Posted on: September 22, 2010 6:09 pm

Hunter: CBA progress needed by All-Star

NEW YORK – After a three-hour bargaining session with NBA owners Wednesday, complete with a reportedly off-key rendition of “Happy Birthday” to recognize commissioner David Stern’s 68th, players union chief Billy Hunter set forth the first unofficial negotiating deadline for making progress toward a new labor deal: All-Star weekend in Los Angeles.

If the owners and players aren’t able to “develop some momentum” and “resolve some of the issues” by February, Hunter said, “We’ll know what the bottom line’s going to be.”

Both sides know that bottom line will be a lockout, the first the league has experienced since the only failed labor negotiation in NBA history in 1998.

“I would anticipate that by All-Star, we should know whether there’s a likelihood of a deal,” Hunter said outside the Omni Berkshire Place hotel, where owners and players conducted their second bargaining session in six weeks.

As was the case Aug. 12, the meeting was characterized as “cordial and productive” by union attorney Jeffrey Kessler and others, with Hunter going so far as to call the talks “amicable.” Still, there were no significant breakthroughs on how to arrive at a new agreement that both sides would be willing to sign to forestall a work stoppage after the 2010-11 season. The current CBA expires on June 30, 2011.

“Progress was definitely made,” said Derek Fisher of the Lakers, the president of the National Basketball Players Association. Fisher also told CBSSports.com that, unlike the NFL Players Association, the NBA players have yet to take the step of collecting signatures to authorize decertification of the union – a legal tactic that would challenge the league’s right to lock out the players.

“Decertification is an option that is available to us, but we’re genuinely focused on the positive side of getting a deal done,” Fisher said. “The only time decertification has ever even been mentioned for us is as a last resort and something that’s our only choice. Right now we view our choices as working as hard as we can to get a deal done. That’s why we haven’t taken that step.”

If nothing else, Wednesday’s bargaining session did nothing to disrupt the constructive tone of the talks, which have progressed cordially after a contentious meeting at the most recent All-Star weekend in Dallas. A working lunch midway through the session, in fact, was punctuated by serenading the 68-year-old Stern for his birthday. Somehow, the opposing sides were able to agree on how to divide up the cake.

“There’s, at least to me, an optimistic feel to how things are going at this point,” Fisher said.

But the owners and players made little progress on actually closing the “gulf, not a gap,” as Stern described it during the August meeting, on major issues such as the players’ share of revenue, the proposed imposition of a hard salary cap, and drastic reductions in maximum salaries and guaranteed deals. The next step, Hunter said, is to break down into smaller groups to begin tackling “the smaller issues that are not quite as divisive.” Hunter and deputy commissioner Adam Silver will begin scheduling those meetings in the next two days, Hunter said.

The players also for the first time had a chance to walk the owners through their proposal, which was submitted to the league in June. Silver called the process “conciliatory and constructive,” but said, “There remains an enormous economic gap between our two proposals.” Silver also took issue with Hunter’s notion that All-Star weekend represented any kind of deadline.

“I think deadlines are helpful,” Silver said. “I don’t necessarily agree that All-Star is a deadline for us. As you know, this deal expires at the end of June. So we view that as the ultimate deadline.”
Posted on: August 12, 2010 9:00 pm

What new ground was broken in CBA talks?

NEW YORK -- With star-studded attendance and a conciliatory tone, collective bargaining talks Thursday between the NBA's owners and players changed the attitude, if not the substance, of the debate. Even with union vice president Mo Evans calling the players "partners" with the owners -- what's next, LeBron James and Dan Gilbert double-dating? -- the two sides are still far from a deal to avoid a lockout after the 2010-11 season.

But quietly, modest breakthroughs were made Thursday on several big-picture points relevant to the new financial structure owners and players are trying to create. According to sources with knowledge of the negotiations, here are the key points that owners and players actually agreed on -- or at least, agreed to disagree:

* First, there seems to be agreement on both sides that something needs to be done to improve the competitive balance of the league. How to do it, however, remains hotly contested. The players believe many of the owners’ woes can be solved through broader revenue sharing, for which they included a plan in their proposal. The owners continue to believe that how the owners divvy up hundreds of millions in annual losses doesn’t solve the problem that expenses are too high. According to sources, the owners seem to be hunkered down in their pursuit of shorter contracts with less guaranteed money – and they appear to be focusing on those issues even more than reducing the 57 percent share of basketball-related income (BRI) that the players receive. In the owners’ view, shorter contracts and the ability to restructure them midway through – a provision that exists in the NFL’s CBA – would help teams become more competitive faster. The players acknowledge the problem with the current system when teams burdened with bad contracts get “stuck in the mud,” according to a source, and need 3-4 years to clean up the mess. But the players disagree with the owners’ desire to shorten contracts and limit guarantees, even with the long history under the current CBA of players with declining ability becoming contractual albatrosses for their teams. Tracy McGrady and his $24 million salary getting dumped on the Knicks as an expiring asset last season is an extreme, but not rare example.

