Blog Entry

Talks blow up with ultimatum, Wednesday deadline

Posted on: November 6, 2011 2:55 am
Edited on: November 6, 2011 2:03 pm
NEW YORK – With another ultimatum, artificial deadline and accusations of fraud and bad-faith bargaining, the NBA labor talks blew up again early Sunday. This time, they appear to be careening toward a point of no return.

After eight more hours of talks under the direction of a federal mediator, league negotiators delivered a proposal around 1 a.m. ET and informed the players’ association it has until the close of business Wednesday to accept it or receive a far worse deal.

Union attorney Jeffrey Kessler, singled out by David Stern as the one who rejected virtually all the compromises the commissioner said were proposed by mediator George Cohen, described the league’s tactics as “threats” and characterized the NBA’s description of its economic proposal as “fraud.”

“Today is another very sad day for our fans, for our arena workers, our parking-lot attendants, our vendors,” union president Derek Fisher said. “A very frustrating, sad day.”

League negotiators essentially offered the players a 50-50 split of basketball-related income, their obvious target for weeks. The offer was tweaked into the form of a 49-51 percent band for the players’ share – the same band discussed informally Oct. 4 at a key meeting that fell apart over the split of revenues between owners and players.

In the league’s proposal, the players would receive 50 percent of revenues (net about $600 in expense deductions, as in the previous system) if revenues grew as projected – 4 percent a year. Stern and deputy commissioner Adam Silver portrayed the band as capable of delivering a 51 percent share to the players if there was, as Stern described, “significant growth.”

But Kessler -- speaking with Fisher in the union’s press conference in the absence of executive director Billy Hunter, who was “under the weather,” according to an NBPA official – said it would take the “wildest, most unimaginable, favorable projections” for the players to ever receive 51 percent of revenues.

“The proposal that this is a robust deal at 51 is a fraud,” Kessler said. “… You can't get to the top of the band.”

The players, who received 57 percent under the previous six-year deal, proposed a 51-49 split in their favor – with 1 percent going toward a fund for benefits for retired players, such as health care, life insurance and pensions. The league never responded to that proposal, union officials said. By going from their previous proposal in which they would've received 52.5 percent, the players moved about $60 million in the first year of the new deal and nearly $400 million over six years. The owners remained in essentially the same place they’ve been economically since Oct. 4.

“They've been consistent for weeks,” Kessler said.

“We made the moves that we needed to make to get this deal done on the economics,” Fisher said. “It just doesn’t seem to be good enough for this particular group of team owners.”

Stern said the proposal will be on the table until the close of business Wednesday, after which the owners will forward a new proposal to the players offering them 47 percent of BRI and an NHL-style “flex cap,” two items the players previously have rejected.

“Hope springs eternal,” Stern said. “And we would love to see the union accept the proposal that is now on the table.”

But while the economic gap between the sides – once 20 percentage points apart – has now shrunk to 1 percent, the implosion early Sunday was as much related to system issues as money. But looking at those issues makes it cruelly implausible that they’d lose a season and squander billions of dollars over their differences.

"With the system issues that we felt like were left open, that we felt like were significant, that we must have in order to get a deal done, they did not go very far at all in trying to close that gap," Fisher said. "And we just did not get the sense that they really had the intent on coming in here tonight to get this deal done. Because there was every opportunity to do it. We were prepared to stay here until the sun came up to get this deal done."

The two sides could not bridge the gap on key aspects of the luxury tax system, specifically the penalty for teams that stay over the tax for three years out of five. The league reduced its offer from $1.50 additional tax for such teams to $1, while the union is holding firm at 50 cents additional tax on the first $10 million over the tax level and $1 after that. The punitive impact would only be felt by a handful of teams that historically have spent at those levels.

They also differ over the length and amount of mid-level exceptions that can be used by tax-paying teams. The players want tax-payers to be able to sign players to four-year mid-level deals starting at $5 million every other year. The league proposed two-year mid-level deals starting at $2.5 million every other year.

Non-tax-paying teams would be able to sign players to mid-level deals starting at $5 million, with the length alternating between four and three years each season under the owners’ proposal. The players want straight four-year mid-level deals for non-tax-payers.

