Tag:CBA negotiations
Posted on: July 18, 2011 9:24 am
 

NBA Lockout: Where did the money go?



Posted by Matt Moore

So here's a quick question.

Where did the money go? No, I mean, seriously, where did the money go?

The NBA is in the midst of what may end up being its longest lockout in league history. The owners are claiming losses of up to $300 million and attributing it almost entirely to the players (and, apparently, staff as they've become fire-happy).  But this isn't the dark days of the late 70's and early 80's, where games are shown on replay late at night and the league is skating a fine line between survival and bankruptcy. The league isn't trying to find its niche. The NBA is one of the largest sports entities in the world. 

How about a $7.4 billion media deal ($930 million a year) extended in 2007? How about $50 million a year in revenue from China alone? How about all that money from concessions, sponsorships, ad sales on the floor and in every spot you can find in every arena? How about suite seats, custom lunchboxes, jersey sales, deals with some of the biggest companies in the sports world like Gatorade, Nike, and AutoTrader.com (that last one was a joke). How about NBATV, which exists on most cable packages. How about League Pass Broadband, League Pass Mobile, League Pass Digital Calculator (again, last one, jokey-joke)? How about BRI being estimated at $3.8 billion for 2010-2011 alone? 

No, for real now, where did all the money go?

Well that gets to the heart of the NBA lockout. The owners believe not only that the players' slice of that revenue pie, the 57 percent of the $3.8 billion (Berger estimates it at $2.17 billion) is what does the damage. From there, it's costs. Costs, costs, costs that pull them under, and all of those costs are things which they feel are not a result of their own decision making, but of all these greedy people wanting too big a cut of what they feel is their pie. 

Before my blood gets boiling, go check out how I feel about those non-player cuts of those "greedy people."  

Here's an interesting question. Reports came out last week from the New York Times and Forbes about how the NBA had cooked the books. Those reports earned a swift rebuttal from the league regarding their accuracy. Naturally, the Times was pretty skeptical about the league's denial of the claims. It should be noted that in the pieces discussing how profit/loss was estimated, one blogger with a financial background took the reports to task independently. I would explain it to you, but my head would explode. 

Lost in all the shuffle about how the losses are calculated, what the ticket sales revenue is, or other complex accounting claims which would pretty much bore you to tears, there was one factor which was overlooked by most of the traditional media outlets. The "mystery meat."

Tom Ziller of SBNation.com wrote a piece earlier this month outlining an intriguing element included in the Forbes data (which may, or may not be Ziller fashion, the man made a chart so you can process it more easily. Republished with permission here. 



It's that "Other" percentage that has Ziller so up in a huff. From SBNation.com: 
In 2007, 2008 and 2009, "other expenses" grew more than revenue or payroll did. From 2006 to 2007, revenue and payroll each grew 6.6 percent. Given the NBA's claimed losses, non-payroll expenses grew 9.8 percent between those seasons. That's a massive uptick in comparison. The gap exists in 2008 and 2009, as well. Strangely -- very strangely -- the 30 NBA teams actually shrunk non-payroll expenses in 2010, despite modest upticks in revenue and payroll. Non-salary expenses had been growing at 4-10 percent over the previous years ... and the NBA cut it by almost 1 percent out of the blue.
via NBA Lockout: Have Owners Spent Themselves Into This Mess? - SBNation.com.
 
 Allright, so the question's got to be asked. What's in that "Other" percentage? Maybe it was partially those employees the league's been laying off that we've been complaining about. But if so, why did it take them so long to figure it out? And if that kind of problem is so big, shouldn't that be the focus of the league and not the players? Maybe they're unavoidable expenses. But if that's the case, why werent' those factored into the last CBA negotiation? The questions go on and on. 

Now, the League's going to say it's irrelevant. They say the data isn't wholly accurate, therefore no conclusions can be gleaned from it. Which is fine. Setting aside the Times' point that there's no way to confirm the league's claim that the data is inaccurate without the league releasing its own data (which will happen on a day when Satan has to break out a parka due to a severe temperature drop), the point's still going to be there regardless of how the data is formulated. Where did the money go? How did the NBA make this much, and wind up losing it? 

You would think the massive amount of income from the profitable teams would cover it. And you would be wrong for thinking so, so sayeth the league.

