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Posted on: October 20, 2011 12:01 pm
 

BRI, revenue sharing take center stage in talks

NEW YORK -- Setting up an important day in the NBA labor mediation Thursday, with BRI and revenue sharing in the spotlight:

* After more than 24 hours of federally mediated bargaining over two days, the two sides are right back where they were on Oct. 4 when it comes to the key issue of BRI split. Two people involved in the negotiations confirmed to CBSSports.com Thursday that the owners are back to offering a range of 49-51 percent for the players, with the percentage varying based on where revenues come in. This is where things were when a crucial session broke down more than two weeks ago, and we all know how that ended: Depending on who you believe, the players either rejected that informal proposal or countered with a band of 51-53 percent, which the league rejected. Either way, the economic negotiation has settled in the sweet spot that it has been heading toward ever since.  The final number A) more than likely will vary based on revenue trigger points, and B) is expected to wind up with the players receiving a share of between 50-52 percent -- the midpoint of the range each side is comfortable with, which we told you on Oct. 4 meant the two sides were only about $80 million-a-year apart. 

* With the owners' planning committee presenting its recommendations on a new revenue sharing plan to the full Board of Governors, the next step will be for the owners' labor relations committee to share the results with the players' executive committee Thursday afternoon when mediation resumes. While the owners have kept their revenue sharing plans separate from the collective bargaining talks, Thursday is expected to be the day when those two crucial topics unite. Before making any further economic moves, the players have been eager to examine the owners' revenue sharing plan as a way to ensure that the union doesn't bear a disproportionate burden of the economic and system changes owners are seeking. Commissioner David Stern has said the plan is to initially triple the revenue-sharing pool and eventually quadruple it. Shifting money from high-revenue teams to low-revenue teams is viewed as a crucial aspect of fitting the league's vision of a flatter payroll disparity into a CBA that already has significant economic concessions from the players built in.  

* Finally, as I examined here, the most prominent sticking point in the talks remains the method by which a reduction in player salaries will be linked up with a new system that seeks to create more competitive balance. Two mechanisms that I didn't mention in that piece could help: an amnesty clause and the escrow system. The latter already was in place in the previous agreement, while the former is a new concept proposed by the owners. Under the league's amnesty proposal, sources say teams would be able to waive a player and have up to 75 percent of his contract removed from the cap and tax, with the remaining balance amortized against the cap over the number of years left on the contract. The player would still be paid 100 percent of the guaranteed money owed; this would be an NFL-style cap management tool to help teams adjust to the new system. The escrow, which evens out any underage or overage in the players' guaranteed share of BRI, also could be used to account for existing contracts that would make it difficult for teams to comply with the lower cap. But this is a tricky one, since any amount paid to the players that winds up exceeding their assigned BRI percentage would have to be refunded to the owners. Union officials may view this as a salary rollback by a different name.

* So, right on cue, sports attorney Matt Tolnick has written a thoughtful piece detailing other solutions to the problem of marrying lower salaries to a more restrictive system. Writing for Hoopshype.com, Tolnick suggests two remedies: 1) Instead of requiring teams to be under a hard or harder spending ceiling (be it a cap or tax level) every year, they would simply need to meet the requirement on average over the course of four or five years; and 2) a rollback of existing contracts commensurate with the players' overall reduction in BRI percentage. The union has flatly rejected rollbacks, and the owners have agreed to back off on the concept. But it might just be the most equitable and simplest way to make all these moving parts fit together without causing a certain class of players (i.e. draft picks or free agents) to bear a disproportionate burden. 

How all of this plays out at the bargaining table Thursday is anybody's guess. But there seem to be enough good ideas to go around.

 
Posted on: October 19, 2011 3:09 am
 

Marathon mediation leads to another meeting

NEW YORK -- After a marathon, 16-hour bargaining session supervised by federal mediator George Cohen, negotiators for the NBA and its players' association left a Manhattan hotel after 2 a.m. ET Wednesday with no comment -- but with another meeting scheduled hours later in an attempt to end the lockout.

The two sides will reconvene at 10 a.m. Cohen requested that both sides refrain from making public comments, and they obliged.

"Nothing has been agreed to," said a person who was briefed on the talks. "There was nothing to say."