* With top players such as Paul Pierce, Ray Allen and Richard Jefferson taking significant pay cuts on new deals this summer, there also seems to be common belief that payrolls will decline during the 2010-11 season for the second consecutive year – even after the biggest free-agent spectacle in league history. Since some rosters aren’t complete and the NBA’s fiscal year hasn’t closed yet, the amount of the decrease isn’t known, and the two sides differ on what the amount will be. The owners seem ready to acknowledge a 1 or 2 percent decline, while the players believe 5 percent is more realistic.

* Regardless of the amount of the payroll decline, one team executive said owners were rattled by the bold free-agent coup pulled off by star players this summer – with James, Dwyane Wade and Chris Bosh teaming up in Miami – and have become focused on limiting player movement as a result. Any efforts to curb players’ free-agent rights would be staunchly opposed by the union. But there is a real sense from the owners, according to this executive, that they’re determined to write provisions into the new CBA that would provide stronger disincentives for free agents to leave their teams.

“If there’s anything I’d love to see happen in collective bargaining, it’s for the term ‘free agent’ to go away and I’d love to see the term ‘mid-level’ go away,” the executive said. “There’s nothing free about it, when you’re making the mid-level, you’re making more than two-thirds of the league. Mid-level sounds like mid-major, Holiday Inn, Applebee’s. It’s inappropriately termed.”

* Sources also revealed new details of the players’ proposal, which National Basketball Players Association executive director Billy Hunter has declined to specifically discuss publicly. In perhaps the first concession of the year-long negotiations, sources say the players have proposed issuing owners a credit on their books for capital improvements to their arenas. The Knicks, who are investing as much as $850 million to renovate Madison Square Garden, would benefit handsomely from such a provision. The players presented this as a way to encourage owners to modernize old arenas and thus create additional revenue streams.

Posted on: August 12, 2010 3:19 pm
Edited on: August 12, 2010 4:49 pm

Stars come out for NBA labor talks (UPDATE)

NEW YORK – NBA owners and players met for 3 1-2 hours Thursday in a bargaining session that didn’t result in any progress toward a deal but did help change the tenor of the debate: The star players did show up, and they’re engaged.

In a surprise development, LeBron James, Dwyane Wade, Carmelo Anthony, Joe Johnson and Chauncey Billups joined the players’ executive committee in the bargaining session – a reprisal of their appearance at the most recent meeting at All-Star weekend in Dallas.

“I think it’s important for all of us, as the faces of the NBA, to be involved in the negotiations and what’s going on,” Anthony said as he exited the Omni Berkshire Place Hotel on 52nd Street, to waves and cheers from passersby. “Our future’s in jeopardy if we can’t come to a mutual agreement.”

According to sources familiar with the players’ strategy, the stars decided to take a break from their appearance schedule associated with the World Basketball Festival, a four-day event in conjunction with Team USA training camp, to avoid the perception that they aren’t going to be involved in the bargaining process for the long haul. Some observers believed that the players’ appearance at the All-Star bargaining table in February would be a one-time deal, something that the stars of the league wanted to dispel, sources said. Wade and Billups were the first to commit, followed by James, Anthony and Johnson.

“It’s important to have representation of all the guys in the NBA and not just ourselves,” said Hawks guard Mo Evans, a member of the executive committee. “It was great to have those guys interested in what’s going on in the league. We’re all involved. We’re going to leave this game to someone else – whether it’s two years from now, five years from now, or 10 years from now. We want to leave this game in a better place than when we got it.”

According to people in the bargaining session, there was far less rancor and rhetoric than in the session at All-Star weekend, when the players rejected the owners’ initial proposal. The word “lockout” was thrown around less frequently, too.

UPDATE: But both sides acknowledge that there's much ground to be covered. According to one person present, commissioner David Stern proclaimed at one point during the meeting, “There’s a gulf, not a gap.”

