Tag:Jeffrey Kessler
Posted on: August 2, 2011 4:25 pm
 

NBA legal action: What does it mean?

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: July 19, 2011 7:29 pm
 

Full labor session not likely before August

While the basketball world was obsessed Tuesday with the release of an NBA schedule that may never happen, CBSSports.com has learned that the owners and players may not convene for another full-blown collective bargaining session until August.

It is up for interpretation, however, whether that would put the two sides behind the negotiating pace set during the 1998-99 lockout. Back then, it was 37 days between the imposition of the lockout on July 1 and the next bargaining session on Aug. 6.

But this time, the two sides have met once at the staff level -- last Friday -- and are scheduled to gather again this Friday for a second meeting. In the smaller sessions, which have not included commissioner David Stern or union chief Billy Hunter, the focus has shifted from the larger economic issues that led to the labor impasse to smaller-ticket system items such as how a new salary cap would be structured, according to sources familiar with the negotiations.

The highest-ranking figures involved in the smaller staff meetings have been deputy commissioner Adam Silver and Ron Klempner, associate general counsel for the National Basketball Players Association. NBPA attorney Jeffrey Kessler has not been involved, perhaps due to his obligations with hammering out the final details of a new NFL collective bargaining agreement. Kessler represents the players' associations in both locked-out sports.

It is possible that the two staffs could negotiate again next week, but sources said it does not appear likely that a full session -- including Stern, Hunter, Kessler, owners and players -- could occur until sometime in August. Though this technically would put the two sides behind the pace from 1998-99, when the lockout resulted in a shortened 50-game schedule, it is possible that the smaller meetings could create some much-needed momentum before the heavy hitters become involved in the process again.

When bargaining broke off June 30, hours before the owners officially imposed a lockout, both sides alluded to first making progress on less controversial topics when bargaining resumed, and then returning to the biggest philosophical divide -- the split of revenues.

"Both sides left the room still fully committed to getting a collective bargaining agreement done," NBPA president Derek Fisher said.
Posted on: June 17, 2011 8:02 pm
Edited on: June 18, 2011 12:28 am
 

Stern: Tuesday is turning point in labor talks

NEW YORK – NBA commissioner David Stern declared Friday that an unofficial drop-dead date is looming next week in the accelerating negotiations to prevent a lockout.

“Tuesday is a very important day in these negotiations,” Stern said after emerging from a 4 1-2 hour bargaining session in which progress was in the eyes of the proposer.

Stern touted what he described as a “very significant” concession that was proposed Friday in which owners backed off their insistence on eliminating fully guaranteed contracts. The players, however, did not view this as a major step forward in the negotiations, saying the owners remain entrenched in their position to slash player salaries by as much as $700 million annually – and that owners have the ability under the current system to offer contracts that are less than fully guaranteed.

“They moved to giving us back guaranteed contracts, which we already had,” said Wizards guard Maurice Evans, a member of the players’ executive committee. “That’s not a move. How can you call that a move?”

However the latest twists and turns are viewed by either side, Stern left no doubt that an expanded bargaining session scheduled for Tuesday in New York – featuring a larger contingent of owners and players, and also player agents, who will be key to signing off on any deal – would be crucial to determining whether there is enough momentum to complete a new labor deal before the current one expires on June 30.

“I really think that the time to have an optimistic or pessimistic view is at the close of the day on Tuesday,” Stern said.

At the end of a nearly 20-minute briefing with reporters Tuesday night in a conference room of the Omni Berkshire Hotel, Stern answered “yes” when asked if a breakthrough was needed Tuesday to assure there would be enough time to get a deal done. The key sticking points remain the negotiated split of revenues that would be paid to the players and the system by which the money would be delivered – a hard cap, which the owners remain insistent upon, or a soft-cap system that more closely resembles the rules already in place.

“If we made a big breakthrough on one or the other, we would have such positive momentum that we could, I think, look forward to a faster track than we’ve been dealing with,” Stern said.

