Posted on: July 22, 2011 6:36 pm
Edited on: July 23, 2011 12:38 pm
The NBA and National Basketball Players Association released their salary and revenue figures for the 2010-11 season, and the numbers were good: a 4.8 increase in basketball-related income (BRI), just one year after the league experienced essentially flat revenues in the wake of the worst economic downturn since the Great Depression.
But we're in the summer of lockouts, and each side will use the numbers to support their own negotiating positions. The joint news release from the NBA and NBPA made the point that player salaries and benefits also increased 4.8 percent, and that player compensation increased 16 percent over the six-year collective bargaining agreement that expired July 1.
A couple of points: Of course player compensation increased 4.8 percent to $2.076 billion. The CBA had a negotiated 57 percent guarantee to the players, which as part of bargaining for a new CBA they offered to lower.
UPDATE: Second, according to people familiar with the BRI meetings that concluded Friday in New York, the players will receive all of the 8 percent of salary that was held in escrow for the first time under the six years of the previous CBA. In fact, negotiated salaries declined by about $100 million to $2.02 billion last season, their lowest level since the 2006-07 season.
The audit also confirmed what key figures on both sides have expected for months: salaries fell short of the players' designated percentage by more than the $162 million that was held in escrow. As a result, the owners owe the players money for the first time under the previous CBA's escrow system. They'll be writing checks totaling $26 million on top of the $162 million in escrow that will be returned, sources said.
So the entire 4.8 percent increase in player salaries was due to the negotiated 57 percent guarantee -- which the players have offered to reduce in a new CBA -- and the full escrow withholding being returned to the players, and then some.
As part of the old rules, the league withheld a certain percentage of salary (8 percent last season) and would keep a portion of it or give it back so player salaries and benefits equaled 57 percent of BRI. In every prior year of the CBA, negotiated salaries -- the contracts offered by owners and signed by players -- rose and the owners kept most or (as in the case of the 2008-09 season) all of the escrow.
What does this mean? Well, to some degree, it means that owners became more judicious in the contracts they doled out. On another level, it means that many teams -- like the Kings and Timberwolves, who hovered near the league-minimum salary, and the Pistons, who did not make a single roster transaction last season -- simply folded up the tents in anticipation of the lockout, a looming ownership change, or both.
Neither league nor union officials would address the details behind the BRI numbers released Friday, but I can already tell you what the NBA's point about this would be: 1) negotiated salaries are irrelevant when the BRI guarantee gives the money to the players anyway, and 2) the costs to generate that 4.8 percent increase in revenues are so steep that the league can't do business anymore.
That's why we're in Day 22 of the lockout. A deficit reduction compromise and debt-ceiling deal almost certainly will come out of Washington, D.C., before a resolution to the NBA's labor impasse. Come to think of it, it better.
Posted on: July 19, 2011 7:29 pm
While the basketball world was obsessed Tuesday with the release of an NBA schedule that may never happen, CBSSports.com has learned that the owners and players may not convene for another full-blown collective bargaining session until August.
It is up for interpretation, however, whether that would put the two sides behind the negotiating pace set during the 1998-99 lockout. Back then, it was 37 days between the imposition of the lockout on July 1 and the next bargaining session on Aug. 6.
But this time, the two sides have met once at the staff level -- last Friday -- and are scheduled to gather again this Friday for a second meeting. In the smaller sessions, which have not included commissioner David Stern or union chief Billy Hunter, the focus has shifted from the larger economic issues that led to the labor impasse to smaller-ticket system items such as how a new salary cap would be structured, according to sources familiar with the negotiations.
The highest-ranking figures involved in the smaller staff meetings have been deputy commissioner Adam Silver and Ron Klempner, associate general counsel for the National Basketball Players Association. NBPA attorney Jeffrey Kessler has not been involved, perhaps due to his obligations with hammering out the final details of a new NFL collective bargaining agreement. Kessler represents the players' associations in both locked-out sports.