Negotiators rehashed the issues they've been wrestling with for more than two years, with the difference being that Cohen, according to a source, "took the emotion out of it." No topics were excluded from the mediation session, including the biggest obstacles in the way of a deal -- the split of revenues and a revised luxury tax system that would replace the hard team salary cap owners long sought in their efforts to achieve parity and competitive balance.

Cohen, a presidential appointee and the top federal mediator in the country, was at least able to do something that the two sides had been unable to do during a recent flurry of negotiations: focus on bridging the gap between them as opposed to concentrating on their own, still widely divergent positions, a source said. 

At one point late into the night, it was decided that the two sides needed to come back later Wednesday -- a session that is expected to decide whether the change of format and removal of emotion will yield movement in each side's position. A person with knowledge of the talks described Tuesday's session as laying the "building blocks" for Wednesday. 

Both sides clearly realized it was time to make a deal, but neither was ready to do it in this -- by far the longest -- bargaining session of the 3 1-2 month lockout.

A meeting of the owners' labor relations committee previously scheduled for Wednesday morning will be replaced by that committee's bargaining session with the players, again under Cohen's supervision. The owners' full Board of Governors is scheduled to meet Wednesday night, and Thursday, the planning committee is scheduled to present to the full board its revenue sharing plan -- a key cog in the logjammed talks.

In addition to the lead negotiators and lawyers for both sides, the mediation session featured the owners' full, 12-member labor relations committee (plus Lakers owner Jerry Buss) and eight members of the players' executive committee (minus Keyon Dooling, who did not attend.)

The meeting began at 10 a.m. Tuesday and finally broke up at 2 a.m. Wednesday, when both sides decided to return to the bargaining table eight hours later.



Posted on: October 19, 2011 3:02 am
 

Marathon mediation leads to another meeting

NEW YORK -- After a marathon, 16-hour bargaining session supervised by federal mediator George Cohen, negotiators for the NBA and its players' association left a Manhattan hotel after 2 a.m. ET Wednesday with no comment -- but with another meeting scheduled hours later in an attempt to end the lockout.

The two sides will reconvene at 10 a.m. Cohen requested that both sides refrain from making public comments, and both sides obliged.

"Nothing has been agreed to," said a person who was briefed on the talks. "There was nothing to say."

Negotiators rehashed the issues they've been wrestling with for more than two years, with the difference being that Cohen, according to a source, "took the emotion out of it." No topics were excluded from the mediation session, including the biggest obstacles in the way of a deal -- the split of revenues and a revised luxury tax system that would replace the hard team salary cap owners long sought in their efforts to achieve parity and competitive balance.

Cohen, a presidential appointee and the top federal mediator in the country, was at least able to do something that the two sides had been unable to do during a recent flurry of negotiations: focus on bridging the gap between them as opposed to concentrating on their own, still widely divergent positions, a source said. 

At one point late into the night, it was decided that the two sides needed to come back later Wednesday -- a session that is expected to decide whether the change of format and removal of emotion will yield movement in each side's position. 

Both sides clearly realized it was time to make a deal, but neither was ready to do it in this -- by far the longest -- bargaining session of the 3 1-2 month lockout.

A meeting of the owners' labor relations committee previously scheduled for Wednesday morning will be replaced by that committee's bargaining session with the players, again under Cohen's supervision. The owners' full Board of Governors is scheduled to meet Wednesday night, and Thursday, the planning committee is scheduled to present to the full board its revenue sharing plan -- a key cog in the logjammed talks.

The meeting began at 10 a.m. Tuesday and finally broke up at 2 a.m. Wednesday, when both sides decided to return to the bargaining table eight hours later.



 
Posted on: October 18, 2011 9:31 am
Edited on: October 18, 2011 9:58 am
 

On big day for NBA, why is the max so sacred?

NEW YORK – A few thoughts on a very important day for the NBA:

• What does it mean that commissioner David Stern is giving mediator George Cohen one day to solve all the league’s problems before breaking away for two days of Board of Governors meetings? On one hand, it’s unrealistic that Cohen and his colleague, Scot Beckenbaugh, could do in one day what Stern and Billy Hunter haven’t been able to do in two years. On the other, it creates a sense of urgency – without which nothing ever gets done in negotiations. “That’s David’s style,” one league executive said. “He likes deadlines.”

