So Many Problems So Little Time: The NBA and its Players find themselves at their biggest impasse of the labor process, which ironically is also when they are at the closest point of a deal in four months.
On Saturday, Players’ Association officials rejected the NBA’s latest proposal for a labor deal saying that the deal presented was not in any way acceptable. Sources close to the process called the deal “98% there”, which brings a litany of questions to the forefront, especially with a deal clearly so close.
The Players Association has requested all of its team representatives to take part in a meeting Tuesday to go over where things stand, but the Players’ Association is adamantly refusing to put the latest offer from the NBA to a full vote of the Players.
The Players’ Association is worried that a full vote would yield an emotional response from players who’d likely take a bad deal just to get back to work rather than a thought out response to the parts of the deal the Players’ Association still feel needs work.
NBA Commissioner David Stern made it clear early Sunday morning that the NBA’s current offer would expire at the close of business on Wednesday at which point the NBA would return to its initial negotiating stance which includes a 47% share of revenue going to the players. A harder NHL-style Flex Cap, large percentage rollbacks in existing contracts and shorter contracts with fewer guarantees in NBA deals.
Earlier last week more than 50 players took part in what agents are calling a “fact finding” call on decertifying their union and its believed that early Sunday that group started to mobilize to assemble enough votes to petition the National Labor Relations Board to force the NBAPA to hold a full vote on decertification.
As we have covered a few times in this space, the mechanism to force decertification is a long one. If the Players want to forcible dissolve their union, they must have 130 votes on a petition. The NLRB has 45 days in which to rule on the petition and force the Players Association to hold a vote. The Players would need 226 votes in favor of decertification in order for the Association to be forcefully decertified.
At any point in the process the Players’ Association could, under their own action, call for a full vote. So while much is being made of the 45 day window required to force decertification, the Players Association can fast track that if it chose to.
No one in the process believes Decertification can yield a deal quickly especially if the process is allowed to play out as some are scripting it.
There are some that believe if the Players begin a forcible decertification process that the fear of the legal battle that follows might be enough to force the NBA and its Owners to relent on the handful of remaining system issues.
It’s been said that the 45 day window before a full vote is held could shift the balance of power a bit and get a compromise out of the NBA.
There are others that feel decertification at this point in the process will simply blow up the deal on the table and destroy any chance for a regular NBA season.
Tuesday will be interesting, as all 30 team representatives could demand a full vote from the Players, if that occurs the odds of a deal before the NBA’s Wednesday deadline is real, simply because so many of the rank and file want to go back to work.
If the 30 NBA team reps opt to hold the Players’ Association line that the offer is not worthy of a vote, the odds that more games are officially cancelled becomes real and more importantly the implosion of the 2011-2012 NBA season becomes more likely as each side would retreat from the compromises on the table.
The Problems: Would it surprise to know that just six items are preventing a deal in the NBA? The NBA has said it adopted five of the six compromises presented by federal mediator George Cohen into their latest offer, but even those compromises were not good enough to reach a deal Saturday. Here is what’s left:
BRI Split: According to David Stern, federal mediator George Cohen proposed a “band” split of Basketball Related Revenue (BRI) that would start at 49% and swell to 51% based on revenue growth.
The short of the process is that every year the NBA and the Players would define a revenue projection, if the final number comes in higher than expected, any dollars over that projected number would be shared 57-43, with 57% going to the players.
The idea here is that if both sides agreed that the revenue goal for the year was $4 billion, they would set a salary cap and tax system around that number, however any monies over that agreed $4 billion would be shared at a greater rate.
There were also protections for underperforming years in which the players share could drop to 49% if the floor falls out from under the league.
The Players had proposed dropping their share of BRI from 52.5% to 51%, only if 1% were to be applied to a retired Player’s fund.
The Players have flatly refused the NBA’s band idea, saying that the terms required to achieve 51% are almost impossible to achieve making this offer a 50/50 offer by another name.
Both sides have warmed up to 51%, all that needs to occur here is to massage the terms of how 51% is obtained and both sides are there on BRI split, something no one thought they’d ever see given where this started.
The most obvious compromise if for the NBA to expand their band to 52%, making 52% the harder number to achieve, lower the criteria on 51% so it’s more easily obtainable and the gap on this issue closed.