It is possible that the two staffs could negotiate again next week, but sources said it does not appear likely that a full session -- including Stern, Hunter, Kessler, owners and players -- could occur until sometime in August. Though this technically would put the two sides behind the pace from 1998-99, when the lockout resulted in a shortened 50-game schedule, it is possible that the smaller meetings could create some much-needed momentum before the heavy hitters become involved in the process again.
When bargaining broke off June 30, hours before the owners officially imposed a lockout, both sides alluded to first making progress on less controversial topics when bargaining resumed, and then returning to the biggest philosophical divide -- the split of revenues.
"Both sides left the room still fully committed to getting a collective bargaining agreement done," NBPA president Derek Fisher said.
Posted on: July 14, 2011 11:43 pm
Edited on: July 15, 2011 12:35 am
NEW YORK -- In-house staff of the NBA and National Basketball Players Association will hold their first meeting Friday since the league imposed a lockout July 1, a person with knowledge of the plans told CBSSports.com.
The session will not include commissioner David Stern, NBPA executive director Billy Hunter, owners or players. The purpose of the session is to "get back on track" and address the timetable of future bargaining sessions, the person said.
Until now, there had been no contact or formal negotiation of any kind since the previous collective bargaining agreement expired July 1 and the league locked out the players.
While the meeting scheduled for Friday afternoon in Manhattan is not overly significant, it could lay the groundwork for the two sides to resume bargaining in an effort to avoid losing regular season games to a work stoppage for the second time in NBA history and the first time since the 1998-99 lockout, which resulted in a shortened, 50-game schedule.
Word of the planning session came as the league laid off 114 employees from its New York, New Jersey and international offices this week in what it described as an ongoing cost-cutting effort aimed at shedding $50 million in expenses. The layoffs represented 11 percent of the league workforce and were felt across multiple divisions. The NBA also closed its offices in Tokyo and Paris.
The job reductions were "not a direct result of the lockout but rather a response to the same underlying issue — that is, the league’s expenses far outpace our revenues,” NBA spokesman Mike Bass said in a statement released to media outlets inquiring about the layoffs.
Posted on: July 8, 2011 4:33 pm
What does Friday’s ruling by the 8th U.S. Circuit Court of Appeals in the NFL labor dispute mean to the NBA lockout?
Not a whole lot, it turns out.
The appeals court rendered a narrow ruling Friday overturning a decision by U.S. District Court Judge Susan Nelson that briefly ended the NFL lockout. The three-judge panel, having already issued two stays of Nelson’s ruling, voted 2-1 to overturn it, saying that federal courts have no jurisdiction to end lockouts under the Norris-LaGuardia Act.
The appeals panel did not, however, rule on the broader aspects of the NFL’s appeal – namely, whether the NFL is immune from anti-trust liability during the lockout and whether the players can legally pursue damages as the result of it. Those issues were remanded to Nelson’s court for further hearings.
From the NFL’s standpoint, all of this is likely to be moot, anyway, as the owners and players have been closing in on a new labor deal for weeks. The NBA? Not so much. Other than unrelated business dealings, sources told CBSSports.com Friday that there has been no contact between the NBA and the National Basketball Players Association since the lockout was imposed July 1. No bargaining sessions are scheduled, the sources said, and neither side offered a comment on the NFL ruling Friday.
Interestingly, the appeals court also left open the possibility that NFL free agents and drafted rookies who have yet to sign contracts may be permitted to market their services and enter into contracts with prospective teams. This issue also was kicked back to the district court for hearings, but it may prove to be meaningless. Since the appeals court ruled that the district court could not enjoin the lockout, any rookies or free agents who signed contracts would then be locked out anyway if no bargaining agreement has been reached.
