Blog Entry

NBA players blow up union, take fight to court

Posted on: November 14, 2011 2:56 pm
Edited on: November 14, 2011 8:54 pm
NEW YORK -- Unable to reach a collective bargaining agreement with the NBA, the union representing the players dissolved Monday and paved the way for a potentially lengthy and ugly antitrust lawsuit to be filed within days.

With a unanimous show-of-hands vote from as many as 50 players, the union sent a disclaimer of interest letter to commissioner David Stern, which effectively ended the National Basketball Players Association's role as the collective bargaining agent for the players. Outside counsel Jeffrey Kessler and star attorney David Boies -- whom the players met for the first time Monday -- will lead the legal team that will sue the NBA alleging antitrust violations.

"We've negotiated in good faith for over two years," said Billy Hunter, who now becomes executive director of the National Basketball Players Trade Association -- no longer the leader of the players' union. "The players just felt that they've given enough."

Stern, speaking live on league broadcast partner ESPN, called the players' tactic "a charade" and characterized it as a "magical trick" that ultimately will fail.

"What they've done is destroyed incredible value that would've gone to the union membership," Stern said. "... We were very close, and they decided to blow it up."

Stern made no pronouncements about further cancellation of games, but added, "The calendar takes care of that." Although the disclaimer action initiated by union executive director Billy Hunter is more expeditious than a decertification vote initiated by the players, the legal fight that will ensue certainly imperils the 2011-12 season.

"Obviously, Mr. Kessler got his way," Stern said, "and we're about to go into the nuclear winter of the NBA."

During a meeting attended by the players' executive committee, player reps from all 30 teams and about 20 more players -- including superstar Kobe Bryant, Tyson Chandler, Carlos Boozer, Rajon Rondo and Elton Brand -- union officials presented and explained details of the league's most recent offer. It had been characterized as the final revised proposal the league intended to offer, and if the players didn't accept it, Stern's negotiating position would revert to a harsher offer -- including player salaries being derived from a 47 percent share of revenues, a hard team salary cap and rollbacks of existing contracts.

The deal on the table for the players Monday included a 50-50 split of revenues -- a 12 percent reduction from their previous share of 57 percent -- and a long list of system and spending restrictions. Hunter said the meeting gained momentum and changed in tone once players raised the option of decertification. They ultimately chose the more expeditious option of a disclaimer, with Hunter saying a summary judgment in the antitrust case could possibly be reached in 60 days -- about the length of time it would've taken the National Labor Relations Board to authorize an election through a player-initiated decertification. 

About 200 players already had signed decertification petitions, displeased with the league's negotiating tactics and the concessions made by the union. Among these were 15 players in the meeting Monday, Hunter said.

The former union executive director said he has no intentions of withdrawing the NBPA's unfair-labor practices charge with the NLRB, although it is not clear how the agency will view it now that the union has been dissolved.

While the route the union chose is quicker than decertification, it is no silver bullet for the NBA players to win what are known as "treble damages" -- three times lost earnings resulting from the lockout -- or to eventually get a better deal. For starters, there will be a significant legal fight over where the union is allowed to file its antitrust case. Presumably, the players would prefer to file it in an employee-friendly district in California, under the auspices of the 9th U.S. Circuit Court of Appeals. For this reason, the NBA in August filed a pre-emptive lawsuit in the Southern District of New York, which falls in the employer-friendly 2nd Circuit. 

Once that is resolved, the league will argue that the players' disclaimer is a "sham" -- in other words, a tactic designed to gain negotiating leverage rather than a serious union dissolution. The NFL Players Association tried the same tactic, and started much earlier in the process -- principally because it had no other choice due to a litigated deadline to decertify or disclaim or lose the option going forward.

The NFLPA never got an ultimate ruling on whether the lockout or disclaimer were legal, but instead got a narrow ruling from the 8th U.S. Circuit Court of Appeals that the federal district court did not have the authority to lift the lockout.

"I felt the combination of Boies and Kessler, from my perspective, would be an unbeatable team," Hunter said. "... We feel extremely confident that we can prevail in this matter. That’s the opinion of both lawyers."

In a statement released by the league office after his live TV interview, Stern said, "The 2011-12 season is now in jeopardy," and immediately began laying the groundwork for what could be the mother of all antitrust lawsuits. Stern alluded to a February 2010 bargaining session in which union attorney Kessler threatened that the players would "abandon the collective bargaining process and start an antitrust lawsuit against our teams if they did not get a bargaining resolution that was acceptable to them."

"The NBA has negotiated in good faith throughout the collective bargaining process but -- because our revised bargaining proposal was not to its liking -- the union has decided to make good on Mr. Kessler's threat."

