Arbitrator: Owners can do what they want with redistributed funds

[Dooby]

Potential impact on Cuban's wallet more than the Mavs. Still a ruling ot the contrary would have enticed a lot more teams to over the luxury tax. Long term, this is a good result for the Mavs.
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Owners can do what they want with redistributed funds

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Associated Press


NEW YORK -- An arbitrator handed the NBA a victory Wednesday that should help keep team payrolls down, ruling that the 29 owners can redistribute luxury tax and escrow funds any way they please.

The players' union filed a grievance in August, arguing that the league's plan to withhold funds from high-spending teams amounted to circumvention of the collective bargaining agreement.

"The NBA bargained for the right in the CBA to decide how the escrow and tax money would be used,'' NBA general counsel Rick Buchanan said. "We are pleased that the arbitrator enforced the terms of the agreement.''

At issue was 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 that tax money is redistributed, but the union contended that the league would be imposing a double penalty by linking the escrow rebate to the luxury tax.


Arbitrator Charles Renfrew rejected that argument.


"We strongly disagree with the arbitrator's decision. We remain convinced that the NBA does not have the right to unilaterally create new ways to punish teams that want to improve by spending on player salaries,'' union director Billy Hunter said.


Hunter said the union was considering whether to appeal the decision or commence a new proceeding alleging collusion.

[Usually Lurkin]

what will Cuban do with the money?
a) employee incentives?
b) $2 seats?
c) gas money for fans driving over 1 hour to the game?
d) nothing. his wife will have spent it already.