March 2005 Basketball Wiretap

NBA And NBPA Announce New CBA

Jun 21, 2005 5:22 PM

The NBA and the National Basketball Players Association announced today that they have reached an agreement in principle on the key items of a new 6-year collective bargaining agreement.

NBA Commissioner David Stern, Players Association Executive Director Billy Hunter and President Michael Curry announced the agreement prior to Game 6 of The Finals in San Antonio.

“This new agreement creates a strong partnership with our players, which is critical to our prospects for continued growth on a global basis,” said Stern.  “Once the deal is finalized, the NBA and its players will be able to focus on the enormous opportunities we have together.”

“Although a definitive written agreement must still be completed,” Hunter added, “we believe we have reached the framework for a deal that preserves and enhances gains that the players have made under the expiring agreement. The new CBA deals fairly with the issues that are important to the league, and gives our sport the continuity that will be so important to its growth and to its fans.”  

The agreement includes an increase in the salary cap, a lessening of the impact of the luxury tax, a decrease in the escrow withholding over the term of the deal (to 8%), and a guarantee by the league that the players will receive no less than 57% of basketball related income (a percentage that will increase as revenue increases).  The maximum length of player contracts will be reduced to 6 years, from their current 7, and maximum annual increases in salaries will be reduced from 12½ to 10½ percent for teams re-signing their own players and from 10% to 8% for teams signing free agents.

On non-economic matters, the minimum entry age will be increased from 18 to 19 years and teams will have the ability to assign players with less than 2 years experience to the NBA Development League.  The number of random drug tests as well as the penalties for violations will be increased.  The league will guarantee that, on average, all teams will have 14-player rosters, and players suspended for more than 12 games for on-court misconduct will be able to challenge the suspension before a neutral arbitrator.  

While the agreement is being reduced to a definitive writing, the moratorium on free agent signings presently scheduled to expire on July 14th will be extended to July 22nd.  During this period, summer leagues may be conducted, rookies may be signed, and free agents will be permitted to negotiate, but may not sign, new contracts.

The agreement is subject to the approval of the NBA Board of Governors and the membership of the Players Association.

Key Points

The following are the key points agreed to by the NBA and the Players Association in their new 6-year collective bargaining agreement:

• Players will be guaranteed to receive 57% of league revenues (BRI), the same percentage paid to players the last two seasons. (This is the first time the league has ever agreed to guarantee the players an agreed-upon percentage of revenues.)

• The Salary Cap will increase from 48% of BRI to 51% of BRI.  All Cap exceptions will remain unchanged, including the Mid-Level Exception ($4.9 million per team this past season).

• The amount of money that can be withheld from player salaries under the “escrow” system will be reduced from 10% of salaries in year 1 of the new deal to 9% in years 2 through 5 and 8% in year 6.  The 57% escrow level will increase with revenue growth.

• The effect of the existing luxury tax on teams will be reduced and there will be no additional taxes.  The tax level will be set at 61% of league revenues (the same level as in the 2001-02 – 2003-04 seasons).  Tax treatment for injured players and minimum salary players will be liberalized.

• The maximum length of a player contract will be reduced by 1 year, from 7 years for a team’s own players and 6 years for other players to 6 years and 5 years.

• The league will guarantee that, on average, all teams will have 14-player rosters.

• The maximum annual increases in multi-year player contracts will be reduced from 12.5% for a team’s own players and 10% for other players to 10.5% and 8%.

• Players will be subject to 4 random drug tests per season and penalties for use of performance-enhancing drugs will be increased.

• The age limit for entering the draft will increase from 18 to 19 (plus one year removed from high school).  

• Players will have the right to an arbitrator’s review of Commissioner suspensions for on-court misconduct of more than 12 games (currently, no arbitrator review is permitted regardless of the length of the suspension).

• Players in their first two seasons in the league may be placed on teams in the NBA Development League for skills development.

• There will be an increase in the minimum salary and benefits.  Pension benefits will be increased subject to IRS approval.

NBA Press Release

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No Lockout: NBA, Union Agree To New CBA

Jun 20, 2005 11:39 PM

The NBA and its players' association are close to labor peace.

A source close to the NBA negotiating committee and a source close to the union's negotiation committee claim that all of the major issues between the sides have been agreed to in principle, and the purpose of Tuesday's meeting is to work out some of the finer points of the agreement that weren't addressed during a lengthy, breakthrough negotiation session Friday. Both sources asserted that none of the issues left on the table are major sticking points.

Key components of the new deal include: A 19-year-old age limit, contract lengths would shorten a year, raises in contracts would be reduced and their will be an extra option year in rookie contracts.

There are apparently some issues still needed to be worked but nothing that could force a lockout.

ESPN

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Tuesday Will Be Pivotal Day For New CBA

Jun 20, 2005 1:34 PM

Tuesday's negotiating session between NBA owners and players is shaping up as a make-or-break day as the two sides try to work out a new deal.

The two sides made progress on several issues in meetings the last three days, according to sources.

But with the current deal set to expire on June 30, Tuesday's session is expected to go a long way in determining if there will be a July 1 lockout, or if a deal can be reached in the coming days.

Trying to remain upbeat, Stern reiterated deputy commissioner Russ Granik's statement issued on Friday that "significant progress" had been made for the first time in months.

New York Daily News

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CBA Talks Resume On Friday In NYC

Jun 17, 2005 1:33 AM

Billy Hunter said on Wednesday that he would call the NBA one more time before the June 30th deadline for a new CBA and so both parties will be in New York on Friday to resume negotiations.

Officials from the league office and the players' union both confirmed that talks would resume Friday at an unspecified site in New York. Both sides are expected to have their usual compliment of attorneys and support staff who have engaged in on-and-off talks throughout the late winter and spring.

ESPN

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Lockout Imminent?

Jun 12, 2005 2:58 AM

ESPN’s Chad Ford is reporting that according to sources, deputy commissioner Russ Granik told members of the NBA's competition committee Monday to prepare for a lockout.  This has been confirmed by four league sources who spoke directly with ESPN.com

"There's going to be a lockout," an NBA executive told Ford. "I don't think there's any way we get a deal done any time soon. We're not seeing eye to eye right now. The truth is that players don't really believe a lockout will hurt them in the summer. It won't be until there's a threat of losing that first paycheck that they'll get serious about negotiating again."

If there is a lockout, it should not last long.  Many believe that even with negotiations currently at a standstill, the 2005-06 season will go on without a hitch.

"I think they'll lock us out," a source with the NBA Players' Association said. "I think David [Stern] has always wanted to lock us out. I think it's a mistake. They act like they don't have anything to lose, but I think they do. The summer league, free agency, NBA players' playing in the qualifying tournament for the World Championships. The bottom line is that the players want to play. They [the players] offered to extend the current deal until a new one could be put into place. They [the owners] want this, and there's nothing we can do to stop them."

ESPN

Tags: NBA, NBA CBA

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