From the NBA's statement:
The Knicks, Bulls and Lakers combined net income for 2009-10 does not cover the losses of the 23 unprofitable teams. Our net loss for that year, including the gains from the seven profitable teams, was -$340 million.
via NBA responds to NYTimes.com blog based on inaccurate info | NBA.com.

So despite a system that allows big market teams to set their own prices, including what can only be considered an obscene new deal for the Los Angeles Lakers, your costs are still so high that you can't make a profit despite all that?

The league responds, "Of course not! Player salaries are too high!"

As if it were that simple. As if that accounts for why there isn't enough to go around, or why we still saw opulance this season and every season. Are we really to believe that the owners made every decision in good conscience and the system simply wouldn't allow them to profit? That they designed a system that denies their ability to profit?

If we're going to take the stance that failing teams get to fail (as the current revenue sharing system allows), shouldn't we take the same ideals for the league's approach before we start backing their demands to simply be gifted what they want?

These are the questions you ask as the lockout only really gets started, that leave you perplexed about why we're here in the first place.  And if we want to get to the bottom of those questions, there's only one way out. for the league to reveal its financials. They're under no obligation to do so. They have every right to keep their data to themselves as private businesses, and to simply keep swatting at these reports that pop up like gnats. But if they really want to tell us that they deserve the support of the media and fans, they need to be open and honest about what's happening and why. 

Otherwise we're just watching kids get sick in the cafeteria, munching on mystery meat and blaming the salad.  
Posted on: July 15, 2011 5:52 pm
Edited on: July 17, 2011 6:59 pm
 

So you want to win people's support: NBA Owners

How can NBA owners win the public relations battle during the NBA lockout? Posted by Ben Golliver.

silver-stern

On Thursday, Matt Moore took a look at how NBA players can curry favor from the general public during the ongoing NBA lockout. His plan included circling the wagons, being honest and educating fans and taking the high road. All great ideas for any negotiation, especially one as high-profile and public as the NBA's.

With the players' PR plan in place, how about the owners? What can this group of billionaires due to help gain support, if not sympathy, for their plight? 

Let's start off by acknowledging that this is an impossible task. The common man cannot relate to the billionaire. It's impossible. The gap is too wide, the lifestyles are too different, the realities are too disparate. Likewise, the billionaire, no matter how hard he tries, cannot put himself in the common man's shoes. Once your income hits the eighth or ninth digit, a bubble forms around you that is impervious to real, everyday struggles.  When people are hired to pick up your dry cleaning or answer your telephone or manage your Twitter account, it's over. There's no going back.

The goal for the NBA owners, then, shouldn't be unrealistic. They don't need to come off like Santa Claus. Instead, they just need to appear a little bit less like Montgomery Burns. Right now, the general air from ownership and the league is that it doesn't much care for the public relations side of this battle. It has remained very quiet, refused to open its books publicly and responded to only a few accusations with prepared statements. Otherwise, pretty much total silence. 

In that vacuum, the players have shined. They've put together funny spoof commercials, shown off their skills in pick-up games and camp across the globe, continued their massive presence on social networking sites and done a very good job of communicating their desire to not miss any games. Put all of that together, and the owners have a tough uphill battle to climb.

Here are five things they should do to get started on the public relations war:

1. Pledge To Protect All League Jobs

The No. 1 complaint against any professional sports team owner who locks out players is that he is greedy. That's the No. 1 complaint because it's pretty much always true. There's no good, direct answer to that question. The owners have made it clear they want more money, significantly more money, and that makes them look greedy.

A good work-around solution: Do what you can to make the players look greedy. Put all the pressure and attention on players' salaries -- they make millions to play a game -- while doing whatever you can to make yourself look like a philanthropist. Encourage your teams to increase their efforts in the community. More camps! More hospital visits by team employees! More everything! Then, to cap it all off, pledge to protect all jobs -- within the team and at the league level -- throughout the duration of any work stoppage. 

See what that would do? It would isolate the players, making them look like the bad guys. "We're all over here doing our jobs and protecing our hard-working employees and their families while you guys make so much money it threatens to put us out of business!" The general public highly values loyalty and commends those who put their employees' interests before their own. 

