SYSTEM ISSUES TO BE RESOLVED
1:15 p.m.: TNT’s David Aldridge checked in with some informative information from New York that should help us prepare for today’s session:
Assuming no delays in the pre-meeting caucus each sides conducts with itself, the NBA and the National Basketball Players Association should be underway in their pivotal meeting in New York.
Sources have indicated that the sides made progress Wednesday on three of the five significant system issues that separate them. Those are believed to be the escrow account that the league has implemented since 2006 where a portion of player salaries are withheld and placed in escrow in case the players’ overall share exceeds their agreed-upon percentage (the league is looking for a 10 percent escrow commitment from players in the next collective bargaining agreement), the league’s “repeater tax” proposal that would add additional financial penalties for luxury tax paying teams that do so three or more times in a five-year period, and the so-called “cliff” issue, with the union concerned that teams that are marginally and infrequently tax payers get punished financially under the league’s proposals just as badly as teams that are tax paying recidivists.
It is not known how much progress was made on those issues, though a source indicated Thursday morning that the moves were incremental rather than substantial, a view also expressed by the union’s executive director, Billy Hunter, in his post-meeting remarks early Thursday.
That would leave mid-level exception use for taxpayers and the ability of tax payers to execute sign-and-trade deals as the two significant issues that still aren’t close to being solved.
The NBA wants to limit tax paying teams to a “mini mid-level” exception that would only run two years and start at $2.5 million in the first year. The union has countered with a four-year mid-level starting at $5 million. Both sides have agreed that whatever mid-level is adopted for tax payers, it will only be available to them every other year.
The league argues that teams that go into the tax shouldn’t be able to add to their rosters by using the full mid-level, as the Lakers did with Ron Artest in 2009 and the Celtics did with Jermaine O’Neal last season. The idea is both to reduce the payrolls of tax paying teams to bring them closer to those of non-payers, which the league thinks will help competitive balance, and to get more players into the system for non-tax payers. The union believes that such restrictions will chill the market for free agents–in essence, taking the top five or six paying teams out of play–and will also affect players who don’t sign with the top teams, because the teams that bid for them will be able to sign them to smaller contracts than they would have to if the bigger payroll teams were able to pursue those players.
The NBA has similar concerns about allowing tax paying teams to execute sign-and-trade deals, where a free agent is allowed to add an additional year to his contract by signing a deal with his old team, which then immediately trades him to another team. Free agents got a seventh year if they re-signed with their old teams under the previous CBA, but only six years if they signed with another team. This was the method used, for example, by LeBron James when he went from Cleveland to Miami last summer–though the Heat was not over the tax threshold when it made the deal.
The union has pointed out that tax payers have only been involved in sign-and-trade deals five times over the past several years, making it an issue hardly likely to impact competitive balance.
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1:15 p.m.: TNT’s David Aldridge checked in with some informative information from New York that should help us prepare for today’s session:
Assuming no delays in the pre-meeting caucus each sides conducts with itself, the NBA and the National Basketball Players Association should be underway in their pivotal meeting in New York.
Sources have indicated that the sides made progress Wednesday on three of the five significant system issues that separate them. Those are believed to be the escrow account that the league has implemented since 2006 where a portion of player salaries are withheld and placed in escrow in case the players’ overall share exceeds their agreed-upon percentage (the league is looking for a 10 percent escrow commitment from players in the next collective bargaining agreement), the league’s “repeater tax” proposal that would add additional financial penalties for luxury tax paying teams that do so three or more times in a five-year period, and the so-called “cliff” issue, with the union concerned that teams that are marginally and infrequently tax payers get punished financially under the league’s proposals just as badly as teams that are tax paying recidivists.
It is not known how much progress was made on those issues, though a source indicated Thursday morning that the moves were incremental rather than substantial, a view also expressed by the union’s executive director, Billy Hunter, in his post-meeting remarks early Thursday.
That would leave mid-level exception use for taxpayers and the ability of tax payers to execute sign-and-trade deals as the two significant issues that still aren’t close to being solved.
The NBA wants to limit tax paying teams to a “mini mid-level” exception that would only run two years and start at $2.5 million in the first year. The union has countered with a four-year mid-level starting at $5 million. Both sides have agreed that whatever mid-level is adopted for tax payers, it will only be available to them every other year.
The league argues that teams that go into the tax shouldn’t be able to add to their rosters by using the full mid-level, as the Lakers did with Ron Artest in 2009 and the Celtics did with Jermaine O’Neal last season. The idea is both to reduce the payrolls of tax paying teams to bring them closer to those of non-payers, which the league thinks will help competitive balance, and to get more players into the system for non-tax payers. The union believes that such restrictions will chill the market for free agents–in essence, taking the top five or six paying teams out of play–and will also affect players who don’t sign with the top teams, because the teams that bid for them will be able to sign them to smaller contracts than they would have to if the bigger payroll teams were able to pursue those players.
The NBA has similar concerns about allowing tax paying teams to execute sign-and-trade deals, where a free agent is allowed to add an additional year to his contract by signing a deal with his old team, which then immediately trades him to another team. Free agents got a seventh year if they re-signed with their old teams under the previous CBA, but only six years if they signed with another team. This was the method used, for example, by LeBron James when he went from Cleveland to Miami last summer–though the Heat was not over the tax threshold when it made the deal.
The union has pointed out that tax payers have only been involved in sign-and-trade deals five times over the past several years, making it an issue hardly likely to impact competitive balance.
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