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Glenn Rogers Explains The Lockout Points
Several contentious
points ine evrelasting
lockout
By Glenn Rogers
Express-News Staff Writer
The NBA lockout grinds
on, and fans undoubtedly
are drowning in the flow
of reports from league
and union headquarters.
Here is one attempt to
explain some of the
league's proposals for a
new collective bargaining
agreement:
What is the league's
fundamental goal?
The owners want to reduce
the players' share of
basketball revenue to at
least 52 percent. The
players' cut from the
total revenue pot rose to
57 percent during last
season.
Would the players'
overall income decrease
yearly under the league's
seven-year proposal?
The owners presented
figures to the players
association maintaining
that the players' income
would continue to rise —
despite the drop in
percentage — because of
ever- increasing revenue.
The league has calculated
that the average player
salary would increase
from $3 million during
the first year of the
agreement (prorated over
the amount of games in
the shortened season) to
$3.8 million in the
fourth year of the
seven-year deal when the
percentage of revenue to
the players hits 52
percent.
How does the league plan
to lower the players'
percentage?
The league has proposed a
maximum salary on all
players coupled with an
escrow and tax system
entering in the fourth
year of the deal.
1) The league would
impose a maximum salary —
for a player with six or
fewer years of service,
it would be 25 percent of
the team salary cap. It
would rise to 30 percent
for a player with 7 to 9
years in the league and
35 percent for a player
with 10 or more years. In
each category, there
would be annual 10
percent increases.
These figures apply even
if a team is under the
cap. A team that is $15
million under the cap
cannot sign a player for
$15 million unless the
player qualifies for that
amount under the 25 to 35
percent rules.
If a team has four free
agents, and is $5 million
under the cap, it could
sign its non-Larry Bird
exception player for $5
million and then sign its
own Bird players.
The Larry Bird exception
permits a team to sign
its own free agent (a
player with at least
three years with the same
team) even if it is over
the cap.
The league calculates
that the cap will rise
from $31 million during
the 1998-99 season to $55
million during the
2004-05 season, the last
(and option) year of the
proposed agreement.
There are two exceptions
to the maximum salary
rules: A 10-year veteran
Bird player (such as
Scottie Pippen) can sign
a contract beginning at
$12 million regardless of
the cap size; any player
(such as Michael Jordan)
who is already at the
maximum- allowed salary
can get an increase of 5
percent for the next
year.
2) The league has
proposed various escrow
and tax systems. The two
sides had reportedly
agreed at one point to 10
percent of players'
salaries being held in
escrow if it was
projected that the
salaries would exceed the
percent of revenue going
to players.
All salaries would be
affected except for the
minimum-wage players.
In addition to the
escrow, the league
proposed to tax the
owners $2 for every $1 on
the amount of salary-cap
excess that still existed
after the escrow money
was collected. The league
and union disagreed on
details of the tax
structure.
3) Rookie contracts would
be extended for four
years, with a team
allowed to match another
team's offer for the
fifth year. Current
players under the rookie-
contract system would be
lumped into this
category.
For example, under the
old agreement, the Spurs'
Tim Duncan would have
become a free agent after
the 1999-2000 season and
allowed to dicker for a
contract for any amount.
Now, Duncan would play a
fourth year with a raise
of about 10 percent of
his 1999-2000 salary. He
would become a restricted
free agent for the
2001-2002 season.
In 2001-02, the Spurs
could offer Duncan a
contract starting at
approximately $11 million
with a $1.1 million
annual raise for a
maximum of six years. Or,
Duncan could sign a
two-year deal and become
a free agent before the
2003- 04 season when he
would enter his seventh
year of service. He could
then sign a deal starting
at 30 percent of the
estimated $51 million cap
— $15.3 million.
What other financial
provisions has the league
included?
1) A $1 million minimum
salary for a 10-year
player, coupled with the
raising of the regular
minimum salary to
$350,000 for players with
3 to 5 years of service
and $400,000 for players
with 5 to 9 years.
Teams over the cap could
sign players to the
minimum salaries.
2) A general exception
allowing teams over the
cap to sign a free agent
starting at $1.5 million
in the first year of the
agreement, rising to $2
million in the third year
and then equaling the
average player salary
figure.
What is the so-called
timing clause?
The league has proposed
that a team will lose the
Bird rights to its own
players if it first signs
another team's free
agent.
This means that if the
Spurs were under the cap
by $8 million and signed
another team's free agent
to push them further
toward the cap, they
could not go over the cap
while signing their own
free agents.
The Spurs could, of
course, sign their own
Bird players to the
maximum deals allowed and
then sign free agents to
the various exceptions.
Is the union close to
agreeing to these
features?
The players association
remains opposed to the
league's bottom-line 52
percent. The players were
still at 57 percent at
the last negotiating
session.
The association remains
opposed to the 25 to 35
percent lid on individual
salaries, but the league
says it's willing to
negotiate those numbers.
The union remains
adamantly opposed to the
timing clause. Players
insist this is a deal-
breaker, maintaining it
dramatically restricts
player movement from team
to team.
The union and league
reportedly are close to
agreeing on escrow
percentages and tax
levies once the
bottom-line percentage of
basketball revenue is
agreed upon.
Tuesday, December 8, 1998
© 1998 San Antonio Express-News