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Blog Entry

Your quality lockout solution of the week

Posted on: September 19, 2011 1:04 pm
 
By Matt Moore

There have been a lot of proposed plans from media and fans for a new CBA during the lockout. Ken Berger's plan from June had a strong set of balanced compromises on both sides. But with the negotiations progressing (kind of - baby steps), we get a clearer idea of what the new CBA will look like, barring a dramatic sequence of events. And with it, the proposals for an end to the lockout, which the two sides seem at times diametrically opposed to, become more refined as well. 

Tim Donahue is a writer for the Pacers blog 8 Points, 9 Seconds. He's written some of the most comprehensive works in regards to the CBA negotiations and the issues involved. On Monday, Donahue posted a revised proposal on 8 Points, 9 Seconds which factors in comments from both sides of the negotiation in pursuing what appears to be a decent compromise for both sides. The proposal includes a reduction in the players' split of the BRI to 53 percent (which the players have already agreed to, according to Jared Dudley), but more interesting, it provides a solution to the "blood issue" of a hard cap, while giving the players a measure of flexibility, and without the "flex cap."
The Cap System

The system will include both a soft cap – more accurately described as a “threshold” – and a hard cap. Structurally, it is similar to the “flex” cap system previously proposed by the owners, but it is not the same. The mechanics would be:

The “soft cap” or “threshold” would be set by reducing BRI by $100 million to cover benefits, then taking 47 percent of the remainder and dividing by 30 (or total number of teams). Teams may spend above the threshold using an exception system that will be largely the same as the previous system – with changes to be outlined below.

A hard cap – which no team will be allowed to exceed at any point during the season – will be established by reducing the BRI by $100 million, then taking 65 percent of the remainder and dividing by 30 (or total number of teams).

A salary “floor” will be established at 75 percent of the soft cap. Any team who fails to meet or exceed this baseline in payroll will be ineligible for participation in the supplemental revenue sharing program.*  (* This is assumed to be the new program, which is expected deal with currently unshared revenue streams. The team will still receive their share of the national revenues – including television – as they do now.)

The luxury tax will be abolished. It will be unnecessary with the hard cap, and it’s revenue sharing function will be replaced in any new revenue sharing program the league implements.
via CBA Talk: Splitting the Baby

The 65 percent the hard cap is set at under Donahue's proposal is actually taken from a Billy Hunter statement on what the players' BRI cut would need to be in order for the players to accept a hard cap. But the key to Donahue's proposal is this. The players' biggest (but not sole) complaint with a hard cap is the loss of guaranteed contracts. Players fought hard to obtain the ability (not the right- teams are welcome to sign players to either guaranteed or non-guaranteed contracts, the CBA simply allows for guaranteed contracts to exist) to sign guaranteed contracts, and to abandon it puts career earnings in jeopardy. But Donahue's proposal sets the hard cap so high, guaranteed contracts will most likely be held through at least the first four years of a contract. While the fifth and sixth years may become non-guaranteed, that isn't dramatically different from the current system in which many of the later years are only partially guaranteed.

Furthermore, players have acknowledged the need for owners to be able to get out of contracts. This system prevents the owners from making terrible deal upon terrible deal, while also managing the impact on flexibility for the players. In short, it's not perfect for either side. It presents the players compromising on a hard cap and their cut of the BRI. It's not a favorable deal to the players. But it's a deal that would get the season to start on time, salvage most of their goals, and work within the confines of the owners' demands to present a solution. On only a six-year (or seven-year, depending on when the system is implemented) deal, it allows for them to make another swing at adjustments once the economy recovers. The large market owners get some room to spend a significant amount as their current market allows, but only in the form of exceptions as to keep costs down for the small-market owners. 

It's not the last proposal that will come from the gallery, but it is one that satisfies the demands of both sides. As such, it's considerably better than what either side in the actual negotiation has to offer.  
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