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.”