In addition to Stern, deputy commissioner Adam Silver, National Basketball Players Association executive director Billy Hunter and legal staff from both sides, Friday’s bargaining session included nine members of the owners’ labor relations committee, the players’ executive committee (including Hornets star Chris Paul), as well as Knicks star Carmelo Anthony, Bucks guard John Salmons, and Timberwolves guard Sebastian Telfair.

“I would say we’re not on the same page right now, but there’s some good conversation going on,” Anthony said. “Both sides are trying to come to an agreement.”

The logistics surrounding Tuesday’s bargaining session in New York leaves little doubt that it will be a turning point in a process that formally began with the owners’ initial proposal in January 2010, just prior to All-Star weekend in Dallas. League executives will be in New York for Thursday night’s draft, and dozens of players will be in the city for the NBPA’s annual meeting. Stern hinted that if enough progress were made Tuesday, the session could be extended by several days – perhaps even into the weekend – as the clock continues to wind down toward the June 30 deadline to avoid a lockout.

“Even though the clock is ticking and the runway is shortening, we think that it’s worth our time and effort to go back to our individual offices and do a lot of crunching of numbers and ideas and to return on Tuesday,” Stern said. “… We're hoping that we will receive from them a proposal directed to the economics.”

As a matter of timing and logistics, Silver announced that the league would be canceling Las Vegas Summer League this weekend – though the move is not meant to send any signals to the players.

“It was purely a function of the calendar and drop-dead dates with hotels and the arena,” Silver said.

Stern said the owners’ decision to back off their insistence on eliminating fully guaranteed contracts as part of the 10-year deal they’ve proposed was in response to a presentation from the players and their attorney, Jeffrey Kessler, about their insistence on protecting such guarantees.

“Of all the issues, the guarantee is one that is very, very important to individual players,” Stern said, describing what was conveyed to the owners and their lead negotiators during the presentation.

This must have been music to the owners’ ears, because their priority from the beginning has been to reduce player salaries by at least one-third. The method of delivery – via a hard cap with shorter and less guaranteed contracts – would seem to be a secondary issue to the overall dollars. Based on the players’ current 57 percent share of revenues, they would go from $2.1 billion to $1.35 billion under the owners’ original proposal – the basic structure of which remains in place, according to multiple sources familiar with the negotiations. That’s a reduction of about $750 million annually, regardless of whether the money is guaranteed or not.

“It’s not as big a move as it would have been if the hard cap was not linked to it,” Kessler said of the owners’ revised stance on guarantees. “That really undermines, from the players’ standpoint, what it means. … They didn’t move on hard cap, that’s for sure.”

Said Evans: "We’re far apart. They’re still negotiating from their proposal from two years ago, and we’re negotiating from the current system we have."

But Stern disputed the notion that the owners have not moved from their original demands on salary reductions, though he declined to get into specifics. And sources said the owners expressed for the first time Friday a willingness to discuss with the players how they would be paid in the “out years” of their proposal – meaning the seven years after a three-year transition period owners have proposed to soften the blow of these drastic cuts.

“There’s been considerably more movement from our first proposal than you understand,” Stern told reporters.

In addition, Silver said the players made a move in their position Friday in terms of how much of basketball-related income (BRI) they would be paid under a new agreement. But he added, “Even they would characterize (the move) as having been very small.”

Part of the problem for the players, aside from how much of a pay cut they are willing to accept, is computing how the new structure would work out for them if revenues rise, as the NBA is predicting they will. When the two sides reconvene next week, the apparent willingness on the owners’ part to negotiate how rising revenues would affect player salaries in the final years of the deal could represent a far more significant development than their decision to back off on the idea of eliminating guarantees.

For example, owners could incentivize the players to accept a revised computation of BRI that increases the players’ share as revenues increase. But the owners’ projections of rising revenues are based on rules that have never been in place, making it difficult for the players to trust the projections.

“We can’t talk about one part in a vacuum because it impacts the entire system,” NBPA president Derek Fisher said of the owners’ reversal on banning fully guaranteed contracts. “We haven’t been, or at this point are inclined to say whether that’s a huge thing. Because without other things, it doesn’t mean much.”