The luxury-tax “cliff” experienced by tax teams, by which they felt the full brunt of going slightly over the tax level by losing all the tax money they would’ve received had they stayed under, also was addressed in the owners’ proposal. The league offered that such teams would receive half the tax money squandered by going from being a tax receiver to a tax payer.

The league has not relented on its insistence that tax-paying teams be forbidden to execute sign-and-trade transactions, which the union argues -- when coupled with the other system restrictions -- would dry up the market for free agents in a way that imitates a hard team salary cap.

"They want it all," Kessler said. "They want the system where tax payers will never be in the marketplace and that for repeat tax payers, it's going to be like a hard salary cap. And those deals are not acceptable for players today, and it's not acceptable for future generations of players. ... The players will not be intimidated."

Nonetheless, the players now find themselves at a crossroads that could determine whether there is a 2011-12 season by Wednesday. Can Fisher and Hunter, notably absent from the post-meeting news conference as Kessler fanned the flames, determine whether they can sell essentially a 50-50 deal to more than half the union membership? A deal with no hard cap, with guaranteed contracts, with mid-level deals scaled back mostly for tax-paying teams, and with salaries rising to nearly $3 billion in 10 years despite an initial 12 percent reduction?

If not, the union appears almost certain to dissolve – either through a decertification petition or a more expeditious but legally riskier disclaimer of interest – either of which would throw the talks into chaos and imperil the entire season.

“We’re not going to talk about other options,” Kessler said.

Stern said the threat of decertification is “not an issue that we're focusing on at this point.”

“We are trying to make a deal with the National Basketball Players' Association,” he said. “They are the duly authorized representative of the NBA players. That's a good thing, and we hope to make a deal with them.”

Fisher said he would communicate with the players and "assess our situation. … But right now, we’ve been given the ultimatum. And our answer is, that’s not acceptable to us."

In the end, the truest words spoken early Sunday morning came from Kessler, who said the owners' tactics were "not happening on Derek Fisher's watch. It's not happening on Billy Hunter's watch. It's not happening on the watch of this executive committee."

If the players successfully decertified, none of the aforementioned would be in power. 

A decertification petition requiring the signatures of 30 percent of union membersship would put the union on approximately a 60-day clock before an election is held to disband it -- and that's only if the National Labor Relations Board authorizes the election. Typically, the agency does not when a union has an unfair labor practices charge pending.

The mere signing of the petition by 30 percent of the union would not by itself cease negotiations since the union would remain in power until the election, which wouldn't happen before January -- if at all.

That leaves two months for cooler heads to prevail. But really, the stopwatch has been set for four days -- 96 hours to spare chaos. Of all the inflammatory words spoken after this latest fiasco, the words "best and final offer" were never among them.

That's legal mumbo-jumbo for this: There's still time to end the asshattery, if everyone's heads return to a place where oxygen is available.

The clock is ticking. 

Since: Dec 5, 2006
Posted on: November 7, 2011 1:32 am

Talks blow up with ultimatum, Wednesday deadline

Perhaps the biggest mistake by the owners has been to come up too quickly from 44% to 47% to 50% while the players have come down from 57% to 54% to 52.5%. The players say now they made a 51% offer but that sounds like an add-on after the meeting. In any case the owners lose money at 50% and they are not going to see any number greater. Even at 50% there is a large group of owners apparently in opposition and they are being listened to by setting a deadline for taking the 50%.

The system is broken. There is no competitiveness in the league. 24 teams might just as well fold as play because they have become the equivalent of the Washington Generals to the Harlem Globetrotters (the other six). The union is fighting desperately against parity. The best route to parity is a hard cap. That is a blood issue' to the union. The next best route is to penalize the big spenders. The union fights for every one of the exceptions and against any increase in tax for those teams. Perhaps the only route left is to end the season until wiser heads prevail in the union. Demanding that the owners lose money is a non-starter in any business negotiation. It is exactly what they have done. The best thing about Wednesday? It just possibly might end this charade. Either way.

