David Stern denied that the offer presented to the players on Thursday night was the league's "last, best offer" to Howard Beck of the New York Times. Beck attempted to follow up, because, well, if the players reject the offer and the league follows through with its threat to revert back to the so-called "cap reset" offer (47 percent BRI, a flex-cap, dragons, a dungeon, no cupcakes, etc.), they're not taking it, as Beck said, but Stern again dodged it. That was the point of this approach. The league's not threatening to cut off talks (they can't for fear of a lack-of-good-faith-barganing charge). This puts the onus on the players. "We're not giving you the worst offer, we're giving you a better offer than the worst offer. So you should take it, otherwise we'll only offer the worst offer." And they try and pass this off as benevolent.
But the reality is that this is their last, best offer. The players can't accept 47 percent with a flex-cap, not without a court fight. They'll take that deal when the battle is truly lost, as opposed to mostly lost, which it is now. Consider that the players are surrendering $3 billion in their position which was extremely close to what the owners have proposed in the last week, but it's the systemic changes that continue to hamper the odds of a deal. The players have given so much, and the league wants just a little more. And at some point it's either surrender or fight. Talking is over. Deal or no deal.
Decertification sounds great when pitched by an agent, I'm sure, but the realities are pretty dark for that course of action. It only really works as a leveraging tactic, considering that with the appeals process and the likely drag from the courts in proceedings as they would want this to be settled outside of their courtrooms and would encourage the parties to do just that, it would take years to complete. But if your options are that or lay down to be stepped on, a lot of players, especially stars with money in the bank, will opt for just that.
And so, like I said, this is the league's last, best offer. Or maybe its "last, not-nearly-as-sucky-as-what-comes-n
ext" offer. So what exactly does it entail and where do we go from here? Here's the rundown of where the sticking points of a deal stand Friday morning according to reports.
Everything in the proposal is based on a 50/50 revenue split which the players have finally conceded to if they feel the systemic changes are swallowable (indications are that they don't, but we'll get to that). It winds up costing the players close to $3 billion over the length of the deal compared to the prior deal which gave them 57 percent. That's a heck of a give-back, and yet still not enough for the owners.
Ken Berger of CBSSports.com reports that the owners have "agreed to increase the mid-level exception for luxury tax-paying teams to three-year deals starting at $3 million. The exception, which was for two years starting at $2.5 million under the previous proposal, would be available every year for teams above the tax threshold." But there's a catch.
(T)he league's proposal would restrict teams from using a full mid-level exception -- four-year deals starting at $5 million -- if the signing itself pushed the team over the tax. Union negotiators want the mid-level restriction to kick in only if the team already is above the tax line before it uses the exception. The league's version is the one that is in the current proposal, according to a person who has seen it.via Stern offers 72-game season, few alternatives - CBSSports.com.
So they've settled how much the MLE will be, but not whether you have to be over the tax already to be barred from using the full version, or if you would be barred from using it if using it would put you into the tax. If this sounds like an obnoxiously small detail, it is, but it also affects a great deal of teams and in particular serves as a disincentive from teams spending more to win, which obviously the players don't want for multiple reasons.
Super-Tax and Repeater tax
The luxury tax is being revamped as the "super-tax," in order to serve as a spending deterrent, either for restriction of player movement, cost reduction, or competitive balance purposes, depending on what side you're on. The previous structure was a simple dollar-for-dollar tax. So if you were $5 million over the luxury tax threshold, you paid $5 million in luxury tax.
The league's latest offer proposes an increase of .50 cents on the dollar for the first $5 million over, then increasing penalties. Here's the breakdown, courtesy of Berger:
First $5 million in salary spent over luxury tax threshold: $1.50 tax on every dollar.
Second $5 million: $1.75 on every dollar.
Third $5 million: $2.50 on every dollar.
Fourth $5 million and above: $3.25 on every dollar.
It's not know at this time if the union has accepted this rate, though it's clear they're not happy with that idea (or any of these, really).
Then there's what's being called the "recidivist tax" or "repeater tax." The idea is that if a team spends above the luxury tax threshold in three out of a five-year span, it needs to be taxed additionally. The league has proposed the following structure:
First $5 million in salary spent over luxury tax threshold (including standard tax listed above): $2.50
Second $5 million: $2.75
Third $5 million: $3.50
Fourth $5 million: $4.25
That's an incredibly steep tax for repeat offenders. To put this in perspective, Storyteller's Contracts shares this information: in the past ten years, the Knicks, Lakers, Mavericks, Celtics, Cavaliers, Suns, and Pacers all paid the tax in at least three consecutive years. Due to no tax being collected in 2005, another five teams (the Timberwolves, the Blazers, the Nets, the Sixers and the Raptors) would have narrowly ducked it. That's a huge percentage of teams this would have impacted, and the corresponding impact on spending would have been significant.
That's why the union wants the following structure:
First $5 million: $2.00
Second $5 million: $2.00
Third $5 million: $3.50
Fourth $5 million: $3.50
That's a huge gap, considering in the last "stanchion" (as David Aldridge of NBATV described it Thursday night) would make for over a $9 million differential if the team spent all the way to $20 million over the tax threshold (the Lakers, for example, were $30 million over the threshold last season and would have been in the repeater tax. Close to $10 million from one team on just one level. That's a lot of dough.
So clearly this remains a big dividing point.
Berger reports that the league may have softened on the limitations on teams in the tax using the sign-and-trade, but there is still some sort of structure in the current offer that deals with it. For the players, this was a big issue, and it's surprising the league didn't just concede on this considering it has been used just three times in the past decade by teams in the tax. But then, the league isn't conceding something. What else is new?
ESPN.com reports that the owners have relented on the issue and that teams in the tax will be able to sign-and-trade players. That had to have been a concession for the big-market owners as well as playrs.
Player contract length
This issue has been agreed upon. Previous limits were five years without Bird rights and six years with. The new proposal which the players have agreed to is four years for non-Bird and five years with Bird. So it's a minor win for the players that they only lost a year, really.
Via SI.com, the league wants the escrow pushed to 10 percent, where it was five years ago, up from 8 percent last year and the last few prior years. The players want an 8-10 percent band.
The salary floor under the previous deal was set at 75 percent. The owners have agreed to raise it to 85 percent, according to multiple reports.
Length of CBA deal
The league has granted a concession to the players to allow them to opt-out of the proposed deal after the sixth year, which is notable for its coincidance with the end of the NBA television deals.
The amnesty clause, "stretch" exception," and length of time a team can match an offer in restricted free agency for a player have all been agreed to.
There's more to discuss, including Bird rights, age limit, etc. Some are huge issues, some are small. But the reality is that while the two sides appear very close together, in reality, the players consider themselves very far apart. Reports flooded in Thursday night and Friday morning about upset agents and players, livid with the deal, saying nothing was granted of substance. If that proves to be the mood of the entire union, it's unlikely a vote will even see the light of day, much less an acceptance of the deal. That means decertification, that means lawsuits, and that means the loss of the entire 2011-2012 season.
There's no more room to give, and it would appear the gap is still too wide.