• There are rumblings in the agent community and among team executives that the hawkish position of the players’ association – its line in the sand at 53 percent and inflexibility over competitive aspects of the system – is a recipe for doom. “Sad to say, but I think (the owners) just want to sit the season out,” one prominent personnel man said. The involvement of superstars Kobe Bryant, Kevin Garnett and Paul Pierce in the negotiations two weeks ago shook some team executives who believed the two sides were on their way to a deal. “It baffles me that a union of 400 guys is fighting for one or two guys, whereas hundreds of guys are the ones taking the loss,” another team executive told CBSSports.com.

• Several executives fear that Hunter and union president Derek Fisher have been swayed by star players and their agents into taking a hard-line position that could be devastating to hundreds of rank-and-file players if the season were lost. “The thing that they’re fighting for right now is not the middle-of-the-road guy, and that's who you would think the union would be fighting for,” one of the executives said. “They’re fighting for the max guys right now or the max-to-be guys.”

• Longtime agent Steve Kauffman, a player agent during the 1998-99 lockout who now represents coaches and management executives, agrees that not enough time has been spent examining how much money and system flexibility could be freed up by reducing max contracts. “The deal is there to be made,” Kauffman said. “It's ridiculous. The main thing is, tell me what the max salaries are going to be. Because if you want to really help your union, who does the union represent? Whose interests are they protecting? If it's supposed to be everybody, then you've got to strike a balance.”

• Among the negotiating points that the league has said it’s conceded is the initial goal of curtailing the size and length of max contracts. Kauffman believes that’s gotten in the way of getting a deal. “You can make the argument that the stars deserve to be paid 75 or 80 percent of the payroll,” Kauffman said. “But if the max got a 15 percent cut, there would be more room to do those contracts that (the agents) are complaining they can't do. … The superstars are always going to get theirs through endorsements and other avenues.”

• Does this point about max salaries bear out in the math? A 15 percent reduction in future max salaries would represent only 1 percent of BRI annually – about $54 million based on the 21 players who currently make $15 million or more. But over a six-year deal, that’s roughly $325 million – the difference between a players’ share of 52 percent, which sources indicate the union would accept, and 51 percent, a figure that owners likely also would agree to. If the league’s biggest stars took a pay cut, or at least agreed that future max contracts would be reduced by 15 percent, the difference could easily be made up by giving those players a bigger share of licensing money, which currently is divided equally among the players regardless of whether you’re Kobe with millions in jersey sales or Sasha Vujacic, whose only jersey sale likely was transacted by his finance, Maria Sharapova.

UPDATE:

• Some small-market executives are fearful that the amnesty provision being negotiated will turn out to be only another advantage for big-market teams. The provision would allow teams to release an underperforming player and spread the money left on his contract over twice the years remaining, plus one, for cap purposes. One small-market GM envisions this provision being used by big-market teams to collect players cast off by small-market teams. "It's a great idea until Baron Davis goes to Miami," the GM said.

• Do not underestimate the owners' obsession with creating a competitive system that mimics the NFL, through whatever vehicle gets them there. 
"In the NFL, every team has a chance," one team executive said. "That's what makes it great, and we don't have that. We're like Euro League. Until we have revenue sharing and a hard cap, we not going to be a fair league." 

• One final note on the two weeks of games that have been canceled so far. Given reports that league scheduling guru Matt Winick is working on a host of contingency plans, including an 82-game schedule that would begin Dec. 1, it isn’t a foregone conclusion that those games are lost forever. Of importance Tuesday in the mediation session with Cohen is that those games could enter the equation as a valuable bargaining chip. If the two sides reach another impasse on the BRI split, they could be enticed to move closer by getting back the $200 million each side “lost” when those games were canceled.

Posted on: October 17, 2011 9:09 pm
Edited on: October 17, 2011 9:50 pm
 

NBA, union meet with federal mediator

NEW YORK -- Federal mediator George Cohen met separately with executives and legal staff from both the NBA and its players' association Monday, a prelude to a crucial bargaining session he will oversee with time running out to avoid losing a subtantial portion of the season to the lockout.

Cohen, director of the federal mediation and conciliation service, and deputy director Scot Beckenbaugh met with NBPA executive director Billy Hunter and legal staff for about 2 1-2 hours at the union's headquarters in Harlem. Sources also confirmed that league executives and lawyers met with the mediators at NBA headquarters.