How much is at stake next week? If you liken the negotiation to a million-piece jigsaw puzzle, all parties involved admitted that two or three key pieces need to be in place by the end of the day Tuesday.

“One piece controls several hundred thousand pieces,” Fisher said. “So essentially, we could put together a million-piece puzzle in a very short time if we can get two or three pieces in the right place. And that’s what we're focused on doing.”
Posted on: June 8, 2011 8:08 pm
Edited on: June 8, 2011 10:13 pm
 

Players: 'No change at all' in owners' demands

DALLAS – Doom and gloom descended on the NBA’s labor negotiations Wednesday, with union officials revealing that the owners’ original insistence on a hard-cap system with shorter and non-guaranteed contracts has not changed during the 18 months since the bombshell proposal was made.

“There’s no hiding the fact that the main components of what we originally received in their proposal has not changed at all,” said Lakers guard Derek Fisher, the president of the National Basketball Players Association.

That proposal, submitted to the players in January 2010, called for nearly a 40 percent salary rollback derived from a hard-cap system that would eliminate guaranteed contracts, shorten contract length and cut annual raises by as much as two thirds. Despite counterproposals by each side since then and three bargaining sessions during the Finals – including nine hours in the past two days – there has been “little or no movement on the part of the owners,” said Billy Hunter, executive director of the NBPA.

Asked if the owners or their negotiators have directly informed players that they will be locked out July 1 if they do not accept these changes, Fisher said, “Yes they have. That’s the best way I can put it. It’s very clear that if we don’t agree to what we’ve been offered so far, we’re probably facing a lockout.”

The gloomy comments from union officials came a day after NBA commissioner David Stern stated that he was “optimistic” a deal could be achieved before the current agreement expires June 30. But given the negotiating details revealed by the players, it would appear clear that this optimism relates to Stern’s belief that the players will cave – not that a compromise will be reached.

So apparently, Stern misspoke when he said Tuesday the owners and players were continuing to negotiate in hopes of achieving a "breakthrough" in the talks. What he really meant was a breakdown in the players' insistence on keeping the system largely the way it is.

"Our owners are thoroughly united in the need for change and also completely behind our various proposals as we seek to compromise with the players," Stern said Wednesday.

But compromise on what? The date and time of the players' surrender?

Given that the players have filed an unfair labor practices charge against the owners, accusing them of not negotiating in good faith, NBPA attorney Jeffrey Kessler openly questioned whether the owners simply repeating their demands amounts to negotiation.

“We just are discouraged because there’s been so little movement from their side, which makes us wonder what their real intentions are,” Kessler said.

Stern tempered his optimism Wednesday, saying the two sides remain “very far apart. … Both sides have moved, but we’re not anywhere close to a deal.”

At the conclusion of Wednesday’s bargaining session, Hunter said one owner stated that he was pessimistic that a deal would be reached by the end of the month – a possibility that would result in a lockout, and presumably an anti-trust lawsuit from the players seeking to adopt the strategy implemented by NFL players, which is pending on appeal with the Eighth Circuit Court of Appeals.

“I’m forced to share that sentiment,” Hunter said. “It’s going to be a difficult struggle.”

A formal counterproposal made by the players last week in Miami was countered by the owners this week – though each side agreed to put these verbal proposals in writing before meeting twice more next week. The first meeting will be Tuesday, in Miami if the NBA Finals requires seven games, or in New York if it doesn’t. Another session is scheduled for Friday in New York.

“As long as there’s negotiation, I’m optimistic,” Stern said. “If we were at a point where it didn’t pay to have negotiations, we wouldn’t be planning meetings for Tuesday and Friday of next week. Neither side is posturing.”

Knicks guard Roger Mason, a member of the players’ executive committee, emerged from Wednesday’s four-hour session and said, “This is going to be a scenario where the players are going to have to sacrifice. I think at the end of the day, owners are probably going to have to sacrifice as well.”

