League to begin gearing up for labor talks

LAS VEGAS – Days after the NBA delivered dire financial projections, commissioner David Stern and the league’s board of governors will meet Tuesday to begin strategizing for upcoming labor talks with the Players Association, multiple sources told Yahoo! Sports.

As team executives gather here for the NBA’s annual summer league, Stern will direct what one board of governors’ source called “largely a strategic planning meeting” at the Palms. The discussions have gained urgency with the NBA’s revelation that declining revenues will cause the salary cap and luxury-tax threshold to drop significantly for the 2010-11 season.

In a memo to teams last week, league officials warned that basketball-related income – the variable that helps determine the salary cap and luxury tax – could drop by as much as 5 percent next season. The league projected the salary cap for 2010-11 to fall somewhere between $50.4 million and $53.6 million. The cap has already dropped from last season’s high of $58.7 million to $57.7 million for the upcoming season.

The global financial downturn has taken its toll on the NBA, with teams weathering a decrease in both ticket and sponsorship revenue. Stern, sources say, has admonished teams for the escalating costs of coaching salaries and scouting expenses, and is determined to also get player salaries more in line with the current economic climate.

The league’s Collective Bargaining Agreement is set to expire in June 2011. Team owners can extend the CBA through the 2011-12 season by a December 2010 deadline, but are expected to decline the option. Stern has said he would like to begin labor talks with the Players Association this summer in hopes of brokering a new agreement that could ward off the threat of a lockout in two years.