Posted on: November 1, 2011 2:43 pm
As explained expertly by SI.com and the New York Times in recent days, much progress has been made on system issues that are crucial to a new collective bargaining agreement. But there are several subsets of deal points still unresolved, and many so-called "B-list" items that haven't even been broached yet.
It's within those issues that compromise finally will have to be reached to push the two sides closer together on the biggest sticking point: the split of basketball-related income (BRI).
The owners are dug in with their offer of a 50-50 split, while the players aren't budging lower than 52 percent. But not all 50-50 deals are created equal, and the key to breaking the revenue logjam will be tradeoffs that have to be made on the remaining open system issues.
There are three key issues that could be tweaked to entice the union to compromise further on BRI and/or compel the owners to move from their 50-50 position. They are as follows:
1) The punitive entry point for small- or mid-market teams considering "wading into" the luxury tax temporarily, which the union refers to as "the cliff." The obvious solution would be for the distribution of luxury tax money to be changed to eliminate the double-whammy teams experience by going from being a tax receivers to tax payers. Such a whiplash effect, in some cases, triples the cost of going for it with a modest move into the tax. For example, a team that is just below the tax adding a $2.5 million player results in a net cost of $7.5 million -- the cost of the player, the loss of $2.5 million in tax revenue from tax-paying teams, and the cost of the $2.5 million in tax that team would have to pay. Rather than a straight transfer of tax money from tax payers to non-tax payers, distributing the money as a revenue-sharing transfer based on need -- or using it for another purpose -- would flatten out the cliff and move the two sides closer to compromise.
2) The ability of tax-paying teams to use exceptions such as the Bird and mid-level exceptions. The players don't want tax-paying teams, which typically are big-market and/or high-revenue teams, eliminated from the pursuit of free agents through restrictions on their willingness or ability to spend that act like a hard cap. Owners have reluctantly agreed to leave the Bird and mid-level exceptions intact, albeit with shorter contract lengths. But the owners are digging in with their insistence on forbidding tax-paying teams from using these exceptions, which to the players means a smaller market for free agents.
3) Severe penalties for repeat offenders who spend multiple years over the tax threshold. While the owners' proposal for recidivism tax rates would accomplish their goal of reining in the big spenders, the players have been unwilling to accept restrictions that would further shrink the options for free agents in a system that, even as previously constructed, typically only had a handful of teams with cap space or the ability to blow through the tax threshold in a given year.
There are any number of small-ticket items still undecided that could be used for what the negotiators call "horse-trading" to close the gap on BRI. As I've suggested previously, one of them is increasing the players' share of licensing money -- which would have a net-zero affect on BRI since those funds already come off the top before the balance is split with the players -- and changing how that money is distributed so stars who sell a lot of jerseys and merchandise get a bigger share of the pie. Another item would be deal length and opt-out clauses; the players will accept a 10-year CBA only if they can opt out after the sixth and eighth years, while the owners want an opt-out after the seventh year.
But the aforementioned items are the Big Three of what's left to negotiate. It's pretty simple, really, from a bargaining standpoint. More player-friendly agreements on those three items may allow union chief Billy Hunter and president Derek Fisher to be able to sell less than 52 percent to the union membership. More owner-friendly agreements would require the owners to move off their 50-50 split. Something in the middle -- a little give, a little take -- could result in a range of percentages for the players' share of BRI. For example, if revenues come in as expected (4.5 percent growth), the players would get 50 percent. If revenues came in higher, they'd get 51 or 52, depending on how much growth there was. The scale could be tweaked based on the compromises made on the three A-list items.
"A very reasonable suggestion," one official involved in the negotiations told me.
There will be a time for reason, eventually. It's just that both sides need to understand how to get from here to there.
Posted on: October 27, 2011 10:52 pm
Edited on: October 28, 2011 12:58 am
NEW YORK – Setting up the next and most pivotal day in the NBA labor talks, negotiators will convene Friday with what commissioner David Stern described as “resolve” to finally close the gap and agree to the two key elements of a new collective bargaining agreement: the system and the split of revenues.
“I can’t tell you we’ve resolved anything in such a big way, but there’s an element of continuity, familiarity and I would hope trust that would enable us to look forward to (Friday), where we anticipate there will be some important and additional progress or not,” Stern said in a news conference Thursday night after a 7 1-2 hour bargaining session at a luxury Manhattan hotel.