However, in an encouraging sign, the league and union issued a joint statement after the bargaining session, as opposed to individual missives: "The NBA and NBPA held a four-hour bargaining meeting today that included constructive dialogue and a productive exchange of information. While we still have much work to do, it was encouraging how many players and owners participated in the process and all pledged to continue to work together. We all agreed to meet again before training camp.”

Still, while the tenor of the dialogue improved, there was virtually no progress on the issues that keep both sides far apart on a new deal to replace the current CBA, which expires on June 30, 2011. The owners and players continue to disagree on the extent of the NBA’s stated losses – the latest figure the league used Thursday, according to a source, was $380 million during the 2009-10 season – and how the pie should be divided. Under the current agreement, players get 57 percent of overall revenues, known as basketball-related income (BRI).

It was the first bargaining session since All-Star weekend, and the first time owners and players discussed face-to-face the players’ proposal that was submitted to the owners last month. There was little concrete discussion of specific issues, such as the owners’ desire to institute a hard salary cap with shorter contracts and less guaranteed money. Both sides agreed to meet again before the start of training camp, and then break into smaller groups to tackle specific bargaining issues.

“They generally objected to the entire proposal,” Hunter said. “They said they didn’t agree with it. We kind of anticipated that. But at the same time, it lends itself to more discussion so they all felt as though we did make progress in terms of our willingness to talk to one another as opposed to at one another. And so to that extent, things felt a lot better in the room – the atmosphere, the environment, the nature of the discussions – more so than in February. Things have thawed a lot.”

In addition to the stars, the players were represented by the members of their executive committee: president Derek Fisher, treasurer James Jones, and vice presidents Adonal Foyle, Keyon Dooling, Roger Mason, Theo Ratliff, Etan Thomas, Chris Paul and Evans. The owners were represented by Peter Holt (Spurs), Glen Taylor (Timberwolves), Wyc Grousbeck (Celtics), Jeanie Buss (Lakers), James Dolan (Knicks), George Shinn (Hornets), Stan Kroenke (Nuggets) and Larry Miller (Trail Blazers). Suns owner Robert Sarver, Cavaliers owner Dan Gilbert and Magic CEO Bob Vander Weide canceled at the last minute to address personal business.

“It was great conversation, great dialogue going back and forth, great communication,” Anthony said. “So hopefully we can come to an agreement soon.”

Posted on: July 2, 2010 2:11 pm

Sources: Players submit CBA proposal to owners

As the NBA free-agent frenzy accelerated Friday, CBSSports.com learned that the players’ counter-proposal on a new collective bargaining agreement has been submitted to the owners’ negotiating committee – with plenty of pushback on teams’ desire to reduce max contracts, institute a hard salary cap and change the financial structure of the sport.

The players’ proposal, hammered out last week in Las Vegas, aims to leave the current soft cap with exceptions and a luxury tax in place, while instituting more aggressive revenue-sharing system, according to a person who worked on the proposal and has viewed the final version. Extreme measures proposed by the owners in late January – including a reduction in the number of years that can be guaranteed in players’ contracts – do not appear in the players’ counter-proposal, the person familiar with it said.

An NBA official confirmed to CBSSports.com Friday that the league office has received the proposal, but said executives declined to comment on it. Similarly, executives from the National Basketball Players Association also declined to comment.

Representatives for the league and the players will convene next week – not for a bargaining session, but rather to participate in the exercise of setting the salary cap and luxury tax for the final year of the current CBA. The final figures will be based on league-wide revenues from the 2009-10 season, and some of that data remains in dispute, one of the sources said. But based on better-than-expected financial results that already have been acknowledged by commissioner David Stern, the salary cap for the 2010-11 season is expected to at least hold steady at the last estimate given by the league -- $56.1 million – and perhaps even approach or exceed $57 million, sources said. A higher-than-expected cap would ease the burden on teams that are still scrambling to clear more space to add multiple free agents with maximum-salary deals, such as the Nets, Heat and Bulls. The Knicks, with $34.1 million in space based on a $56.1 million cap, already have room for two max free agents.

The owners’ spending spree the opening hours of free agency -- $449 million in the first 36 hours -- has only reinforced the players’ belief that the system as currently constructed is working fine, according to Hawks guard Mo Evans, a member of the players’ executive committee.