Since: Jun 25, 2009
Posted on: November 6, 2011 11:52 pm

Talks blow up with ultimatum, Wednesday deadline

The owners are in control, plain and simple.  The players are certainly the product, but don't forget there was an NBA before LaBron, Garnett, Kobe, etc. and there will be an NBA after all of those guys.  The players have no place to possibly go where they can get the type of money the owners are currently putting on the table even at the 47%.

You're right, no doubt about it.  That being said you have to wonder why so many NBA fans on these boards and elsewhere don't understand anything you said.  For some reason a lot of fans believe the league absolutely needs THESE players, I just don't understand their logic.  The league has survived the loss of a lot of great players and a lot of great teams along the way, they'll survive just fine after today's NBA superstars disappear.   The argument player supporters love to make is the league can't replace almost 400 players all at once, but that's such a weak and stupid argument I can't believe people actually talk like that.  If the players were to disband the union and fight this all the way but eventually lose in court, at least 300 or 350 of today's players would be BEGGING for a job in the NBA and would play for much less then they play for today. If necessary at least that many would take a 15 percent, or even a 20 or 30 percent paycut to play in the NBA, they wouldn't even hesitate if the only other option was playing overseas.  

Last season the players grossed just over 2 billion, 160 million dollars based on their cut being 57 percent of the BRI.  They were predicting the BRI to increase to about 4 billion dollars this season, a 50-50 split would have meant 2 billion dollars for the players or a 160 million dollar pay cut.  That would have been a paycut of 7.5 percent... instead the players are choosing to lose 100 percent?  Even if hypothetically speaking after a missed season the owners gave the players 57 percent they used to get before ( which they'll NEVER get) it'll take about 13 years with the little extra they get to recoup the 2 billion dollars they lose.  Most, if not all of today's players will be gone between now and then....  this doesn't make any sense.  Are today's players really willing to sit out and make a statement JUST FOR FUTURE PLAYERS?  I doubt it... but we'll see.

As for decertification, that's a non issue here.  The union is just being stupid, decertification makes even less sense then anything else they've done so far.  I wouldn't be surprised if 30 percent of the membership votes for decertification to begin, I mean that's a little less then 4 players per roster, I can see that happening since the highest paid players in the league come to on average 3 or 4 players per roster.   But it would be at least January before the final vote would take place, and then the union would need at least 50 percent of NBA players to support disbanding the union which would virtually guarantee the whole season would be cancelled.  By January players will have missed a few checks and most likely 40 percent of their yearly salary, will they be willing to go any further then that?

I doubt it.... 

Since: Nov 21, 2006
Posted on: November 6, 2011 11:37 pm

Talks blow up with ultimatum, Wednesday deadline

Both the owners and players are greedy; why not each take 33% and donate the other third to a jobs program in their local communities.
Because the league would fold after the first year with so many teams going bankrupt that the NBA would not be able to continue to operate.  The 2 sides are arguing over how to split revenue, not how to split profits.  While the players profit from practically every dollar their side gets except for whatever small percentage their agent gets, the owners have millions of dollars of operating expenses that need to be paid every year to keep the league running.  Every team is not losing money, but a significant cut to their revenue would bankrupt enough teams so that the league would no longer be sustainable.

Since: May 20, 2011
Posted on: November 6, 2011 9:59 pm

Talks blow up with ultimatum, Wednesday deadline

I notice that Stern came out with his ultimatum at arond 2:30 a.m.  Is he a drinker ?  This ultimatum ends up being answered by the threat of decertification the NBA is rapidly reaching the point where the season will be lost. I think ultimatums in negotiations are counter productive in every case. Obviously the players do not believe that the owners are serious about the need for a hard cap and a lower revenue split. Everyone may be frustrated but the ultimatum is not a good tactic and it is a poor position to take from a public relations standpoint. Stern needs to start addressing his comments to the fans and provide a transparent explanation of what the NBA needs to create a competitive balance and a sustainable economic system. 

The current system clearly does not work. Cities can no longer afford to build ever larger and more profitable arenas for the local NBA teams. Seattle rebuilt its arena in 1996 and less than ten years later it was out of date. Of course Stern was there for the opening in 1997 to proclaim it a state of the art facility. The big lesson for the NBA in all of this is that damn few people in Seattle miss the NBA and I doubt many fans would attend an event sponsored by a league with Stern as the commissioner. There will be bad feelings if the league loses a year and it may take longer to recover than anyone can imagine.