“We’re looking forward to seeing whether something good can be made to happen,” Stern said.
After spending 22 1-2 hours over two days hammering out many of the details of a new system that the league believes will foster more competitive balance, the moment of truth has arrived – for the third time this month. Two times prior, the negotiators expressed confidence they were within striking distance of one or the other key issue – the system or the split – only to have the talks fall apart in spectacular fashion.
But according to several people involved in the negotiations or briefed on them, there has been a noticeable uptick in urgency to finally end the nearly four-month lockout, with the last realistic possibility to salvage games already canceled – and avoid canceling more – set to evaporate without a deal in the next several days.
In a moment of levity that also pointed to the importance of Friday’s bargaining session, Stern chimed in from the back of the room during union executive director Billy Hunter’s news conference when Hunter was asked when the important, difficult moves would be made to finally close the deal.
“Well, David Stern is sitting back there,” Hunter said. “I think he can probably tell you. Hopefully, sometime tomorrow.”
And right on cue, Stern shouted jovially from the back of the room, “Tomorrow!”
In another important moment from Thursday night’s separate news conferences – held only 18 hours after the 4 a.m. ET affairs earlier in the day – Stern was asked if the league was prepared to make another economic move Friday if necessary to get the deal done. The two sides are trying to agree on the framework of a new system of player contracts and team payrolls before proceeding with the final, most important, and interrelated piece of the negotiation: the split of BRI.
“We’re prepared to negotiate over everything,” Stern said. “We’re looking forward to it.”
The most recent formal proposals have the owners offering the players a 50-50 split of revenues, while the players have proposed a 52.5 percent share. The players received 57 percent under the previous six-year CBA. The split of revenues was not discussed Wednesday or Thursday, the parties said.
“We remain apart on both, so from that standpoint, we’re disappointed,” Silver said.
Hunter does not share Silver’s view that the split and system structure are unrelated, and those two viewpoints must collide one last time Friday with urgency to reach an agreement and preserve a full 82-game schedule at its highest point since the lockout began July 1.
“You definitely have to have some agreement on the system,” Hunter said. “Because if the system’s not right, then as we’ve indicated before, the number’s not going to work. And so the two are interrelated.”
But while there remain significant details to be resolved over a more punitive luxury tax system and other rules governing trades and contracts, Stern’s demeanor was decidedly upbeat after a second consecutive day of trying to bridge the bargaining gap in a small-group format that clearly has gained traction and momentum.
The rosters of negotiators were essentially the same as the 15-hour session held Wednesday into the early morning hours of Thursday. Stern, Silver, deputy general counsel Dan Rube, general counsel Richard Buchanan, labor relations committee chairman Peter Holt of the Spurs, Board of Governors chairman Glen Taylor of the Timberwolves, and James Dolan of the Knicks were joined by Mavericks owner Mark Cuban, who was flying through New York on his way home from Paris. Other than the absence of union economist Kevin Murphy (who will be present Friday) and the addition of vice president Roger Mason, the players’ contingent was intact with Hunter, president Derek Fisher, vice president Mo Evans, general counsel Ron Klempner and attorney Yared Alula.
Posted on: October 4, 2011 8:42 pm
Edited on: October 4, 2011 11:19 pm
NEW YORK -- There were no fireworks, no tantrums and no tirades. There was all the resignation and disappointment of doomsday, but none of the reality.
The reality is that the NBA owners and players, after showing most of their cards Tuesday in a bargaining session that failed to save an on-time start to the regular season, are approximately $80 million-a-year apart on the economics of a new collective bargaining agreement, multiple sources with knowledge of the negotiations told CBSSports.com.
Though no additional negotiations are scheduled and the process now enters the dangerous and unpredictable phase where any slipups could jeopardize a large chunk of the regular season, the two sides are closer than they publicliy divulged in a pair of dueling news conferences in adjacent meetings rooms of a Times Square hotel.
Here is where they are, according to multiple people involved in the negotiations: After the owners offered the players a 50-50 split of revenues that effectively was a 47 percent share with about $350 million in expenses deducted first, the two sides met in small groups in the hallway while each side's larger group caucused in separate rooms. As the hour grew late, the tension was rising and becoming palpable. Both sides recognized it was time to try everything possible to make a deal.