“They get to police themselves,” Evans said. “The owners are the ones that are signing these deals. There’s nothing in the CBA that says you have to do that, so why would we propose something that says you can’t do that? In my opinion, we don’t need to fix anything because the system isn’t broken. It’s been proven to work.”

In terms of changes to the existing agreement, the players are proposing to loosen the guidelines for restricted free agents, which have proved onerous to such players and teams trying to retain them. The Grizzlies being forced to offer restricted free agent Rudy Gay a five-year, $82 million deal rather than risk losing him to a team trying to lure him with a front-loaded offer sheet is a prime example.

The players’ proposal also seeks to eliminate base-year compensation rules, which make it difficult for teams to satisfy the 125 percent rule in matching salaries for a trade involving a player who just received a significant raise. Such a provision theoretically would be embraced by players and teams because it would facilitate player movement in cases when the team is amenable to a trade but couldn’t work it out under the current agreement. A revenue-sharing plan, absent from the owners’ initial proposal, is included in the players’ version. But Stern has said the league’s position is to keep that system separate from the CBA negotiations.

“We’re excited about our proposal, and we’re hoping the owners are excited, too,” Evans said. “Hopefully, when they look at it they’ll see it the same way we do – that we’re trying to work together and make the game better.”

That hardly seems realistic, given that virtually all of the significant changes to the salary and cap structure proposed by the owners do not appear in the players’ proposal. With less than a year to avert a work stoppage when the current CBA expires on June 30, 2011, the owners and players don’t appear any closer to a middle ground than they were when negotiations began in earnest in August 2009. In fact, sources told CBSSports.com that the players continue to dispute Stern’s assertion that teams lost $400 million during the 2009-10 season – a figure that seems to have been contradicted by the better-than-expected cap figure for next season and the owners’ loose purse strings in the opening days of free agency.

So whereas the media frenzy this week is about owners and players arriving for free-agent pitch meetings via Gulfstream jets and luxury SUVs, it remains quite possible – even probable – that a similar scene will play out a year from now in New York City with very different stakes. Some of the very same people will step out of window-tinted Mercedes in front of hotels and office towers, but they won’t be chasing free agents. They’ll be trying to end a lockout.

Category: NBA
Tags: CBA, lockout
Posted on: May 14, 2010 5:21 pm

Union making progress on CBA proposal

It was a week of progress for the NBA Players Association as it works toward submitting a new collective bargaining proposal within the May1-July 1 window that executive director Billy Hunter offered in March, sources told CBSSports.com.

Internal staff meetings have heated up in New York, where union lawyers are said to be getting close to a framework for a proposal countering the owners' draconian contract offer, which was rejected by the players during All-Star weekend.

Asked about the progress of internal discussions at a recent playoff game, Hunter declined to give specifics of the union's counter-offer, saying details were still being finalized. In a March interview with CBSSports.com, Hunter estimated that the union would have a new proposal in the hands of owners before the free-agent negotiating period begins on July 1.

As for a potential collusion lawsuit stemming from the NBA's claims last year that the 2010-11 salary cap could be drastically reduced amid plummeting revenues, sources told CBSSports.com that such a legal option remains on the table. But without proof that the league was spreading doom-and-gloom news about revenue and cap projections with the intent to have a chilling effect on free-agent signings, a collusion suit would be unlikely. With no smoking gun, one source said, legal action would be akin to "throwing good money after bad."

Commissioner David Stern recently contradicted those previous gloomy projections by revealing that the current projection for the '10-'11 cap is $56.1 million -- about $6 million more than the worst-case scenario presented to teams in a league memo last July.

Owners and players are trying to avoid the league's first work stoppage since the 1998-99 season when the current labor agreement expires after the 2010-11 season.

Category: NBA
Posted on: April 16, 2010 2:45 pm
Edited on: April 16, 2010 3:33 pm

Stern: '10-'11 cap could be $56 million

NEW YORK -- At the end of a typically mundane summary of the NBA's two-day Board of Governors meeting, commissioner David Stern dropped a bombshell of sorts Friday. And it means that teams chasing 2010 free agents will have considerably more money to spend than they thought.

Based on a more optimistic revenue picture than the league was projecting as recently as All-Star weekend, Stern said the revised projection for the 2010-11 salary cap is $56.1 million. That's significantly higher than last summer's estimate of between $50.4 million and $53.6 million -- figures that were floated last summer in a doomsday memo to teams that warned of a league-wide revenue decline of between 2.5 percent and 5 percent.

