Lockout update: Sides still talking after 13 hours

NEW YORK — Owners and players held their longest bargaining session since the NBA lockout was imposed July 1, breaking the 13-hour mark — and continuing to talk — as the clock hit 11 p.m. EDT Tuesday night.

Federal mediator George Cohen was presiding over the meeting, which included the owners’ and players’ full bargaining committees. There were no details being released regarding what was transpiring in the bargaining room, but the very fact that the sides were spending so much time together was hard to view in a negative light.

Previously, the longest the sides had met in a single bargaining session was 7 1/2 hours. And as the clock kept ticking, the word on the street (or, to be more accurate, in the hotel hallway) was to prepare for a long night.

There was pressure to make measurable progress Tuesday night for two reasons:

_ Commissioner David Stern said last week that his gut was telling him there won’t be any NBA basketball by Christmas if the sides didn’t make a deal by Tuesday.

_ The NBA’s Board of Governors, with one representative from each of the league’s ownership groups, is meeting Wednesday and Thursday at a hotel just a few blocks from where the negotiations are taking place.

Representing the owners were Peter Holt (San Antonio), Clay Bennett (Oklahoma City), Mickey Arison (Miami), Mark Cuban (Dallas), Jim Dolan (New York), Dan Gilbert (Cleveland), Wyc Grousbeck (Boston), Larry Miller (Portland), Robert Sarver (Phoenix), Glen Taylor (Minnesota) and Bob VanderWeide (Orlando).

Representing the players were Derek Fisher, Maurice Evans, Chris Paul, Theo Ratliff, Etan Thomas, Matt Bonner, Roger Mason and James Jones.

As I reported on this site Monday night, these are the main issues that have been keeping the sides apart.

1) The split of basketball-related income (BRI)

You hear different stories from different sides about who knocked on whose door two Tuesdays ago when a 50-50 split of revenues was thrown out there as a compromise concept, and Stern has gone on record recently as saying the owners are formally offering 47 percent, while the players are asking for 53. The settlement number is going to be somewhere in between, with each percentage point of BRI representing roughly $45 million of player salaries per year. The more militant players have told union director Billy Hunter he has already gone far enough by offering to reduce the players’ share from 57 percent to 53 (players haven’t been below 57 percent since 1995). But Hunter knows he’s eventually going to have to give ground on that number and put the deal up for a ratification vote, and anything less than 51-49 is going to be a very tough sell. Problem is, this week might be Hunter’s last chance to get something close to a 50-50 deal, because Stern might not go that high if the lockout lingers into the winter.

2) The punitive nature of the new luxury tax

The union has agreed in theory to a higher tax rate for teams that surpass the tax threshold, but the sides are in disagreement on the size of those tax rates (The old luxury tax was dollar-for-dollar. The new tax would be between $1.25 and $1.75 under the union’s proposal; The owners are asking for a tax beginning at $1.75 and rising to $2.75 for teams more than $10 million above the threshold). The owners are also asking for other restrictions on tax-paying teams, including a prohibition against signing mid-level free agents, a penalty provision that would triple the tax rate for any team that surpassed the luxury tax threshold three times within the upcoming six seasons, and a restriction that would prevent teams from having more than three players with Bird contracts on their roster.

3) Contract lengths.

Under the old system, a player could sign for no longer than five years unless he was a free agent and signed under the Larry Bird exception, which allowed for a six-year deal. The owners want to reduce the maximum contract length to four years for Bird players and three years for others, while the union wants five-year deals for Bird free agents and four-year deals for other players. The owners have also proposed a “SuperBird exception” that would allow a team to designate one player worthy of receiving an extra year on his contract. The union has accepted the concept to a certain degree, but the sides differ on the length of the contract that SuperBird player would get.

4) Maximum annual raises.

Under the old system, players could receive 10.5 percent annual raises if they had Bird rights and signed with their old team, 8 percent raises otherwise — a system that caused most big free agent transfers to be executed through sign-and-trade deals. The owners have asked to eliminate sign-and-trades of Bird players by tax-paying teams, and to reduce the maximum annual raises to 4.5 percent and 3 percent. The union wants to keep the current 10.5/8 system but would allow for a smaller annual raise (9 percent) in the fourth and fifth years of contracts signed under the Bird exception. 

5) The mid-level exception.

The sides are actually relatively close on this. The owners want the maximum contract value to be $4.8 million in the first year, while the union wants it to be $5 million. The owners want mid-level deals to be for a maximum of three years, the union wants the maximum to be four.