From: “G. William Hunter”
TO: NBPA BOARD OF DIRECTORS
FROM: G. WILLIAM HUNTER
As you have no doubt heard, early this morning, we reached a tentative agreement to settle the Anthony lawsuit. My best wishes and congratulations to all the players and everyone involved in this action.
The settlement will be conditioned on reforming a union and executing a CBA by December 9. Training camps are tentatively scheduled to open and free agent signings are tentatively scheduled to begin on December 9, with the season opening on Christmas day.
We will be sending out formal correspondence in the coming days describing the terms of the agreement and the upcoming processes, but for now, you should have a quick understanding of why we reached this agreement. I have prepared a quick list that sets forth all the changes that the owners agreed to as part of the settlement since a week ago Monday, the day the player reps voted to disclaim the NBPA’s status as the players’ collective bargaining representative. We will follow later with an overview of the general gains players achieved in this settlement.
The parties settled the litigation because the owners either gave in or sufficiently compromised on all of the open issues:
1. BRI Split – Players receive a 49-51 band of BRI, with the expectation that players will receive 51% of BRI by year 6. The split is set on a base case of 50%, with the players receiving 60.5% of every incremental dollar beyond the targeted amount, which is based on the mid-point of the agreed upon projections, or a symmetrical reduction in our share if revenues fall short of the targeted amount. The players’ share this first season (2011-12) will be 51.2% of BRI.
a. Mid-Level Exception for Non-Taxpayers: The Mid-Level Exception’s contract length is 4 years, every year.
b. Player Options: Player options are allowed for all players, as per the prior CBA. Owners dropped their demand to eliminate player options for high-paid players.
c. Escrow: 10% max withholding, 1% New Benefits Pool, system adjustments as necessary to avoid forecasted overage. Owners dropped their demand for unlimited escrow, carry over, true up, or banking.
d. Qualifying Offers: Beginning in 2012-13, players defined as “starters” – 41 games started or 2000 minutes, average over prior 2 seasons – will receive substantially higher qualifying offers. A first-round pick will receive the greater of his existing qualifying offer or the qualifying offer amount made to the 9th pick of the draft ($4.67 million for the 2010-11 draft class). A second-round pick or undrafted player will receive the qualifying offer amount made to the 21st pick. A first-round pick drafted 1-14 who is not a “starter” receives the amount offered to the 15th pick.
e. Max Salary: A player finishing his rookie scale contract will be eligible to receive a maximum salary equal to 30% of the Cap (up from 25%) if he signs with his prior team and is either: 1st, 2nd or 3rd team All-NBA 2 times; an All-Star starter 2 times; or 1-time MVP.
f. Minimum Salary: The owners dropped their demand to reduce the minimum salary scale by 12%. The current amounts will not be reduced.
g. Rookie Scale: The owners dropped their demand to cut the rookie wage scale. The current amounts will not be reduced.
h. Extend-and-Trade: The owners dropped their demand to eliminate extend-and-trades. As with sign-and-trades, players moving pursuant to an extend-and-trade may not receive Bird annual increases or one year longer maximum contract length.
i. Annual Increases: Annual increases will be set at 7.5% for Bird players and 4.5% for non-Bird players.
j. Taxpayers’ Use of Mid-Level Exception & Sign-and-Trade: The owners agreed to a $4 million “apron” above the tax threshold. Teams may go above the tax threshold by $4 million to use the entire $5 million mid-level exception, or acquire a player via sign-and-trade. Teams above the $4 million apron may use a $3 million/3-year mid-level exception every year.
k. Cliff: No change to prior proposal to reduce the cliff by 50%.
The above points will be incorporated into a litigation settlement agreement early this week. The NBPA will then re-form as a union, and negotiations may take place on various other CBA issues. The players will then vote to ratify a new CBA.
I will update you on further logistics over the next few days. Thank you everyone for your support and best regards.