On the most productive day of negotiations in the NBA lockout, owners backed off their insistence on having a hard salary cap.
Players and owners met for about nine hours Monday on Day 118 of the lockout, and finally started talking in detail about a compromise.
"We need a system that eventually gets to where there's a set percentage for the players and a set percentage for the owners," deputy commissioner Russ Granik said. "I don't think it has to be a hard cap, and in fact some of the things we're talking about now are not hard caps."
The ownes' shift in position was downplayed by the union, but it meant the sides have to be closer, at least in principle, on coming to an agreement on the main economic issues.
Talks resumed Tuesday with the sides discussing non-economic issues. On Wednesday, a negotiating session will cover many of the topics discussed Monday.
"The best thing is we have some sort of an agreement on basic principles," said Orlando center Danny Schayes, a member of the union's executive committee.
"Right now, we're talking about a hybrid system. The first couple of years it would work one way, for another couple of years it would work another way if the first way didn't work. At least we're finding some common ground," Schayes said.
About 20 people from the union and 10 from the league worked through the afternoon and into the night at a Manhattan hotel. The site was kept a secret to avoid the circus atmosphere that has surrounded past negotiating sessions.
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"There's not been any movement at all. We've got some difficulties. We've made little or no progress," Hunter said, contradicting statements made by others involved in the talks.
Despite the different spin from different people, it was clear the sides were moving away from confrontation and toward compromise.
The league was asking to operate under a luxury tax system for the next three seasons, with a fallback system of a harder salary cap for the next three years. The union was asking for a tax system lasting two years, with the fallback system lasting another two years, Schayes said.
"Instead of absolute cost certainty, there would be mechanisms that give the owners a very good shot at costs within a certain range. So it's a good compromise in that area," Schayes said.
Still, the sides have not made any movement on whose contracts would be taxable and how high the tax would be.
In earlier bargaining sessions, the union proposed a 50-percent tax on the amount of any annual salary exceeding $18 million, and the owners proposed a tax of anywhere from 50 to 200 percent on any contract signed under the Larry Bird exception for more than $2.6 million annually.
"The good news is at least we're talking about the same thing," Schayes said. "We're not close on the specifics, so it depends what you call progress. There's nothing that would signal any imminent announcements, but we've agreed to talk more."
Monday's talks -- the seventh joint session -- came in advance of a two-day meeting of the league's Board of Governors. It was Stern's best chance to make a bold move toward settling a dispute that has lasted nearly four months and has forced the league to cancel games for the first time in its history.
The owners' labor committee was to meet Tuesday, and on Wednesday the full board will meet. The sides have scrapped plans to have dozens, or perhaps hundreds, of players attend.
In their previous proposal, the owners insisted upon having a hard salary cap as a fallback in case a tax system failed to reduce the amount of basketball-related income devoted to player salaries.
Under that fallback proposal, each player would have a percentage of his salary deducted from his paycheck and put into an escrow account. At the end of the season, if the amount of revenue devoted to salaries had not dropped to 52 percent, enough of that escrow money would be returned to the owners to hit the targeted percentages -- 52 percent in the 2000-01 season, 50 percent in 2001-02 and 48 percent in 2002-03.
Such a system would amount to a hard salary cap, and the players voted unanimously in LaVegas never to accept such a system.
Under the compromises being discussed Monday night, the escrow funds would not all be returned to the owners. Instead, the sides discussed possibly instituting the cap-tightening mechanisms the union has offered in its previous proposals, Schayes said.
Barring a quick settlement, the rest of the November schedule -- and probably some December games -- will be canceled this week. So far, only the first two weeks of the season have been scrapped.
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