View Full Version : Union Claims NBA Circumventing Current Agreement at Arbitration Hearing

08-09-2002, 04:37 PM
Union claims NBA circumventing current agreement

Associated Press

NEW YORK -- In a case with financial implications for NBA free agency, an arbitration hearing commenced Thursday over the league's plans for redistributing money collected from the so-called luxury and escrow taxes.

The players' union claims the league is circumventing the collective bargaining agreement by creating an extra penalty for the teams with highest payrolls.

At issue is what happens to moneys collected from the escrow and luxury taxes.

Under the escrow tax, players last season began having 10 percent of their salaries withheld because they were collectively receiving more than 55 percent of basketball-related income. Of the $154 million collected, about $23 million was returned. The remainder was divided among the 29 owners.

In the upcoming season, teams with payrolls exceeding $51 million-$54 million (the exact amount will not be known until next summer) will have to pay a dollar-for-dollar luxury tax on the overage. That money would then be redistributed to teams that did not exceed the threshold.

In addition, those high-spending teams would be eligible to receive only a portion (70 percent in 2003, 40 percent in 2004, zero percent in 2005) of the escrow money.

A paragraph in the collective bargaining agreement says the league shall have sole discretion over how those tax moneys are redistributed, but the union contends the league would be imposing a double penalty by linking the escrow rebate to the luxury tax.

"Additional penalties beyond the dollar-for-dollar tax were never bargained for,'' union spokesman Dan Wasserman said. "For them to impose additional penalties against the clubs is an egregious violation of the spirit of this agreement, if not a literal one as well.''

This summer, a few free agents -- including Keon Clark, Travis Best, Rodney Rogers and others -- have not received lucrative offers because many teams are determined to stay below the luxury tax threshold.

If a team signed one of those free agents and increased its payroll above the threshold, they would not only have to pay a luxury tax but also would be ineligible for some of the redistributed funds.

NBA deputy commissioner Russ Granik declined comment until the hearing before arbitrator Charles Renfrew concludes.

League spokesman Tim Frank said the hearing will resume Friday.

08-09-2002, 04:39 PM
I don't think people realize how much money Cuban is forfeiting by spending the way he does.

08-09-2002, 04:40 PM
Mark Cuban is the MAN! I just cannot tell you how damn happy I am he is the owner of our fine team!!!

Red White and Blue
08-10-2002, 01:53 AM
Money can't buy a title, it can buy exciting basketball but we have seen that the last 2 years. It's time to start winning in the playoffs, and bring home a title to the Big D.