So the NBPA will likely not be swayed one way or the other as it weighs the costs and benefits of following the NFLPA’s path of decertification and an anti-trust lawsuit. The NBPA has thus far determined that bargaining is a better path to a CBA than litigation, but the 8th Circuit’s ruling Friday did not present any legal obstacles to decertification; it only stated that a federal court does not have the authority to end a lockout once it is imposed on a decertified union.
If you have nothing to do this weekend – meaning, there is no paint to watch dry or grass to watch grow – you can read the 8th Circuit’s majority and dissenting opinions here.
Posted on: June 28, 2011 6:43 pm
Edited on: June 28, 2011 10:20 pm
NEW YORK -- NBA owners and players will meet Thursday in Manhattan for perhaps their final bargaining session before a lockout is imposed, leaving little hope that an agreement can be reached before the 12:01 a.m. ET Friday expiration of the collective bargaining agreement.
The bargaining session will be smaller than the full-blown negotiation that was attended by more than 30 players last Friday. The owners' full Board of Governors met in Dallas Tuesday, and commissioner David Stern told reporters there that it was the union that asked to scheduled bargaining for Thursday as opposed to Wednesday.
A formal procedural vote authorizing the owners' labor relations committee to impose a lockout was not conducted. However, the board authorized the committee to "act in whatever way they deem appropriate," deputy commissioner Adam Silver told reporters in Dallas -- which, effectively, is the same thing. It's a moot point anyway; Stern said last week that such a vote was a mere formality, and owners clearly are galvanized to use a work stoppage as a means to achieve their goals of creating a new economic system that guarantees them profitability.
The owners and players remain hundreds of millions of dollars a year apart in their most recent proposals, with the players choosing last Friday not to counter the owners' most recent proposal in which league negotiators offered to guarantee players $2 billion a year in salary and benefits over the life of a 10-year deal.
The players want a much shorter CBA, proposing a five-year deal with $100 million per year in salary concessions. Aside from disagreeing over the most critical issue -- the split of the league's revenues (or basketball-related income, known as BRI) -- owners and players have taken irreconcilable positions on how the money will be distributed to the players. Owners have proposed what they called a "flex cap," with a midpoint of $62 million per team and an undetermined maximum and minimum payroll. The players have rejected the idea, calling it a hard cap in disguise.
While the key players in the negotiation continue plotting their end-game strategy with Thursday night's deadline looming, legal forces on both sides also were busy Tuesday weighing their options. If owners imposed a lockout, attorneys for the National Basketball Players Association would have to decide whether to follow the NFL players' strategy by decertifying the union and filing an antitrust lawsuit. This would be the nuclear option, and one both sides seem to want to avoid since it would turn the dispute over to the federal courts and waste valuable time. With a far longer season than the NFL, choosing the courts over bargaining would all but assure that games would be missed in the 2011-12 season.
Also, if the union decertified, owners and players would no longer be able to continue negotiating after the expiration of the CBA. If both sides decided Thursday that there was enough will to reach a deal, they could extend the deadline or continue negotiating even after the lockout was imposed. The latter would not be an option if there were no union.
It was not clear whether the players' tipped their hand regarding a reluctance to decertify by having more than 30 players show up at Friday's bargaining session with matching T-shirts with the word "STAND" printed on them. In any event, it is clear that each side has a legal option in its briefcase that it appears reluctant to use.
For the players, the union has thus far decided not to file a complaint with the National Labor Relations Board seeking a ruling on whether revenue sharing should be a "mandatory subject" of collective bargaining. While the league continues to assert that its $300 million in annual losses cannot be addressed through revenue sharing alone, union negotiators have been frustrated by owners' refusal to provide details of the league's revenue-sharing plans -- a position that has put the uncomfortable onus on players to accept significant salary concessions before the NBA addresses the competitive inadequacies created by the massive gap among high- and low-revenue teams.
Using league salary data obtained by CBSSports.com for the 2010-11 season and accounting for luxury-tax payments estimated to be paid and received, the gap between the highest-paying team (the Lakers, at more than $112 million) and the lowest (the Kings, at just under $42 million) amounted to $70 million -- more than the average payroll in the league.