It hasn’t happened yet, and the clock is ticking toward labor Armageddon for a sport that is enjoying a new zenith of popularity and international interest. Shortly after union officials finished addressing the media at the Hilton Anatole hotel in Dallas, the NBA distributed a news release with the latest astronomical TV ratings for the NBA Finals – which through four games are averaging 15.5 million viewers, the most-watched Finals since 2004.

“The owners say that they don’t want their own game if the players won’t agree to radically change the system,” said Kessler, who also is litigating the NFL labor dispute, which is bogged down in the federal courts. “It’s an odd position when the game is the best it’s ever been, when the ratings are the highest they’ve ever been, when the excitement is the greatest it’s ever been. It’s sort of odd to see the owners say, ‘We’re going to destroy this game unless you change this whole system.’”

Since their initial proposal, the owners have proposed phasing in their draconian changes, a concession that was not viewed as such by the players, since a hard-cap system would by definition require grandfathering in existing contracts that do not fit under the $45 million hard cap proposed by the owners. Stern's negotiators have proposed a two-year phase-in of their new system on a 10-year CBA. The players are not only adamantly opposed to a hard cap and 10-year deal, but also reluctant to accept what sources described as an 8 percent giveback in Year 1, a 13 percent giveback in Year 2, and a 39 percent reduction in salaries thereafter under the phase-in compromise.

While sources say owners have yet to clearly explain their insistence on using a hard cap to bridge the approximately $750-$800 million gap between the two sides, the players have proposed what appear to be little more than incremental changes that would leave most of the existing soft-cap/luxury tax system in place. The players' most recent proposal to accept a reduction in their 57 percent share of basketball-related income as revenues rise was described this week by Stern as "tiny" and insufficient to get a deal done.

 
Posted on: December 16, 2008 1:45 pm
Edited on: December 16, 2008 1:48 pm
 

David Stern rules the world (of sports business)

Sports Business Journal's annual list of the 50 most influential people in sports is out, and NBA Commissioner David Stern is third -- first among major pro sports commissioners.

Duh.

Stern received credit for steering the league through the potentially devastating officiating scandal, expanding the league's global footprint, and partnering with the NCAA to clean up youth basketball.

Full disclosure: Sean McManus, the president of CBS Sports and CBS News, is eighth -- up one spot from 2007.

The rest of the NBA-related titans who made the list:

11. Tim Leiweke, president and CEO of AEG. Serves on the board of the Los Angeles Lakers, overseeing Philip Anschutz's 30 percent stake in the team and Staples Center.

14. Charlie Denson, president, Nike Brand.

15. Herbert Hainer, chairman and CEO, Adidas.

16. David Levy, president, Turner Sports. The Atlanta-based media company has added control of the NBA's digital media business to its TNT coverage of the league.

23. Jeffrey Kessler, attorney. Outside counsel to both NBA and NFL players.

24. Adam Silver, deputy NBA commissioner. The force behind Stern's global initiative, Silver also spearheaded the recent deal allowing NBA teams to control their local digital rights to stream games live on their Web sites.

27. Casey Wasserman, chairman and CEO, Wasserman Media Group. Primarily through agents Arn Tellem and Warren LeGarie, WMG represents a cross-section of top players and coaches in the league. You know Wasserman is influential when he's listed ahead of No. 28, Hal Steinbrenner.

34. Kevin Plank, CEO and founder, Under Armour. Long a boutique to Nike's behemoth, Under Armour is making inroads in the basketball apparel market.

35. Mark Cuban, owner, Dallas Mavericks. How Cuban rebounds from insider trading charges will affect his image and influence.

38. Peter Moore, president, EA Sports. NBA Live, enough said.

44. Billy Hunter, executive director, NBA Players Association. Good news: Hunter has gotten his players the highest average salary in major American sports. Bad news: Owners are feeling the pinch, and negotiations on extending the agreement beyond 2011 will be contentious -- so much so that Hunter said recently he's preparing for another lockout.

46. Rick Dudley, president and CEO, Octagon. Agency represents numerous NBA players, including Chris Paul.

48. Michael Levine, co-head, CAA Sports. Stable of agents includes super-agent Leon Rose, who represents LeBron James.

 

 

 

 

 

 

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