The separate meetings set the stage for a bargaining session Tuesday in Manhattan under the supervision of Cohen, a respected presidental appointee and the top federal mediator in the country. During appearances on various media outlets late last week, commissioner David Stern said if the two sides weren't close to a deal by the time his owners convened in New York for meetings Wednesday and Thursday, his "gut" feeling was that games eventually would be canceled through Christmas.

 "I really think David wants to go present his owners with something on Wednesday," a person familiar with the process told CBSSports.com.

On Wednesday, the league's planning committee -- headed by Celtics co-owner Wyc Grousbeck -- is expected to present a revenue sharing plan to the full Board of Governors. The labor relations committee, headed by Spurs owner Peter Holt, will report on the progress -- or lack thereof -- on negotiations with the players. The issues of revenue sharing and collective bargaining have always gone hand-in-hand, and they will be inexorably linked this week in New York.

If there is no collective bargaining agreement soon, there will be no revenue to share.
Posted on: October 13, 2011 5:49 pm
Edited on: October 13, 2011 11:18 pm
 

Stern: Deal or despair by Tuesday


NEW YORK -- Setting another arbitrary deadline for more lost games, NBA commissioner David Stern said that without an agreement on a new collective bargaining agreement by Tuesday, he fears there will be no games on Christmas Day.

"It's time to make the deal," Stern said, speaking deliberately and threateningly Wednesday in an interview on New York's WFAN radio. "If we don't make it on Tuesday, my gut -- this is not in my official capacity of canceling games -- but my gut is that we won't be playing on Christmas Day."

Tuesday is the day the league and players' association will meet with federal mediator George Cohen in an attempt to resolve their differences before more games are canceled.

"Deal Tuesday, or we potentially spiral into situations where the worsening offers on both sides make it even harder for the parties to make a deal," Stern said.

Stern confirmed that negotiating committees for the league and National Basketball Players Association will meet separately with Cohen on Monday and then will convene for a bargaining session under Cohen's supervision Tuesday. Why the deadline? Stern's Board of Governors is scheduled to meet in New York Wednesday and Thursday -- first for the planning committee to present its revenue sharing plan and then for a full board meeting.

Asked when more games could be imperiled after he canceled the first two weeks on Monday, Stern said, "I don't have a date here sitting at my desk. But if we don't have a deal by the time the owners are in, then what's the purpose of us sitting around staring at each other on the same issues?"

Sources familiar with the mediation process told CBSSports.com that Cohen at first wanted to hold bargaining sessions at his Washington, D.C., office beginning Tuesday and continuing for the rest of the week. With owners headed to New York for the board meetings Wednesday and Thursday, that wasn't possible.

"We have owners meetings Wednesday and Thursday," Stern said later in another interview on NBA TV. "Each side’s going to meet with the mediator on Monday, and if there’s a breakthrough, it’s going to come on Tuesday. If not, I think that the season, you know, is really going to potentially escape from us because we aren’t making any progress."

Pressed by interviewer David Aldridge, Stern said, "How many times does it pay to keep meeting, and have the same things thrown back at you? We’re ready to sit down and make a deal, and I don’t think the union is. But hopefully on Tuesday, aided by the mediator, they’ll be ready to make a deal. And certainly, I’ll bring my owners ready to make a deal. Unlike Billy Hunter, you’ve never heard me say something is a 'blood issue.'"

Hunter, who appeared Wednesday on WFAN -- the nation's largest sports talk station -- was traveling Thursday to Los Angeles, where he will meet with players Friday to update them on the bargaining status.

In a work stoppage known more for catch phrases and YouTube moments than compromise, this will go down as Stern's "Grinch" moment. Placing that much importance on the first sit-down bargaining session with a mediator who has no binding authority felt like a negotiating tactic more than a realistic deadline or threat.

But in responding to assertions made a day earlier on WFAN by union chief Billy Hunter, Stern did by far his most effective, convincing job yet of laying out the owners' vision for a new system that would shrink payroll disparity and enhance competitive balance in a new CBA.

In meticulous, lawyerly fashion, Stern skewered the union's bargaining stance on the key system issues standing in the way of a deal -- the type of cap system and contract length. He also took Hunter to task for his characterization of a 50-50 split of revenues that had been discussed in informal side meetings during a key bargaining session on Oct. 4 -- calling it an idea first broached by the players and saying Hunter's characterization of it "caused my head almost to explode."

