Union proposal countered by owners

NEW YORK -- NBA players and owners each made new financial proposals Tuesday at a three-hour collective bargaining meeting, emerging from the discussion cautiously optimistic that progress was being made.

The current CBA expires June 30, and the two sides are trying to prevent an impasse like the one that has stopped NFL business.

The union made the first proposal, asking to retain the current "soft" salary-cap system but with a half-billion dollar reduction in salaries -- $100 million in each of the next five years in a proposed five-year agreement, according to a source who was briefed on the negotiations.

The owners, who are asking for a 10-year agreement, then came back with a counterproposal of their own. Owners offered what they called a "flex cap" system that would earmark at least $2 billion per season toward player salaries.

The owners also moved their position on cap exceptions, saying the Larry Bird Exception and the mid-level exception would remain in a new system, although teams could not exceed an as-yet-determined maximum team salary.

The sides agreed to meet again Friday in New York.

"We both made real moves, but we're still very far apart," union attorney Jeffrey Kessler said.

Commissioner David Stern called the league's offer "virtually the best shot we think we have" to avoid a work stoppage. He refused to call this his last offer, but said the "cupboard is getting barer and barer."

"It's all out there," he said. "The owners to a person feel that this is what we have to give."

The "flex cap" system had been brought up in prior discussions between the sides but was never formally proposed. That changed when the owners came out of their caucus late in the bargaining session, which was held across the street from league headquarters.

"We would have liked to have seen more, but we thought it was directionally better than what we had before," said Stern, who labeled the players' $500 million giveback "modest."

Under the owners' new proposal, the luxury tax would be eliminated and players would give back the 8 percent "escrow tax" that is currently withheld from all NBA paychecks. The financial terms would evolve over the first few years of the agreement.

"We're prepared to take less in the early years of a 10-year deal because we would come out in the latter years with something we are satisfied with," deputy NBA commissioner Adam Silver said.

Stern said the average NBA salary would drop to about $5 million, and that the owners are still seeking a 50-50 split of basketball-related income, which would be recalculated under the new deal. Silver said the owners' new proposal looks like the NHL's labor agreement and less like the NFL's "hard cap" system. It targets a "mid-point" payroll for all 30 teams of $62 million.

"Today was productive and there was movement, but we're still very far apart and ... the hard salary cap system is still something that we're really having difficulty trying to get past," players' association president Derek Fisher of the Lakers said. "Our players just don't see that as the best way to tackle some of the things at least we've been given by owners as to reasons why we need a hard salary cap."

The source who was briefed on the negotiations said the owners' proposal would increase salaries only minimally over the 10-year period, having the effect of cutting the players' portion of basketball-related income, as currently calculated, from 57 percent last season to less than 40 percent in the latter years of the proposed 10-year agreement.

The proposal presented by the players Tuesday would cut the players' guarantee of BRI from 57 percent to 54.3 percent, rising to 55 percent in the fifth year, the source said.

Last week, the league withdrew its insistence for all contracts to be non-guaranteed in a new deal, offering to leave the system as is, where teams and players can negotiate individually.

The players have argued that was not truly a concession, because they were given something they already have.

"We've had guaranteed contracts for 40 years, so it's almost like somebody walks into your house and they take something that belongs to you, and then they want to sell it back," union executive director Billy Hunter said. "And you say, 'It was mine from the get-go, so why should I pay for it? And I didn't authorize you to take it, and I never said it was available for you to take or use or abuse.' "

Hunter had long said he was nearly certain of the league's first work stoppage since 1998, but now says he sees signs owners are interested in making a deal.

But both sides caution they aren't close to one yet. Asked if they were 100 miles apart going into Tuesday how far they were now, Hunter said, "What, 99?"

Though the league's newest proposal would mean an 8 percent pay cut in the first year, owners have moved from their initial proposal that players rejected in February 2010. Stern said there have now been 10 proposals exchanged between the sides and the players could offer another Friday.

They still must sort through the differences in the cap, with Stern saying the sides have a "different characterization" of what the league proposed.

The players' executive committee was joined by stars such as Tony Parker of the Spurs and Atlanta's Al Horford. Fisher said all the players have expressed their willingness to be flexible but "there are certain parts of it we have no interest in moving on and right now that's where we stand."

Following Friday's bargaining session, the owners are scheduled to meet Tuesday in Dallas.

Senior writer Chris Sheridan covers the NBA for ESPN.com. Information from The Associated Press contributed to this report.