Mid-Level Exceptions For Tax Teams: The NBA was ardently opposed to Luxury Tax teams having the ability to continue stockpiling contract dollars. They wanted to prohibit Luxury tax teams from using salary cap exceptions.
There were compromises made before Sunday with the NBA relenting on the use of Larry-Bird rights for Luxury tax teams.
On Sunday mediator George Cohen introduced the idea of a Mini Mid-Level, that would be worth $2.5 million for two years for Tax paying teams, something NBA said it would adopt into its offer.
Sign And Trade Deals For Tax Teams: The mediator, according to David Stern, recommended that sign and trade deals be prohibited for tax teams, which lines up with where the NBA wants to see the rule set.
The Players have a huge objection because it limits the pool of teams competing for a free agent player, but more importantly the teams at or near the tax line are typically the better teams.
The Players view this prohibition as removing a player’s ability to join a good team, and they are opposed to anything that restricts movement.
There is no compromise point on this one, either the NBA relents or they stand firm.
CBS Sports’ Ken Berger is reporting that exactly FIVE sign and trade deals have been done in the last six years by Luxury Tax teams, not exactly a huge shift in power or dollars.
One source pointed out that the NBA is pursuing a repeat offender plan for chronic tax paying teams. If that provision is passed it’s should act as a deterrent for stockpiling of contracts making a league imposed restriction almost moot. This is an area where the NBA could relent and it would be viewed as a significant gain in the deal for the Players.
Length of Mid-Level: The two sides have debated on how long a new reduced value Mid-level exception should be with the NBA wanting a three year deal starting at $5 million, where the Players side wanted a 4 year deal starting at $5 million.
The valuation is set, so the compromise the NBA adopted is that on alternating years NBA teams would have the ability to issue different length deals.
For example in year one of the deal a team could offer a four-year deal worth $20 million. The following year they could only issue a three-year deal worth $15 million. In year three they’d get the ability to issue another four year deal.
Sources familiar with the process said it sounded like the use of the four year-three year would be at team discretion, so a team could opt to use their three year exception this year and save their four year exception next year.
Teams would not be required to issue contracts of that length; they could do shorter deals however it sounds like they would have to classify which slot they were using at the time of the deal signing.
Repeater Tax Penalty: The NBA has been adamant that they want some kind of penalty for teams that exceed the Luxury Tax on a regular basis.
What’s been talked about is an additional Luxury tax charge for teams that have been in the Luxury Tax more than three times in a five year span.
The new Luxury Tax that both sides seem to have agreed on has an escalating tax based on tiers over the tax line, with a tax that will increase for every $5 million spent beyond the established line, starting with a tax of $1.50 for every dollar over the tax line. That number increases to $1.75 after $5 million, $2.25 after $10 million and $3 after $15 million.
The Repeater tax penalty proposed by the NBA was an extra $1.50 to each of those tiers, the Players proposed a $.50 additional penalty. The compromise was a flat $1 additional charge to each tax tier for teams that exceed the Luxury Tax line for too many seasons within the life span of the deal.
An informed source, said the only way bringing down the ceiling will fly with the rank and file is if the NBA in turn increases the minimum teams are allowed to spend.
Under the old labor deal teams only had to spend 75% of the salary cap, allowing for some teams to spend as little as $43 million last season. There is a desire to see that floor raised if the ceiling will be lowered.
The Cliff Provision: For years there has been a reward system of sorts for teams that stayed under the Luxury Tax line.
In fact the swing from the double-dollar penalty of the Luxury tax to the rebate from being a non-tax payer was so great that the Players have viewed it as a cliff, and its often referred to as the Cliff provision.
In essence teams that are under the tax, used to share the tax collected by the tax paying teams. In some instances collected Luxury Taxes have exceed $80 to $90 million and are shared with the teams that did not pay tax.
Bonusing them if you will for being under the tax.
The Players have argued that between the reward paid for being under the tax and the newer harsher penalty for being over the tax, teams are incentivized to stay under the tax in too many ways.
The Players have proposed that the NBA reducing the percentage of tax dollars from 100% going to teams under the cap to 50%.
The NBA did not adopt that concept into their offer, which is a problem for the Players as they see the “Cliff” provision as a hindrance to open spending.
