NBA labor talks spur progress on small issues

David Stern didn't attend Thursday's mediation because he's sick with the flu

NBA players and owners resumed mediation for a third straight day as several smaller issues in the labor talks are starting to fall into place, sources involved in the discussions told Yahoo! Sports.

NBA commissioner David Stern isn't attending Thursday's mediation session after being sent home in the morning with the flu. Stern will continue to participate in the talks via phone, deputy commissioner Adam Silver said.

The league and players union made some progress in smaller issues in the first two days of mediation. Among them:

• The two sides are nearing a compromise on the annual midlevel exception starting at $5 million with annual raises over three years, sources told Y! Sports. Two weeks ago, the NBA was proposing a $3 million starting salary for the midlevel.

In previous days, the owners and players agreed on starting the midlevel exception at $4.8 million. The sides had differed on the length of contracts teams could offer players with the exception, as well as the percentage of annual increase. The players were willing to reduce the maximum length of midlevel deals from five years to four, but the owners wanted the length dropped to three years.

Now, they're close to compromising on a $5 million starting salary with a maximum length of three years.

• The owners also are proposing a “bonus pool” of money for high-achieving young players with performance-based incentives. Under the proposal, players would be rewarded for winning Rookie of the Year and making All-Star teams and other accomplishments. The union wants young stars such as the Chicago Bulls' Derrick Rose(notes) and Los Angeles ClippersBlake Griffin(notes), who have out-earned their rookie-scale contracts, to have quicker access to more lucrative extensions. Currently, a rookie contract can be renegotiated between the third and fourth seasons, and goes into affect after the fourth and final year of the initial deal.

• As CBS Sports reported, the proposed amnesty clause that will allow teams to cut loose one problematic contract per team at the conclusion of the lockout will allow for teams to have 75 percent of the money taken off the salary cap over the length of the deal. The player will become a free agent, and the team will have only 25 percent of his annual salary on the books going forward. Players will still receive the full amount of money they're owed under the contract.

[Related: NBA city mayors sign plea to end lockout]

The biggest hurdle left in discussions for the new amnesty clause, sources told Y! Sports, is how long teams will have to pay the player the money owed him. Will it be over two years, five years, seven years? The teams want the bought-out player to be paid over a longer period of time, while the union wants the money paid in shorter order. This is an area where a compromise will easily be found, sources said.

On Wednesday, the owners and players also narrowed the gap between them on the league's revenue split. As long expected, the two sides moved closer to a “50-50 split, give or take a point with ranges based on revenue performance,” one source said.

While the league’s owners and players made progress in Wednesday’s 8½-hour mediation session, one source involved in the talks was hesitant to characterize it as a “breakthrough” moment, saying system issues could again derail talks.

[Related: Kobe Bryant, other NBA stars plan global barnstorming tour]

The biggest obstacle between the two sides remains the luxury tax proposals to punish big-spending teams and discourage them from overpaying players. The NBA wants to limit players’ “Larry Bird Rights” they enjoy now by forbidding teams to go over the cap to pay their current players. They also want to restrict teams over the cap from using the midlevel and biannual exceptions to sign players on an every-year basis. The players contend the restrictions will act as a de facto hard salary cap.

Thursday's mediation began shortly after the end of the owners' board of governors meeting in which the owners had a "robust" discussion on revenue sharing, Silver said. Silver didn't reveal specifics on the proposal saying the structure of the new revenue-sharing system remains contingent on the completion of a new collective bargaining agreement with the players.

Silver also didn't rule out the NBA still putting together an 82-game schedule even though the league has already canceled the first two weeks of the season. He said only that it's "unclear" whether the 29 arenas the league uses would have flexible-enough dates to create a full schedule.

The NBA and Players Association have met with federal mediator George Cohen for more than 24 hours over three days, including a 16-hour session on Tuesday. They suspended talks Wednesday evening to allow the league’s owners to meet. Cohen said the discussions between the two sides have been “direct and constructive.”

During a media tour last week, Stern said he would consider canceling more games – possibly through Christmas – if a new labor agreement wasn’t reached by Tuesday. The ongoing mediation sessions appear to have forced Stern to at least table those plans.

Other popular stories on Yahoo! Sports:
Titans coach expresses interest in Terrell Owens
Bryant Gumbel calls NBA commish 'modern plantation overseer'
Silver: Raiders' Jackson not hesitant to roll dice on QB Palmer