In the group for the league side were commissioner David Stern, deputy commissioner Adam Silver and Spurs owner Peter Holt, the chairman of the labor relations committee. For the players, it was union president Derek Fisher, outside counsel Jeffrey Kessler and two of the brightest stars who attended Tuesday's crucial bargaining session -- Kobe Bryant and Kevin Garnett, according to one of the people with knowledge of the side meeting.
In that group, the league -- sensing that the opportunity for a deal was there -- proposed essentially a 50-50 split with no additional expense reductions over a seven-year proposal, with each side having the chance to opt out after the sixth year, one of the people said. This was the offer Stern described in his news conference Tuesday evening, one that he and Silver thought would be enough to finally close the enormous gap between the two sides.
The league's offer, according to three people familiar with it, came in a range of 49-51 -- with 49 percent guaranteed and a cap of 51 percent, the sources said.
Stern told the players and Kessler that he was bringing this proposal to his owners in an attempt to sell it, making no bones about the fact that he would. In fact, Stern said in the news conference, he did sell it. The owners were prepared to sign off on this 49-51 percent band, and with many of the most polarizing system issues resolved, the framework of a deal was in sight.
While the owners were caucusing, a member of the players' group returned with a counterproposal -- approximately 52 percent of BRI for the players with no additional expenses deducted. The players' counterproposal followed the format presented by the owners -- a 51-53 percent band with 51 percent guaranteed and a cap of 53. League officials rejected the offer, the sources said.
So while Hunter and Stern remained publicly entrenched in the ecoomic positions of their most recent formal proposals -- with the players asking for 53 percent and the league offering effectively 47, the reality is this: the gap has closed to 2 percentage points of BRI, the difference between the midpoint of the two offers.
With each percentage point of BRI worth about $40 million, the two sides -- who were at one time $8 billion apart over 10 years -- are now a mere $80 million apart on an annual basis. So you can see what the two sides saw Tuesday -- the road to a deal that both sides eventually can find a way to live with that is better than the alternative of missing a substantial portion of the regular season.
UPDATE: Though there were no immediate plans for the two sides to meet Wednesday, two people close to the discussions said a Thursday meeting was possible. Several key parties to the process will be unavailable from sundown Friday to sundown Saturday for Yom Kippur, the most solemn day of the Jewish calendar.
Complications remain, of course, not the least of which is the fact that this sidebar, informal discussion of the two BRI bands would have to be worked through the formal process of getting each side's committee to sign off -- and then, it would have to be negotiated further. Also, by walking out without a deal Tuesday, the players' association is subject to the influence of agents who have made it clear they are unhappy with the course of negotiations and have openly threatened encouraging their clients to decertify the union.
Two people with direct knowledge of the strategy being invoked by a group of seven super agents who wrote a letter to their clients over the weekend said the group -- including Arn Tellem, Bill Duffy, Mark Bartelstein, Dan Fegan, Jeff Schwartz, Leon Rose and Henry Thomas -- is willing to accept no less than 52 percent. There is disageement within the ranks on that figure, with a hard-line faction pushing for the players not to retreat at all from the 57 percent of BRI they received under the previous CBA.
The more time that goes by without closing the now comparatively narrow gap between the two sides, the more opportunity there will be for players and their agents to apply pressure to the union -- and perhaps even encourage clients who are unhappy with the course of negotiations to hold a decertification vote, which would stall the talks.
One of the people with direct knowledge of the super agents' strategy said at least two strong voices in that camp have quelled their pursuit of decertification, which would remove the process from the negotiating room and throw it into federal court under anti-trust law. Such a move at this stage, the person with knowledge of the agents' approach said, would inject too much chaos with a deal within reach.
With most system issues preserved from the previous deal, one of the high-powered agents has told associates that he would accept 52 percent and "call it a wrap," a source said Tuesday.
Recognizing the uncertainty and risk that lies ahead -- the rest of the preseason was canceled after the bargaining session Tuesday and regular season games are potentially days away from being lost -- Fisher took direct aim Tuesday at the agents who have most vocally objected to the union's legal and bargaining strategies.
"The only people that really decide whether we accept and ratify a deal are the guys that are standing right here and the other 400-plus guys that aren't here right now," Fisher said, flanked by several committee members and superstars Bryant, Paul Pierce and Kevin Garnett. "And not out of disrespect, I'm just not inclined to engage in a discussion about what a group that doesn’t control any part of this process has to say."