For the owners, sources say the NBA's legal team does not seem inclined to file a pre-emptive lawsuit -- known as a declaratory judgment -- asking a federal court to rule that the work rules it has proposed do not violate antitrust law. Such a move would strictly be made to assure the NBA a home-court advantage by putting the case in a court that historically has been pro-management in labor disputes. If the players decertify and file an antitrust lawsuit first, they could do so in any jurisdiction where the NBA does business or has a team -- thus strengthening their chances of getting a pro-labor court.
Given all that, the court of appears to be heavily tilted away from the possibility of a deal by Thursday night. So if you like lockouts, pull up a chair and get your popcorn.
Posted on: June 27, 2011 11:55 am
Edited on: June 27, 2011 12:12 pm
NEW YORK -- The NBA owners' planning committee is meeting by conference call Monday to tackle one of the most significant sticking points that have kept the league's imperiled labor negotiations from progressing toward any chance of a deal: revenue sharing.
The committee, led by chairman Wyc Grousbeck of the Celtics, had been scheduled to meet last Friday in conjunction with a full-blown bargaining session with players, but the session was rescheduled.
The status of owners' work on a revamped revenue sharing program -- and the sharing of that information with the National Basketball Players Association -- is viewed as paramount to any slim chances the two sides have of progressing toward a new collective bargaining agreement by midnight Thursday, the expiration of the current deal. Commissioner David Stern last week disputed the union's assertion that owners have not shared "one iota" of their revenue sharing plan, and the upshot was this: not only can owners and players not agree on the league's financial losses, they cannot even agree whether revenue-sharing information has been shared with the players.
The owners' full Board of Governors is scheduled to meet Tuesday in Dallas in preparation for either one last push toward a deal or the lockout that executives on both sides have viewed as all but inevitable for the better part of two years. The owners and players are tentatively scheduled to convene in New York Wednesday and/or Thursday to take one final stab at making a deal. If enough progress is not made to at least prompt an extension of the negotiating deadline, owners are prepared to impose a lockout at 12:01 a.m. ET Friday. The Board of Governors could conduct a procedural vote Tuesday in Dallas to authorize the labor relations committee to lock the players out, although Stern said such a vote could be taken at any time and wouldn't have to be done in person.
At the Tuesday meeting, the labor relations committee -- led by Spurs owner Peter Holt -- will update the full board on the progress in collective bargaining talk with the players. That presentation should take about as long as it takes Tony Parker to get to the basket from the foul line. Despite bargaining sessions in Dallas and Miami during the NBA Finals, and three sessions last week in New York, the two sides appear no closer to a deal than they were in January 2010 -- when owners first presented a draconian proposal calling for a $45 million hard salary cap, the elimination of fully guaranteed contracts, and a more than 33 percent rollback of player salaries.
Owners have since moved about $650 million annually on their salary demands, offering to guarantee players no less than $2 billion in salary and benefits over the life of a 10-year CBA. They also have relaxed their insistence on banning fully guaranteed deals -- though contracts would be for a maximum of three or four years under their proposal, as opposed to the five- and six-year deals free agents can sign under the current CBA, with the extra year in both cases going to a player re-signing with his current team.
Owners also made what they portrayed as a significant concession in offering a "flex cap" concept with a $62 million target for all teams and a top and bottom range to be negotiated with the players. The NBPA rejected this proposal during a week filled with incendiary rhetoric, with union president Derek Fisher of the Lakers calling it a hard cap in disguise and saying it was a "total distortion of reality."
The players have made two significant economic moves during the recent talks, first offering to take a $318 million pay cut over a five-year deal and then raising that offer to $500 million. Stern referred to the latter move as "modest," infuriating union officials and galvanizing the players to the point where more than 30 of them showed up at Friday's bargaining session at the Omni Berkshire Hotel wearing NBPA T-shirts with the word "STAND" printed on the front.
