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: Oct 23, 2008
Posted on: November 6, 2011 10:39 am

Talks blow up with ultimatum, Wednesday deadline

There it is the racism comment! Unbelievable...we are talking about people making millions vs. billions and you have to throughout the "Card". LOL. to quote you and change just one word "It hurts to see how blatant 'ignorance' has become acceptable".  Good luck Redhoff, I disagree with your assumptions and believe this more about the fans not understanding their "power" in this situation and allowing this to happen. If we dont pay neither the billionaire or the millionaire will get paid.

Since: Jun 5, 2009
Posted on: November 6, 2011 10:38 am

Talks blow up with ultimatum, Wednesday deadline

Redhoff - Some of your points are valid, and your math is sound.  You're missing the point in some cases though.  I can't speak for everyone, but for me personally, it has nothing to do with race.  You also can't throw out the statistic that more NBA players went to college than the national average.  It holds no weight.  If everyone in the country was given a free ride through college, the number would go up drastically.  Going to a school for a year or two and then dropping out (going pro) also isn't exactly an accomplishment scholastically speaking.  They dropped out...that's no different than the frat guy that parties all night, never goes to class and fails out after a year.  If you're looking solely at college graduates, you'd probably be surprised at how low of a number that is for NBA players.

That being said though, their education, their race, their favorite pizza topping...none of that matters when it comes down to it.  These guys are employees.  They play basketball.  I'm an employee.  I work in law enforcement.  Don't give me the media drivel about their situations being different.  It isn't.  They are employees just as you and I are.  If I walked into my bosses office and demanded to set my salary, I'd be laughed out the door, hopefully with empty hands and not a pink slip.  These guys are no different.  If they aren't happy with what they're being paid, they can go do something else, or they can go work for an opposing company.  I don't care if they're getting paid millions, billions, trillions or $10.  The amount of money doesn't matter to me, because I'm not the one making it.  If you apply for a position that pays $50,000 annually, but then demand to be paid $100,000, you'll get one of three things.  You'll get told "No" and leave, you'll get told "Yes" and sign on, or you'll accept the offer given.  You're not going to sit there arguing for months about it because they're going to fill the position with someone else.  The owner of the business sets the wages...not the employee or potential employee.

These guys can go rot for all I care.  I guarantee there are tons of second round picks and undrafted guys that would jump at the chance to sign this deal if it meant they were going to get paid what the owners were offering.  Let them play and 5 years from now, if the "stars" like Lebron and Kobe opt to take their game elsewhere, they'll be long forgotten as new "stars" would take their place. 

So make valid points with some of your statements, and your math is sound, but for me and I'm sure many others, this isn't about cheering on the billionaire owners, it's about cheering against the guys who are in the same position as us, yet get paid substantially more than we ever will, refusing to play.  And again...the argument that "the players aren't like other employees...they're the best at what they do so should have more leverage" is media crap.  They are exactly like other employees and with or without them, the NBA would survive, because people that want to watch pro basketball are going to watch it, and new stars will emerge just as quickly as those who don't want to play for the amount the owners are proposing disappear.

Since: May 17, 2007
Posted on: November 6, 2011 10:36 am

Talks blow up with ultimatum, Wednesday deadline

I like the limiters put on Tax teams as far as sign and trades and not getting all the mid level exceptions.  The Heat the other year filled the cap with three players then planned to use exceptions as a big part to fill out the team.  Close that loop hole I say.

Since: Oct 29, 2008
Posted on: November 6, 2011 10:32 am

Talks blow up with ultimatum, Wednesday deadline

So we can watch a game with no whinning about every foul call, desire for team over self and players not playing for money but to win a game. College hoops is on the way and I for one cant wait to see the game played for all the right reasons

Since: Jun 5, 2009
Posted on: November 6, 2011 10:26 am

Talks blow up with ultimatum, Wednesday deadline

Could't have put it better myself, Buccs

Since: Sep 7, 2006
Posted on: November 6, 2011 10:22 am

Talks blow up with ultimatum, Wednesday deadline

There is no economic or fairness basis where any fan could support the owners here.  There seems an eagerness to punish the players, presumably because they are primarily minority.  I see postings about education level of players, but statistically more NBA players went to college or graduated from college than the national average so that's not it. 
It hurts to see how blatant racism has become acceptable.  We can blame certain political factions for making outright public hatred for any minority group acceptable, and even applauded.   Posters who support owners are mindless tools and fools filled with non-facts and misplaced resentment. 
Billionaires verses Millionaires and most posters are cheering for the Billionaires. I think some people are totally math challenged as they don't realize that it takes a Thousand Million Dollars to equal a Billion.
Think about a family making $50,000 a year, a nice but fairly average sum. If you compare that to billionaires verses millionaires than the "billionaire family" making $50,000 per year would compare to a "millionaire" family bringing in fifty dollars in an entire year. There are dudes flying signs on corners who make fifty bucks a day.
Just about every one posting here can hope their kid becomes a millionaire and maybe have a shot at that happening. No body posting here, zero, can hope their kid becomes a Billionaire.
Owners losing money can just sell their asset for about 400 million bucks and walk away happy. There is zero risk. More money going to Billionaires just hurts the economy. Billionaires money just stays where it is, concentrated in the top 1%. 

Since: Feb 2, 2007
Posted on: November 6, 2011 10:19 am

Talks blow up with ultimatum, Wednesday deadline

Derek Fisher pisses me off. "its sad for our maitenence, vendors, exc" WHAT HORSE BULL. Mr. Fisher, you do realize that you are trying to take more money from the guys that pay those people in the first place, dont you!?

Since: Aug 25, 2006
Posted on: November 6, 2011 9:56 am

Talks blow up with ultimatum, Wednesday deadline

this could be awesome...if they cancel the season we wont be subjected to even 1 minute of nba trash on espn during weeknights and during sportscenter..then maybe they can fold the league completely and really rid the world of a huge turd stinking up our winters.

Since: Dec 4, 2010
Posted on: November 6, 2011 9:52 am

Talks blow up with ultimatum, Wednesday deadline

Go Owners!   Why would the owners give in?   I really dont care what percentage of the BRI the players get I just hope the owners hold out for Non-Guarneteed Contracts (or a really nasty luxury tax)  Teams need to be able to cut the deadbeat players that sign and then dont try, practice, or even fake it

Since: Dec 10, 2006
Posted on: November 6, 2011 9:40 am

Talks blow up with ultimatum, Wednesday deadline

I think the League needs to stand firm on their Luxury Tax demands. Teams over the tax should HURT. If it is just a matter of a few dollars in penalties you will always have the billionaires spending 90 or 100 million on salaries. That must change. Ever team should at least be in the same ball park with salaries: maybe the top spending 60-65 and the lowest spending 45 million.

Luxury tax paying teams SHOULD be banned from sign and trades. When you already are paying 95 million in salaries, you should NOT be able to manipulate your roster further.

Same with mid level exceptions. If you don't play by the same economic rules as most teams, you end up losing the ability to tweak your roster through manipulation- the players oppose this because it will force those signing the exceptions to play for half the money on a contender or go to one of the less appealing teams.

That being said, if the owners get all of this, they should accept the 51-49 split on condition the 1% goes towards benefits for retired players. Not all NBA players make 5+ million per year and there are huge problems for many players once they leave the league. To leave with guaranteed health care, life insurance and a modest pension is not an unreasonable request. Any good employer should be offering that considering the huge income being generated by the game. This is NOT a struggling factory.

So I hope the ownerrs hang tough but bend on the 51-49 split. It is the right thing to do.

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