SBD/June 22, 2011/Leagues and Governing Bodies

NBA Offers Players "Flex Cap" Of $62M Per Team In Latest CBA Proposal

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Silver said NBA owners want to implement an "NHL-type" cap system

With the June 30 NBA CBA deadline looming, labor talks failed to yield an agreement yesterday, with the league offering the players no less than $2B in annual salary along with what league officials called a “flex cap” of $62M per team. NBA Commissioner David Stern said the $2B is what the player salary level is this year. While the league had been discussing the flex cap in previous sessions, the $2B salary offer was made yesterday after the union’s initial proposal of a five-year offer to include a $100M annual salary decrease along with a reduction of the players' share of basketball revenue to drop to 53.4% from the current 57% share. The league then countered with its offer to pay players no less than $2B. After the meetings, Stern said that while both sides will meet again on Friday, “the cupboard is getting barer and barer." He added, “We think this is virtually the best shot we think we have to both demonstrate to the players our good faith, our desire to go as far as we can to avoid a lockout. This now makes 10 proposals that have gone back and forth at least.” After the meeting, NBPA Exec Dir Billy Hunter, along with union economist Kevin Murphy, held a lengthy conference call with the player representatives to go over the proposals (John Lombardo, SportsBusiness Journal). NBA Deputy Commissioner & COO Adam Silver said that the owners "want to implement an 'NHL-type' system," one that would "allow teams to exceed the $62 million cap but would also place the financial onus on the players if the average payroll of all 30 teams" exceeded that amount. The NBPA said that it "will spend the next three days determining whether it interprets this proposal as a hard cap with different language." The sides are expected to meet again on Friday, and Lakers G and NBPA President Derek Fisher said that they "have not agreed on any of the smaller issues because they are interconnected with the hard cap and guaranteed salaries." Fisher: "So far, there hasn’t been much movement at all" (BOSTON GLOBE, 6/22).

INSIDE THE OWNERS' PROPOSAL: Stern did not indicate if yesterday's proposal was the final offer from the owners, but he said, "We wanted to make sure that we laid it all out there. It’s all out there." CBSSPORTS.com's Ken Berger reported the proposed CBA calls for an escrow-like system that "would be used to adjust for teams coming in below and above" the $62M target. Stern said that unlike the current CBA, the owners "would keep the escrow under the new system -- making this, in effect, an 8 percent pay cut for the players in Year One." Compared to the owners' initial proposal of a $45M hard cap, this offer "amounts to a $650 million move." The luxury tax "would be eliminated under the owners' proposal." Berger noted the "flex cap offer made by the owners Tuesday seemed to be a victory for high-revenue owners and the trend of forming superteams" (CBSSPORTS.com, 6/21). ESPN.com's Chris Sheridan reported the owners "also moved their position on cap exceptions, saying the Larry Bird Exception and the mid-level exception would remain in a new system, although teams could not exceed an as-yet-determined maximum team salary." In addition, a source said that the proposed CBA "would increase salaries only minimally over the 10-year period, having the effect of cutting the players' portion of basketball-related income, as currently calculated, from 57 percent last season to less than 40 percent in the latter years of the proposed 10-year agreement." NBPA attorney Jeffrey Kessler said, "We both made real moves, but we're still very far apart" (ESPN.com, 6/21).

AND MILES TO GO ... In N.Y., Howard Beck notes after "nearly five hours" of negotiations yesterday, the league and players "appeared only marginally closer to a deal and still on course for a lockout July 1." There was a "slight softening of the rhetoric," but NBPA officials contend that the owners' proposal "still amounts to a massive pay cut for the players -- at least $7 billion over 10 years, when compared to the current system." Still, Hunter said it was the "first move of any consequences they’ve made in the two years that we’ve been negotiating" (N.Y. TIMES, 6/22). Knicks G and NBPA VP Roger Mason Jr. following yesterday's meeting said, "We know the deadline is approaching and we're doing the most we can to prevent a lockout. We're still so far apart on the hard salary cap. As players, it's something we don't see as something we can do." NBPA attorney Ron Klempner: "I don't know what a flex cap is. As long as there is a target number, it's a hard cap. I don't see how it isn't. It's nomenclature" (N.Y. POST, 6/22). Hunter said, "While it obviously demonstrates some good faith on their part, there's still a huge gap from where they are to where we are." Yesterday's meeting "included several players and seven of the 11 owners on the league's labor relations committee" (NEWSDAY, 6/22). In Charlotte, Rick Bonnell wrote, "They're still miles apart, and it won't take much for David Stern and Billy Hunter to start growling at each other again and maybe [end] up in court. But steps were taken today toward a deal. That feels important" (CHARLOTTEOBSERVER.com, 6/21). Below is a list of some of the participants in yesterday's CBA negotiating session in N.Y.


MANAGEMENT
COMMITTEE
PLAYER
COMMITTEE
Jeanie Buss (Lakers)
Spurs F Matt Bonner
James Dolan (Knicks)
Lakers G Derek Fisher
Dan Gilbert (Cavaliers)
Hawks F Al Horford
Peter Holt (Spurs)
Knicks G Roger Mason Jr.
Larry Miller (Trail Blazers)
Hawks C Zaza Pachulia
Robert Sarver (Suns)
Spurs G Tony Parker
Bob Vander Weide (Magic)
Hornets G Chris Paul
Lakers C Theo Ratliff
 
Bucks G John Salmons
 
T'Wolves G Sebastian Telfair
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