The players also were rankled by the league's offer of a flat $2 billion in annual compensation in the owners' 10-year proposal. Not only do the players oppose a CBA of that length, they also allege that they would not regain their 2010-11 mark of $2.17 billion in salary and benefits until the final year of the owners' 10-year plan. The owners' offer to phase in their salary reductions -- first for two years, and then for three -- was viewed by the players as a non-starter because they would receive less than 50 percent of basketball-related income (BRI) by the midpoint of the deal and would be below 40 percent in the final years. The players currently are guaranteed 57 percent of the league revenues, which are expected to come in at $3.8 billion for the '10-'11 season.
Players also viewed the owners' request to keep the approximately $160 million in salary collected by the league in an escrow fund for the '10-'11 season as part of their most recent proposal. Money earned by players under the existing CBA should be "off the table," according to Fisher, who said this request by the owners "speaks to their arrogance." League officials were dismayed by Fisher's comments and believe it would've been more productive for the players to reject the idea during negotiations rather than air it publicly.
But a key tipping point in bargaining could be what revenue-sharing details the owners come forward with this week. Owners have long rejected the players' request that revenue-sharing be collectively bargained, but the players believe many of the issues owners have addressed with regard to improving competitive balance could be satisfied by redistributing revenues from successful to struggling teams. In Friday's bargaining session, the Celtics' Paul Pierce crystallized the players' perception that owners have cloaked their determination to slash salaries behind the more benign concept of competitive balance.
"If it’s about being competitive, let’s come up with a system we can all be competitive in," Pierce told the owners, according to Suns player representative Jared Dudley. "If it’s about money, that’s a different story that we’re talking about."
Although NBA owners have enhanced their revenue-sharing plan in recent years, the league continues to have one of the most inequitable systems in professional sports, with big-market teams holding enormous advantages because local gate and broadcast revenues are not included in the revenue-sharing pie. Owners view the current luxury-tax system as akin to revenue sharing, but it is not enough to address the disparity between teams like the Knicks and Lakers, who make more than five times what teams like Memphis and Minnesota bring in through ticket sales. Those glamour-market teams also enjoy local broadcast deals that exceed some small-market teams' total revenues, according to a person familiar with league finances.
It has been difficult for the NBPA to justify the massive salary reductions the league is seeking without knowing how owners plan to address this enormous disparity among teams. One option at the NBPA's disposal would have been to file a request with the National Labor Relations Board seeking a ruling that revenue sharing should be a "mandatory subject" of collective bargaining. Sources say union officials have opted not to go this route and instead have trusted the owners to come forth with an effective and transparent approach to getting their own financial house in order before getting further salary concessions from the players.
After declining to make a counter offer to the owners' latest proposal Friday, the players have put the onus on owners and league negotiators to reveal their revenue-sharing plans as part of the next scheduled bargaining session in New York. As of Monday, sources said NBPA officials had no plans to travel to Dallas for an additional bargaining session.
In any event, it may already be too late to get a deal in place and avert a lockout. Even if the two sides unexpectedly made significant progress Wednesday and Thursday, there would not be enough time for lawyers to craft a new agreement before the deadline. In that case, the league would impose a moratorium on business while final details were hammered out and the contract was drafted.
But far more likely is that both sides will be unwilling to move off their most recent positions until the pain of a work stoppage is experienced.
"They've got to go through the process," said a person who has been heavily involved in past labor negotiations. "It's going to be ugly."
Posted on: June 24, 2011 6:21 pm
Edited on: June 24, 2011 8:10 pm
NEW YORK – NBA owners and players ended a contentious week of negotiations and rhetoric Friday without a counter-offer from the players, leaving a slim chance that a deal can be reached by the June 30 expiration of the current collective bargaining agreement.