Oh, wait. Wait. You're telling me the NBA announced less than two weeks into the lockout that it's laying off 11% of its workforce and then said it was due to a desire to cut costs? In other words, because the league wanted to keep more of the money it was generating? Oh boy. We're off to a rocky start here. 

2. Don't Make Idle Threats

Appearing tough is very, very important during a negotiation. You can't blink first. You've got to make it clear that every word that you speak is to be taken seriously and every demand you make must be met or the entire deal is at stake. Those are basic negotiating principles. Whatever you do, owners, do not make idle threats. If you say that you will take an action if something happens, you have to take that action when that something happens, or you look both soft and like you're blowing smoke. Your credibility gets crushed and the other side has no real incentive to take any of your other demands seriously. 

Unfortunately, the NBA has failed this one too. As soon as the lockout went into effect on July 1, the league made it very clear that a gag order was in place. No team employees were to make public reference to a current player or they would risk a $1 million fine. In addition, the NBA scrubbed its website of references to current players. 

Granted, that's a fairly ridiculous and petty decision, but it was their decision. What's happened since the gag order went into effect is even worse. Minnesota Timberwolves president David Kahn mentioned multiple players during a press conference streaming live on his team's official website. Dallas Mavericks coach Rick Carlisle mentioned multiple players during a radio interview. Both were clear violations of the supposed gag order and yet the NBA has tap-danced around whether it will fine the offenders as threatened. Guess what? Until someone gets fined, and fined big, violations of the gag order will continue ad nauseum. Each time a coach or team executive accidentally steps out of line, the NBA looks less and less in control and united.

In the public's eye, they start to look like they're full of it. Why should the Average Joe believe the NBA is losing millions of dollars a year if the league won't follow through on its promise to fine people? Say what you mean and mean what you say. Hammer the offenders or offer a really, really good explanation for why you didn't. Otherwise, the impression is that you're tough-talking bullies who don't need to be taken seriously.

3. Take The Lead On Meetings

This is an easy one. Fans do not want to miss games whatsoever. The players seem committed to doing whatever it takes to not miss games. At least some portion of the owners seem content to miss a whole season. That's a huge public relations black eye.

The best way to fix it? Go way above and beyond to make it clear that you're willing to meet to negotiate at any time and place. No two-to-three week breaks after the lockout is imposed. No waiting until the players start to feel a pinch in the fall. No delay tactics. If you're seriously committed to potentially losing a season, you absolutely have to be able to point to your track record and say, "Look, we did everything in our power to prevent this from happening. We killed ourselves to make a deal." Get up early, stay late, use videoconferencing tools, use subcommittees. Whatever. It. Takes. If you want a new, restructured economic system then you must do everything in your power to prove your commitment to the goal. 

Missing a season would be a bitter pill to swallow, but it will be 10 times worse if it happens without continued negotiations and contact between the sides between now and the start of training camp. The general public hates billionaires and millionaires arguing over money. But the general public really hates billionaires and millionaires who can't even be brought to the same table to argue over money.

4. Use The Past As A Guide For The Future 

The NBA just completed a Collective Bargaining Agreement that both sides, obviously, signed off on. The owners chose to lock the players out because they felt an overhaul was necessary. Other than repeating a desire to guarantee a profit to its teams and increase competitive balance, the owners have not done a good job of communicating exactly what portions of the framework need to be reworked, and why. An important ingredient in this communication is explaining what didn't go according to the owners' plan at the time.

While the league has maintained that it won't conduct negotiations in public, finding a way to present the flaws or unexpected outcomes from the previous deal would help the general public have a much better idea of where they are coming from. Just about everyone can relate to changing interest rates on their mortgage, car loan or credit cards. No one likes to pay more after the fact than they were expecting, especially if it's something that is out of their control. The owners would be wise to own up and lay out the areas where that occurred. "We didn't anticipate this" or "This wound up costing way more than projections" or "This competitior came in and influenced this revenue projection" or whatever.

Lay those out as mistakes or needs for correction. Then, and only then, provide the remedies and explain why those remedies protect the league from future risk. Belts have been tightened across the country. People have spent more conservatively on discretionary items. Connect your goals to that behavior and you've got a real chance to make some headway.

5. Paint A Pretty Picture 

As any GM worth his salts knows, you absolutely must sell hope. There needs to be a pot of gold over this rainbow. All the dreary talk about losing money gets people down. Nobody cares if you're losing money. Again, you've got to flip this for fans. What is in it for them? 

