Critical Bargaining Day Ahead After Owners Budge Off Hard Cap

lockoutNBA labor negotiations head into what could be a critical day today after league owners budged off their insistence on a hard cap.  

The offer by league negotiators came Tuesday in a brief, two-hour bargaining session that set the stage for what one source described as “an important day” on Wednesday.

“It’s put up or shut up time,” said the person, who is connected to the talks but spoke on condition of anonymity due to the sensitivity of the negotiations. 

While this is good news in some ways, and it’s definite progress, it may be incremental progress.

The owners’ proposal on Tuesday “would still have the affects of a hard cap,” one source with knowledge of the talks said.

The owners didn’t budge on a desire to change the basketball-related income percentage (BRI) to a split that takes the players from 57 percent to the mid 40s, sources said. The players had offered to drop from a 57-43 split to 54-46 at a meeting last week in New York.

There are also other conditions tied the owners coming off the hard cap demand:

•The “Larry Bird exception,” which allows teams to exceed the cap to retain their own free agents regardless of their other committed salaries, is limited to one player per team per season.

•The mid-level exception, which the league valued at $7.4 million last season and could be extended by as many as five years, is reduced in length and size.

•The current luxury tax, the $1-for-$1 penalty a team must pay to the league for the amount it exceeds the salary cap, is to be severely increased. 

So it looks like both sides have some moving to do.  For players to bite on limiting the Larry Bird and mid-level exception, owners are going to have to come up to at least a 50/50 split of BRI.  Players are not going to agree to limiting exceptions that lead to more money for themselves if they’re have to give up so much of the overall revenues.  

This is moving closer to what a lot of people, including myself, have been saying for a while now.  The system doesn’t need an outright overhaul.  The system, if it is to be less favorable to big market teams that have no fear of the luxury tax, needs to limit the exceptions and have a more punitive luxury tax system.  Those proposals do that.  It will be interesting to see how GM’s get around them if they survive the bargaining process.  Will players agree to stagger deals so key guys can potentially be re-signed with Bird exceptions in consecutive years?  Will teams find loopholes like NFL signing bonuses?

This is progress, for sure.  Any sort of discussion that moves off the key sticking points of previous proposals is progress.  Today will, if I may state the obvious, be key.  This may be the day where make enough progress to get a deal done in time to save the season.  It may also be the day where we realize we’re not going to get anything done for a while.  It may be the most important day yet of the negotiations.