Before the players and owners begin to address their split of revenue, the sides must solve system issues concerning the use of midlevel and bi-annual exceptions for teams paying the luxury tax.

While details were still unclear how a punitive luxury tax system would work for teams exceeding the salary cap, one league source involved in the talks told Y! Sports on Thursday night: “The tax is not the issue. The exceptions are where the fight is.”

The owners have largely relented on letting players use their “Larry Bird rights” to re-sign with teams that are over the cap, but the owners don’t want to permit teams paying luxury tax to be able to sign players to the midlevel and bi-annual exceptions, a source said.