"The first time 50 percent was uttered was several weeks earlier, by the players' negotiator (Jeffrey Kessler), who said it's not an offer, it's a concept," Stern said. "He said it's a concept if everything else stays the same. And we said, 'No, no, no, no.'"

Stern said when each side was in its respective room during the Oct. 4 session, there was a knock on the door. 

"It was Derek Fisher, the president of the union, and Jeff Kessler, the lead negotiator, who probably does 70 percent of the talking for the union," Stern said. "And they asked us to come out into the hall, where I went with Peter Holt, the head of the labor relations committee, and Adam Silver, who's really our lead negotiator.

"Without trying to pin it on anybody in particular, all the parties to that conversation agreed that we would go back to our respective rooms and each promised to try to sell a 50-50 split," Stern said. "We were in the process of selling it, and there was a knock on our door. Kessler and Derek Fisher asked us to come into a room where they were with three other players -- not Billy -- and they said, 'We can't do it. We can't sell it.' And we said, OK, we get it.' Now it strikes me as strange that the union and the chief negotiator are being left out there because Billy wasn't in the room? I'm sorry."

Union sources have given a different account of the side discussions, saying the league at one point offered to try to sell a band of 49-51 percent for the players, while the players countered with a band of 51-53 percent.

"It was actually a union-initiated proposal, and it didn't fly, OK?" Stern said. "But Billy's ... you may have to have both of us in tomorrow with lie detectors."

In any event, Stern now considers the two sides to be six percentage points apart on the split of BRI, with the players asking for 53 percent -- a $1 billion concession over six years from their previous guarantee of 57 percent -- and the owners offering 47 percent. Stern made it clear that he believes the economic deal to be made is 50-50.

"When one side is at 53 and the other side is at 47, you have an idea of where this is going, OK?" Stern said.

While Stern's motivation to put another threat of canceled games out there was clear -- negotiating leverage -- it's unclear why he waited this long to give a thorough, persuasive summary of the system changes owners are seeking. 

"If you live in a market where you have a perception as a fan that it's only open to the rich teams to have the best players, then you're starting out in a bad place," Stern said.

On negotiations over the type of cap system, Stern said, "We proposed to the players that every team have the same amount available (to spend). That's what the NFL has. And the union said, 'No way. That's a blood issue.' So we said, 'All right, all right, you know, good ol' softees that the owners are, how about the flex cap like NHL has, where you agree upon a band between $52 million and $68 million -- because you can compress the difference? And they said, 'Blood issue. That's still a hard cap at the high end. Why don't you propose a punitive tax?' We said, 'OK, we'll propose a punitive tax.' And we did."

Stern described in detail how the owners' latest luxury tax proposal would work: It would tax teams $1.75 for every dollar of the first $5 million over the tax threshold, with 50 cents added for each additional $5 million. So a team spending $20 million over the tax would be charged $65 million, compared to the $20 million it cost under the dollar-for-dollar tax system in the previous CBA. The players on Monday rejected the owners' luxury tax plan because it was so punitive, it would effectively serve as a hard salary cap.

The league also wanted to impose even stiffer penalties for teams that failed to come out of the luxury tax after a period of time -- repeat offenders, so to speak. 

"We really have been reaching for the union here," Stern said. "... If anyone thinks we wanted to miss a single game, they are wrong."

UPDATE: In the NBA TV interview, Stern asserted that near the end of Monday's bargaining session, the union's tax proposal worsened from a $12.5 million tax on $10 million to $11 million.

"It was clear that they weren't ready to make a deal," Stern said. "And we didn’t know what else to do."

Stern didn't mention the aspect of the league's proposal that would forbid tax-paying teams from using the Bird exception to retain their own free agents, but did reveal that the league proposed a so-called "Super Bird" exception whereby teams could re-sign one designated free agent for a maximum of five years. Other contract lengths would be capped at four and three years under the league's proposal. Previously contracts could be no longer than six years for free agents who stayed with their teams and five years for those who left. The union has offered to cap contract lengths at five and four years, respectively.

"I was a participant in developing the Bird exception in 1983, so it doesn't break my heart to see it continued," Stern said. "But frankly, our owners went into this thinking that it was better to eliminate it so that teams could only keep certain players and the rest would be available to other teams."
 
