Blog Entry

Stern: Cut expenses, but only the players'

Posted on: February 13, 2010 10:25 pm
Edited on: February 13, 2010 11:10 pm
 
DALLAS – NBA players simply make too much money, commissioner David Stern said Saturday night, and salaries must be curtailed to keep the league afloat. 

Citing $400 million in operating losses this season – and an average of $200 million annually in previous years of the current collective bargaining agreement – Stern issued a challenge to the players’ union to come back with a proposal that would develop “a sustainable business model.” 

“At our current level of revenue devoted to players’ salaries, it's too high,” Stern said. “I can run from that, but I can't hide from that, and I don't think the players can, either.” 

In a state-of-the-league address that was alternately witty and biting, Stern ridiculed union chief Billy Hunter’s assertion that the owners’ initial proposal was taken off the table during a contentious bargaining session Friday during All-Star weekend. 

“I don't know what that means,” Stern said. “We are talking semantics, and everyone around here knows that I am not anti semantic.” 

Ba-dump-bump. 

“I don't know what to say,” Stern said. “If they don't like it, you know, that's what counters are about. Speak to me, that's all. Off the table, on the table, under the table; I don't even understand it. The answer is, it's for them to make a proposal.” 

While Stern was in rare form on those topics, he artfully dodged three of the most important issues related to avoiding a lockout if the two sides can’t reach an agreement by June 30, 2011:

1) The 2010 free-agent class: Though Stern professed no urgency to reach agreement on a framework of a new economic system by July 1 of this year, the owners need cost-certainty by then in order to plan accordingly for spending on the biggest free-agent class in NBA history. Since the players like the current system, they’re in no hurry to speed up the process. So owners will have to risk committing max money to free agents this summer and having it come back to haunt them if the cap falls as far as the union predicts under the owners’ proposal – from $57.7 million to about $43 million.

2) Revenue Sharing: Stern said he’s committed to revamping the revenue-sharing model to help low-revenue teams compete. Despite saying it would be done “in lock step” with collective bargaining, Stern also said, “We can’t do it until we complete the negotiations.” Asked to explain why, Stern said, “We are going to do it all at once. It’s going to be when we have the new collective bargaining agreement.” According to internal NBA documents obtained by CBSSports.com, 12 teams averaged more than $1 million per game in ticket revenue during the 2008-09 season, with seven of those teams making the playoffs. Six teams made less than $600,000 per game, and only one – the Hawks – made the playoffs. “When we get to where we need to get to, there will be a very robust revenue sharing where teams will not be in a position to decline to compete because of money,” Stern said.

3) Other Ways to Reduce Expenses: While there have been cutbacks at the league office and on the team side, Stern admitted that his precious expansion to international markets has been a drag on the league’s financial picture. Stern referred to investments in such countries as India and China as having “not great margins.” But he refused to concede that reducing the league’s global efforts would be another way to rein in expenses. “We think that this will be a large payoff for future players that the present players are benefiting from because of investments that were made previously,” Stern said. But it seems to me that present players aren’t benefiting if the owners are asking them to accept less money while the league plans to open offices this year India, Africa, and the Middle East, with exhibition games planned for Mexico City, Barcelona, Paris, London, Beijing, Milan, and Guangzhou.

“Other expenses squeeze us,” Stern said, when pressed on the issue, “but player expenses are too high.”

Stern relished taking shots at what he described as the union’s “theatrics” during Friday’s negotiating session, though he later said, “I would have to plead guilty to participating a bit in such negotiations as well.” He accused union attorney Jeffrey Kessler, who also is handling CBA negotiations for the NFL, of “threatening us.” One such threat, Stern revealed after his news conference, was that the union would decertify and sue the NBA for anti-trust violations. Coincidentally, the league recognized during All-Star Saturday night festivities Spencer Haywood, the first player to challenge the NBA's eligibility requirements. Haywood's anti-trust lawsuit against the NBA went to the Supreme Court in 1971, and Haywood won the right to join the league although he didn't complete four years of college.

For the second straight day, a story published by CBSSports.com was raised in a news conference on the subject of labor talks. According to sources, Stern was referring to a Jan. 29 story in which a team executive ridiculed LeBron James and Dwyane Wade, saying James could “play football” and Wade could “be a fashion model” if they didn’t like the drastically reduced maximum contracts owners were proposing. Other news outlets published similar swipes, including Yahoo! Sports, which quoted an anonymous team executive who characterized the owners’ proposal as “a photocopy of Stern’s middle finger.” 