Posted on: October 3, 2011 6:03 pm
Edited on: October 4, 2011 1:43 am
NEW YORK -- After more than two years of often rancorous negotiations, rifts within each side, finger-pointing and name-calling, the NBA and its players have reached a moment of truth in their quest to reach a collective bargaining agreement that would preserve an on-time start to the 2011-12 season.
After setting the table in a five-hour meeting Monday involving a small group of negotiators, the league and union will convene separately and then sit down for a crucial full bargaining session Tuesday. Though the meeting is expected to include at least 10 owners and multiple players accompanying the union's bargaining committee, neither side could say with any certainty whether the moment has arrived to make their last, best offers.
What is clear is that some significant movement will be necessary to at least begin closing the enormous gap between the two sides' positions on the two main issues -- the split of revenues and the cap system -- or the rest of the preseason schedule and some regular season games will be at risk.
"We both understand that if we don’t make our best offers in the next few days, we’re going to be at the point where we’re going to be causing damage to the game, to ourselves, and they're going to be out paychecks," deputy commissioner Adam Silver said.
But even as both sides recognized the gravity of Tuesday's meeting with the scheduled regular season opener less than a month away, the potential for trouble already was brewing.
As opposed to going into the meeting with the more productive small-group format, Tuesday's session is expected to include a potentially strong showing from players who are not on the executive committee. Though it was not clear Monday whether a similar contingent of stars who attended Friday's meeting -- LeBron James, Dwyane Wade, Carmelo Anthony, and others -- would be present Tuesday, it was that very format that nearly resulted in the talks blowing up when players became so irate with the owners' intransigence that they threatened to walk out of negotiations. According to sources, Kobe Bryant -- fresh off a promotional tour of Italy, where he is contemplating a potentially lucrative deal with Virtus Bologna -- and Amar'e Stoudemire are among the players interested in attending the bargaining session.
In addition, the Celtics' Paul Pierce -- who was among the stars present Friday and who stuck around for Saturday's and Monday's sessions -- will take on a prominent role in the negotiations again on Tuesday. Though Pierce has previously expressed interest in being involved in the union -- perhaps even as a committee member and vice president -- his presence is notable for more than his star power. Pierce's agent, Jeff Schwartz, is one of seven powerful reps who wrote a pointed letter to their clients urging them not to agree to any further reductions in their share of basketball-related income (BRI) or any further restrictions to the system beyond what the union has negotiated.
In the letter, agents Schwartz, Arn Tellem, Bill Duffy, Dan Fegan, Leon Rose, Henry Thomas and Mark Bartelstein warned their clients not to rush into a deal and encouraged them to demand to see the league's full financial statements from the previous six-year CBA -- including related-party transactions, which can make it difficult to identify profits and losses on a team-by-team basis.
This same group of agents has been pushing for the players to decertify the union in the face of the owners' demands of massive and fundamental changes to the league business model. Though the letter did not mention decertification, it potentially undercut the negotiating power of National Basketball Players Association executive director Billy Hunter and president Derek Fisher, who have offered to drop the players' share of BRI to 53 percent and signaled a willingness to go to 52 with certain conditions, sources said.
The agents' letter explains the impact to the players of accepting 52 percent -- a $200 million giveback that atones for most of the owners' $300 million in losses last season -- and warns that there are "monumental repercussions" associated with giving back any more, a high-profile agent told CBSSports.com.
"All that’s going on right there is, (the owners) have a captive audience and they just keep going for more," the agent said. "If the players just walk away from the thing right now -- 'We decertify, we're done' -- they get their deal at 53 and it’s over with. Why keep talking to them? You think the owners are going to walk away from this deal right now at 53 percent? No way."
UPDATE: But there was disagreement among two agents familiar with the letter as to what was meant by "no further reductions" in BRI. One said the intent was to urge clients not to accept any further reductions in what the union already has offered -- believed to be 53 percent, with the possibility of going down to 52 percent under certain conditions. However, another agent with direct knowledge of the conversations that led to the drafting of the letter said it was agreed that players would be advised not to vote for any deal that includes a reduction in BRI from the 57 percent the players received under the previous agreement.
"We shouldn't give back anything," the agent said. "With record TV ratings, record revenues, and global growth, why should we?"
