As we complete the first quarter of the 2010-11 NBA season, I am reminded of an episode of Cheers where Dr. Fraser Crane is attempting to elevate the cultural IQ of the bar's denizens by reading from Charles Dickens' A Tale of Two Cities: "It was the best of times, it was the worst of times," Crane began. "Boy, that guy really knows how to cover his butt," barked an unimpressed Cliff Klavan.

We are definitely in a Dickensian moment, and time will tell if we approach Klavan's absurdity.

This NBA season is already filled with several exceptional contending teams, chock full of some of the game's best players in decades, perhaps the best group of serious contenders in memory. The playoffs look to be extraordinary, and may produce the best basketball ever played. If nothing else, this could be the spring that vaults the NBA to an even higher level in the United States and globally. These truly could be the best of times.

Yet just past the June playoffs and the 2011 NBA Draft lies the likelihood of a lockout that could threaten the 11-12 season, and maybe change the economics of the game for the worse for a very long time from a fan's perspective.

The owners claim that a majority of teams are losing piles of money and that the totals reach into the hundreds of million of dollars annually. I am traditionally skeptical toward ownership claims, particularly as their books are closed and they seem to always plead poverty, even when sitting on top of a Jed Clampett gusher. But this time I am willing to take them at their word, if only because a friend who owned an NBA team and intimately knows team finances has sworn to me that David Stern is not exaggerating the dire situation of the teams as much as one might expect.

The players can obviously say, 'Welcome to capitalism' to the owners.

No one forced Atlanta to give Joe Johnson an idiotic contract, or Milwaukee to pay through the teeth for Drew Gooden or John Salmons, or Detroit to sign Ben Gordon and Charlie Villanueva to big deals in 2009.

If owners can't make money, it is up to them to get their own houses in order. Clearly, a good third of the teams are doing fine so someone has figured out how to win at the money side of the NBA. It is called risk and is the basis of the economic system.

But the nature of the beast is that the owners are going to demand that profitability be restored to most if not all of the failing teams, and the one variable that can change that will instantly rectify the situation is labor costs. Hence the battle of 2011, or, Lord help us, 2012.

It is understandable that owners would prefer a hard-cap which requires teams to stay under a specific amount. This guarantees all teams a profit regardless of their incompetence, the proverbial socialism for the rich. But for a hard-cap system to be functional, as in the NFL, players cannot have guaranteed contracts, beyond a small percentage of their salaries. Whatever may take place in the forthcoming negotiations, it is impossible to see the NBA Players Association agreeing to an abandonment of guaranteed contracts; it would likely disband and decertify the union first and go the antitrust route to force a better deal from the owners.

So, please, forget the hard cap. It leads to mutually assured destruction.

It is also worth noting just how terrible a hard cap is from a fan's perspective.

What is the "fan's perspective" It is a question well worth asking since neither side to the negotiations has a particular immediate interest in it. In my view, fans benefit very much by the current soft-cap system that allows teams to keep its players and develop stability and continuity. It is no mere coincidence that since the development of the soft-cap system in the 1980s the popularity of the sport has exploded.

From a fan's perspective, it is a high priority to keep some vestiges of the soft-cap system in place. If we have an eventual agreement that forces teams to sacrifice star players to meet some hard-cap it would be disastrous. Imagine if the Celtics had to allow Rajon Rondo to leave or else cut Kevin Garnett, or if Oklahoma City had to eventually choose between Kevin Durant and Russell Westbrook. It penalizes the best GMs as well as the hard-core fans. That may work in football, but in the NBA, where there are fewer players and they are very visible, it would be a killer.

What to do then?

What is clear is that the owners want to slash wages as much as possible. The players give every sign of being willing to take a smaller slice of the pie. But they understandably want, and need, some concessions.

The immediate place to look for savings is to try to somehow eliminate the tens of millions of dollars that go to dead-weight or massively overpaid players every year, typified by Eddy Curry, but the numbers probably include at least two dozen players. If that wasteful money were eliminated, and only productive players received salaries, a good part of the problem would be solved. That is almost impossible to do within the current system without excessively penalizing very productive players.

A while ago, in these pages, I argued that the NBA and the players could get at this dilemma by going to a system that abolished individual contracts and allocated a certain percentage of the money to players and that money would be distributed based upon player performance. The best players would get the most money, as it is currently, but the system would be based on actual performance. I drew from the NFL Player Association proposals of the early 1980s that eventually led to the NBA's soft-cap system. The system I proposed would eliminate any money going to dead weight players like Eddy Curry, and effectively divide that money evenly between owners and players, thus making everyone happy. The only clear losers would be deadweight overpaid players and player agents, who would have little or no role to play.

But this is such a radically different vision, with neither the owners nor players pushing for it, that it is a non-starter.

That does not mean the overall crisis cannot be solved. It can. There is enough money in the NBA revenue pie to satisfy all the stakeholders and to put the game on solid footing for the coming years. And it can be done without a disastrous lockout, which might threaten to push the NBA back toward the quasi-minor league status the NHL has gravitated toward over the past two decades. Younger readers may not realize that the NHL was once considered a major-league sport in the United States. Then, among other things, the NHL had two lockouts to reduce player salaries, one that cost much of the 1994-95 season and another that cost all of the 2004-05 season, and it has drifted to relative obscurity. The overall NHL revenue pie the two sides battle over presently is probably a lot smaller than it would be had the two sides been able to avoid the lockouts and focus on producing great hockey for sports fans.

