Blog Entry

Turns out this isn't entirely about the money

Posted on: September 15, 2011 11:17 am
 
By Matt Moore

Back in July when the lockout began, there were a number of standard phrases being tossed around. Chief among them is "this is all about the money." The idea was that the players and owners weren't really unmovable, it was just a matter of dollars and cents. Basically, if the BRI could be figured out, compromised on, all the rest of this would just work itself out. 

Not so much.

I was on a radio call shortly after the lockout began and expressed my concerns for everything I'd heard and read. Because what I'd gathered was that the dispute went far beyond both sides scrapping over dollars. It had turned ideological. The NBA and its owners wanted to reverse decades of precedence in guaranteed contracts, implement a hard cap, eliminate exceptions, limit player flexibility and control, and they wanted the increase in their cut of the BRI to a 50/50 split. Most people thought that was ridiculous. There was no way the owners expected all that. The thought was that while there may be games missed, if there are, it will be because the players refuse to give up enough in BRI. 

Again, not so much.

Ken Berger of CBSSports.com reported earlier this week:
Neither side would say how far the players moved economically, but a person with knowledge of the negotiations said they expressed a willingness to move lower than the 54.3 percent of basketball-related income they last proposed on June 30 as a starting point in a six-year deal. Stern disputed the players' contention that the owners haven't made an economic move since the day before the lockout was imposed. Nobody outside the room knows how many millions the two sides shaved off the gap, but it hardly matters since everyone seemed willing to concede that they've at least dipped their toes on common ground when it comes to dollars.
via Despite posturing, owners and players near resolving money issue - NBA - CBSSports.com Basketball.

That's extended by these comments from Jared Dudley to the Salt Lake City Tribune Wednesday:
How much was the NBPA willing to concede in basketball-related income during a collective bargaining agreement meeting Tuesday in New York: I think they offered 53, 54 [percent]. We're at 57. They're looking more in the 40s. That's a huge jump — that's over 10 percent. That's where $800 million becomes a big gap. I think we have offered $300 million and they wanted more than that.
via Suns' Jared Dudley says ball's in Billy Hunter's court as NBPA returns to square one during NBA lockout | Utah Jazz Notes | The Salt Lake Tribune.

More from Dudley:
I think [the NBPA] even went down, to be honest with you, to 53 [percent]. I talked to Roger Mason -- 53 percent. And you know what, let's say they went down to 52, 51. If that gets the season done, I guarantee you we would have the season if that's what it takes. But it's not just that, it's a lot. And right now, the owners want a lot and they're willing to sit out. Some are losing money, some are making money.
 



53 percent down from 57, and that's a starting point. Where the owners to respond with 51 or 52 percent, they could likely get somewhere within baby's breath of the 50/50 split. Probably not right at it, but no one gets everything that they want, right?

Not so much. The owners, understanding their considerable leverage, do want everything they want and expect to get it. Except that goes far beyond the 50/50 cut. This hasn't been offered, but the new standing feeling from multiple media sources is that the players could offer up the 50/50 and the owners would likely still be pursuing the hard cap.  If anything, the owners seem more entrenched the more the players seem to surrrender. It's only getting worse. 

If the concern is over the yearly losses the owners are taking in, and the players are offering to give back up to 4 percent of their take right now before negotiations even get serious, what is it that the owners do want? What's the target of all this hard-line insistence? What's the end point?

In short, it boils down to toddlers baby-proofing the house. The league's owners are looking to be able to remove themselves from the burden of bad contracts which they themselves provide. A bad contract sinks a franchise like nothing else. It's an albatross, an anchor, and a curse at the same time. It stands as a mark of their own impudence. There are exceptions of bad luck, where no one could have foreseen the injuries that would come. But for each of those there is a player who the franchise could not bear to see go, and paid despite reservations. The Blazers knew about Brandon Roy's knee condition when they offered him his extension. The Hawks were aware that Joe Johnson would be in his early-to-mid-30's when his final year of his contract is paying him over $20 million. It goes on and on, and even the smaller deals are ones they want to be able to remove themselves from.  Much of this is dictated by the market, and almost all of it is dictated not by the players, but by their agents. Consider what Rashard Lewis, one of the players under a contract that is considered dead weight, told ESPN earlier this week, and a point made by ESPN's J.A. Adande:
Just keep in mind how we got to this point: After the players agreed to a salary cap, a rookie wage scale, a maximum player salary and a luxury tax designed to slow the escalating contracts, can they really be expected to just say no to whatever money the owners kept offering?

Or, as Lewis puts it, "You sign me to a deal, you think I'm going to say, 'No, I deserve $50 [million] instead of $80 [million]?' I'm like, 'Hell, yeah.' I'm not going to turn it down. You can't blame the players. If anything, we don't negotiate the deal. We've got agents that negotiate the deals with the team. Y'all need to go talk to the teams and the agents."
via Rashard Lewis is what this lockout is all about - ESPN.

