The NBA’s initial proposal for a new collective-bargaining deal called for a $45 million per team hard salary cap along with non-guaranteed player contracts and significant cuts in annual salary increases.
The details, spelled out in an April 26 memo issued by National Basketball Players Association Executive Director Billy Hunter, marks the league’s push for a major overhaul of the NBA’s economic model and emphasizes to players an aggressive bid to significantly slash costs and shorten contracts.
The memo was sent to all NBA players and was dated just days prior to the league delivering to the union a new labor proposal, which a source said still included the $45 million hard cap but added a phase-in of the cap over a few years. Union president Derek Fisher publicly dismissed the latest proposal as too similar to the original proposal.
The memo’s most eye-popping element is the league’s proposed $45 million hard cap, which cuts the current $58 million soft cap by nearly 25 percent.
Hunter said in the memo that the NBA projects the $45 million hard cap number with a team’s total salary not to exceed the cap for any reason. The proposed hard cap as outlined by Hunter also would eliminate the current luxury tax provision, which penalizes teams with a dollar-for-dollar tax for the amount spent on player payroll exceeding the salary cap.
The proposed hard cap is something the NBA has never had under collective bargaining, but it has become a critical element to owners. This initial proposal, and its steep cut in player cap space, demonstrates a strong commitment by the owners to dramatically curtail player payrolls while also supporting NBA Commissioner David Stern’s mantra of making the league more profitable.
The inclusion of non-guaranteed player contracts, while a negotiating point, also represents a radical shift for players who have long benefited from guaranteed deals. Taken together, Hunter felt compelled to send out the missive.
“The nature of the owners’ demands is so onerous that I feel it is imperative to reinforce the message of our recent team meetings with this letter,” Hunter wrote in the memo.
The union confirmed the letter but refused to comment.
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Thom Yorke
