -- up from 25 percent. A player would be eligible by satisfying any of the following criteria: 1) winning MVP; 2) being named first-, second- or third-team all-NBA twice; or being voted as an All-Star starter twice. The Bulls' Derrick Rose, for example, would be eligible.

* Player options: Same as in the previous CBA. Owners had been seeking to eliminate player options for players who make more than the league average.

* Stretch and amnesty provisions: Same as in the prior proposal.

* The luxury tax cliff: Same as most recent proposal. Owners have agreed that a tax-paying team will only lose half the tax money it otherwise would've received by remaining under the tax.

* Minimum team payroll: It's set at 85 percent of the cap in the first two years, and 90 percent thereafter. The cap ($58 million) and tax ($70 million) levels can be no lower than last season's levels in the first two years.

* Deal length: 10 years, with each side able to opt out after Year 6. (Same as previous proposal.)
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Comments

Since: May 5, 2011
Posted on: November 27, 2011 4:07 pm
 

What's in the deal and how it got done

Go Mavs!  The season was shortened just enough for my "old" team to stay fresh for the playoffs and REPEAT!!!


JimmyGusto
Since: Oct 10, 2011
Posted on: November 27, 2011 2:51 pm
This comment has been removed.

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Since: Aug 11, 2006
Posted on: November 27, 2011 2:47 pm
 

What's in the deal and how it got done

Bottom line: the owners caved.  None of the fundamental flaws of the league have been addressed, therefore nothing will be different.  The handful of teams that make money will continue to blow way past the fictional salary cap while the small market teams will continue to dwindle away.

In the end, all that was accomplished was that the best teams in the best markets will have to spend a few million more dollars to compile their dream teams. 



Since: Mar 4, 2008
Posted on: November 27, 2011 2:46 pm
 

What's in the deal and how it got done

However, how many people in the world can play basketball proffesionally?
None. However, a few hundred can play professionally.





Since: Oct 24, 2010
Posted on: November 27, 2011 2:08 pm
 

What's in the deal and how it got done

Appears to me that the owners gave up too much, but what do I care? Not much either way.



Since: Oct 12, 2006
Posted on: November 27, 2011 1:05 pm
 

What's in the deal and how it got done

Sad that it got done. Don't get me wrong, I've watched the NBA for some tiome now, but let's face it, I'll watch college hoops before these guys and the pretty much the "strictly" playoffs watching that I do, the NBA will be no better than it's ever been. I did attend a single 76ers vs Heat playoff game. To be candid, the Miami Heat had no business selling that ticket to anyone even for face value. Let's put it this way, I'd have had a better seat had they sat me in the basement of the building in front of a TBS broacast.



Since: Sep 14, 2008
Posted on: November 27, 2011 1:02 pm
 

What's in the deal and how it got done

Macodi.Im not on any drugs. You're right half the players in the NBA probably couldn't pass a physics or calculus class. However, how many people in the world can play basketball proffesionally? BTW, I would rather watch basketball played at the highest level. There isnt one player in college right now that could match the intensity level of LBJ, Kobe, Garnett, Durant in a game. Im sorry college hoops died along time ago when the players started leaving early.



Since: Nov 30, 2009
Posted on: November 27, 2011 1:02 pm
 

What's in the deal and how it got done

I love the vocal minority on this site that claims "Nobody cares about the NBA, we all wish it never came back." In truth the most you can say is that you personally don't care about the NBA. The fact that you are visiting an NBA message board to say it might just indicate that you really do care though.

The fact is millions of people love the NBA, and will be very happy to be watching it again come Christmas day. I can't wait to see Blake Griffin, Eric Gordon, and the rest of my Clippers play again. So feel free to say you hate the game, and wish it never came back, but quit trying to claim that everyone thinks the same. It just makes you look stupid.

Of course trolls gotta troll, so I'm sure you guys will continue claiming how we all hate the NBA.





Since: Nov 27, 2011
Posted on: November 27, 2011 12:55 pm
 

What's in the deal and how it got done

I did not read this...I just wanted to post a clear message to the NBA...WHO CARES!




Since: Sep 14, 2008
Posted on: November 27, 2011 12:54 pm
 

What's in the deal and how it got done

If it sucks why do you continue to come on an NBA blog and comment. I dont get it, if someone doesnt like something they avoid it at all cost. I dont like wrestling, so I never watch or comment on it. If it sucks stay the phuck away from it. BTW, your opinion sucks! The NBA isnt going anywhere and will be around for the "fans" that appreciate the game..


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