Teams that have been clearing cap space to pursue marquee free agents like LeBron James and Dwyane Wade this summer -- such as the Knicks, Nets, Bulls, Heat and Clippers -- have spent much of the season budgeting on a $52 million cap in '10-'11, which would've been a nearly $6 million drop from this season's payroll limit of $57.7 million. The reason for the healthier figure was what Stern called a "Herculean effort" by teams to prop up ticket and sponsorship sales that were hit by the recession.

Stern said "it's pretty clear" that although revenue will still be down from last season, the drop will "not be as much as we feared at the beginning of the season."

One of the people most affected by the revised financial picture, Knicks president Donnie Walsh, was sitting in the second row of Stern's news conference when the announcement was made. Walsh, who already was figuring on having enough cap space to sign two max free agents for about $32 million, now has more flexibility.

Walsh, who was on hand to learn the result of a draft-pick tiebreaker, merely smiled when I dropped this line on him after Stern's news conference broke up: "Now you have enough money for two max players and Jerome James."

But the news was far more significant than that for an organization like the Knicks, which has hitched its future to the hope of landing at least one major free agent this summer when numerous NBA stars will be on the market. In addition to courting LeBron, Walsh also will be exploring sign-and-trades to revamp the roster and will be simultaneously juggling his desire to retain unrestricted free agent David Lee. For every dollar the cap exceeds Walsh's $52-$53 million projection, it helps his efforts on all fronts.

Similarly, the Heat now don't have to sweat losing Wade nearly as much, as they'll get $2-3 million more space on top of the $18-$19 million they were already projecting -- money that can be used to sign a star and a second-tier player to placate Wade and persuade him to stay. The Bulls now will have enough room to sign a max player and add another piece without doing a salary-dump trade beforehand.

So what changed?

The precipitous decline in the cap that teams were warned about last summer was based on a doomsday projection of an 11 percent collapse in gate (or ticket) revenues, a person with knowledge of league finances told CBSSports.com. As the league closes the books on the regular season, the person said gate revenue actually declined only 7 percent. Based on league-wide gate receipts of $1.1 billion last season, an 11 percent decline would've amounted to a loss of $120 million in ticket revenue. A 7 percent decline at the gate would result in a loss of only $77 million.

Whereas league officials were projecting a decline in overall league revenue of between 2.5 and 5 percent last summer, the revised figure now calls for only a 0.5 percent decline, said the person familiar with league finances, who spoke on condition of anonymity. Basketball-related income, or BRI, determines the salary cap and luxury tax threshold, which is now estimated to be $68 million next season -- down only slightly $69.9 million this season.

Stern was less specific about a controversial number related to the ongoing negotiations aimed at achieving a new collective bargaining agreement and avoiding a lockout after the '10-'11 season. Despite the rosier revenue picture he painted, Stern didn't back off much from the $400 million in league-wide losses he projected for this season during his All-Star address in Dallas two months ago. He placed the new figure at between $380 million and $400 million. Billy Hunter, executive director of the National Basketball Players Association, already has disputed the $400 million figure, telling CBSSports.com last month that it was "overstated."

On the labor front, Stern said the league continues to furnish financial data to the union and that negotiations are taking place on the "staff meeting" level. League owners and executives will meet again during Summer League in Las Vegas, but no high-level CBA talks are expected to occur until after the players submit their counterproposal to the league. Hunter told CBSSports.com last month that the players intend to do that sometime between May 1 and July 1.

Posted on: March 19, 2010 7:12 pm

What's a few hundred million among friends?

NEW YORK – David Stern says the NBA will lose $400 million this season. Billy Hunter has crunched the numbers and disagrees. How could the two men charged with negotiating a new collective bargaining agreement for a $4 billion industry potentially be hundreds of millions apart when it comes to the focal point of their argument? 

Well, it’s tax season, so to paraphrase Mark Twain, one way is this: Liars, damn liars, and accountants. 

Aside from the fundamental argument over whether players or owners should bear the brunt of a difficult economic environment, the two sides disagree on what figures should be included in the league’s profit-loss statements. When asked for a response to Hunter disputing Stern’s number Friday, NBA spokesman Tim Frank said, “Our financials are based on GAAP accounting.” This is important because GAAP – Generally Accepted Accounting Principles – allow for non-operating expenses such as interest and depreciation to be included when depicting the health of a business. These expenses, and how they are taxed and depreciated, allow companies more leeway in reporting earnings. (The NBA is not a public company, and thus is not required by law to disclose such things.) 