The owners must start painting the dream. How great will the NBA be in three years if you get your way? How many homes will be watching games then compared to now? How many teams that would have had to move will be safe in their current locations? How many teams won't have to be contracted? How many jobs will be saved and/or restored? How many hours of community service can be added? What cool new events can be added to All-Star Weekend? What preseason showcase tours will pop up on the schedule? What interactive TV or internet programming will now be possible?

Sell. Sell. Sell. You made millions selling products or services. Do not stop selling the future of your league in your vision. People want to hear it. Just make sure it sounds better than the status quo for someone besides yourselves.

Conclusion

When it's all over, offer the fans a blatant kickback. Discounted tickets or jerseys. Public autograph sessions. Free NBA League Pass for an extra few weeks. Whatever. Have a goodwill gesture on tap because, regardless of how long the lockout extends, you'll need it. 
Posted on: July 14, 2011 4:49 pm
Edited on: July 14, 2011 10:56 pm
 

So you want to win the people's support: NBPA



Posted by Matt Moore

Imagine you're the players of the NBA. You've known this was coming, you've hoped it could be avoided, you've even made a few compromises to try and avoid it. But here you are, locked out of the league you tried desperately for years to get into, staring at whatever the Istanbul version of Craigslist is. You know it's going to be a long fight, but it's one you're committed to winning (you even had T-Shirts made and everything!).

And while you understand that the people, the fans, the public have no real bearing on who ends up winning this thing, that neither side is going to look good in this lockout, every little bit helps. So how exactly are you going to get the public's support on your side of this ugly little spat with the powers that be?

Here's a five-step plan.

Step 1: Circle the wagons. And that means wrangling a few wild horses. You want the public to sympathize with you? Playing up the human interest angle isn't going to work here. You make zillions of dollars playing basketball while most people work in an office with a coffee machine that makes sludge and a terrible boss who likes baseball or something. But you don't need to engender sympathy, you just need to engender respect. And that means staying out of trouble.

It's the offseason. Guys aren't even under the leashes of their respective teams during workouts or events. But if the players want the public to take them seriously as a group of professionals fighting to protect their earning potential and wage-earning, they need to represent themselves as such. And respected professionals aren't arrested. When that happens respected professionals become disrespected (often former) professionals. DUI, assault, even things like speeding in extremely fast cars, all of these things contribute to an image the NBPA needs to keep at bay. This goes for every member of the union, regardless of age, race, or background. It's one thing when a player's irresponsible actions hurt himself, but now it can damage the collective efforts of the union.

Whether it's applying pressure to the right people, making personal pleas, or just downright babysitting, the player's union needs to make sure its athletes come across as suit-wearing professionals who are being prevented from going out and doing their job. That's harmed if it looks like they're having the time of their life, blowing the money they supposedly need to protect and getting in trouble.

Step 2: Spin the Euro bottle. Right now players escaping to Europe seems like a vacation. Fans feel like their favorite players (or Zaza Pachulia) are skipping out to go make money somewhere else while they're stuck without a team. The players need to first commit to who's going to go and who's not going to go. A decent combination of stars and role players should go, with players who have planned well enough to survive the lockout on their own staying home. Then the trick is to push this publicly as something they were forced to do. "Well, I need to play and I'm not allowed to here, so I went elsewhere." It should be made about staying in shape for their careers (for the NBA fans) and not about the money. In fact, players should pledge a certain amount of their income to charity, and a certain amount to a collective fund for the union.

The worst thing that can happen is this looking like a selfish avoidance of the problems here in the States. Every player is affected by the lockout, and every player should be working to bring it to an end. Pitching their European defection as an effort to do just that, to get the owners off their gulag-prison-guard-like stance, is the best way to go about it. Don't pretend your "family needs to eat" is the reason you're going. Make it about basketball.

Step 3: Level with the fans. A certain amount of PR in ugly situations like this involves saying things and taking stances you know make you sound like a moron. But those are often things to keep you out of trouble, a defensive position. What the players need to do is capitalize on the fact that they were the ones locked out, not put on strike, and level with the fans about how this looks.