Fortunately there is a way to satisfy both sides in the NBA, and keep the core of the soft cap system. The owners can get a larger slice of the pie, and the players can get some benefits they would like. Here is how:

1. Players are currently guaranteed at least 57 percent of all revenues by the owners. Lower that figure to 54 percent. That is a huge concession, and the following changes make that a likely outcome.

2. The salary cap is set at 51 percent of basketball-related income for every team. Lower it to 49 percent of basketball-related income. This is immediately important because is sets the rate for maximum salaries.

3. Set the maximum salary at 27.5 percent of the salary cap. (The rate is currently 30 or 35 percent, depending upon a player's length of service.) This will produce considerable savings.

4. Have the luxury tax kick in at 10 percent over the salary cap. (That would have been $64 million this season, rather than $70 million.)

5. The luxury tax increases from 1-to-1 to 2-to-1 for salary levels that are more than 20 percent over the salary cap.

6. The luxury tax revenues are divided evenly among all teams that are under the salary cap. Donald Sterling will get so excited they will have to double his heart medication.

Steps 4, 5 and 6 are all about penalizing the wealthy teams willing to pay over the salary cap so they will be more judicious in their spending. Then, those teams that elect to pay the luxury tax will effectively subsidize and reward those teams that stay under the cap. It means that a team that is rebuilding can build a war chest of money to eventually go after free agents. This will appeal to fans.

7. Teams that remain below the salary cap for two consecutive seasons are eligible for a "bonus" first round pick following the lottery picks in the middle of the first round. A team cannot receive such a bonus pick in consecutive drafts.

This is a nice bone to throw to teams and fans of those teams that are rebuilding and shedding salary.

8. Eliminate annual raises from contracts. What a player signs for the first season is the same salary he gets every year of the deal. This is another major saving for the owners, a huge concession by the players. It recognizes the deflationary times we are in. If players do not like it, they can sign shorter deals and hope to fare better down the road. This is maybe the largest concession by the players, as it will have a dramatic effect on salaries over time.

9. Make the MLE salary level be $4 million; and it remains constant for the life of the CBA. This means the "middle class" free agents take a hit.

10. Keep contract lengths at their current level; however any deal running more than two seasons must have the final season be a team option, i.e. it is not guaranteed. Combined with eliminating annual raises, this will nip the Eddy Curry syndrome a bit, while not penalizing good players or teams that want stability.

These are major concessions by the players to the owners. It would shift hundreds of millions of dollars from the players to the owners over the course of the five or six year deal. Of course, the lawyers and accountants would have to negotiate precise terms; I provide what I do for illustrative purposes. It would give owners an extreme incentive to stay away from the luxury tax and get under the salary cap. It would provide a floor for struggling teams so they would have no one but themselves to blame if they ran consistently in the red. It would still allow teams to keep their players and allow the long-term deals that players love and that bring stability to the game.

The Players Association would no doubt reject these changes unless they got something of great value in return. So what would the players get in return?

1. The minimum salary for all NBA players (on the 15-man roster) would be at least $750,000. That would be an immediate pay raise for several dozen NBA players.

2. NBA team player payrolls would expand from 15 to 19, with the creation of a four player D-Team roster in addition to the 15 man NBA roster. An NBA team would be obligated to fill all 19 spots. The four D-League players earn $200,000 and not count against the salary cap. These players would not be on the official NBA team roster, and to move to the core 15 someone from the core 15 would have to be released. This creates 120 more jobs, and could improve the product on the floor.

This will also make the D-League more commercially lucrative, and it will allow the NBA to develop a farm system. I suspect that this could pay for itself over time.

3. The LLE bi-annual free agent slot would be eliminated. Instead there would be a second MLE slot at up to $4 million available every season. This will double the number of good-paying "middle-class" jobs there are for free agents every off-season. There will now be 60 such slots every summer.

4. 18-year-olds and high school grads would again be eligible for the draft.

5. Make trades easier for teams over the salary cap, so that salaries only need to come within 150 percent of each other to qualify, rather than the present 125 percent plus $100,000.

These, no. 4 and no. 5, are both concerns raised by the Players Association. Might as well let them have these.

6. Now here is the kicker: The proposal to this point sticks it to the best players: They get a lower max salary and they get no annual raises. A disproportionate amount of the owners' gains are coming out of the hides of the league's 35-50 very best players, the very players who sell tickets and put fannies in the seats. So we need something for them, aside from a pat on the back. This is what I propose: Any player over the age of 31 before the beginning of a season, who is an unrestricted free agent, has the right to be signed to a contract for up to two-years in length with any team in the league for up to the maximum salary level. In other words, the salary cap does not apply and the player has, in effect, "Bird rights" with every team in the league. This will give the great and quality veterans, those with market value over $4 million per year- the ability to pick a team to play with in their sunset years. A player can only do this one time, but the team that signs him will retain Bird rights after the two-year deal expires. An NBA team can only sign one such "over-the-cap" player every two years.

The players get many more jobs, a bigger middle class with the second MLE slot every year, and the superstars and stars get the right to play for whomever they wish when they get into their 30s. The system otherwise is intact.

And, best of all, fans get to keep the stability that has made the NBA so successful since the soft-cap was introduced in the 1980s. This is fan-friendly.

Obviously the numbers have to be tinkered with to make both sides happy. But herein lies, in my humble opinion, the contours of a workable solution that can avoid a disastrous lockout, and point the NBA toward a very successful future. We can have the best of times.