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NBA AM: Will The Players Accept The Deal?
Posted By Steve Kyler On November 11, 2011 @ 8:51 am In All,Main Page,NBA | No Comments
Before we get too far into the results of last night’s meeting in New York, from all of us here at HOOPSWORLD we want wish a happy Veterans Day to all of the men and women who have donned the uniform of our armed services who have fought to protect our nation. Thank you for your service.
The End Is Here: It took 133 days, but we have arrived at the moment of truth. The NBA has made its best and final offer and the NBA Players’ Association will now take that offer to their constituents.
“We don’t expect them to love every aspect of our revised proposal,” NBA Commissioner David Stern conceded. “I would say that there are many teams that don’t like every aspect of our revised proposal.
“We have made our revised proposal,” Stern said, “and we’re not planning to make another one… we moved as far as we could and now we’re at where we’re at.”
“There comes a time when you have to be through negotiating,” Stern said, “and we are.”
The NBA and its Players spend the better part of 30 hours negotiating the finer points of the league’s latest offer and emerged without a handshake agreement, leaving the future of the NBA hanging in the balance.
The NBA’s offer which has drawn criticism from both the Owners’ side and the Players’ side may be a tough deal to get approved, but David Stern believes he has the votes on his side to ratify a labor deal if the Players agree to the terms.
“I am optimistic owners will approve it if the players approve it and I await their response. We’ve done our best.”
The NBA Players’ Association director Billy Hunter said last night that the NBPA will gather their 30 team representatives in New York on Monday or Tuesday to review the League’s final offer.
“It’s not the greatest proposal in the world … but I have an obligation to at least present it to our membership,” Hunter said. “And so that’s what we’re going to do. We’ve got members of our executive board standing behind us, and they all agreed that we needed to sit down and discuss it with all of the reps and collectively decide what it is we should do.”
The NBA did not move off their initial deal points too significantly, but did tweak some areas of concerns for the Players. The initial response to the new revised offer was not good.
The owners agreed to increase the mid-level salary cap exception for luxury tax-paying teams to three-year deals starting at $3 million. The exception under the initial offer was for two years starting at $2.5 million. The “mini-mid-level” as its being called would be available every other year for teams above the tax threshold.
The owners also agreed to make sign-and-trade transactions available to tax-paying teams with certain restrictions.
There was minor movement on the luxury tax “cliff” that rewards teams that stay under the luxury tax.
The repeater tax for teams that go above the tax threshold three times in five-year period was also adjusted, but not by much according to sources close to the process.
In all the deal looks like this:
- The biannual exception will be available only to non-taxpaying teams. The NBA will allow sign-and-trade deals for tax paying teams, on a limited and restricted basis.
- Extend-and-trade deals, such as the one signed by Carmelo Anthony last season, will be prohibited.
- The mid-level exception will be set at $5 million for non-taxpaying teams, with a maximum length between three and four years (alternating annually). The value of the exception will grow by 3 percent annually, starting in Year 3. The Mid-Level would not be available to a team if its use would push them into luxury tax.
- The mini mid-level exception will be set at $3 million for taxpaying teams, with a maximum length of three years, and cannot be used in consecutive years. Its value will also grow at 3 percent annually.
- A 10 percent escrow tax will be withheld from player salaries, to ensure that player earnings do not exceed 50 percent of league revenues. An additional withholding will be applied in Year 1 “to account for business uncertainty” stemming from the lockout.
- Maximum contract lengths will be five years for “Bird” free agents and four years for others.
- Annual contract increases will be 5.5 percent for “Bird” players and 3.5 percent for others.
- Players will be paid a prorated share of their 2011-12 salaries, based on the number of games played once the season starts, with a 72-game season on the table.
- Team and player contract options will be prohibited in new contracts, other than rookie deals. But a player can opt out of the final year of a contract if he agrees to zero salary protection (i.e., if it is non-guaranteed).
- The Basketball Related Revenue Split will be 50-50, with the NBA locking in salaries and benefits equal to last season for the first two years of the deal insuring the players lose no money in accepting a reduced BRI share.
- The Luxury Tax would be an escalating tax based on tiers over the tax line. The tax will increase for every $5 million spent beyond the established line – starting at $70 million in the first year of the labor deal. Teams would be charged a tax of $1.50 for every dollar over the $70 million tax line. That number increases to $1.75 after $5 million over ($75 million), $2.25 after $10 million ($80 million) and $3 after $15 million ($85 million).
- The Repeater Tax would offer an additional $1 charge to each tax tier for teams that exceed the Luxury Tax more than three times in a five-year span, allowing teams to dip into the Luxury Tax, but penalize teams who stay above the tax line for too long.
- There will be a one-time Amnesty Cut allowed. 100% of this cut will be removed from the Luxury Tax and the Salary cap, however 100% of the cut salary will be paid in full to the player and the value of the cut contract will count towards the BRI calculation.
David Stern established that the “clock” on the NBA’s offer would remain stopped to allow for the NBPA to assemble its player representatives and discuss the deal on the table, with an established timeline of Monday at the earliest and Tuesday at the latest to receive an answer.