Stern said he was “offended” by the comments, calling them “cowardly,” and he apologized to players’ negotiating committee and the 10 All-Stars who were so enraged by the stories that they showed up at the bargaining session Friday. 

“Some of our so called team executives have been quoted – as you might expect anonymously – in the media, and saying disparaging things about our players,” Stern said. “If you know me, and you know our owners, that’s not what we do. That’s not us. And the players were upset with those quotes, which I find cowardly, if they were actually said. And if I ever found out who said them, they would be dealt with; they would be former, former NBA people, not current. And we assured the stars of that.” 

Comments

Since: Oct 22, 2007
Posted on: February 14, 2010 3:14 pm
 

NBA Lockout - Lets hope so.

Nothing I'd like to see more than the NBA just disappear.  Nothing but a bunch of overpaid thugs, period.  All you hear is about how they don't get the respect. 

Try living in the real world where you're called into a meeting and told your job no longer exists.  You then get about 3 weeks pay and it takes 6 months to find a job.  You live on unemployment which is about 25% of your salary but your house note and the rest of your bills arne't 25% of what they were before hand. 

I'm really tired of hearing millionaires complaining about their compensation, especially in this day and age.



Since: Oct 13, 2006
Posted on: February 14, 2010 2:09 pm
 

Stern: Cut expenses, but only the players'

The main problem with the NBA is not the money that the stars make.  They are the face of the league and most of the stars have a strong desire to be great.  The problem is the amount of money paid to guys who have one great year, get paid huge money, and then don't perform.  You end up with lazy guys making huge money, that have no desire to do anything but show up and get a paycheck.  The league is so non-competitive, save for a few teams, and that to me is a HUGE problem.  Problem is, there is no way to change laziness.  It's too bad that players don't realize that many of their own actually ruin it for all of them.  There is more laziness in the NBA than in any other major sports league.  It gets progressively worse every year.  That I do not understand.   



Since: Aug 18, 2006
Posted on: February 14, 2010 1:59 pm
 

Stern: Cut expenses, but only the players'

If the NBA wants more money and more fans attending games, how about the following actions take place:

1 - Remove David Stern
2 - Boot the worse refs and the ones obviously giving favorable calls
3 - change the rules back to the traditional style that we had during the late 90s.
4 - start promoting teams other than the Lakers, Celtics, and Knicks.



Since: Aug 11, 2006
Posted on: February 14, 2010 1:41 pm
 

It's Hard To Take The NBA Seriously

You know what's funny?

The NHL is not only a better business than the NBA, it is a significantly better.

Prior to the NHL owners lockout a few years ago, that league was not only erroneously attempting to compete with the NBA for network TV rights and marketing deals, but the pay structure of the NHL was also trying to stay within earshot of the NBA.

Despite the NBA's eroding status as one of the country's major professional sports leagues, the NHL was (and still is) in last place among the 4 major sports leagues.  Nevertheless, that painful and costly hockey lockout has actually done wonders for the NHL.  By dismantling the former pay structure, Gary Bettman and the league were able to institute a newer, stricter salary cap.  In addition, the NHL signed TV deals with NBC and VS that are often mocked, yet when you take into consideration the NHL shrunk it's own business model bubble, those deals actually pay signficant dividends for a league that has become highly competitive and wildly unpredictable in terms of making the playoffs and who will win the Stanley Cup.

The NBA, on the other hand, would already be bankrupt if not for the ABC/ESPN and Turner Broadcasting deals.  Attendance in arenas has actually lagged behind the NHL for several years, the only saving grace for David Stern is that the NBA draws noticeably bigger numbers on TV than hockey does.

But the core problem with the NBA is that the league is inherently unbalanced.  Over the past 31 NBA seasons, only 9 different teams have won the NBA Finals.  As a comparison, Major League Baseball is often chided and criticized for a lack of a salary cap which supposedly leads to a lack of parity, yet in MLB, 9 different clubs have won a World Series just over the past 11 seasons!  Baseball, overall, has as much parity as the NFL.  And no sport has more parity than the NHL.

On the day training camp opens every year for NBA teams, you already know that 25 teams have less than no chance at winning an NBA title.  There is no cinderella in the NBA.  There is no 2003 Florida Marlins or 2006 Carolina Hurricanes or 2000 Baltimore Ravens.  In the NBA, the best players are only interested in playing in markets that will allow them to grow their brand.  That means that with only 1 or 2 exceptions, the best players play on teams in coastal areas.  For every other team from Minnesota down through Memphis, there is no chance of ever winning an NBA title. 



