Blog Entry

What's in the deal and how it got done

Posted on: November 26, 2011 6:54 pm
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.


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Players Association rejected the owners' latest offer, dissolved and filed antitrust lawsuits that soon will be withdrawn: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.)

Since: Apr 12, 2011
Posted on: November 27, 2011 8:08 am

What's in the deal and how it got done

The owners got the anti-Cuban powers they wanted.

Any owner willing to spend his own money to improve his team for his fans is now financially raped.

Welcome to a league where teams are financially rewarded for running their team like Donald Sterling ran the Clippers for years. Where there is zero incentive to make your team better, more exciting and more fun to watch and many financial penalties for any owner silly enough to act like putting a winner on the court for their fans is more important than making money.

Of course, the owners know most fans will blame whatever players and coaches they trot out there, not the owners sitting back and counting the profits and saying: "Hey, nothing I can do about this, the Union Contract has my hands tied!" Yeah, because you wanted your hands tied, and got it by locking the players out until they let you all tie your hands.

Owners won. Fans lose. Most are too big of suckers to even know the hands of owners that actually want to give them a great, entertaining team to follow just got tied in many key areas.

Now franchises get to wait for lucky ping pong balls or hope their talent guy gets luckier than others on guys not good enough to be drafted.

Oh the excitement!

Since: May 30, 2007
Posted on: November 27, 2011 7:49 am

What's in the deal and how it got done

I'd rather watch the WNBA then the NBA. The ladies play for nearly nothing, a salary even the NBA ball boy would refuse. They put in a full effort throughout the entire game, unlike the NBA who play only in the last quarter. The ladies are much friendlier with their fan base then the NBA. I don't see the WNBA players bringing guns into the locker room, arrested for fighting in night clubs or beating their spouses, coaches or anyone who sit happened to walk by.

Since: Aug 19, 2006
Posted on: November 27, 2011 5:00 am

What's in the deal and how it got done

Imagine what a couple lost paychecks will do !

Since: Oct 7, 2006
Posted on: November 27, 2011 4:37 am

What's in the deal and how it got done

winnerz  - "I think you have the NBA confused with Major League Baseball.
Yeah big market teams do well in the NBA but teams like Miami, NJ, Philly, Cleveland, San Antonio, Indiana, Detroit have all at least made the Finals in recent years."

When exactly were you seeing the Nets, Sixers or Pacers in the finals recently?? I dont call a dozen years recent.  

Since: Sep 23, 2009
Posted on: November 27, 2011 4:27 am

What's in the deal and how it got done

"Agree Boycott this talentless, no heart, greedy league, owners and players locked us out we should lock them out.  Never hated the NBA more than I do know.  The whole Im a thug, every time I drive im fouled, I need more money, i've got no jumper, I can't pass, terrible culture thats overtaken this POS is just sad."

What year did you last watch the NBA?  All your ignorant comments/stereotypes you just typed are so 1998.  Who's the Thug?  Who's crying for more money?  Who can't shoot/pass?  What are you talking about?!?

Do you mean the humble soft spoken NBA MVP Derrick Rose.  Do you mean the loyal to his team, scoring champion Kevin Durant?  Or are you talking about the most recent NBA champion Dirk Nowitzki?  I can go on and on.

Are there always a couple of nuckle heads in any professional league yes, but there's hundreds more athletes (NBA players) that are not.


But the NBA is a bunch of thugs uh? uhmm.....*thinking*......*scratchin

g head*.......oh you mean the NBA 85-90% Black (yea I went there).

Since: Sep 23, 2009
Posted on: November 27, 2011 4:04 am

What's in the deal and how it got done

people keep paying the high ticket prices and concessions and don't have anything left over to financially support the things that are really mportant. 

I'm sure some financially irresponsible people do this, but I'm pretty sure the majority of the people that go to games can "afford" to go to games.  Ticket prices are ridiculous, it's not the low income people at these games trust me.

Since: Sep 23, 2009
Posted on: November 27, 2011 3:59 am

What's in the deal and how it got done

Teachers, and several other "noble" occupation don't get paid a fair amount.  But it's not possible for these occupation to get paid millions.  One of the major factor of how much your salary will be is how much money your job position directly creates.  Unfortunately jobs like teachers, police officers, firefighters, etc don't generate enough money for them all to get paid millions.

That's capitalism.  It takes more than how important or noble your job is to get a large salary. 

Since: Jan 4, 2011
Posted on: November 27, 2011 2:38 am

What's in the deal and how it got done

Public school teachers deserve the same money as police officers, firefighters, senior postal workers and so on. Many other civil servants have college degrees as well. So do many career enlisted members of the armed forces. If teachers are not getting as much money as law enforcement officers and firefighters, I'll listen to the argument. No teacher deserves what anyone who is successful in achieving celebrity deserves. Sports careers often are short, far more so than musical and acting careers can be. Many athletes end up broke and with physical infirmities in some cases. The total earnings of someone who spends two and one-half seasons in the NFL as a fringe player might be $1.5 million, maybe much less. Take out taxes, agent fees (not that fringe player needs one, really), and employment-related expenses borne by the player and that leaves less than $1 million. That's not a lot of money in today's world. If anyone wants to expend their energy on the issue of athletic pay, they might accomplish more discussing how athletes can hang onto their money and use their brief high earnings as a basis for establishing lifetime wealth. Even an NFL player who received only a signing bonus and one year's salary could accomplish that with a rational financial plan.

Since: Dec 19, 2006
Posted on: November 27, 2011 2:19 am

What's in the deal and how it got done

I think you have the NBA confused with Major League Baseball.
Yeah big market teams do well in the NBA but teams like Miami, NJ, Philly, Cleveland, San Antonio, Indiana, Detroit have all at least made the Finals in recent years.

Also the rules are the same for big market teams and small market.
You go over the luxury tax you have to pay.
Some teams in big markets refuse to pay like the Clippers.
So will pay like the Mavs, Lakers but they are always competitive and for the most part draft well and make smart trades.

Can't help it that small market teams overpay players like the Warriors, Bucks, Raptors.

Even small market teams have owners with deep pockets like the Blazers.

Look at this past season final Four 2 of the teams Miami and Oklahoma City are small market teams.
Yeah Miami has 2 of the top players but thats becaz they wanted to win and took less money.

Since: Dec 19, 2006
Posted on: November 27, 2011 2:12 am

What's in the deal and how it got done

Sorry but a teacher shouldn't be making millions of dollars or even half.
They work basically 8 months out of the year when you count all the winter, spring and other school holidays out there.
Also they work 8-3 while the average person works 9-5 or 9-6.
The way the youth is growing up today I wouldn't rate teachers that high.
Yeah they provide a great deal to society but there are a surplus of teachers out there at least from Kindergarten till 12th grade.

Don't forget its a skill to play basketball.
Tiger Woods makes more than probably any NBA player and he just hits a golf ball.
At least NBA players have to be in shape, play back to back nights and fly to diff. places to play on short rest too.
Its not just the fans that pay, a lot of corporations buy tickets and use them.

The entertainment industry is ridiculously overpriced whether its tourists sites, hollywood actors, athletes all are paid way too much.
I just wouldn't single out NBA players, especially since they've been giving up more control to the owners for a while now.
Starting with the rookie contract scale to the age restriction which I'm surprised they didn't lose in the new deal.
The shorter guaranteed contracts, mid level exceptions etc.

Anyway life isn't fair, its not fair that kids of stars are set for life or we have so many trust fund babies.  Don't forget about kids who's parents are multi billionaires like the Dolan's.
All this meanwhile ppl in the world are starving and don't have shelter even.

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