Despite reaching a stalemate on economic issues and the split of the league’s $4 billion in annual revenues, the two sides agreed to meet again Wednesday in Manhattan for one, or possibly two more days of bargaining before the current CBA expires at 12:01 a.m. ET Friday.
"We think we’ll have one more shot at it," National Basketball Players Association executive director Billy Hunter said. "Obviously, we’ll have some idea as to where they are in terms of owners -- whether there’s a chance to make a deal or whether there isn't."
Practically speaking, sources said it would be nearly impossible to write a new CBA in that time frame, leaving only two likely scenarios – a lockout imposed by the owners that would shut the sport down for the first time since the 1998-99 season, or an extension of the deadline to negotiate, which neither side has ruled out. But the latter option would require progress on narrowing the gap between the two sides’ bargaining positions, which remains hundreds of millions of dollars a year – and billions over the length of a new deal.
“There's still such a large gap,” said NBPA president Derek Fisher of the Lakers. “We feel that any move for us is real dollars we'd be giving back from where we currently stand, as opposed to where our owners have proposed numbers that in our estimation don’t exist right now. They're asking us to go to the place where they want us to go. We've expressed our reasons why we don't want to continue to move economically.”
In a display of unity and force that commissioner David Stern said he welcomed, more than 30 players arrived for meetings at the Omni Berkshire Hotel wearing tan NBPA T-shirts with the word, “STAND” printed on the front. The bargaining session included various player representatives who previously had only been briefed by union officials and executive committee members on the progress – or lack thereof – in negotiations.
The players streamed out onto 52nd Street around 3:30 p.m. after a four-hour bargaining session, many of them boarding a luxury touring bus and declining to comment. Several stopped to sign autographs. The scene – including a throng of media camped out on the sidewalk – caused such a spectacle that at one point, former New York Gov. Mario Cuomo cut a swath through the crowd and was noticed by only a couple of reporters.
Paul Pierce and Kevin Garnett of the Celtics, among the most vocal players in the room Friday and the players who devised the T-shirt idea, were driven away in a black SUV with executive committee member Theo Ratliff. In the meeting, Pierce accused the owners of taking a disingenuous stance by disguising their insistence on slashing salaries under the cloak of creating a new system that would allow more teams to be competitive.
“Is it more about money or being competitive?” Pierce said to the owners, according to Suns player rep Jared Dudley. “What does this have to do with? If it’s about being competitive, let’s come up with a system we can all be competitive in. If it’s about money, that’s a different story that we’re talking about.”
Hunter reiterated that he expects the owners to vote on imposing a lockout during the meeting of their full Board of Governors Tuesday in Dallas, but sources said there were no plans for such a vote – which would be procedural, anyway, and no surprise to anyone given that the threat of a lockout has loomed over the negotiations for more than two years. But with the attendance and engagement of a large group of players Friday, Hunter said owners “may find it difficult to pull the trigger” on a lockout vote.
“Even though we didn’t make an progress, I think they felt that the energy and attitude within the room was such that it might necessitate further discussion,” Hunter said.
In a softening of the rhetoric that marked the week of labor meetings -- the tone of which Stern said became "incendiary" at times -- Stern declined to discuss details of Friday's bargaining points. It was his public revelation of a $62 million "flex cap" system proposed by owners, along with a guarantee of no less than $2 billion in salary and benefits during the league's 10-year CBA proposal, that infuriated union officials who felt blindsided -- and subsequently conducted one small and one large media briefing to go on the attack.
Stern also sidestepped the possibility of a lockout vote, which typically would be taken by the Board of Governors to authorize the owners’ labor relations committee to impose one upon expiration of the current CBA.
“We can do whatever we need to do, whenever we need to do it, however we need to do it,” Stern said. “It's not about the formality of a meeting. … For us, the best time we're going to spend next week hopefully is on a meeting with the players on Wednesday that with any luck goes over to Thursday. And that’s where we are.”
