NBA Lockout: Short meeting on ‘ideas and concepts’ – UPDATED

By Chris Sheridan

NEW YORK — If things had gone poorly Tuesday in the jump-started NBA collective bargaining talks, the sides would have let that be known.

So it should probably be seen as a positive sign that the owners and players retreated to their neutral corners after meeting for less than three hours and agreed to meet again today.

I tweeted back on June 30 that there was probably a deal to be done at 52/48 in terms of the split in revenue (the players dropping from 57 percent of revenues to 52), and I think that remains the case. But if union director Billy Hunter brings forward a 50/50 split or even a 51/49 split, there would be a strong possibility that the deal would fail to be ratified by the union membership, which would put the sides back at Square One (and put Hunter out of a job).

One of the concepts the players have resented most during these negotiations is that the sides are assuming 4 percent annual growth per season, but the players would not get any of those additional revenues because the owners were asking them to accept an offer that flatlined player salaries at $2 billion over the first seven seasons of the proposed 10-year deal.

That helps explain this line from union president Derek Fisher in the memo he recently sent to players:

“Our game has never been more popular and we’re poised to see tremendous revenue growth over the next 5 to 6 years. … We must share fairly in the continued growth of our business. Any deal that decouples us from a fair share of the revenue growth in the years ahead is a deal we cannot accept. Period!”

As for the players’ resistance to a hard salary cap, there is a middle ground that would likely be palatable to both sides: Keep the luxury tax, but make it more punitive — something like $2 in tax for every $1 spent over the threshold, rather than the current dollar-for-dollar tax. That would provide more revenue sharing money, in addition to the tripling of revenue sharing from income such as gate receipts and local television dollars that commissioner David Stern has promised.

“There are a number of team owners that will not lose the season over the hard cap system. We’ve been clear from Day 1 of this process that we cannot sign off on a deal that attempts in any way to include a hard salary cap for our teams. That has not changed,” Fisher wrote in his memo.

Again, I must stress that this is a financial negotiation much more than it is a systemic negotiation, and when there is a deal on how many aggregate dollars are devoted to player salaries, the rest of the agreement will fall into place over the course of 2-3 days. 

So if the “ideas and concepts” that were discussed Tuesday included the players getting a piece of that projected 4 percent annual revenue growth the sides have been using as their economic model, we could be moving closer to a deal. So stay tuned, and I will report more info as I acquire it.

UPDATE: Adrian Wojnarowski of Yahoo Sports reports the owners have indeed moved off their insistence on a hard cap, restoring the luxury tax but making it more punitive:

“The owners proposed at Tuesday’s negotiating session an idea similar to the current system that allows teams to pay a luxury tax for going over the cap. Only, now there would be ultra-punitive measures against higher-spending teams. The current system has teams pay a dollar-for-dollar tax for exceeding the cap.”

UPDATE: Ken Berger of CBSSports suggests the owners will propose a 50-50 split of revenues when the sides reconvene Wednesday.

“Among the many concepts league negotiators proposed Tuesday were a more punitive luxury tax and adjustments to two key spending exceptions that teams had under previous agreements: the Larry Bird exception and the mid-level exception. Both would have been eliminated under the owners’ original proposal from two years ago, with many of those dramatic systemic changes living on in subsequent proposals until Tuesday.
There is a feeling among two people who have been briefed on the talks that the owners will come forward Wednesday with an enhanced version of the concepts proposed Tuesday. According to the sources, among the additions could be a proposed 50-50 revenue split, which to this point the league has not reached in terms of the players’ average share over the life of a new CBA in its previous proposals.”

UPDATE: Ric Bucher of ESPN.com reports the owners have specified that the Larry Bird exception would only be used on one player per team per season:

“In last week’s negotiating session, the owners proposed that the players’ share of basketball-related income, or BRI, be sliced from 57 percent to 46 percent, and a source told ESPN.com’s Chris Broussard that the players were offered 48 percent of BRI on Tuesday. The owners also want a five-percent reduction on all existing salaries for this season, a 7.5 percent reduction of all 2012-13 salaries and 10 percent reduction of 2013-14 salaries, a source said.