That is the nuts and bolts of where things stand on pseudo-major issues.
HoopsWorld.com
On Saturday, Players’ Association officials rejected the NBA’s latest proposal for a labor deal saying that the deal presented was not in any way acceptable. Sources close to the process called the deal “98% there”, which brings a litany of questions to the forefront, especially with a deal clearly so close.
The Players Association has requested all of its team representatives to take part in a meeting Tuesday to go over where things stand, but the Players’ Association is adamantly refusing to put the latest offer from the NBA to a full vote of the Players.
The Players’ Association is worried that a full vote would yield an emotional response from players who’d likely take a bad deal just to get back to work rather than a thought out response to the parts of the deal the Players’ Association still feel needs work.
NBA Commissioner David Stern made it clear early Sunday morning that the NBA’s current offer would expire at the close of business on Wednesday at which point the NBA would return to its initial negotiating stance which includes a 47% share of revenue going to the players. A harder NHL-style Flex Cap, large percentage rollbacks in existing contracts and shorter contracts with fewer guarantees in NBA deals.
Earlier last week more than 50 players took part in what agents are calling a “fact finding” call on decertifying their union and its believed that early Sunday that group started to mobilize to assemble enough votes to petition the National Labor Relations Board to force the NBAPA to hold a full vote on decertification.
As we have covered a few times in this space, the mechanism to force decertification is a long one. If the Players want to forcible dissolve their union, they must have 130 votes on a petition. The NLRB has 45 days in which to rule on the petition and force the Players Association to hold a vote. The Players would need 226 votes in favor of decertification in order for the Association to be forcefully decertified.
At any point in the process the Players’ Association could, under their own action, call for a full vote. So while much is being made of the 45 day window required to force decertification, the Players Association can fast track that if it chose to.
No one in the process believes Decertification can yield a deal quickly especially if the process is allowed to play out as some are scripting it.
There are some that believe if the Players begin a forcible decertification process that the fear of the legal battle that follows might be enough to force the NBA and its Owners to relent on the handful of remaining system issues.
It’s been said that the 45 day window before a full vote is held could shift the balance of power a bit and get a compromise out of the NBA.
There are others that feel decertification at this point in the process will simply blow up the deal on the table and destroy any chance for a regular NBA season.
Tuesday will be interesting, as all 30 team representatives could demand a full vote from the Players, if that occurs the odds of a deal before the NBA’s Wednesday deadline is real, simply because so many of the rank and file want to go back to work.
If the 30 NBA team reps opt to hold the Players’ Association line that the offer is not worthy of a vote, the odds that more games are officially cancelled becomes real and more importantly the implosion of the 2011-2012 NBA season becomes more likely as each side would retreat from the compromises on the table.
The Problems: Would it surprise to know that just six items are preventing a deal in the NBA? The NBA has said it adopted five of the six compromises presented by federal mediator George Cohen into their latest offer, but even those compromises were not good enough to reach a deal Saturday. Here is what’s left:
BRI Split: According to David Stern, federal mediator George Cohen proposed a “band” split of Basketball Related Revenue (BRI) that would start at 49% and swell to 51% based on revenue growth.
The short of the process is that every year the NBA and the Players would define a revenue projection, if the final number comes in higher than expected, any dollars over that projected number would be shared 57-43, with 57% going to the players.
The idea here is that if both sides agreed that the revenue goal for the year was $4 billion, they would set a salary cap and tax system around that number, however any monies over that agreed $4 billion would be shared at a greater rate.
There were also protections for underperforming years in which the players share could drop to 49% if the floor falls out from under the league.
The Players had proposed dropping their share of BRI from 52.5% to 51%, only if 1% were to be applied to a retired Player’s fund.
The Players have flatly refused the NBA’s band idea, saying that the terms required to achieve 51% are almost impossible to achieve making this offer a 50/50 offer by another name.
Both sides have warmed up to 51%, all that needs to occur here is to massage the terms of how 51% is obtained and both sides are there on BRI split, something no one thought they’d ever see given where this started.
The most obvious compromise if for the NBA to expand their band to 52%, making 52% the harder number to achieve, lower the criteria on 51% so it’s more easily obtainable and the gap on this issue closed.