When I asked Kevin Love about the lockout earlier this week, he said that fans "don't want to see billionaire owners and millionaire players bickering over money." This was a golden quote that could be dangerous if Love distanced himself from the rest of the union. But he didn't. He's firmly behind the union's efforts, but recognizing that people aren't going to feel sorry for the players, no matter how upset they are with the league's approach.

Being honest with the fans and acknowledging that there's a certain amount of ridiculousness to this process considering the amount of money involved doesn't hurt the players' case. They're not asking for change. They're just asking for things to stay the same. That should remain firmly in their wheelhouse of approach.

Step 4: Educate as much as possible. Your average person is going to be offended that players are doing anything but being grateful for the money they earn playing a game. Once again we return to the fact that so many people's jobs suck. It's offensive that someone who's life is awesome is saying his life isn't awesome enough.

So instead, focus on putting things in terms people can understand. "If your boss walked in one morning, even though your company has experienced record growth and critical success in the past year, and asked you to take a significant paycut, how would you react?" While spending time and resources on investing the public isn't going to win you anything with the players, it does remove something from the owners. The players aren't directly beholden to ticketholders and sponsors. The owners are. So the players need to spend some time to make the average season ticket holder understand that the players want to play, they aren't being allowed to.

No one needs to hear about BRI, or the difference in a hard cap. Just make it plain, that "billionaire owners made poor decisions and now say they want more money, and they want it from us, their workers, while they've fired their staffs until they get what they want." That's the reality of what's going on with the owners, and it paints them in about as bad a light as possible. If you really want to get in the trenches, release some information about how much some of these owners are actually worth, compared the amount of money they're squabbling with the players over.

But above all, follow Step 5.

Step 5. Be the better men.

This "negotiation" process quickly turned into one of prideful bickering and overdramatic gestures. The owners refuse to provide a counterproposal. The players release statements about how ridiculous the owners' proposal is. The owners bully up and take a hard line. The players show up in synchronized t-shirts. The owners let Stern do the talking. Kevin Garnett yells in a meeting.

This is not how business should be conducted.

This is not "Norma Rae." There's no moral high ground to be won. This is a business deal between two entities, both of which are doing exceptionally well in life. The players have every right to stand and fight for what they believe they deserve and protect the future earning potential of those in their profession. Anyone would do that, from plummers, to software designers, to middle management, to media members. No one wants to be sold up river or sell future people who will share their position up the river.


But behave with superior class. Don't get dragged into the mud. Peel back on the rhetoric. The public isn't sold that the players are greedy, they just haven't been sold on their requests being reasonable yet. By being the bigger men and taking the high road, they let the owners hang themselves by looking ridiculous and petulant, all the while the union is earning income through exhibition games and European contracts. The world's a smaller place, which means voices can carry more loudly. All the more reason to speak quietly, but firmly, and simply let the owners' red-faced bombastic approach peter out as the tide turns against them.

The union needs to be vigilant, reasonable, and clear. Do those things and their chances of putting the pressure back on the owners to crack will improve significantly.

Check back tomorrow for Part Two of our series and how the owners can crush the union's public support.
Posted on: July 12, 2011 7:51 pm
Edited on: July 12, 2011 8:24 pm
 

What teams risk in a lockout: Pacific Division

Posted by Matt Moore

Talk of losing an entire NBA season is a bit ridiculous. But it's a possibility. And with all this hardline talk going on, it seems like neither the players nor the owners are wanting to budge. There's incentive for teams to get a deal done and not just for the money, but because a year without basketball and, more importantly, basketball operations, could greatly affect every NBA franchise.

Earlier this week, we took a look at the Southeast Division, the Atlantic Division, the Central DivisionSouthwest Division, and Northwest Division.  We finish our series with the Pacific Division.

Los Angeles Lakers

The quick answer here is: it depends. A lost season would remove what could be the final year of this Laker core together. Kobe Bryant will be 34 in the summer of 2012. Bryant will be able to play until he's 40 thanks to conditioning. But his body is already showing significant wear and tear at age 32. Losing another year of Bryant, along with 30+ players Lamar Odom and Pau Gasol guarantees the end of meaningful contention, most likely. That doesn't mean it's not possible. It just becomes more difficult.

