Sources: Players won key concessions

Updated: November 26, 2011, 9:46 PM ET
By Ric Bucher | ESPN The Magazine

Whether the handshake agreement the owners and players reached early Saturday morning on a new labor deal is ratified remains to be seen, but the players apparently did win some concessions on vital system issues -- including the split of basketball-related income -- that prompted union leaders to reject the previous offer without a vote, league sources said.

NBPA executive director Billy Hunter told players Saturday night in a memo obtained by ESPN that the first step would be incorporating the new deal points into a litigation settlement agreement early next week. "The NBA will then re-form as a union," Hunter wrote, "and negotiations may take place on various other CBA issues. The players will then vote to ratify a new CBA."

Hunter's memo also informed players that their share of BRI from the 2011-12 season will be 51.2 percent.

League sources said the players' union viewed the following three aspects of the owners' previous offer as the most unappealing:

• An escrow system that assured owners would be fully reimbursed in subsequent years if they spent too much on player salaries in any given season.

• The inability of teams under the salary cap to use a mid-level exception if it took a team's player payroll over the cap and teams over the cap to have use of any exceptions at all.

• Prohibition of teams over the salary cap from making sign-and-trade deals.

The players won concessions on two of the three issues, league sources said.

Owners still will retain 10 percent of every player contract and have the right to keep that money if total salaries go over the allotted percentage allowed in a given season for player salaries, but they will not be allowed to take additional money from benefits or future escrow to settle up, as the owners proposed roughly two weeks ago.

Any excess spending not covered by the 10 percent of salaries withheld will be drawn from a one percent pool of BRI earmarked for benefits.

Teams under the salary cap now will be allowed to go as far as $4 million over the luxury tax threshold without restrictions to utilize the $5 million mid-level exception. For example, if the luxury tax is set at $70 million and a team's payroll is at $68 million, they would be allowed to use the full $5 million.

However, if a team is at $69.5 million in allotted payroll, they can go as far as $74 million and thereby use only $4.5 million of the exception. In the previous offer, the owners wanted teams below the cap to be required to get back under the limit by Oct. 15 of the following year if they used an exception to go over.

Mid-level deals can be a maximum of four years every season in the agreement reached early Saturday morning, sources said. Owners wanted them to alternate between four-year deals one season and three-year deals the next.

Tax-paying teams, meanwhile, will be allowed to use a "mini" mid-level exception of $3 million every year, sources said. Those deals can be a maximum of three years. At one point, owners proposed that teams over the salary cap could not use any sort of exception.

Other elements of the deal include:

• A maximum salary for a "star player" -- if he reaches certain benchmarks -- can rise to 30 percent of the salary cap, rather than 25. However, with the reduction in BRI for players and a 10 percent escrow, it's not clear what kind of a gain, if any, that will prove to be.

• Teams in the luxury tax four times in five years will see a one-dollar rate hike. Also, non-tax-paying teams will split 50 percent of the money paid by tax-paying teams. The other 50 percent will go to league office for use on various projects. Previously, non-tax-paying teams split 100 percent of the tax money.

The players did not get all that they hoped for on sign-and-trade rules, sources said. For the first two years of the 10-year deal -- either side can get out of it after six -- tax-paying teams still will be eligible to do sign-and-trade deals. That opens the door for such impending free agents as Chris Paul, Dwight Howard and Deron Williams to be moved to big-market teams that are already over the salary cap (i.e. Lakers, Knicks and Mavericks).

In the final eight years of the agreement, teams can still make sign-and-trade deals, as long as the result does not put them more than $4 million into the luxury tax. Teams also will continue to have the option of extend-and-trades, where they can sign their own player to an extension and then deal them. Owners, at one point, wanted to abolish extend-and-trade deals for all teams.

These elements will be presented to the 14 players, or plaintiffs, who filed an antitrust suit against the NBA in Minnesota nearly two weeks ago, Hunter indicated early Saturday morning. If the plaintiffs find the terms sufficient to withdraw their suit, then the remainder of the labor agreement will be negotiated.

The players' union, which disclaimed shortly before the suit was filed, would have to be reconstituted. The labor proposal would then have to be put to a vote and a simple majority of the league's 440-plus players would have to approve it. That process could take several days or up to a week, commissioner David Stern indicated.

The tricky part at this point, one source said, is that only broad, basic tenets of a new deal have been agreed to by both sides and none of it has been committed to paper. One potential stumbling block is that when it comes to committing the entire deal to writing, disagreements on what was said and mutually accepted could arise. There's also a host of secondary elements.

The owners also apparently relented on several other demands in the previous offer that were not mentioned in the summary proposal the league made available to various media outlets. According to a source, the owners also wanted to eliminate the opt-out clauses for players making above the league average salary.

The owners also abandoned reducing minimum salaries and the first year of rookie contracts by 12 percent in the handshake agreement, sources said.

Ric Bucher is a senior NBA writer for ESPN The Magazine. Information from ESPN.com's Marc Stein contributed to this report.

Ric Bucher

NBA Reporter, ESPN The Magazine Senior Writer

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