The primary purpose of the owners’ meetings in Dallas Tuesday is for the labor relations committee – featuring such big-market representatives as the Knicks’ James Dolan and Lakers’ Jeanie Buss and small-market owners such as the Thunder’s Clay Bennett and Spurs’ Peter Holt, the committee chairman – to update representatives from all 30 teams about the state of negotiations. The owners’ planning committee also will brief the board on the status of a new revenue sharing plan, the lack of inclusion of which in the bargaining process has been an irritant for union officials.
Hunter told reporters this week that owners have not divulged “one iota” of their plans to enhance the sharing of revenue as a way to help small-market teams compete, and that rancor among high- and low-revenue teams continues to divide the owners. Stern disputed that notion Friday, saying, “We’ve had a full discussion with the players about everything, and we're prepared to discuss everything with them.”
The players and union officials have tried to get the owners to include their revenue-sharing plan as part of the new CBA, saying competitive balance could be improved through sharing more revenue – such as gate receipts and local broadcast revenues – without trying to solve the league’s stated annual losses of at least $300 million strictly through salary reductions.
“As we've said repeatedly, if we lose money on an aggregate basis, we can’t possibly revenue-share our way to profitability,” deputy commissioner Adam Silver said.
Stern would not divulge whether owners would reveal to the players the substance of their revenue-sharing plan that will be discussed among owners in Dallas. And sources told CBSSports.com that the union seems disinclined to use a legal tool at their disposal – asking a court to rule on whether revenue-sharing should be included as a “mandatory subject” in collective bargaining.
“We can’t make the final sort of push on revenue sharing until we know what the yield or not of the labor deal is,” Stern said. “… The revenue sharing is moving as well. We're setting things up, I would hope, on both fronts.”
Setting things up for a deal or a lockout? After two years of negotiations with no results, you be the judge.
Posted on: June 22, 2011 7:57 pm
Edited on: June 23, 2011 6:05 pm
NEW YORK – NBA players association chief Billy Hunter on Wednesday assailed the owners’ latest collective bargaining proposal and said he is prepared for owners to vote on a lockout at next Tuesday’s Board of Governors meeting in Dallas.
“Their demand is gargantuan and we just can’t meet it,” Hunter told reporters at the Manhattan hotel where players are staying for crucial meetings and draft-related activities this week.
A day after commissioner David Stern seized control of the message by disclosing details of the owners’ latest proposal, Hunter gathered reporters in an effort to respond and “set the record straight,” he said. At the meeting, also attended by union president Derek Fisher of the Lakers, executive committee member Maurice Evans of the Wizards and union staff, Hunter said the owners’ latest proposal would cost the players $8.2 billion over 10 years compared to the current system and $7 billion compared to the players’ standing offer.
“Under their proposal, over five or six years, they would reap a profit of over $1.8 billion after expenses – after their alleged expenses,” Hunter said.
Hunter and Fisher also clarified a point that was lost after Tuesday’s bargaining session: As part of their proposal to guarantee the players $2 billion in salary and benefits per year during their 10-year proposal, owners are seeking to keep the $160 million in escrow money withheld from players’ paychecks for the 2010-11 season. Eight percent of player salaries is withheld under the current agreement and returned each August to ensure that players ultimately wind up with 57 percent of basketball-related income (BRI).
“That’s money that players have already earned, worked for this past season,” Fisher said. “That’s off the table, as far as we’re concerned. To me, it speaks to the arrogance that they feel in approaching us with their proposal, to be able to go back and reach for those dollars.”
Fisher also assailed Stern’s characterization of a new cap system verbally proposed by owners as a “flex cap,” with a $62 million target per team and an undetermined maximum and minimum.
“We view that as just a total distortion of reality,” Fisher said. “It’s not a flexible cap, it’s a hard cap. … It’s flexible as long as you’re below what the hard level is.”
The so-called flex-cap concept disclosed by Stern Tuesday “has not been in a written proposal, with any teeth or any details,” Fisher said.