Stern's spin on the league dropping its insistence on eliminating guaranteed contracts and rolling back existing ones was that, "We were anxious to save the season and make a deal." While the provision forbidding tax-payers from retaining Bird free agents would result in many of those players leaving their teams -- which is exactly what the exception was created to prevent -- he said the Super Bird provision would be "better for the players."

"The very good players will keep getting raises and new contracts, and the others, the money that becomes available by the expiration of the four- and three-year contracts will be available to the performers," Stern said. "That's what we call pay-for-performance. The union is not in accord with our view. They want longer contracts."

The luxury tax penalties and contract lengths will be the two most divisive issues when the parties meet with the federal mediator next week, Stern said.

"We really want the union and us to explain ourselves to a federal mediator," Stern said. "It may be that in the act of explaining, we will get a better reality check -- maybe of our proposals and our willingness, I accept that -- and maybe of the union's. We'll just see how that works out. So that's why, in some measure, both sides embrace the arbitrator."



Posted on: October 12, 2011 6:24 pm
Edited on: October 12, 2011 8:54 pm
 

NBA talks headed to federal mediator

The NBA labor talks are headed for government intervention after the canceling of games drew the attention of the nation's top federal mediator.

George Cohen, director of the federal mediation and conciliation service, will oversee further negotiations between the NBA and its players' association on a new collective bargaining agreement, the agency said in a news release Wednesday. The sessions will begin Tuesday in New York.

"For a number of months, I have participated in separate, informal, off-the-record discussions with the principals representing the NBA and the NBPA concerning the status of their collective bargaining negotiations," Cohen said in the statement. "It is evident that the ongoing dispute will result in a serious impact, not only upon the parties directly involved, but also, of major concern, on interstate commerce—i.e., the employers and working men and women who provide services related to the basketball games, and, more generally, on the economy of every city in which those games are scheduled to be played.

"In these circumstances, the agency has invited, and the parties have agreed, to convene further negotiations under my auspices," Cohen said.

Billy Hunter, the NBPA's executive director, divulged in a radio interview with WFAN in New York earlier Wednesday that the two sides had agreed to have their failed negotiations federally mediated.

Cohen, appointed by President Obama, was called upon to mediate the NFL's labor negotiation with the NFL Players Association before that sport's recent lockout was imposed. He has no binding authority and can only make suggestions. If nothing else, a fresh set of eyes and opinions -- not to mention meetings with a different venue and format -- couldn't hurt.

Cohen has argued five landmark labor cases before the U.S. Supreme Court and last year helped avert a crisis in Major League Soccer's labor talks. He is a former appellate court attorney with the National Labor Relations Board, and in fact argued before then-U.S. District Judge Sonia Sotomayor on the day she issued an injunction that effectively ended the Major League Baseball strike in 1995. Cohen was the MLBPA's lead attorney in the case, and also has worked with the NBPA.

In a Los Angeles Times article from March, football agent Leigh Steinberg said a good mediator is "an expert in the psychology of human gridlock." To that extent, Cohen has joined the right fight, as the NBA and NBPA are hopelessly, needlessly gridlocked over issues that should have been easily solved once they approached a compromise on how to divide the sport's $4 billion of revenues. The league's bargaining talks broke off Monday night after 13 hours over two days and multiple sessions over a two-week period. The league on Monday canceled the first two weeks of the regular season.

Drawn by the fact that lost games will have an economic impact beyond the parties involved, Cohen's office called both parties this week to request that they voluntarily participate in mediation, two sources said. Both agreed.

For those wondering why the step wasn't taken sooner, federal mediators generally don't get involved in labor disputes unless asked, or unless they reach an impasse after the sides had ample time to bargain. The NFL requested Cohen's involvement before the lockout was imposed, and while it's unclear what impact he had on the ultimate resolution, his powers at the time were muted by the lack of urgency in the talks.





Posted on: October 10, 2011 11:08 pm
Edited on: October 11, 2011 1:15 am
 

Stern cancels two weeks over labor impasse

NEW YORK -- Citing an impasse with the players' association over matters that seemed trivial entering the home stretch of negotiations, David Stern announced Monday night the cancellation of regular season games for the second time in his more than a quarter century as commissioner.