An agent who has long been frustrated with the path of negotiations -- and fearful of the outcome -- told CBSSports.com, "If this is the best we can do, then why the hell haven't we decertified?"
Late Monday, Fisher responded with a letter of his own to the union membership -- his second strong rebuke of the dissatisfied agents in less than a month -- saying the agents' letter to clients "includes misinformation and unsupported theories."
According to two people familiar with the NBPA's strategy, Hunter has never closed the door on decertification. But he has no intention of calling for a decertification vote or disclaiming interest in representing the players -- either of which would send the case to the federal courts under anti-trust law -- until the National Labor Relations Board rules on the union's unfair labor practices charge against the league. If the NLRB issued a complaint, it could lead to a federal injunction lifting the lockout. The NLRB has been investigating the union's charges since May, and there is no timetable for a decision by the agency's general counsel in Washington, D.C.
In the letter, which says that negotiations have reached "a critical stage," the agents told their clients that the owners' proposal will "cripple your earning potential and the earning potential of every future NBA player." Among other things, the agents urge their players to:
* Reject any further reduction in the percentage of BRI the union has negotiated.
* Maintain the existing structure of the Bird and mid-level exceptions.
* Resist any reduction in the current maximum player salaries.
* Maintain current contract length at existing levels.
* Keep unrestricted free agency the same and improve restricted free agency.
In addition, the letter urges players to demand a full vote of the union membership on any proposal agreed to by the NBA and NBPA negotiators. The vote that ended the 1998-99 lockout was a show-of-hands vote after players had only 24 hours to review the proposal. Only 184 of the more than 400 players actually voted.
"If and when there is a proposal that we feel is in the best interests of us as players, each of you WILL have the opportunity to vote in person," Fisher said. "It's in the union bylaws, it's not up for negotiation."
One of the agents concerned about the outcome said he would not allow what he called a "sham" vote on a proposal agreed to by the NBPA. "I'm telling you right now, I won't stand for it," the agent said. "Not on my watch."
It was this and other unpredictable elements -- such as how unified the small- and big-market owners are on missing regular season games and revenue sharing -- that made it almost impossible to predict how Tuesday's meeting would play out.
"If it’s a very short meeting, that’s bad," commissioner David Stern said. "And if it’s a very long meeting, that’s not as bad."
Stern had said Saturday that no decisions would be made before Tuesday on canceling the remainder of the preseason schedule if no deal were reached. Once Monday ended, however, the league entered what Stern had referred to as a "day-by-day" period where decisions would have to be made. According to several team executives, agents and others with a stake in the process, there is a widely held belief that the first chunk of regular season games would be canceled in the absence of significant movement by the end of the week.
Beyond the stated goals, talking points and hidden agendas that have infiltrated each side, the moment of truth is cloaked in one obvious reality: For a deal to be consummated this week, one side or the other is going to have to reveal its true position -- in bargaining terms, the "last, best offer."
"Neither side has been speaking in those terms," Silver said.
Beginning Tuesday, they will have to.
"Each side has preserved its right to be where it is, knowing that there’s a heart to heart that will ultimately take place," Stern said.
In other words, it's time for the B.S. to stop and for the cards to be laid on the table. When that happens, how that happens, and who throws the first card will be a product of the tone that is set Tuesday.
"There’s always a Magic card in somebody’s back pocket that they say, ‘I know this will get the deal done,'" a team executive said Monday. "And you don’t want to show that card until you absolutely have to. At some point, does somebody whip out that card?"
Though the two sides continue to hold diametrically opposed positions on what kind of system they want -- hard cap, soft cap, flex cap, guarantees and spending exceptions -- they both agree that system issues will not cause them to miss games or cancel the season. This is primarily, if not ultimately all about the bottom line: money.
"We’re apart on the split," Stern said. "But we know that the answer lies between where they were and where we are. And without defining ours, or defining theirs, I think if there’s a will, we’ll be able to deal with both the split and with the system issues."
The most recent formal proposal from the owners would've given the players a flat $2.01 billion in salary over the first eight years of a 10-year deal, though sources say league negotiators have since modified that position slightly to a model that would give the players roughly 46 percent of BRI on average over the life of the deal. The players have been holding firm to an offer in which they would accept a pay freeze in the first year of a new deal -- the same $2.17 billion they received in salary and benefits last season -- with the BRI split in the 52-54 range thereafter.