The players believe that they shouldn’t be asked to make concessions to account for expenses such as interest associated with an owner’s purchase of his team or arena. Since no major American pro sport has ever given players an ownership stake, the players never share in the upside of rising franchise values. That’s an investment risk taken by the owners, most of whom stand to reap huge returns if they ever sell their teams. 

Another tricky aspect of the NBA business that makes deciphering its health difficult is related-party transactions. At least five teams – the Knicks, 76ers, Nuggets, Raptors and Bulls – are the property of owners who also own the arena and local TV network. (The Bulls are co-owners of their arena and network.) Six more – the Kings, Pistons, Hawks, Wizards, Jazz and Lakers – are property of owners who also own the arena. (The Lakers are part-owned by AEG, which owns Staples Center.) More teams, like the Spurs and Pacers, don’t own their arena but operate it. 

This means that if the Sixers, for example, are losing money, chances are a significant portion of that money comes from arena and TV expenses, which all flow to Comcast-Spectacor, which also owns the team. It’s a dream scenario – like losing millions of dollars to yourself. 

Do these issues account for all the difference between Stern and Hunter when it comes to the financial health of the NBA? According to CBSSports.com’s analysis of the NBA’s ticket sales projections for the 2009-10 season, probably not. 

Stern’s $400 million figure appears rooted in a doomsday projection of a double-digit league-wide decline in gate receipts – the money teams bring in from all ticket sales – during the 2009-10 season. Based on ticket sales data from July 2009 obtained by CBSSports.com, the league was looking at a 17 percent decline in revenues from full- and partial-season ticket plans this season. The figures excluded three teams – the Knicks, Lakers and Thunder – because they had not reported season-ticket sales in July 2008 for comparison purposes. 

Season-ticket sales are important not only because they provide teams with revenue certainty, but also because they account for the vast majority of ticket revenues. Of the more than $1.1 billion in league-wide gate receipts during the 2008-09 season, $917 million – or 83 percent – came from full- and partial-season ticket plans, according to league data. 

At the 2009 NBA Finals – weeks before the July report obtained by CBSSports.com was produced – Stern floated the possibility that the league could see as much as a 10 percent decline in basketball-related income during the 2009-10 season. (Gate receipts are about one-third of BRI, which determines the salary cap.) That figure was later revised to a reduction of between 2.5 percent and 5 percent in a league memo to teams. In the memo, the league warned that the resulting drop in the 2010-11 cap would be $5-8 million from its previous level of $58.7 million. 

If 2009-10 gate receipts declined 17 percent – as the league’s July report suggested would be the case – it would’ve resulted in a loss of approximately $200 million in ticket revenue. Potentially, there’s the difference between Stern’s stated annual losses of $200 million in the first four years of the CBA and the $400 million he projected for 2009-10. 

But the latest data available on gate receipts showed a decline of only 7.4 percent for 2009-10, according to another league ticket sales report through Nov. 29 that was obtained by CBSSports.com. The 7.4 percent decline in revenue was associated with a 3.7 percent decline in paid attendance, the report said. No updated figures have been made public since then, but Stern said during All-Star weekend that attendance would be down about 2 percent this season. “It is doing better this season than we were actually projecting it,” he said. 

If the decline were to have held steady at 7.4 percent since Nov. 29, the resulting loss of ticket revenue would be about $80 million – not the $200 million reflected by the league’s July projections. 

Frank, the NBA spokesman, declined to discuss league financials, saying the appropriate data were being provided to the players’ union. 

Which can only mean that those damn accountants have a lot more fun ahead of them.
Category: NBA
Posted on: February 13, 2010 10:25 pm
Edited on: February 13, 2010 11:10 pm

Stern: Cut expenses, but only the players'

DALLAS – NBA players simply make too much money, commissioner David Stern said Saturday night, and salaries must be curtailed to keep the league afloat. 

Citing $400 million in operating losses this season – and an average of $200 million annually in previous years of the current collective bargaining agreement – Stern issued a challenge to the players’ union to come back with a proposal that would develop “a sustainable business model.” 

“At our current level of revenue devoted to players’ salaries, it's too high,” Stern said. “I can run from that, but I can't hide from that, and I don't think the players can, either.” 