In response to the union's complaints, Stern said Wednesday night: "Players have benefited from the current system more than the teams. For them it has been a much better partnership. We are sorry that the players' union feels that way since it doesn't seem designed to get us to the agreement that is so important to the teams, and we had hoped, the players."
In briefing players around the league on the state of negotiations, including teammate Kobe Bryant, Fisher said players “are in total disbelief. They have asked us point-blank why we are even talking.”
Despite the grim turn these talks have taken in the past 48 hours, there's no need to panic. There is a blueprint for getting sports labor deals done when the sides are far apart, and the NBA talks are following it to a tee. I'll let the sports labor veteran I spoke with Wednesday take it from there.
"You curse each other out, go to marriage counseling, then blow the house up and stay away from each other for a while," the person said. "And you bring everybody back together when the bills come due. There's a deal to be made in there, but not now. No way."
With eight days before the current labor agreement expires, union officials will meet Thursday with player representatives of all 30 teams and as many as 20 other players who have elected to attend. Hunter said union officials will then determine what, if any, counterproposal to make in Friday’s scheduled bargaining session – likely the last one before the owners’ full Board of Governors convenes Tuesday in Dallas, where Hunter said he expects a lockout vote to occur.
“I’m sure that there’s going to be a vote,” Hunter said. “Whether or not they lock out, that’s going to be up to them. We’ve been threatened with that for the last two years … so I’m assuming that, from their perspective, (June 30) is the drop-dead date.”
Hunter and Fisher explained how they arrived at their offer of a more than $100 million-a-year salary reduction in their five-year proposal, saying it amounts to 57 percent of what Fisher described as the owners’ “true losses” – the same share of BRI they currently receive. By the players’ estimation, the owners’ $300 million annual loss figure is actually less than $200 million when interest expenses are deducted. Hunter stopped short of calling it an ambush, but he and the players clearly were blindsided when Stern characterized this offer as “modest.”
“I guess at this stage, the question is to what extent are they willing to kill this thing,” Hunter said of the owners.
Hunter also said owners have proposed adding $900 million to the $600 million that currently is deducted from gross revenues before the money is shared with the players, bringing the total to $1.5 billion under the owners’ proposal.
And a key sticking point remains the fact that owners have refused to collectively bargain a revamped revenue-sharing plan, an area the owners believe should be kept separate from the negotiations. Hunter referred to a group of small-market owners who wrote a memo to Stern in 2007 asking for enhanced revenue sharing, saying the fight is between small- and big-market owners as much as it is between owners and players.
“They have not disclosed to us one iota of what their proposed revenue-sharing plan would look like,” Hunter said. “… We want the assurance that it’s not all coming off the backs of the players.”
Hunter again derided the owners’ offer of a flat $2 billion pay scale for 10 years, saying the players would not regain the $2.17 billion level of salary and benefits they received for the 2010-11 season until the 10th year of the owners’ proposal. The union is projecting 4-5 percent annual revenue growth for the league over the next decade, a figure that is expected to rise after the current broadcast and digital rights agreements with ABC/ESPN and TNT expire in 2016.
Hunter was careful to stop short of saying the negotiations are at an “impasse,” a legal term that would signal that talks have irretrievably broken down – paving the way for a lockout, possible decertification of the union, and an antitrust lawsuit similar to the case filed by the NFL Players Association.
“We’re not at an impasse because there’s so many issues that we haven’t discussed,” Hunter said. “We’ve gotten stuck on economics.”
Asked if he trusts Stern to negotiate a fair deal, Hunter said, “We’re engaged in hard-knuckle negotiations. It ain’t about trust.”
“We have an idea what we’re willing to do and what he’s willing to do,” Hunter said. “And what we’ve indicated to them is that the perception is that it’s really becoming a game of power vs. power. And right now, I think that they feel as though they have the leverage or the upper hand.”