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: 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: 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.” 

Posted on: February 12, 2010 8:20 pm
Edited on: February 12, 2010 10:18 pm

LeBron, Wade join CBA talks; owners pull proposal

DALLAS -- In a stunning development, 10 All-Stars including LeBron James, Dwyane Wade, and Carmelo Anthony joined the collective bargaining talks Friday, standing in defiance of commissioner David Stern and the owners' negotiating committee during what was described as a "contentious" and "heated" bargaining session. The owners, according to union chief Billy Hunter, agreed to pull their current proposal off the table, relinquishing ground after hitting the union with demands for a hard salary cap and drastically reduced salaries.

Overreaching with a hard-line initial proposal submitted to the union on Jan. 29 may have backfired on the owners, whose demands for reducing the players' share of revenue, eliminating Larry Bird exceptions, reducing the length of contracts, and virtually eliminating guarantees got the attention of the league's stars. The murderer's row joining Hunter and the players' executive committee also included Kevin Garnett, Paul Pierce, Rajon Rondo, Joe Johnson, Amar'e Stoudemire, Chauncey Billups and Al Horford. The players skipped their obligations at the NBA's annual All-Star "day of service" charity events to stand with Hunter and send a message to the owners.

"The players came in there and said, 'We don't want a fight,'" Hunter said. "'But if we're not given any other choice, we won't run from a fight.'"

Calling the owners' proposal "shock and awe" and a "non-starter," Hunter said the players would submit their own proposal in the "near future," but did not provide a date. He described the league as "eager" to get a deal in place by July 1, which marks the beginning of the biggest free-agent signing period in NBA history. The economics behind that impending bonanza are now seriously clouded with the owners and players back to square one in their negotiations.

The current deal, ratified in 2005, expires after the 2010-11 season. The owners, citing massive financial losses they have documented to the union over the past few months, already have notified the players that they will not exercise their option to extend the current deal through the 2011-12 season.

Adam Silver, the NBA's deputy commissioner, issued a statement late Friday disputing Hunter's account.

"While we do not agree with the Players' Association's characterization of today's meeting or the status of the NBA's bargaining proposal, David will address the subject of collective bargaining during his media availability prior to All-Star Saturday night," Silver said.

A year ago at All-Star weekend in Phoenix, Hunter joined Stern for a joint address as an indication of unity heading into the bargaining process. On Friday, Hunter said he had not received a similar invitation for this year and didn't believe one would be forthcoming.

In his first public comments on the owners' proposal, Hunter cited a Jan. 29 story by CBSSports.com in which a source detailed the owners' strategy to drastically reduce the length and amount of max contracts in the new CBA. The report, in which a team executive with knowledge of the bargaining process detailed the owners' belief that the players "need us more than we need them," only served to "inflame" the players, Hunter said. A particular quote from the article was read to the owners' negotiating committee and Stern during Friday's negotiating session at the Sheraton Hotel in Dallas.

“If they don’t like the new max contracts, LeBron can play football, where he will make less than the new max,” said the team executive, who spoke to CBSSports.com on condition of anonymity for the Jan. 29 article. “Wade can be a fashion model or whatever. They won’t make squat and no one will remember who they are in a few years.”

The article, and others written on the topic by other media outlets, was circulated to the players -- resulting in the 10 All-Stars going directly from All-Star media day interviews to join the bargaining session across town.

"What it really did was, it really inflamed a lot of the players," Hunter said.

The owners "sensed that this thing had gotten out of control a little bit because of the nature of the proposal that was sent, sort of like when you go for the jugular," Hunter said. "And then when we read stuff ... that they’re going to decimate the union and they’re going to do all these things, I kind of read that back to them and said, 'These are the kind of things that inflamed the players. You can't talk about how you’re going to destroy the union, you’re going to impose the same system that happened in the NHL. And the players came in and said, 'We don’t want to go that way.'"

Hunter said the owners "maybe underestimated the response, the blowback they were going to get from the proposal."

New details of the owners' proposal and their posture -- including their desire to agree to a deal before free agency begins July 1 -- emerged from Hunter's press conference, where he was joined by executive committee members Derek Fisher (president), Adonal Foyle, Theo Ratliff, Roger Mason, Maurice Evans, and Keyon Dooling. Committee member Chris Paul, on crutches as he recovers from knee surgery, attended the bargaining session but not the press conference.

