NBA lockout: System issues both sides reportedly need to resolve
1. Luxury tax. NBA teams normally pay a dollar-for-dollar penalty whenever they exceed the luxury tax threshold. But The Times' Mike Bresnahan and Broderick Turner report the players' union fears a harsher luxury tax would inhibit free-spending teams from fully paying the players' potential market value. Besides, both sides have already reached agreement on a so-called "super tax." That will require teams to pay $1.50 for every dollar it goes over the luxury tax. The tax ratio also will change incrementally for every $5 million teams spend over the luxury tax.
2. Mid-level exception. Both sides had agreed to reduce the cost of a spending tool that normally allowed middle-of-the-road free agents to sign up to five-year contracts. (Bresnahan and Turner say that was up to $29 million last season). Yahoo! Sports' Adrian Wojnarowski reported Oct. 20 that both sides neared a compromise after the NBA earlier had proposed a $3-million starting salary. Although they agreed to reduce the number from $5.8 million to $5 million, Sports Illustrated's Chris Mannix reported they remain divided on the contract length. The NBA wants to limit mid-level deals to three years, while reducing the mid-level option to teams that pay over the luxury tax to a smaller, $2.5-million exception.
3. Various other ways that help a player's market value. For the players' union, that includes a few issues. They want teams to keep the ability to sign and trade even if they spend over the luxury tax. They want an increase in trade exceptions and annual raises, while the owners want a decrease in both areas. And the players want a more lucrative rookie scale, so it's easier for up-and-coming young talent to immediately cash in on their market value.
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Photo: Billy Hunter, executive director of the NBA players' union, speaks while standing near union President Derek Fisher, left, during a news conference early Thursday morning in New York. Credit: Patrick McDermott / Getty Images)