Based on the league's current bargaining position, even if the players offered to receive 49 percent of BRI -- thus accounting for all of the owners' $300 million in stated losses -- it still would not be acceptable to the owners, who are seeking the opportunity for every team to make a profit in addition to increased parity they believe can be achieved through a combination of systemic changes and more robust revenue sharing. One prominent agent told CBSSports.com Monday that the owners' position is "out of touch with reality."
"These guys think they're entitled to have a business that’s fool proof," the agent said.
Said another: "Why do the most powerful and successful businessmen in the world need protection from agents and players in negotiations? If they don't want to pay the money, don't pay the money."
And if the owners maintain this bargaining position on Tuesday? If their bargaining position is real, with no magic cards hiding in their back pockets?
"Then I tell them," one of the agents said, "see you in court."
Tags: Adam Silver, Amar'e Stoudemire, Arn Tellem, Bill Duffy, Billy Hunter, Carmelo Anthony, CBA, Dan Fegan, David Stern, Derek Fisher, Dwyane Wade, Heat, Henry Thomas, Jeff Schwartz, Knicks, Kobe Bryant, Lakers, LeBron James, Leon Rose, lockout, Mark Bartelstein, National Basketball Players Association, NBPA
Posted on: September 28, 2011 3:30 pm
Edited on: September 28, 2011 5:01 pm
NEW YORK -- Calling it a "key moment" in efforts to reach a collective bargaining agreement, commissioner David Stern said Wednesday that the full negotiating committees from both sides will meet Friday and through the weekend as they try to save the 2011-12 season.
"There are enormous consequences at play here on the basis of the weekend," Stern said after league negotiators and representatives for the National Basketball Players Association met for a second straight day at an Upper East Side hotel. "Either we’ll make very good progress, and we know what that would mean – we know how good that would be, without putting dates to it – or we won't make any progress. And then it won’t be a question of just starting the season on time. There will be a lot at risk because of the absence of progress."
In addition to the players' executive committee and the owners' full labor relations board, union president Derek Fisher said several "key players" will be attending Friday's meeting. Among them are expected to be LeBron James, Dwyane Wade and Carmelo Anthony, sources said, with other stars like Amar'e Stoudemire and Kevin Durant possibly joining the negotiations.
Deputy commissioner Adam Silver said the two sides agreed to expand their presence because "whatever decisions we are now going to be making would be so monumental" as to require the presence of those who'd be signing off on them.
You didn't have to read to closely between the lines to catch the meaning from Stern and Silver, who sought to ratchet up the pressure on getting a deal or risk not simply an on-time start to the season, but indeed the whole thing. With training camps already postponed and a first batch of preseason games canceled, Stern said the two sides are "at a period of enormous opportunity and great risk."
"I can't say that common ground is evident, but our desire to try to get there I think is there," Fisher said. "We still have a great deal of issues to work through, so there won't be any Magic that will happen this weekend to just make those things go away. But we have to put the time in. We have a responsibility to people to do so."
The incremental rise in doomsday talk from Stern signaled that the negotiations are entering a new phase, where the threat of a canceled season will become a leverage point for both sides. If no agreement is reached by the end of the weekend -- the four-week mark before the scheduled regular season opener -- it would be virtually impossible to get a subsequent deal written, hold abbreviated training camps and a preseason schedule, and pull off a shortened free-agent period.
And yet neither side evidently was prepared to move enough Wednesday to get within reach of a deal. That moment of truth, one way or another, should come in the next 96 hours.
Once the league agreed to replace its insistence on a hard cap with the more punitive luxury tax and other provisions -- a "breakthrough," as one person familar with the talks called it -- it sparked "the process of negotiation" that the two sides have arrived at now.
"There could be some compromises reached," the person said.
According to multiple sources familiar with the talks, the owners did not enhance their economic offer Wednesday, instead focusing on using systemic changes to hit the number they are seeking to achieve -- still 46 percent for the players over the life of a new deal. The problem, sources say, is that the players are not willing to accept a deal at that percentage, and that some of the systemic adjustments the league has proposed as alternatives to a hard team cap will act like a hard cap -- such as a luxury-tax system that rises from dollar-for-dollar tax to $2 or more.
NBPA executive director Billy Hunter has called a hard team salary cap a "blood issue" for the union, and Fisher wrote in a letter to the union membership this week that he and Hunter will continue to oppose any deal that includes one "unless you, the group we represent, tell us otherwise."