Since: Jul 26, 2008
Posted on: February 14, 2010 1:12 pm
 

Stern: Cut expenses, but only the players'

I agree that the NBA is a bad product. No defense, mediocre fundamentals, but hey, they can all dunk.

One thing that would help balance books is to go to the contract model of the NFL. No guaranteed contracts, with coaches or players. How many millions of dollars did Larry Brown and Alonzo Mourning get from guaranteed contracts after they "retired", only to go back and do it again. I believe Mourning actually retired three times, the last time after signing a three year contract and playing one game before he "retired" for good. Meantime, he walked away with something like 30 million dollars.



Since: Jan 4, 2009
Posted on: February 14, 2010 11:40 am
 

Stern: Cut expenses, but only the players'

Please don't ever comapsre the irrelevent NBA to Major league baseball.  Other than the NFL, MLB is the healthiest and wealthiest professional sport........and the majority of the players don't have to make bail to play ball.

Nobody watches the NBA.  Nobody.



Since: Nov 23, 2009
Posted on: February 14, 2010 11:26 am
 

Stern: Cut expenses, but only the players'

As I read this article, I realized that the Union and the Owners refuse to see that their business model which Stern so eloquently believes "no longer works"--IT NEVER WORKED!!! They created an Alice in Wonderland world where there was a salary cap, but if you had a player under contract you could exceed the cap itself. Whoops, if that player got injured, no worries, you have a 4-8 million dollar mid-level exemption to sign a free agent veteran. Then of course, is the idiotic lottery system... Ok, your team sucks, but you only have to go to a lottery to see if you draft first. THis is designed to prevent professional teams from "tanking" the remaining games, once the cities these dreg teams play realize they're done for the season. Boy do I wish I could be a GM in the NBA and bring my lucky rabbit's foot to the podium to get the superstar 16 year old du jour. 
The NBA rode the wave of previous superstars over the past two decades (i.e, Michael Jordan, Larry Bird, Charles Barkley, etc.) and expected this wave to last indefinitely. The other problem is these immature teenage multi-millionaire pituitary cases, leave college and are too young to handle the deal. Perhaps any player under 21 should have a blind trust set up where the $$$ are invested for him until he is 23 and then could control the $$$. I think the product is also diluted. Do we really need all these franchises? Oklahoma CIty, Charlotte (which failed one franchise), LA CLippers (2 BBall teams but no football team--are you kidding me?), Portland, etc. Let the weak teams die, and the product will be enhanced. Reduce the length of the playoffs and the interest will rise. Get rid of the zone defense and let them play the old fashioned way, call 3 seconds once in a while, teach fundamentals, call walking, palming, etc. Bring the game back from the street and into the living rooms of the suburban/businesses that actually support the product.



Since: Dec 3, 2006
Posted on: February 14, 2010 10:53 am
 

Stern: Cut expenses, but only the players'

You can say you hate the NBA, but you shouldn't brag about baseball.  Baseball is going to be in worse shape than the NBA soon.  It has fallen a lot further and a lot faster.  No one cares about baseball either.



Since: Dec 15, 2007
Posted on: February 14, 2010 9:45 am
 

Stern: Cut expenses, but only the players'

The really sad part is that many rank and file employees on each of the teams will likely lose their jobs just so Mr. Player can make an extra million on top of the multi millions they make each year.  In some ways, the problem is the"salary" structure within the company.  Obviously, we call them contracts for the players, but there is still a fixed amount to go around each year. 

If we blame the owners for paying people too much money, then we should have no problem with them lowering their salaries.  This is what is broken in the NBA.  The owners don't have the authority to lower the salaries. 

The raising and lowering of salaries happens all the time in the business world.  You pay more for talent when the economy is good due to demand and you correct when the economy is really bad.  Note I said really bad.  A business owner of any type should be able to cut the salaries of the employees:  especially the over paid.

We all are fully aware that the NBA players (and MLB) make way too much money.  A correction is due.



Since: Feb 19, 2009
Posted on: February 14, 2010 9:03 am
 

Owners did it to themselves but who really cares

About the only player I even respect is KG but who paid him the ungodly amount of money--the owners, so it is hard to feel sorry for them as they did it to themselves.  Besides, when the idiot from Dallas is the owner's face in the media, the NBA gives the world the appearance they are led by Al Davis Jr.



The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com