But the owners simply want to cut the agents' power off at the knees. Instead of bargaining better, they want to remove that hold. Now, in many ways, this is actually a very reasonable request. Even the players will tell you that. Dudley, once more (you really should read the entire interview with the Tribune, it's quite extensive, particularly regarding decertification):
I understand that the common thing is they don't want players that make a lot of money not playing. Look, if you were a business or you were a restaurant, you don't pay someone that you think's not [working]. We're not going to put it all on the owners. We're going to take some of the blame. But, hey, we're willing to work on it. We're just not willing to give up guaranteed contracts and $800 million.
 And yet that's what the owners are asking for. Both. Sports Illustrated's Zach Lowe reported Thursday morning that the players have said that if the owners were to theoretically turn the conversation to how much BRI the players would want to accept a hard cap, the players would want 65 percent, an eight percentage points increase from their current number of 57. That's a lot of dough. That's what it would take to get a deal for the season to start. Unfortunately, the owners would never accept that because while the systemic changes they want are extremely important to their belief in what is necessary for the league to profitable and to increase competitiveness (despite any number of challenges to the idea that a hard cap would result in such competitive balance), they still do want the money. It's not that they want one more than the other, it's that they want their cake, to eat it, too, and to have the players bring them as many slices as they want until they are full. And if that means it takes until January, or an entire season to force the players to accept both conditions, that's what they're willing to do at this moment. 

There's been a lot of talk since Tuesday's "sky is falling" meeting reaction about how things are actually progressing. And there's a certain element of that. The players gave ground, and still didn't get what they want, a resolution. So now the standard for negotiations has shifted. The new status quo is working off the assumption the players will surrender that percentage of the BRI, and the owners are now working to see what else they can get. If the hard liners on the owners' side of the table maintain control, it will be until they squeeze every drop they can from the players that we get a season. If the moderates manage to reclaim the gavel, a reasonable shift with a harder while not "hard" cap and the salary rollbacks could be agreed upon in time to start the season or shortly thereafter. 

And that's where we return to the fundamental psychology involved here. If this is a business negotiation, there's progress to be made, a system to create, a season to save. If this remains ideological from the owners' side, the only reasonable prediction is for an equally extremist reaction from the players. Talks broke down because the owners have kept to that ideological divide. And the only way this whole God forsaken thing ends is if the two sides are talking. 

Meanwhile, the agents wait in the forest like wolves waiting for the right time to attack, and if that happens and decertification is the plan, everything is thrown into the air as this enters the courts. Things only get worse from there. There's definitely a chance talks could resume and the two sides could find enough common ground to spearhead things into a blossoming agreement that gets things started in time for the season without a single game lost. But in reality?

Not so much. 
Comments

Since: Dec 5, 2006
Posted on: September 15, 2011 10:43 pm
 

Turns out this isn't entirely about the money

If the concern is over the yearly losses the owners are taking in, and the players are offering to give back up to 4 percent of their take right now before negotiations even get serious, what is it that the owners do want? What's the target of all this hard-line insistence? What's the end point?
 Matt doing the simple math yields the difference between 57% and 53%, based on $4B in BRI, which is $160M. Since the owners claim they have lost $300M every year of the old CBA the 53% is only half way there. But there is more. Getting down to no financial losses still does not solve the problem because investors calculate ROI (return on investment) to determine which industries and companies to invest in. The breakeven point for the NBA means still no opportunity for ROI.

Some say revenue sharing solves all the problems. It does not. It is a component of competitive balance. But if the league loses $300M (or $140M) and there is perfect and complete revenue sharing (never happen) than each and every team loses $10M on an investment of $356M (Forbes). The Lakers and the Knicks draw hundreds of millions more than most other teams. They may share 20% of that to ease the pain but that is still leaving them with the money to far exceed the cap and still pay luxury tax. This is where a hard cap comes in. These are the essential issues for the owners - 47% of BRI, a hard cap and few if any exceptions. The players fog the issues by claiming 65% with a hard cap. That is inimical to reality. A hard cap does not drive down total salaries. It drives down some teams over paying. If the players accept 50% BRI there is no difference between a hard cap and a soft cap except that the hard cap encourages shorter contracts and lower amounts. The players in total get the exact same amount.



Since: Aug 2, 2011
Posted on: September 15, 2011 7:46 pm
 

Turns out this isn't entirely about the money

It is all about money and guaranteed salary income even through injury and loss of form.............................an

d issues beyond the game itself. Owners want to limit the risk of loss of money and maximise therir return on the teams fortunes;  and players (agents included) after the best deal on offer for themselves.....................whic

h means the more they get offered, the more they take. This is player power and player greed end of! 



Since: Dec 12, 2010
Posted on: September 15, 2011 3:17 pm
 

Not So Good

I wish Matt Moore would not say not so much, so much.



Since: Nov 1, 2006
Posted on: September 15, 2011 12:44 pm
 

Turns out this isn't entirely about the money

Why write an article titled, "THIS IS NOT ENTIRELY ABOUT THE MONEY" the proceed to talk about they money and all facets of when and how it is paid. LOL. This lockout is about nothing but, "MONEY" and all the different ways the owners can keep more of it or give more of it away.


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