Report: new CBA to set a cap at 62 million ?

[Fafnir]

From Ken Berger at CBS:

The essence of the system described by Stern was an NHL-style cap system with a targeted salary of $62 million per team and a to-be-negotiated range from a minimum to an amount above $62 million that teams could spend up to through various exceptions currently in place – such as the Larry Bird exception and mid-level exception. An escrow-like system would be used to adjust for teams coming in below and above the $62 million target. Unlike the current escrow system, through which 8 percent of players’ salaries is withheld and paid back if negotiated salaries fall short of 57 percent of revenues, Stern said owners would keep the escrow under the new system – making this, in effect, an 8 percent pay cut for the players in Year One.

In terms of the owners’ initial proposal of a $45 million hard cap, the latest offer from the league amounts to a $650 million move from their initial position. The basic structure of a 50-50 split of revenues – based on a modified formula with about $900 million in expenses deducted before sharing with the players – remains intact. The luxury tax would be eliminated under the owners' proposal.

In what Stern termed a "modest" proposal, the players on Tuesday offered to reduce salaries by $500 million over a five-year deal. The $100 million-per-year reduction would be achieved through a reduction in the players' share of basketball-related income by from 57 percent to 54.3 percent, sources said. The owners and players continue to disagree about the expenses the owners want taken off the top before revenues are shared with the players.

The owners' proposal, sources said, would reduce the players' effective share of BRI - once expenses were deducted - to less than 50 percent by the third year of their 10-year proposal and to 36 percent in the last three years of the deal. The players' salary and benefits for the 2010-11 season were approximately $2.17 billion, sources said.

deal killer.

Yeah I don't see the players signing of of that big of a reduction. It appears to be crafted with PR in mind with a similar share of revenues post expenses, but grealy expanded the expenses that owners are allowed to claim.

Similar to how movie companies claim that they never trun an operating profit to avoid royalties.

[action781]

So, we're talking about a two-tiered hard cap, with the first tier around $62 million and the second tier unspecified, but perhaps around $70 million or so (the current luxury tax level)?

I'd be on board with that, and that's much, much more realistic than $45 million.

I heard an interview with Derek Fisher on the Stephen A. Smith show and he said he wouldn't consider the negotiations that took place today to be of any note.  He said the players get 57% of the revenue and would be willing to give back 57% of the owner's losses (which would be about $150 million of the almost $300m they are claiming to be losing annually). 

He said the owners want the whole $300m they are losing plus a guarantee that each owner would make $20m per season which is about $900m in player give backs per season.

Sounds like both sides are way off.

Holy crap, guarantee that each owner would make $20M???  I need to get in this business!  What business classes did these owners take that taught them that instead of managing a business properly in order to make a profit, they can instead just pick a profit they'd like and then demand it?

[The Walker Wiggle]

The owners' proposal, sources said, would reduce the players' effective share of BRI - once expenses were deducted - to less than 50 percent by the third year of their 10-year proposal and to 36 percent in the last three years of the deal. The players' salary and benefits for the 2010-11 season were approximately $2.17 billion, sources said.

Deal killer.

Yeah I don't see the players signing off on that big of a reduction. It appears to be crafted with PR in mind with a similar share of revenues post expenses, but greatly expanded the expenses that owners are allowed to claim.

Similar to how movie companies claim that they never turn an operating profit to avoid royalties.

Exactly what I thought upon reading it. Still at least there's progress being made.

[greenpride32]

I suspect all the recent CBA progress talk is to get people excited about basketball again because of the upcoming draft.  Remember what happened in the NFL?  They saved the draft, and all the advertising revenue from it, by temporarily halting the lockout.  Then resumed it shortly after.  In the case of the NBA, the draft is before the lockout, but the idea is to still make it an event the fans will get excited about.