NEW YORK — It is Black Friday, and the players are going bargain(ing) hunting at today’s NBA lockout negotiations.
If commissioner David Stern is willing mark down a few pieces of merchandise, there will be something under the tree for everyone on Christmas Day.
There is a deal to be done today, or later this weekend, if the owners are in a giving mood, but the players had better realize that they are not going to get everything on their wish list. That became apparent to them two weeks ago at the last formal bargaining session when they couldn’t squeeze very much out of the owners, whose failed to get an endorsement out of Billy Hunter, leading us to the place we are today.
The anti-trust suit filed by the players on Monday in Minnesota has given them some additional bargaining leverage — although exactly how much is open to debate. Technically, today’s talks will be settlement discussions, because the players’ union no longer exists as a formal entity. The New York Times is reporting that the sides have agreed in advance that nothing in these talks would impact the litigation or be used to prove either side’s case in court.
There will be new lawyers in the room, and there will be an understanding that the calendar is impacting everyone’s position. We are 30 days away from Christmas, and commissioner David Stern has said it will take 30 days from the time a handshake agreement is reached until the season can start.
So here is a look at what is on the players’ wish list. Remember, when the players offered to do a 50-50 split, they did so with the caveat that they’d need five or six key system changes to drop to that number. Thus far, they haven’t gotten enough of those changes.
_ The mid-level exception: The sides have already agreed on the max salary for mid-level free agents — a $5 million starting salary– who sign with teams that are beneath the luxury tax threshold. The owners want teams to be limited to offering a four-year mid-level contract one year, then a three-year mid-level the next, then back to four, then three, etc. In numerals, it is 4-3-4-3-4-3. If the owners go to 4-4-4-4-4-4, one item is off the table.
_ The mini mid-level: This is the exception that would be available to teams above the luxury tax threshold, and the owners have already moved from a max of $5 million spread over two years to allow taxpaying teams to offer three-year deals. The small-market owners are pretty hard-core on this one, because they do not want system in which the highest earning teams (i.e. the Lakers) can compete on a level playing field in the mid-level free agent market. That is also the reason why owners want taxpaying teams to be excluded from executing sign-and-trade deals.
_ The escrow system:I wrote about this yesterday, describing it as the most contentious of the remaining disputed issues. Escrow funds are withheld from players’ paychecks to ensure that total salaries do not exceed a pre-determined percentage. The players are willing to have 10 percent withheld, but there is a question of what will happen if those funds do not reduce the players’ share to 50 percent of BRI. Does the shortage carry over into the next season? Do the players have to dip into a different pool of money (pension benefits, group licensing revenues) to make up the difference? This will be a tough nut to crack.
_ The split: It has become common to say that the sides have agreed to a 50-50 split of basketball related income, but it actually is little more complicated. The owners have proposed a split in which the players would receive between 49 and 51 percent of designated revenues, but the players have complained that the realistic ceiling is 50.2 percent. If they do not get all the system changes they are seeking, they want the rules loosened so that a 51 percent ceiling (or a 50.4 percent or 50.6 percent share) becomes more achievable.
_ The pay-for-performance issue: When Derrick Rose becomes an unrestricted free agent, he will be eligible for a max salary equal to 25 percent of the salary cap. Veterans with 7-9 years of service can get 30 percent, and players with 10 or more years in the league can get 35 percent. The sides have discussed instituting a system under which certain young players would be eligible for a 30 percent max contract if they achieve certain benchmarks while playing under the rookie scale. In Rose’s case, winning the MVP award last season would push him into 30 percent eligibility territory. The question for today is what other types of benchmarks can be set that would put other young players into the 30 percent eligibility category.
_ Restricted free agency: The sides have already agreed that the matching period for teams at risk of losing a restricted free agent will be cut from 7 days to 3. Still unresolved is the size of the qualifying offers that must be made to restricted free agents in order for teams to retain matching rights. The players want big increases in the size of qualifying offers in order to make restricted free agency even less restrictive.
_ The Carmelo Anthony rule: Owners want to prohibit the type of extend-and-trade deal that Anthony wrangled out of the Denver Nuggets last season when he forced his old team to trade him to the New York Knicks. This system issue could have an immediate impact on Dwight Howard and Deron Williams (and to a lesser degree, Chris Paul, because his team is owned by the league office). If the prohibition stays, Williams and Howard are going to lose a lot of leverage if they plan to force their way out of New Jersey/Brooklyn and Orlando, respectively. They could still be traded during the upcoming season, but their new teams would have to re-sign them as unrestricted free agents in the summer of 2012.