In addition to what they presented as hard cap alternatives -- which also included a reduction in the Bird and mid-level exceptions -- league negotiators also have presented a concept that could drive a wedge in the players' association. In exchange for keeping certain spending exceptions in place -- albeit in a reduced form -- one idea floated by the owners was a gradual reduction in existing contracts -- the "R" word, as in rollbacks -- that would minimize the financial hit for players who will be signing deals under the new system.
Such a proposal would alleviate the problem of players such as James, Wade, Stoudemire, Anthony, Chris Bosh and Joe Johnson having outsized contracts compared to stars who'd be faced with signing lesser deals under a new system. In essence, the players who already are under contract would take a percentage cut in the early years of a new CBA -- 5 percent the first year, 7.5 the second and 10 percent in the third year, sources said -- so that players like Derrick Rose, Dwight Howard, Chris Paul and Deron Williams wouldn't bear a disproportionate share of the burden when they sign their max deals under the reduced salary structure the owners are seeking.
The provisions are not geared strictly for the star class of players; in fact, the proposed rollbacks would be across the board, "for everyone," a person with knowledge of the idea said. And while this concept may alleviate the problem of having future stars bear more of a burden, it would create other problems -- not the least of which is the players' unwillingness to accept a percentage of BRI in the mid 40s that would make such rollbacks necessary.
It is for this, and other reasons -- such as restrictions the owners would want even in a soft-cap system -- that a person familiar with the owners' ideas told CBSSports.com Tuesday night that what they were proposing was deemed "alarming" by union officials.
And it is why Stern said Wednesday, "We are not near a deal."
"I'm focused on, let’s get the two committees in and see whether they can either have a season or not have a season," Stern said. "And that’s what’s at risk this weekend."
But amid all the comments made throughout these negotiations, it was an ordinary fan who hit a home run Wednesday with the most sensible statement yet. As Hunter and other union officials spoke with reporters on the street outside the hotel hosting negotiations, a guy in a white luxury sedan stopped in the middle of the street and started pounding on his door panel.
"We want basketball!" the fan shouted. "Stop the playing and get it done!"
He then drove off, heading west, having made the most sense of anyone.
Posted on: August 2, 2011 4:25 pm
NEW YORK – As it turns out, my question to David Stern as he walked away from a gloomy media scrum Monday night was a prelude to the next phase of the NBA lockout, which has now entered its second month and a new frontier of ugliness.
Stern, who certainly knew full well league attorneys were busy preparing a double-barrel legal assault on the players, thought carefully for a few seconds before answering the question: “Would you say the players are bargaining in good faith, or not?”
We all know what he said, and it was followed up Tuesday with a two-fisted legal maneuver that will set the tone for the next 30-60 days of bargaining – or lack thereof.
What does it mean? First, the easy part: In a charge before the National Labor Relations Board, the league accused the National Basketball Players Association of failing to bargain in good faith – just as Stern said. This was in response to a pending complaint from the players, who leveled the same accusation against the NBA before the NLRB.
You can sum it up like this:
“You’re bargaining in bad faith!”
“No, you are, meathead!” (Archie Bunker sticks out tongue and sprays, “THHZZZZTHZZPPHTH!”
The second action, a federal lawsuit in the Southern District of New York, is more complicated. As we’ve discussed previously, the NBA decided not to sit idly by and wait to see if the NBPA would, in fact, decertify and file an antitrust lawsuit. The league is asking U.S. District Judge Paul Gardephe for a declaratory judgment affirming that the lockout is legal and heading off the players’ potential decertification. The lawsuit stipulates that, even in the event the court finds that the players have the legal right to decertify, all player contracts under the previous collective bargaining agreement would be “void and unenforceable” if the union disbanded.
“These claims were filed in an effort to eliminate the use of impermissible pressure tactics by the union which are impeding the parties’ ability to negotiate a new collective bargaining agreement,” deputy commissioner Adam Silver said. “For the parties to reach agreement on a new CBA, the union must commit to the collective bargaining process fully and in good faith.”
Billy Hunter, the NBPA’s executive director, released a statement Monday calling the NBA’s actions “totally without merit.”