Mid-Level Exceptions For Tax Teams: The NBA was ardently opposed to Luxury Tax teams having the ability to continue stockpiling contract dollars. They wanted to prohibit Luxury tax teams from using salary cap exceptions.
There were compromises made before Sunday with the NBA relenting on the use of Larry-Bird rights for Luxury tax teams.
On Sunday mediator George Cohen introduced the idea of a Mini Mid-Level, that would be worth $2.5 million for two years for Tax paying teams, something NBA said it would adopt into its offer.
Sign And Trade Deals For Tax Teams: The mediator, according to David Stern, recommended that sign and trade deals be prohibited for tax teams, which lines up with where the NBA wants to see the rule set.
The Players have a huge objection because it limits the pool of teams competing for a free agent player, but more importantly the teams at or near the tax line are typically the better teams.
The Players view this prohibition as removing a player’s ability to join a good team, and they are opposed to anything that restricts movement.
There is no compromise point on this one, either the NBA relents or they stand firm.
CBS Sports’ Ken Berger is reporting that exactly FIVE sign and trade deals have been done in the last six years by Luxury Tax teams, not exactly a huge shift in power or dollars.
One source pointed out that the NBA is pursuing a repeat offender plan for chronic tax paying teams. If that provision is passed it’s should act as a deterrent for stockpiling of contracts making a league imposed restriction almost moot. This is an area where the NBA could relent and it would be viewed as a significant gain in the deal for the Players.
Length of Mid-Level: The two sides have debated on how long a new reduced value Mid-level exception should be with the NBA wanting a three year deal starting at $5 million, where the Players side wanted a 4 year deal starting at $5 million.
The valuation is set, so the compromise the NBA adopted is that on alternating years NBA teams would have the ability to issue different length deals.
For example in year one of the deal a team could offer a four-year deal worth $20 million. The following year they could only issue a three-year deal worth $15 million. In year three they’d get the ability to issue another four year deal.
Sources familiar with the process said it sounded like the use of the four year-three year would be at team discretion, so a team could opt to use their three year exception this year and save their four year exception next year.
Teams would not be required to issue contracts of that length; they could do shorter deals however it sounds like they would have to classify which slot they were using at the time of the deal signing.
Repeater Tax Penalty: The NBA has been adamant that they want some kind of penalty for teams that exceed the Luxury Tax on a regular basis.
What’s been talked about is an additional Luxury tax charge for teams that have been in the Luxury Tax more than three times in a five year span.
The new Luxury Tax that both sides seem to have agreed on has an escalating tax based on tiers over the tax line, with a tax that will increase for every $5 million spent beyond the established line, starting with a tax of $1.50 for every dollar over the tax line. That number increases to $1.75 after $5 million, $2.25 after $10 million and $3 after $15 million.
The Repeater tax penalty proposed by the NBA was an extra $1.50 to each of those tiers, the Players proposed a $.50 additional penalty. The compromise was a flat $1 additional charge to each tax tier for teams that exceed the Luxury Tax line for too many seasons within the life span of the deal.
An informed source, said the only way bringing down the ceiling will fly with the rank and file is if the NBA in turn increases the minimum teams are allowed to spend.
Under the old labor deal teams only had to spend 75% of the salary cap, allowing for some teams to spend as little as $43 million last season. There is a desire to see that floor raised if the ceiling will be lowered.
The Cliff Provision: For years there has been a reward system of sorts for teams that stayed under the Luxury Tax line.
In fact the swing from the double-dollar penalty of the Luxury tax to the rebate from being a non-tax payer was so great that the Players have viewed it as a cliff, and its often referred to as the Cliff provision.
In essence teams that are under the tax, used to share the tax collected by the tax paying teams. In some instances collected Luxury Taxes have exceed $80 to $90 million and are shared with the teams that did not pay tax.
Bonusing them if you will for being under the tax.
The Players have argued that between the reward paid for being under the tax and the newer harsher penalty for being over the tax, teams are incentivized to stay under the tax in too many ways.
The Players have proposed that the NBA reducing the percentage of tax dollars from 100% going to teams under the cap to 50%.
The NBA did not adopt that concept into their offer, which is a problem for the Players as they see the “Cliff” provision as a hindrance to open spending.
That is the nuts and bolts of where things stand on pseudo-major issues.
HoopsWorld.com