Since: Sep 15, 2006
Posted on: November 15, 2011 1:43 pm

NBA players blow up union, take fight to court

I don't care about anything ESPN says regarding this mess.

As far as I'm concerned, they have their hand in the cookie jar just the same and the way they marketed the NBA over the last decade or so is one of the reasons why the NBA has alienated the casual fan.

Blame Disney.

Since: Sep 30, 2011
Posted on: November 15, 2011 1:42 pm

NBA players blow up union, take fight to court

@mijunk......very good points.  The difference with Microsoft is that they created an unfair barrier for competitors to enter the market, including having their operating systems pre-installed in most windows based computers.  The NBA is a bit different in that the league has not set a barrier for competition, anyone can start another league.  A great example of a failed attempt was the XFL trying to compete with the NFL.

Although owner's in the NBA cannot get together and collectively state they are imposing a limit to salaries (collusion), they can negotiate certain terms in a collective bargaining agreement or have an unwritten/spoken agreement amongst themselves that caps salaries.  Unless you are in sales, I do not know of any company that does not have fixed salary caps for certain positions, it is not a free market within the may be able to negotiate higher pay elsewhere, but at a certain point you will hit the ceiling.  NBA players cannot be put in a place where there are no salary restrictions, this makes no sense for anyone.  Smart business dictates that success is predicated on ownership making money, losing money is not a sound business practice.  Look at the state of our economy, in every industry across the board employees are taking less money to do more work; why should the NBA be any different.  You have to shift your demands to fit into the current business environment.  The deal is not forever, and should the economy change by the time the next negotiation comes up, then revisit more pay and system changes for the players.

Since: Jan 9, 2007
Posted on: November 15, 2011 1:42 pm

NBA players blow up union, take fight to court

sdjsmart you are kind of arguing against yourself

If the owners are controlling the purse as you end your argument then what is so wrong with them tightening that purse as you are opposed to in your opening argument.

In what negotiation school did you learn that one should come up with something in the middle? The players could then have asked for 200% and the league at 0% and they should according to your school of thought have ended at 100% to the players. Haggling with a car salesman normally works the way you describe but not real life. You forget the minor little detail that the players have had 7 fantastic years of income while the owners claim that something like 22 teams have lost money. This isn't about getting a small amount back it is about making all the teams profitable. Now there are lots of arguments for and against this and what is real numbers blah blah blah but ending "in the middle" works in kindergarten and not in the real world.

With all that said - lockout, strike do whatever you NBA people want to do but stay out of the court system. This is a misuse of the court systems and they shouldn't be allowed in there. The league and the players agreed to a monopoly setting for years to now blow up the anti-trust because one party isn't getting their way is childish and will not lead to anything good.

Either take the deal or keep sitting out for a year - don't reject the deal and go to court

Since: Nov 15, 2011
Posted on: November 15, 2011 1:19 pm

NBA players blow up union, take fight to court

Ok, I have read a lot of the comments on this board about how these "NBA thugs" need to take the offer given to them and how they should just be happy to be playing basketball etc etc.  I understand that these are millionaires and that regardless of the deal on the table that they are going to be payed a lot of money to play what is essentially a childs game.  What is lacking from this argument, though is perspective and context.

Let's begin with the negotiations themselves.  Generally, it is expected that a final offer will land somewhere in the middle between the initial offers of both sides in a negotiation effort.  The players began at 57% and the owners at 47%.  This would appear to find a resolution somewhere around 52% if you split the difference.  This was the final offer that the players made to the owners that was sumarily rejected.  The owners were making a stand at 47% (their initial offer) before their final offer of 50/50.   
from an outsiders perspective this would appear to be a disingenuous effort at negotiations on the part of the owners.  When combined with the rhetoric heard from some of the more beligerant owners like Dan Gilbert it would appear that they are more interested in breaking the union and forcing the members into an unfavorable deal more than they are interested in saving this years basketball season.

Secondly, the players, after making every effort to negotiate with the NBA have every right to decertify in order to gain leverage.  Let's not forget that the owners themselves imposed this lockout for that very reason.  By imposing this lockout the NBA is forcing the players to negotiate from a position of weakness.  The players have every right to to make every effort to gain every advantage they can.

The argument regarding small market teams and competitive balance is a legitemate point.  However, why are the owners forcing the players to make an inordinate amount of concessions that have very little to do with competitive balance.  This appears to be a smoke screen to hide the real issue which is money.