“The litigation tactics of the NBA today are just another example of their bad-faith bargaining and we will seek the complete dismissal of the actions,” Hunter said. “The NBA Players Association has not made any decision to disclaim its role as the collective bargaining representative of the players and has been engaged in good-faith bargaining with the NBA for over two years. We urge the NBA to engage with us at the bargaining table and to use more productively the short time we have left before the 2011-12 season is seriously jeopardized.”
Jeffrey Kessler, the NBPA attorney mentioned frquently in the league's lawsuit, told CBSSports.com the action has "no merit" because the union has made no decision to decertify and has never done so in its history.
"They're just determined to do anything they can to prolong their lockout so they can try to break the players and don't really seem to care about the damage it does to the game," Kessler said. "That’s unfortunate. The players won't be deterred."
A couple of important points: the NLRB charges (one by each side) follow a different legal track than the federal lawsuit. One does not necessarily influence the other. So first off, nothing the NBA did Monday can stop the players from continuing to follow their most expeditious path to an injunction lifting the lockout – that being a complaint issued by the NLRB and a subsequent request to a federal judge to enjoin the lockout.
Even a ruling in the NBA’s lawsuit asserting that the lockout is legal could not prevent a judge from lifting the lockout via the NLRB case, which is governed by federal labor law – not antitrust law. The Norris-LaGuardia Act, which tripped up the NFL players in their antitrust lawsuit, does not apply to the NLRB cases.
In fact, when asked how the NBA's legal action affects the players' unfair labor practices charge pending before the NLRB, Kessler said told CBSSports.com, "We think this is going to be part of the evidence of their bad faith. This will support the complaint that’s already before the NLRB."
But what the NBA has done here is tried to disarm the players of the legal strategy of decertification, through which they would follow the NFLPA’s lead and challenge the lockout and other practices as violations of antitrust law. Unlike the NFL players, who had to decertify by a collectively bargained deadline, the NBA players were at a legal advantage while they pursued the NLRB charge while keeping decertification and an antitrust suit in their back pockets to use when they saw fit. The NBA’s federal lawsuit seeks to remove this option, purportedly as a way to force the players to soften their bargaining strategy and expedite an agreement on a new CBA.
But the very nature of legal timetables could have the opposite effect. Depending on how the NBPA responds, you could be looking at 60-75 days before the matter would even reach the point of a hearing – much less a decision by the judge. The NBA’s regular season is supposed to open three months from Tuesday, and if both sides want to go to trial, well you can pretty much forget about that.
If an eventual ruling is appealed to the 2nd U.S. Circuit Court of Appeals, it’s difficult to imagine a decision from the appeals panel before the calendar says 2012.
Kessler declined to comment on how and when the players would respond to the lawsuit. As for the NBA's charge of bad-faith bargaining by the players, Kessler said, "We know where the bargaining table is. They know where the bargaining table is. We were just there yesterday, and we came out and found this lawsuit. There's been no breakdown of bargaining except by them."
On the bright side, both sides fully understand – and the courts favor – the notion that the only way this labor dispute will be resolved is at the bargaining table between the parties. So the leverage and threat of various outcomes on every one of these legal tracks are far more important than the outcomes themselves.
The league hopes that the federal lawsuit will cause the union to abandon decertification as a possibility, and that once the antitrust option is “out the door,” as one legal expert put it, the two sides will be better positioned to reach agreement at the bargaining table.
It’s too early to tell whether the NBA will be successful on either front. From now until the district court actually rules on the NBA’s complaint, the union is free to decertify and file whatever lawsuits it wishes – as long as it does so in the 2nd Circuit, since the NBA succeeded in setting the venue by suing first. Also, with numerous players still getting paychecks from last season throughout the summer – and with the league owing the players $188 million in escrow and additional payments based on the 2010-11 BRI audit – the players are in a position to endure the missed paychecks that eventually will come with missed games.
League sources insist there was no Magic to the 2nd Circuit as a venue for its legal action; the court is in Manhattan, where both parties and most potential witnesses are based. But the fact remains that the league could’ve filed the case anywhere in the country where an NBA team exists, and it chose the 2nd Circuit.
A preliminary scouting report on Gardephe shows that he is a Republican appointee, having received his ticket to the bench by President George W. Bush in 2008, and thus could be considered a pro-management judge. Either way, the league has set home-court advantage – which is every bit as important in a basketball lawsuit as it is in a basketball game.
Basketball fans who want to see games, meanwhile, can only hope it doesn’t get to that point.
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.”