But on the other hand, if the team's already moving toward the future, making the requisite good faith effort to keep this core together but planning around Andrew Bynum (as rumors have suggested), then the lockout doesn't affect things much. The question is whether the team believes the run is over. It probably doesn't, but their actions over the last few months haven't exactly spelled confidence. They haven't indicated an "abandon ship" attitude either. Far from it. But there's enough there for it to be confusing.

Some other good news from a lockout for L.A.? Matt Barnes comes off the books, Lamar Odom enters a non-guaranteed year, and Derek Fisher, Luke Walton and Steve Blake enter contract years, so their contracts finally become easily movable. The bad news? Bynum enters a contract year without a fully healthy season in four years. Good times.

Phoenix Suns

The lockout would probably be a good thing for Robert Sarver's organization, based simply on the fact that the Suns' salaries will drop by close to $40 million from 2011-2012 to 2012-2013. (Note: Vince Carter and his bought-out contract make up $18 million of that, so it's kind of a fake $40 million. But still!) They lose the last year of Steve Nash's contract, which is a bummer. But considering most of us think Nash deserves to be freed from a sinking ship like the Suns, it's not that terrible. Plus the Suns manage to clear off Mickael Pietrus and Aaron Brooks (assuming they decline to match him in free agency, which they may not, but it's a nice thought) and Hakim Warrick and Robin Lopez could both enter contract years depending on if the Suns elect to pick up or not pick up various options.

That would leave just Jared Dudley, Channing Frye and Josh Childress as their only long-term contracts. And don't get me wrong, those contracts are horrible. But if the Suns want to rebuild (and they need to rebuild), they'll be in a great position to do so. The Suns are unlikely to improve next season, so there's no big risk in losing next season. Imagine paying no salary for a year plus the money Sarver will make when he sells his 2012 first-rounder! (A joke, and a bad one. Sorry, Suns fans.)

Sarver may actually sabotage the negotiations.

Golden State Warriors

Lacob and Guber spent a pretty penny on this franchise. So you can imagine they'd want to get started early. On the other hand, after spending that much, they need the profit-guaranteeing, value-increasing measures the lockout is geared toward. They're likely to commit to a full-season lockout, especially since it chops off $20 million they'd have to pay David Lee and Andris Biedrins for what will naturally be a losing season.

And hey, it's taken them two years to figure out what to do with Monta Ellis. They could use another twelve months.

But the Warriors still have a lot to fix, and they need to get on it. Time's a wastin'.

L.A. Clippers

The Clippers would see their payroll drop by $20 million dollars if they lost the entire 2011-2012 season. They've already activated Blake Griffin's 2012 option, naturally. Mo Williams would be entering a contract year, taking the sting out of the money they paid to get rid of Baron Davis (now about that draft pick...). Eric Gordon would have to get paid, but the fact remains that the Clippers would only have six players on roster, and two of them would be entering expiring deals.

Thanks to their market, the Clippers make a profit no matter what happens, so this wouldn't harm them tremendously. But for a franchise with so much promise, they need to get started. Because otherwise Griffin could enter restricted free agency in 2014 (if restricted free agency exists) with only one year to convince Griffin to work with them on a reasonable extension. Fun stuff.

Sacramento Kings

It's another year for the Maloofs to figure out how to get out of Sacramento. It's a year to take out the full-blown momentum of the fan uprising. But it's also a year that loses all that young talent, and a small-market team like Sacramento can't really survive losing an entire year of revenue. The Maloofs may have to fake a death to cover debts otherwise.

This could get awkward.



Posted on: July 12, 2011 2:56 pm
Edited on: July 13, 2011 3:29 pm
 

NLRB investigating NBPA's claim

Posted by Matt Moore

Back in late May, the NBPA got out in front of things and filed with the National Labor Relations Board, charging that the NBA failed to bargain in good faith. That was two months ago, and since then we haven't heard a thing about it, distracted with the Finals, the Draft, and oh, yeah, this lockout we've got on our hands. 

But Sports Business Journal reports that the NLRB is still very much investigating the union's claim. From the SBJ on Twitter; 
SBJ: In recent weeks an NLRB investigator has interviewed 7-10 witnesses in @TheNBPA's unfair labor practices charge against the NBA.
via Twitter / @SBJLizMullen: SBJ: In recent weeks an NL ....

