Sheridan column: What they’re fighting over

By Chris Sheridan

NEW YORK — So they’ll all be back in the same room together Tuesday, this time with a federal mediator presumably presiding over and standing between the owners and the players.

When collective bargaining talks resume Tuesday, mediator George Cohen will be trying to get the main players in the NBA lockout to compromise on the major differences keeping them apart, and it’s anyone’s guess whether he’ll have any luck.

Positions tend to harden whenever a work stoppage goes past the type of critical juncture these guys blew by last week when commissioner David Stern canceled the first two weeks of the regular season.

Depending on what day you listen to them, the sides are either oceans apart or they aren’t. And if you look at it issue by issue, you can understand why they speak that way. It depends on which issue they’ve been bargaining over most recently.

So with that in mind, let’s have a closer look at five of the main lockout issues that have not yet been resolved.

1) The split of basketball-related income (BRI)

You hear different stories from different sides about who knocked on whose door two Tuesdays ago when a 50-50 split of revenues was thrown out there as a compromise concept, and Stern has gone on record recently as saying the owners are formally offering 47 percent, while the players are asking for 53. The settlement number is going to be somewhere in between, with each percentage point of BRI representing roughly $45 million of player salaries per year. The more militant players have told union director Billy Hunter he has already gone far enough by offering to reduce the players’ share from 57 percent to 53 (players haven’t been below 57 percent since 1995). But Hunter knows he’s eventually going to have to give ground on that number and put the deal up for a ratification vote, and anything less than 51-49 is going to be a very tough sell. Problem is, this week might be Hunter’s last chance to get something close to a 50-50 deal, because Stern might not go that high if the lockout lingers into the winter.

2) The punitive nature of the new luxury tax

The union has agreed in theory to a higher tax rate for teams that surpass the tax threshold, but the sides are in disagreement on the size of those tax rates (The old luxury tax was dollar-for-dollar. The new tax would be between $1.25 and $1.75 under the union’s proposal; The owners are asking for a tax beginning at $1.75 and rising to $2.75 for teams more than $10 million above the threshold). The owners are also asking for other restrictions on tax-paying teams, including a prohibition against signing mid-level free agents, a penalty provision that would triple the tax rate for any team that surpassed the luxury tax threshold three times within the upcoming six seasons, and a restriction that would prevent teams from having more than three players with Bird contracts on their roster.

3) Contract lengths.

Under the old system, a player could sign for no longer than five years unless he was a free agent and signed under the Larry Bird exception, which allowed for a six-year deal. The owners want to reduce the maximum contract length to four years for Bird players and three years for others, while the union wants five-year deals for Bird free agents and four-year deals for other players. The owners have also proposed a “SuperBird exception” that would allow a team to designate one player worthy of receiving an extra year on his contract. The union has accepted the concept to a certain degree, but the sides differ on the length of the contract that SuperBird player would get.

4) Maximum annual raises.

Under the old system, players could receive 10.5 percent annual raises if they had Bird rights and signed with their old team, 8 percent raises otherwise — a system that caused most big free agent transfers to be executed through sign-and-trade deals. The owners have asked to eliminate sign-and-trades of Bird players by tax-paying teams, and to reduce the maximum annual raises to 4.5 percent and 3 percent. The union wants to keep the current 10.5/8 system but would allow for a smaller annual raise (9 percent) in the fourth and fifth years of contracts signed under the Bird exception. 

5) The mid-level exception.

The sides are actually relatively close on this. The owners want the maximum contract value to be $4.8 million in the first year, while the union wants it to be $5 million. The owners want mid-level deals to be for a maximum of three years, the union wants the maximum to be four.

 

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  1. Andrew says

    Just an idea to get star players what they are actually worth. Have a hard cap like the owners want at whatever the percentage that is deemed fair BUT every team is allowed one “franchise” player thats cap hit is $18 million but there is no limit on what he can actually be paid. So for instance, Kobe would have a cap hit of $18 million to the Lakers but they could pay him $50 million a year. It would be great incentive for star players to stay put but not allow a lot of star players to join forces as each team could give big money to only one player

  2. floppymoose says

    I disagree with the idea that the owners offer is going to get worse as time goes by. The players are going to get at least 50% of the BRI as long as they don’t just fold. That holds true no matter when the agreement is reached. Stern’s “take it now or it gets worse” is a transparent bluff.

    If the players just sit out the whole year they will get > 50%. The league makes very good money, and eventually the profitable teams will start to put tremendous pressure on Stern and the other owners.

  3. Joel says

    this is how the lockout should be presented sheridan, from a neutral stand point, not leaning one way or the other. i gained a lot of respect of your calling of the melo drama on espn but your lockout logic was in the end wrong and provided a false sense of optimism. i understand you did your best to explain why you thought it would, but as a journalist you put a lot of your rep on the line after starting your new website and were ultimately wrong. stay this path, reporting the facts as they are and not as they should be and i will continue reading.

    • AK says

      It would be a matter of journalistic accuracy to point out that, per these numbers, the players union has adopted proposals that *already* qualify as compromises between the status quo and the owners’ desired system.

      Inevitably, when the owners and players reach an agreement in between their two current positions, it will be reported as a compromise. This is factually incorrect. The players union has already compromised. When they move closer to the owners’ pole, the owners will have “won” the lockout.

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