This brings me to my last point.  The owners have always controlled the power of the purse.  They are the people writing the checks.  If the price is too high why are you paying it?  If you can't compete and are unwilling to pay these exhorbant prices why don't you sell (which is what Michael Jordan - now an owner - said to Abe Pollen in the last strike)?  Small market teams seem to do okay in every other league because they make smart management decisions and don't overpay for meager talent.  This argument that teams aren't able to field a winner because of the current climate that favors super teams has been disproven by both the Detroit Pistons and the Dallas Maveracks.

Since: May 5, 2008
Posted on: November 15, 2011 1:17 pm

NBA players blow up union, take fight to court

I am a fan of college basketball and could care less about the NBA, so I am rooting for the lockout to continue.  That will make the college game much better and their star players will hang around longer.  The only thing I want to see in the new collective bargaining agreement is to get rid of the "one and done" rule.  If a player is good enough to go pro out of high school, fine, go pro, however, if you go to college, your committing to three years, period.  College campuses are treated like bus stops under the current system.  It doesnt matter, I'm not even sure this topic is even being discussed in the negotiations.

Since: Mar 30, 2008
Posted on: November 15, 2011 1:13 pm

NBA players blow up union, take fight to court

If a tree falls in the woods and no one is around to hear it, does it make a sound?  Have the NBA players realized yet the general public does not care if there is a season or not?  College basketball will fill the void.  The owners have recognized they have a dying product, that College Hoops has captured the heart of the nation, that going to a college game is much cheaper and provides better entertainment value to a middle class family, and that NBA ticket prices have outpriced the demand.  The players and their leadership are to blame for this mess.  Someday, they'll figure it out.

But will it be too late to save the league?

Since: Sep 5, 2008
Posted on: November 15, 2011 1:09 pm

NBA players blow up union, take fight to court

YEAH!!!! YEAH!!!! YEAH!!!

NO Monkeys playing street ball and taking up valuable ESPN Time..... Thank you....  NBA is not a sport... its a terrible show highlighted by the stars they support....

Now how do we get the NBA to just fold period?

At $90.00 a ticket, (family of 4), never went to see the Monkeys anyway..... over paid bunch of prima-dona's!

save your money people..... save your money.... go watch a true baseketball game and go see a good high school game or college.

Since: Mar 15, 2008
Posted on: November 15, 2011 12:59 pm

NBA players blow up union, take fight to court

Again the leverage is based on the same thing that all entertainers have - the NBA has been marketed on the players and this will hurt the over all brand and the longer the locket goes on the more they risk permenantly losing viewers
wrong again....the NBA has been marketed on a small handful of players...90% of NBA players are just cogs and are interchangable with any other cog. 

And since most of the teams have no chance of winning (and being relevant)  even before the season starts the only cogs that really matter are the one which make a team competetive and due to the business model of the NBA they are concentrated on a few teams further lessoning the leverage of the union as a whole. 

Again the leverage is based on the same thing that all entertainers have - the NBA has been marketed on the players and this will hurt the over all brand and the longer the locket goes on the more they risk permenantly losing viewers.

still wrong....the NBA has already lost the interest of fans in all but a few markets. The only hope of growing the brand is to beat the players and change the NBA 
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Since: Mar 23, 2009
Posted on: November 15, 2011 12:50 pm

NBA players blow up union, take fight to court

"wrong..the players have very little leverage because they will have to give in first as they dont have any other way to make anywhere near the money."

How exactly is that different thanany other sport?   

" In addition there is no groundswell of opinion from the marketplace to get this thing solved...most people just dont care"

The TV contract is 930 mil a year.   That kinda money gets tossed at things that people are watching.  Might not be you but you're a pretty small sample size.

"The reality is that the owners just need to hold out and they will break the players."

The owners in any sport always have more financial reserves than the players.  That's why they're owners.  There's a small minority of the owners I'm sure that will be hurt by this but most are much more wealthy than the players and have such deep pockets this isn't going to hurt.   But again, that's no different than any other sport.

Again the leverage is based on the same thing that all entertainers have - the NBA has been marketed on the players and this will hurt the over all brand and the longer the locket goes on the more they risk permenantly losing viewers.

Since: Mar 15, 2008
Posted on: November 15, 2011 12:36 pm

NBA players blow up union, take fight to court

It's no different than any other sport.  And the leverage they have is the same as any other entertainer - pepople pay to watch them and pay more to watch them than lesser talented people.
wrong..the players have very little leverage because they will have to give in first as they dont have any other way to make anywhere near the money. In addition there is no groundswell of opinion from the marketplace to get this thing solved...most people just dont care

There jsut isnt that much incentive for the owners to give in especially when you realize that most of the teams nead there to be a completly different NBA in order to compete.

The reality is that the owners just need to hold out and they will break the players.

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