So the charges are still out there. If the players' perception that the owners have stonewalled them by barely negotiating (i.e. sending a counterproposal only after a prolonged delay, etc.) carries with the board, there may be some fire with the smoke. But the owners likely have a similar feeling about how the players have approached discussions. It's also not clear yet how a ruling would affect the lockout or negotiation process, but you can be sure it would be somewhere between "really bad" and "a disaster" for the owners.
Posted on: July 9, 2011 12:17 am
Edited on: July 10, 2011 10:21 pm
 

What teams risk in a lockout: Atlantic Division

Posted by Matt Moore



Talk of losing an entire season is a bit ridiculous to us. There's just way too much at stake. Money, momentum, fan support, money, loyalty, money -- it's just hard to imagine losing any games much less a whole season.

But it's a possibility. And with all this hardline talk going on, it seems like neither the players nor the owners are wanting to budge. There's incentive for teams to get a deal done and not just for the money, but because a year without basketball and more importantly, basketball operations, could greatly affect each and every NBA franchise. We continue with the Atlantic Division.

Boston Celtics

The Celtics have already started keeping an eye on the future past this core. Their trade of Kendrick Perkins for Jeff Green and the Clippers' draft pick were both aimed at the future. In 2012-2013, the Celtics have less than $30 million comitted. But their best shot at a title is now. Losing 2011-2012 ends the Big 3 era in Boston. Kevin Garnett and Ray Allen's contracts would expire just as their ability to anchor a championship team also goes the way of the dodo. Losing next season means they wind up with a single championship for all that money invested, all that excitement created. 

On top of that, no city needs the current structure to hold as much as Boston. The ability to outspend the small markets under a flex-cap, using its big market status combined with its superiority as a historical powerhouse are both tied to the current luxury-tax system. Savvy spending, reasonable contracts, creative maneuvers? Does any of that sound like the team whose current core is the product of Kevin McHale pitching his old team a favor?

New Jersey Nets

Mikhail Prokhorov did not get into this business to lose an entire season, the last he has Deron Williams under contract before an extension he hopes to sign him to, and then begin to build a contender under a system which negates every advantage moving his team to Brooklyn provides. But that's the reality that faces the Russian mogul.

Deron Williams is the big key for the Nets. They sent a fortune in the trade for Williams, with the understanding they would convince him of their grand vision and build around him on his next contract. It was a gamble. But they need the 2011-2012 season to convince Williams that the plan works, that the vision is in place, that they can succeed as the team Williams wants to commit to. Without the 11-12 season, Williams will end up entering free agency with his only time as a Net filled with failure. He may wind up with more wins with his team in Turkey than he won with New Jersey.

From there, Prokhorov would actually be better suited to a system that allows for overspending. If small market teams succeed under the new CBA, his advantage is leveraged. And in such a scenario, New York's power would be amplified within the market. If you're getting paid the same amount regardless, going to the team with the most cache is the best idea.

New York Knicks

Speaking of the Knicks, they have quite a bit to lose in this scenario. A harsher cap drives up the likelihood they won't be able to build effectively around Carmelo Anthony and Amar'e Stoudemire, if at all. They're already struggling to fill in the gaps (as Donnie Walsh put it in his conference call after stepping down), with a lower spending ceiling that job only gets more difficult. Dolan has failed to succeed when he's broken the bank open. What happens when he can't spend his way out of a problem?

Bigger than that, however, are the risks of the actua lockout. Amar'e Stoudemire is an injury risk. Despite the fact that he's had no problems since microfracture surgery five years ago, scouts and execs are still hesitant about him. Stoudemire is talking about heading to Israel to play during the lockout. Any uninsured play could wind up wiping out time for Stoudemire which devastates the Knicks' prospects for contention. They need to have the stars available so build around, and another year to see what direction they need to go to build a complete team. Losing the season is a disaster. 

Philadelphia 76ers

Hey, look! They could spend a whole year thinking more about whether to trade Andre Iguodala! They haven't really done enough of that so far.

The lockout could actually help the Sixers on two fronts. First, their attendance was terrible again last season despite making the playoffs. They need the kind of financial overhaul the lockout aims to create. Second, losing the 2011-2012 season means they lose out on a year where they are on the books to pay Elton Brand, Andre Iguodala, and Andres Nocioni (remember him?) over $37 million next season. They can probably do without that with a fanbase that still hasn't bought in.

