NEW YORK -- As bleary-eyed negotiators reconvened Thursday in Manhattan after a 15-hour session that yielded progress on the difficult system issues needed to strike a deal, the next step is a precarious one: marrying a new system with a reduced split of BRI for the players in a way they can accept and, ultimately, ratify.
The two sides have been here before, and it's at this intersection of system and split where the talks have spectacularly blown apart before -- most recently, last Thursday, when the owners insisted on the players accepting a 50-50 split as a precondition for continuing negotiations.
With both sides recognizing that they have one last chance over the next few days to not only avoid losing more games but also, perhaps, salvage those already lost in a compressed, revamped 82-game schedule, the time for ultimatums and preconditions has passed. It is time for compromise and real, 11th-hour movement in both sides' bargaining positions. Without it, there will be no deal and there will be widespread, unnecessary economic carnage.
One of the interesting phenomena of this messy work stoppage is that, despite the public's knee-jerk reaction to blame the players and cast athletes as greedy villains, NBA fans have become educated about the issues and facts involved and seem, by and large, to recognize that the players have been in an untenable negotiating position. The owners have asked for an awful lot, and seem awfully determined to get it. But in exchange for agreeing to a reduction in their share of BRI from the 57 percent under the previous deal as a fait accompli -- and for openly and forthrightly negotiating certain system changes that the owners believe will help create more competitive balance and payroll parity -- the players need something in return. NBPA executive director Billy Hunter and president Derek Fisher need to bring a deal to the union membership by the end of the weekend that allows them to declare some measure of victory.
Here are a couple of ways that can happen, and unsurprisingly, they are interrelated, like many aspects of these negotiations:
It is clear that the owners' ideal BRI split is 50-50, but the time for seeking the ideal was July, August and September. It's late October, almost November, so there needs to be one final push from the owners on BRI to make the system changes more palatable to the players. It is the players, remember, who already have given up more than $1 billion over six years compared to what they would've gotten under a 57 percent system by offering to go as low as 52.5 percent. They players should be willing to meet the owners somewhere in the middle, but not all the way to 50 percent.
If this deal getting done hinges on the owners getting their 50-50 split come hell or high water, then I am scared for basketball humanity.
Here is how it can get done -- and, once again, silly me, I am being logical and sensible about this. The difference between the players' position of 52.5 percent and the owners' offer of 50 percent is approximately $100 million a year. As Hunter alluded to Thursday morning, there are tradeoffs to be made between system issues and movements in the BRI split -- in other words, an economic move by the owners would make some of the system restrictions they are seeking more palatable.
"We’ll continue to remain focused on some key principle items in our system that have to remain there in order for our players to agree to what is already a reduced percentage of BRI," Fisher said.
In other words: Work with me here, guys.
By reducing the players' share from 57 percent to 50 percent, the owners are seeking a 12 percent reduction in salaries -- from the $2.25 billion they would've received under the old system to $1.97 billion. There are thousands of ways to get there, but a key one that hasn't been discussed much would achieve a substantial amount of the further reduction needed for the two sides to meet in the middle without the affected players feeling it much -- if at all.
Both sides seem to have agreed to leave the structure of max contracts largely intact under the new agreement, meaning stars would still be able to get 25 or 30 percent of the cap, depending on the situation. But if players across the league are facing a 12 percent pay cut, why would max contracts be sacred?
Next season, there will be 22 players at or just below the max -- ranging in pay from $13.7 million (Kevin Durant) to $25.2 million (Kobe Bryant) for a total of $392 million. Since league negotiators are open to phasing in some of the system changes they are seeking to create more balanced payrolls, a 15-20 percent reduction in future max salaries -- say, 20-25 percent of the cap instead of 25-30 -- would result in approximately $70 million a year in future savings. That's nearly all of the annual difference between the two sides' economic positions.
While the vast majority of max players deserve what they get and more, they also earn tens of millions more through marketing and endorsement deals. If max players absorbed a bigger share of the reductions the owners are seeking, it would ease the bridging of the gap between 50 and 52.5 percent -- say, to somewhere in the middle, such as 51 or 51.5 percent -- and there's a way to do it without the star players feeling the reduction.
UPDATE: The NBPA annually receives licensing money from the NBA and typically has distrubuted it evenly among the league's approximately 420 players. Last season's share was $37 million, a person with knowledge of the arrangement told CBSSports.com. The NBPA has withheld the licensing money for several years and kept it in a fund to help players through the lockout. When the lockout is over, the money will be distributed.
Through giving players a share of licensing money commensurate with their own jersey and merchandising sales, the star players would receive some of the money given up through the reduction in max salaries. A negotiated increase in the amount of licensing money paid to the players would sweeten the pot, with minimal impact on the owners' share of BRI. Licensing money -- revenues from merchandise sold with team or league logos and/or player names -- is part of the approximately $650 million in deductions that come off the top of overall revenues before they are counted in BRI and split with the players.
So if you're among the next wave of max players to sign extensions -- Dwight Howard, Derrick Rose, Chris Paul, Deron Williams -- the haircut you'd take on the max salary could be minimized by a bigger share of the licensing money.
Sometimes, the solutions make too much sense.