The owners sought to reduce the players' current share of basketball-related income from 57 percent to a figure estimated by union sources to be 37 percent. This would be derived by deducting $1 billion of expenses from the $3.7 billion in annual revenue and then dividing it 50-50 between owners and players. The result, sources said, would be a loss of $750 million for the players in the first year of the new CBA.

The maximum length of contracts would be reduced to four years if a player re-signs with his current team and three years for other free agents from the current length of six years and five years, respectively. Annual raises would be reduced to 2-3 percent, down from 8 percent and 10.5 percent, depending on the contract.

Salary cap exceptions -- such as the Larry Bird exception, which allows teams to go over the cap to retain its own free agents -- would be eliminated. Guaranteed contracts would be dramatically curtailed, allowing only 50 percent of the first $8 million and 25 percent of the rest to be guaranteed, sources said. Contracts would be retro-fitted to conform to the new deal. On balance, the changes would cut roughly in half the maximum salary a top-shelf free agent like James or Wade would be able to receive. Hunter said such a deal would create a system where only two players per team make max money and the rest of the roster would be filled out by minimum-salary players.

"Pretty much everything that they could ever think of, at least in the 15 years I've been here, was in that proposal," Hunter said. "And so our position that it was a non-starter. That was the posture we took from the moment we arrived."
Posted on: February 5, 2010 2:10 pm
Edited on: February 6, 2010 8:24 am

NBA owners propose hard cap, paycut for players

NEW YORK-- Launching a grim opening salvo in what is expected to be a contentious labor negotiation, NBA owners have sent their initial proposal to the players association and are pushing for some elements of a "hard" salary cap as well as a drastic reduction in player salaries, CBSSports.com has learned.

The proposal, sent to the union earlier this week, seeks a reduction in the players' share of basketball-related income from 57 percent to well below 50 percent, according to a person familiar with the document. Owners also are seeking some elements of a hard cap -- a departure from the current luxury-tax system -- and a reduction in the length and amount of max contracts.

Owners and players will meet in Dallas during All-Star weekend for their first face-to-face bargaining session as they try to reach an agreement before the current deal expires in 2011. The talks coincide with the NFL's labor negotiation, in which owners have proposed an 18 percent pay cut for players.

Billy Hunter, executive director of the players association, did not return calls seeking comment on the proposal, which is sure to set a serious tone in talks aimed at averting the league's first lockout since the 1998-99 season. NBA spokesman Tim Frank said league officials would have no comment.

Owners are seeking significant changes to the league's financial structure as many of them face massive losses in the wake of the global economic crisis. In addition to lowering the players' overall share of basketball-related income (BRI), owners are pushing for some elements of a hard cap to replace the current luxury tax system, in which teams with payrolls above the tax line subsidize those staying below the limit, which was set at $69.9 million this season.

But players already are facing a reduction in salaries next season, when the cap is expected to decline from the current level of $57.7 million to between $50 million and $54 million. Most team executives working on financial projections for next season are predicting a $52 million cap.

Union president Derek Fisher, speaking Sunday before the Lakers played the Celtics in Boston, predicted that the owners would "overreach" with their initial proposal and said the players would strongly oppose a dramatic reduction their share of BRI.

One prominent player agent, speaking to CBSSports.com about the impending labor talks, called a hard cap "untenable," but said the owners' financial losses a similar request for pay cuts by NFL owners create a double-whammy of leverage.

"The players will talk tough, but I'm not sure they have a whole lot to hang their hat on," the agent said. "If the NFL is cutting salaries, I think you can expect something similar in the NBA."

If the owners succeed in implementing some version of a hard cap, management sources predict it would drive player salaries down precipitously. The players likely will argue that the luxury tax system is working as a payroll impediment. Only a handful of the highest-revenue teams pay luxury tax in a given year, and a flurry of trades prior to the Feb. 18 deadline will illustrate the union's point. The majority of trades that will be consummated will be driven by teams trying to pare salary to avoid clipping the luxury tax line.

"An NFL-style hard cap is going to blow the minimum-salary and mid-level players completely out of the water," one person familiar with the owners' proposal said. "In any hard-cap system, the owners are going to pay the stars. If there are no exceptions and no ways to exceed the cap, everybody else is going to be left with the scraps."