Stern was clear that if the Players did not take this offer on the table, that the NBA would follow through with its “reset” proposal which would drop the BRI share to a 47-53 split, return to a hard cap system with salary rollbacks.
What’s Next? The NBA Players’ Association has requested its 30 team representatives return to New York for a meeting on Monday, there is a window to allow for the meeting to happen on Tuesday if there are significant travel issues getting everyone to New York.
The Executive Committee will review the NBA proposal with the 30 team reps, with the understanding that a full review to the rank and file of the NBA is possible, but not required in accepting the NBA’s offer.
There are some key points that surfaced from yesterday’s meeting, namely the idea of a 72-game season which to the players means the return of a lost paycheck, making the damages of the labor fight one check per player, significantly reducing the hit each player would take because of the fight.
That nugget in and of itself is a huge concept for some players, especially players that are not on large dollar contracts. Returning lost wages in the form of a condensed 72-game schedule will sway a larger number of votes if this deal is presented to the entire player body.
Late last night a number of agents involved in the Decertification of the union movement made it clear they would likely be holding a conference call among themselves today to discuss next steps on the decertification front.
Sources close to the process saying the Decertification group has more than 200 player signatures and could file its decertification petition with the National Labor Relations Board as early as today, however sources say it’s more likely to occur on Monday.
Even if the Players group files their petition, that simply starts a process that could take up to 45 days.
There has also been talk that the Players’ Association itself could opt to join the decertification fight on Monday, opting to reject the NBA’s offer and file their own Disclaimer of Interest claim with the NLRB, in effect renouncing their interest in representing the players in collective bargaining.
If the Players’ Association opts for the Disclaimer of Interest route, that would allow for the Players to fast track anti-trust lawsuits and move this process into the court system.
The biggest problem facing the NBA players in a Decertification/Disclaimer of Interest path is that it very rarely yields progress in court.
Historically the process can take up to two years to run its course in the courtroom.
The NFL Players opted for the Disclaimer of Interest route in their recent labor fight, and while they initially won an injunction on the NFL’s lockout, it was overturned a few days later in an Appeal.
There is always a chance that a different set of judges could see things differently, but as one informed sources pointed out – it’s not like the NBA has done anything illegal in this process, so finding the ‘smoking gun’ that leads to a slam dunk in court is unlikely.
There are some things that the legal process can afford the players and that’s the power of Subpoena. To help make its case the Players could Subpoena all kinds of private information on owners and their businesses in efforts to apply pressure to deal and build their case that the NBA is not losing money, therefore the massive economic changes being asked are unreasonable.
The players can challenge the owners’ stance that they are losing money and force individual owners to share their personal holdings and financials to prove that owning a NBA team can and does benefit owners in ways not reflected on their balance sheets. That can open the door for the NBA’s calculations on basketball related income to be challenged.
So there are many elements to taking this process to the courts, including damages, which can force compromise at the negotiating table, especially as complaints get closer to be ruled on by a judge.
The reality is that as much as anti-trust becomes a hammer for the players’ side, a deal will not be reached through the courts, so this is very much a process to force the tone of the talks to change. It will also allow for a different set of voices to be involved in reaching a deal.
It’s been long believed that if the Players opt to decertify or that the Players’ Association opts to Disclaim Interest that the 2011-2012 season would be completely lost. Sources close to the process say that’s not an absolute given, but that reaching a compromise deal would get harder especially if the Players go on the offensive and try and attack individual owners.
Making 72-Games Work: NBA Commissioner David Stern revealed last night that the NBA has a 72-game schedule worked out and that should the NBA Players accept their labor proposal on Tuesday, getting the regular season open for business on December 15th was ready to go.
Here is how it happens.
The normal 82-game regular season has a large number of open dates. These are typical off-days and practice days. Games that can be rescheduled into these off days will help restore a large number of the lost November dates. Sources say roughly 8 to 10 games can be made up compressing the schedule teams are already used to, meaning more back to back games and less practice time for the season.
The NBA has also mapped out a plan that would extend the regular season roughly a week into late April. The normal end to the regular season is generally April 15th; there is talk that date could get stretch to as late as April 25th, moving the start of the NBA Playoffs back one week.
The NBA has also said the NBA Finals would be moved back one week creating the room to get in 72 games.
Assuming the season starts as mapped out, the 2012 NBA All-Star Game in Orlando would go off as planned the weekend of February 26th.
NBA Deputy Commissioner Adam Silver revealed the NBA has been running alternate schedule models basically on a daily basis to be ready for a labor deal and that all of the dates for a 72-game schedule have been locked in with the teams and the various arenas the NBA plays in.
If a deal is reached on Tuesday the 15th of November, sources believe that free agency would open the weekend after Thanksgiving, with training camps opening on or about December 1st. There is a belief that Training camp would run roughly seven days with at least two pre-season games before an opening night slate of games on December 15th.
All that remains is for both sides to make a deal.
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