Before tackling the revenue split, the biggest hurdle left to solving the system issues appears to be with the use of midlevel and bi-annual exceptions for tax-paying teams.
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.
The two sides could be closing on a three-year maximum for signing players to the midlevel exception, starting at $5 million per season, sources said.
The two sides still have a litany of “B-list” items that they barely discussed in the process, including the draft age minimum, code of conduct for players, drug testing and pensions. Nevertheless, those items often fall into place quickly once the major issues are resolved in talks.
So far, the union has tried to tie the age minimum to changes in the rookie wage scale. The union wants high-performing players to be able to renegotiate contracts sooner than between their fourth and fifth years in the league. The NBA has proposed a bonus pool that could add as much as 20 percent to players’ rookie scale contracts for such accomplishments as Rookie of the Year and All-NBA teams.
The league can encourage players to stay in school longer if players don’t have to rush to the NBA to get the clock started on significant pay raises and free agency. The NBA wants American players to be at least 20 years old and two years removed from high school to be eligible for the draft. Under the previous labor agreement, the rule was 19 years old and one year removed from high school.
While the union would like to return to having high school players being able to enter the draft, they privately know that will never happen. In the end, they’re hopeful to keep the rule as it is.
The league and players union have moved closer to consensus on several important issues within the past two days. Sources said the sides have made significant progress on one of the labor fight’s most vexing obstacles: the luxury tax teams would have to pay for going over the salary. Nevertheless, there’s still a couple sticking points with the tax that need to be resolved.