This league has been poorly managed for several years and its star policy has evolved into a Monday Night Wrestling copycat. Last year we had the big bad Miami Heat as the villains. Eventually we will have cities visited by the hated Knicks and several other large market teams that have enough talent to coast through a meaningless regular season. The television ratings are high because the large market teams draw well but nobody tunes in to see the Bucks play the Grizzlies. The problems of the NBA go way beyond the split of bri, length of contracts, or the other issues currently being discussed. 

Since: Jan 14, 2008
Posted on: November 6, 2011 9:49 pm

Talks blow up with ultimatum, Wednesday deadline

The NBA players make themselves even less likable than they were previously with every airheaded comment they make on this matter.  I love how Derek Fisher feels bad for all the people who work at the arenas.  Really?  Then get your idiot followers (i.e. the rest of the players) to take the deal being offered so all of those people aren't forced to find new employment.  These uneducated morons are too stupid to realize that they will lose more money by haggling over 50 or 51% when the entire season is cancelled.

And on another note, if the deal includes the continuation of guaranteed contracts, then the NBA will suck just as much as it has been for the last few years.  Guaranteed contracts are what allow worthless players like Charlie Villanueva (one of my least favorite Pistons EVER) to give zero effort on defense and just camp out at the 3-point line on offense because they know they can't get cut.  Bottom line, NBA sucks, the players are incredibly selfish and stupid, and at this point, I think the majority of people are with me in saying, go ahead and cancel the damn season.  College basketball, hockey, football, baseball, and just about any other televised sporting event you can think of are better than a free throw shooting contest that features 48 minutes of players bitching at refs and not playing any defense anyway.

Since: Oct 1, 2006
Posted on: November 6, 2011 9:25 pm

Talks blow up with ultimatum, Wednesday deadline

'sham decertification' as it's called will not work....A true 'Union' can't be used then thrown away like a light-switch when it's inconvenient.....That would make any 'union' more un-trustworthy than they already have been...

The majority of the courts have mostly rejected decertification(going by the NFL decisions).....Plus, experts say that if 'decertification' would go the distance, it would take YEARS to resolve....So you wouldn't see some of your favorite players anyway, and the owners would win in the end...

Since: Oct 28, 2007
Posted on: November 6, 2011 9:17 pm

Talks blow up with ultimatum, Wednesday deadline

Frankly, who cares.  Both the owners and players are greedy; why not each take 33% and donate the other third to a jobs program in their local communities.  I don't feel sorry for either side and if they don't get it worked out then I will find something else to watch.

Since: Apr 22, 2009
Posted on: November 6, 2011 9:13 pm

Talks blow up with ultimatum, Wednesday deadline

Come on guys 96 hours! END the SEASON NOW! ESPEEN will make a side deal with the players. hahaha 96 hours and Lebum will have to wait ANOTHER year!

Since: Nov 24, 2006
Posted on: November 6, 2011 8:44 pm

Talks blow up with ultimatum, Wednesday deadline

so explain this to me...i own my house, put my money into making it my home. i pay the monthly mortgage and everything that comes into the home was purchased by me. i bought the couch, the oven, the tables, the bed, and on and on. Then, I would like to have my house painted, but due to the time it would take to do that, I employ someone else to paint it. They come over, paint the house and I pay them what they charge for such a job. Now, is that painter then entitled to half of everything in my house since they were under my employ? I purchased the house, but since the did the job that I myself did not do, do they deserve one of my televisions? I mean, the guy painted it so it would be more pleasing to look at for everyone in the neighborhood. Does his ability to do that and the fact that it is a benefit for those in neighboring houses make that painter deserving of my earnings?

your delusional

Since: Jan 13, 2011
Posted on: November 6, 2011 8:39 pm

Talks blow up with ultimatum, Wednesday deadline

By then, 50% of the PLAYERS will be living in their cars, and will come back to work for $25 per game.

By then ... it'll probably be one of our cars.

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