Stern canceled the first two weeks of the regular season after more than 13 hours of bargaining over two days with the National Basketball Players Association left the two sides "very, very far apart on virtually all issues."

"I'm sorry to report, particularly for the thousands of people that depend on our industry for their livlihood, that the first two weeks of the season have been canceled," Stern said.

Asked if there was no chance of having an 82-game season, Stern said, "Yes, I think that's right. And every day that goes by, we need to look at further reductions in what's left in the season."

The biggest issue that separated the parties in negotiations that began in earnest with the owners' initial proposal in January 2010 -- the split of revenues -- was not the tipping point that led to the cancellation. It was system issues -- luxury tax, contract length, length of the CBA, annual raises, and the like -- meaning that both sides will miss games over details neither imagined they would.

"I'm convinced this was all just part of the plan," said Billy Hunter, executive director of the National Basketball Players Association.

Indeed, a person involved in the negotiations told CBSSports.com that the cancellation seemed "pre-ordained."

"This could have been solved so easily, with any amount of effort," the person said.

Indeed, the two sides engaged in a flurry of lengthy talks over the past two weeks, culminating with six hours Sunday night and seven hours on Monday -- all dealing with system issues with no sunstantive discussion of the split of basketball-related income. Speaking on the sidewalk outside the Upper East Side hotel where negotiations took place, Stern delivered a laundry list of items that league negotiators found most objectionable about the players' proposals: contract length, length of the CBA, use of exceptions by tax-paying teams, the tax levels and what deputy commissioner Adam Silver described as the "frequency of the tax."

The latter point, according to a union source, apparently was in reference to the owners desire to punish teams that repeatedly spend over new luxury-tax thresholds in order to prevent "runaway teams" in big markets from maintaining an unfair competitive advantage over small-market teams.

Such negotiating points seemed minor heading into the final push to save regular season games, given that last Tuesday, the two sides had shaved about $1.6 billion off the economic gap that separated them. Few observers or participants in the talks expected games to be lost over technical deal points -- the likes of which could've been agreed upon and written up by low-level attorneys working at home on the weekend while players reported for training camps.

But Stern characterized the distance between the sides as "a gulf," and added, "We just can't get over the system hurdles."

"It makes no sense for us to operate under the current model, where taxpayers ... have a huge advantage over other teams," Silver said.

Unsurprisingly, each side had a different view of the others' vision of the system they were negotiating to achieve. According to a union source, the players agreed to concessions on contract length -- reducing them from five- and six-year deals in the previous CBA to five- and four-year deals -- and offered to lower the mid-level exception from its previous level of about $5.8 million to $5 million. The source said league negotiators were insisting on a reduction in the mid-level to $3 million a year.

Not mundane enough for you? Other aspects of the impasse included annual raises. The players offered to reduce them from 10.5 percent and 8 percent for "Larry Bird" free agents under the previous deal to 10.5 percent and 9 percent for Bird free agents and 8 percent and 7 percent for other players. Hunter said owners wanted to forbid tax-paying teams from using the Bird exception, meaning they would need to have cap space to retain one of their Bird free agents.

The totality of the owners' system offers -- including a more punitive luxury-tax model that would increase to as much as 4-1 and beyond for repeat offenders -- would have the same effects as a hard salary cap, Hunter said.

"My attitude is, if it quacks like a duck and walks like a duck and it looks like a duck, it's a duck," Hunter said. "... We came up with proposals to stiffen the tax, but we do not want a hard cap. You can't say, 'OK, we agree we're going to move away from a hard cap,' but then do everything else that brings about the same result."

Stern maintained that the owners' latest proposals did not include a hard team salary cap, and also would allow players to retain guaranteed contracts and would not roll back existing contracts.

"We tried awfully hard," Stern said. "We made, in our view, concession after concession."

Stern predicted that the economic loss from canceling games would cause the league's negotiating position to harden because "we have to account for the losses that we are incurring." He stopped short of saying the entire season is in jeopardy, but added that further cancellations would be dealt with in two-week increments.

"I don't know that the season is in jeopardy," Hunter said. "I think it would be foolish for them to kill the season. We're coming off the best season in the history of the NBA, and I'm not so sure in this kind of economy if there is a protracted lockout whether the league will recover."



 
 
 
 
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com