Perhaps that is why the owners want to go farther than changing the rules; they want the league's highest-paid players to take a haircut, as well. Owners are seeking to reduce the maximum length of contracts to five years for players re-signing with their current teams and to four years for players signing with new teams. Under the current collective bargaining agreement, in effect since 2005, players re-signing with their current teams can be under contract for a maximum of six years. Other free agents can sign for a maximum of five. This would be a way to avoid star players' salaries remaining high while the second- and third-tier players bear the brunt of the overall payroll reduction.

As CBSSports.com reported Jan. 29, a segment of ownership believes that reducing the length and amount of max contracts would wipe out the owners' collective financial losses by itself. But by pushing for a significant reduction in maximum salaries, the owners would be alienating the players who produce the vast majority of revenue for their teams; fans pay to see LeBron James and Dwyane Wade, not Daniel Gibson and Dorell Wright.

“If they don’t like the new max contracts, LeBron can play football, where he will make less than the new max,” one team executive told CBSSports.com last week. “Wade can be a fashion model or whatever. They won’t make squat and no one will remember who they are in a few years.”

The negotiations also have implications that are much more immediate than a potential lockout to start the 2011-12 season. Numerous marquee stars, such as James, Wade, Chris Bosh, Amar'e Stoudemire and Joe Johnson, have the ability to opt out of their contracts July 1 and become free agents. Most of those players and their agents already were expecting a less favorable CBA in 2011. But if a drastic cut in max contracts becomes inevitable as part of a new labor agreement, such players might be even more motivated to opt out and sign long-term deals under the current deal. Just another wrinkle that could make what is expected to be the biggest free agency period in NBA history even bigger.

Posted on: December 18, 2009 4:52 pm

NBA, union to exchange proposals at All-Star

NEW YORK -- The All-Star game in Dallas will be significant for a lot of reasons, not the least of which is Texas' attempt to do it bigger than anyone else in the 100,000-seat Cowboys Stadium. But something else will happen behind the scenes, in a much smaller room, that will be even more critical.

Representatives from the NBA and the players' association plan to use All-Star weekend Feb. 12-14 as the first opportunity to meet face-to-face and actually exchange proposals on a new collective bargaining agreement, NBPA president Derek Fisher said Friday.

"All-Star will kind of be maybe the first real step in cracking this thing open and taking it beyond just exchanging information," Fisher said after the Lakers practiced at an East Side health club in preparation for Saturday's game at New Jersey. "I would say it would be more of an exchange of proposals. I don’t think any negotiations would begin until they see what we’re offering and we see what they’re offering."

The two sides previously met Aug. 5 in New York, where the owners officially notified the players that -- as expected -- they would not opt to extend the current agreement beyond the 2010-11 season. They've spent the past four months exchanging financial information so both sides can be on the same page once actual negotiations begin. Fisher, who met with NBPA executive director Billy Hunter Friday, said the league furnished its latest round of financials to the union about a week ago.

One person with knowledge of the situation said the league has been more forthcoming with financial data than ever before, which could be a sign of two things: 1) The data on revenues, attendance, and the like are more grim than in previous negotiations because they've been collected during a severe recession; 2) The owners, like the players, recognize the importance of avoiding a work stoppage so the NBA's growth in TV ratings and global popularity isn't stalled.

"We’re all kind of saying the same things at this point: Nobody wants a work stoppage or a lockout," Fisher said. "Let’s start working early to make sure we’re moving toward that. The conversations I’ve been a part of, that’s pretty much what it’s been. And All-Star weekend is a time where we really get the opportunity to kind of get into it, exchange proposals, exchange information, and really start to try to crack this thing open."

The NBA hasn't endured a work stoppage since the 1998 lockout, and the owners and players agreed to begin negotiations early on a new agreement that would begin with the 2011-12 season. Everything is on the table, from a new revenue sharing plan to help low-revenue teams, to the structure of the salary cap system, to the overall share of revenues that go to players and how teams hurt by lower attendance could be helped by other revenue streams. CBSSports.com reported last week that ticket revenues were down 7.4 percent league-wide through the first month of the regular season, yet the NBA has seen significant increases in national TV ratings and massive growth in its online and digital properties.

Category: NBA
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