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Fan holds up a sign in protest of the baseball strike during a game between the Seattle Mariners and the Oakland Athletics at the Oakland Coliseum on August 4, 1994 in Oakland, California. The Mariners won the game 8-1. (Photo by Otto Greule Jr/Getty Images) (Otto Greule Jr/Getty Images)
Fan holds up a sign in protest of the baseball strike during a game between the Seattle Mariners and the Oakland Athletics at the Oakland Coliseum on August 4, 1994 in Oakland, California. The Mariners won the game 8-1. (Photo by Otto Greule Jr/Getty Images) (Otto Greule Jr/Getty Images)

Contract Analysis

Players earn concessions at buzzer Add to ...

For nearly 150 days of an anxiety-filled lockout, NBA players made every concession imaginable – on salaries and free-agent rules and payroll limits. But in the final hours of negotiations, they at last extracted some key compromises from the league.

Some of the items are arcane. Many will seem minor to all but the most dedicated salary-cap enthusiast. But to the players, the issues were critical – so much so that they disbanded their union, filed a U.S. federal lawsuit and extended the lockout by two weeks to gain the concessions.

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From late Friday night through early Saturday morning, the players gained ground on the following items:

Big-spender flexibility

The league agreed to create a $4-million (all currency U.S.) cushion, or “apron,” that will allow teams near the luxury-tax threshold to use the full midlevel exception and to acquire players in sign-and-trade deals.

The league had sought to ban teams from using those measures if doing so pushed them even $1 over the tax line. Now, a team with a $69-million payroll ($1-million below the tax threshold) will be permitted to use the full, $5-million exception, pushing its payroll to $74-million, or $4-million over the line. A team at $69.5-million would be limited to just $4.5 million of the exception.

The same framework will apply for teams acquiring a player in a sign-and-trade deal.

This was a huge issue for players and their agents, because the proposed restrictions could have severely undermined a player’s leverage in free agency.

Derrick Rose rule

Young superstars (those with less than six years experience) negotiating a “max” contract may now be eligible to earn 30 per cent of the salary cap, instead of 25 per cent. To gain that right, a player must earn All-NBA honours (first, second or third team) twice or be voted an all-star game starter twice or be named most valuable player.

Rose, who was named the 2010-11 most valuable player as a third-year player for the Chicago Bulls, will be among the first to take advantage of the new rule.

Oklahoma City Thunder forward Kevin Durant may be eligible, because the extension he signed in 2010 has not yet taken effect. Under NBA rules, a max contract is tied to league formulas, not a specific dollar amount. Durant could ask the Thunder for the extra 5 per cent once the league reopens for business.

Escrow tax

The NBA will cap the withholding from paycheques at 10 per cent – a measure that is used to ensure that players’ salaries do not exceed 50 per cent of league revenues.

If that withholding is insufficient to hold the players at 50 per cent, the league will tap a newly created benefits fund, equal to 1 per cent of league revenues.

Under the league’s previous proposal, the escrow withholding would have been virtually unlimited, according to the players association.

Options and trades

The league dropped its ban on player options and extend-and-trade deals. But a player who wants an extension as part of a trade will be limited to three years, instead of four, with raises of 4.5 per cent, instead of 7.5 per cent.

Salary scales

The scales for rookies and minimum players will be frozen at 2010-11 levels, with future raises being determined. The league had sought a 12-per-cent rollback, to 2007-08 levels.

New York Times News Service

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