In a state-of-the-league address that was alternately witty and biting, Stern ridiculed union chief Billy Hunter’s assertion that the owners’ initial proposal was taken off the table during a contentious bargaining session Friday during All-Star weekend. 

“I don't know what that means,” Stern said. “We are talking semantics, and everyone around here knows that I am not anti semantic.” 


“I don't know what to say,” Stern said. “If they don't like it, you know, that's what counters are about. Speak to me, that's all. Off the table, on the table, under the table; I don't even understand it. The answer is, it's for them to make a proposal.” 

While Stern was in rare form on those topics, he artfully dodged three of the most important issues related to avoiding a lockout if the two sides can’t reach an agreement by June 30, 2011:

1) The 2010 free-agent class: Though Stern professed no urgency to reach agreement on a framework of a new economic system by July 1 of this year, the owners need cost-certainty by then in order to plan accordingly for spending on the biggest free-agent class in NBA history. Since the players like the current system, they’re in no hurry to speed up the process. So owners will have to risk committing max money to free agents this summer and having it come back to haunt them if the cap falls as far as the union predicts under the owners’ proposal – from $57.7 million to about $43 million.

2) Revenue Sharing: Stern said he’s committed to revamping the revenue-sharing model to help low-revenue teams compete. Despite saying it would be done “in lock step” with collective bargaining, Stern also said, “We can’t do it until we complete the negotiations.” Asked to explain why, Stern said, “We are going to do it all at once. It’s going to be when we have the new collective bargaining agreement.” According to internal NBA documents obtained by CBSSports.com, 12 teams averaged more than $1 million per game in ticket revenue during the 2008-09 season, with seven of those teams making the playoffs. Six teams made less than $600,000 per game, and only one – the Hawks – made the playoffs. “When we get to where we need to get to, there will be a very robust revenue sharing where teams will not be in a position to decline to compete because of money,” Stern said.

3) Other Ways to Reduce Expenses: While there have been cutbacks at the league office and on the team side, Stern admitted that his precious expansion to international markets has been a drag on the league’s financial picture. Stern referred to investments in such countries as India and China as having “not great margins.” But he refused to concede that reducing the league’s global efforts would be another way to rein in expenses. “We think that this will be a large payoff for future players that the present players are benefiting from because of investments that were made previously,” Stern said. But it seems to me that present players aren’t benefiting if the owners are asking them to accept less money while the league plans to open offices this year India, Africa, and the Middle East, with exhibition games planned for Mexico City, Barcelona, Paris, London, Beijing, Milan, and Guangzhou.

“Other expenses squeeze us,” Stern said, when pressed on the issue, “but player expenses are too high.”

Stern relished taking shots at what he described as the union’s “theatrics” during Friday’s negotiating session, though he later said, “I would have to plead guilty to participating a bit in such negotiations as well.” He accused union attorney Jeffrey Kessler, who also is handling CBA negotiations for the NFL, of “threatening us.” One such threat, Stern revealed after his news conference, was that the union would decertify and sue the NBA for anti-trust violations. Coincidentally, the league recognized during All-Star Saturday night festivities Spencer Haywood, the first player to challenge the NBA's eligibility requirements. Haywood's anti-trust lawsuit against the NBA went to the Supreme Court in 1971, and Haywood won the right to join the league although he didn't complete four years of college.

For the second straight day, a story published by CBSSports.com was raised in a news conference on the subject of labor talks. According to sources, Stern was referring to a Jan. 29 story in which a team executive ridiculed LeBron James and Dwyane Wade, saying James could “play football” and Wade could “be a fashion model” if they didn’t like the drastically reduced maximum contracts owners were proposing. Other news outlets published similar swipes, including Yahoo! Sports, which quoted an anonymous team executive who characterized the owners’ proposal as “a photocopy of Stern’s middle finger.” 

Stern said he was “offended” by the comments, calling them “cowardly,” and he apologized to players’ negotiating committee and the 10 All-Stars who were so enraged by the stories that they showed up at the bargaining session Friday. 

“Some of our so called team executives have been quoted – as you might expect anonymously – in the media, and saying disparaging things about our players,” Stern said. “If you know me, and you know our owners, that’s not what we do. That’s not us. And the players were upset with those quotes, which I find cowardly, if they were actually said. And if I ever found out who said them, they would be dealt with; they would be former, former NBA people, not current. And we assured the stars of that.” 

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