Elton Brand has an early termination option for 2012-2013, but he is unlikely to exercise it. Instead, the Sixers will be hoping for the amnesty clause to allow them out from under that final year of Brand's contract.

If any team could use all of the ramifications of the lockout, it's the Sixers, big market or not.

Toronto Raptors

The Raptors won't be winning the title any time soon. Their huge contracts won't be moving off the books any time soon. Their fanbase is still angry over giving Andrea Bargnani his extension and the damage done by Chris Bosh's departure.

So pretty much the Raptors are fine with however the lockout works out. Lose the season, they get Jose Calderon into a contract year, and have more time to come up with inventive ways to ditch Andrea Bargnani, plus Jonas Valanciunas is available to come over from Europe. A new salary cap may mitigate the uphill climb they face with their market and location.

They're pretty much fine with however this shakes out.
Posted on: July 2, 2011 2:34 pm
Edited on: July 2, 2011 4:55 pm
 

While you're in a lockout... other things to fix



Posted by EOB Staff

Well, now you've done it, NBA. You've locked out the players with neither side willing to budge. The owners want to set back decades of negotiations to the Stone Age by implementing a hard cap and decreasing the players' share of the profits. The players want everything to remain the same, basically, and not to lose their diamond-studded shirts. This thing's going to take a while. That's pretty clear. 

So we thought instead of us just sitting around moaning about this lockout, which, trust us, we're going to do, we'd actually do something positive. In that spirit, we thought we'd take a look at what we feel the owners and players should work on changing about the NBA, while they're locked out. As long as you're blowing up the NBA universe and starting over, you might as well be comprehensive about it. 

From Matt Moore:

Finally Put Up For The D-League -- The owners like it because it gives them somewhere to stash talent they can keep an eye on. The league likes it because it helps reduce the bust rate. The coaches like it because it gives them somewhere to send head cases when they're bugging them. The players like it because it means more jobs, conceivably. So why on earth won't both sides agree to substantial changes to the NBA D-League to make it a true development system?

Whenever the NBA starts up again, the following teams will own either part or all of their D-League affiliate: the Lakers, the Spurs, the Warriors, the Thunder, the Mavericks, the Nets, and the Knicks. That's seven out of 30 possible teams, leaving only nine D-League teams without an owner, and forcing 23 NBA teams to share those nine teams. Clearly, there's a trend towards buying in. 

When you look at the number of players out of the draft each year who bust, wouldn't it be worth investing in a legitimate development system so that those players can grow into the players teams need them to be before they're cast aside? But the keys to a viable D-League don't just end with actual development. Elton Brand, among others, has expressed a willingness in the past to play for a D-League team while rehabbing from injury. Instead of forcing a player back early, where coaches will be nearly forced to overplay them to try and win games, the D-League could serve the same function as minor league baseball, helping players recover from injury on a timeline, with controlled minutes and longer rest. Worried about a player's conditioning coming back from a year-long absence? Instead of having him sit in a suit game after game, have him go five minutes at a time for a week in the D-League, then 10, then 20, before returning to the main club. 

Most confusing about the lack of progress for the D-League is just how cheap it is. Essentially, for the cost of a single year of Sasha Vujacic, you could not only buy a D-League franchise or set one up from scratch, but actually make substantial improvements in training, staff, travel and organizational structure. Everything is cheap in the league, and cutting corners won't set you back.

Instead of wasting two roster spots for guys who sit on the bench in a league that doesn't really practice all that much, assign two roster-spots to the D-League. Those players are paid under $1 million on non-guaranteed contracts (just like most mid-season call-ups), and if they are brought up, another non-guaranteed player is sent down, if applicable. Teams can also develop coaching staff at that level as well. 

The league has flourished under Dan Reed, and has proven it can work as a development system for talent. Look at Aaron Brooks, Reggie Williams, Jordan Farmar for starters. It's time the NBA and the players' association actually commits to it. 

Close The Trade-Buyout-Re-Sign Loophole -- This one's tricky to deal with, but it needs to be expressed, if only for the sake of not annoying us. You throw an aging, expiring contract in as filler for a trade. That player agrees to a buyout with the salary-shredding team that traded for him and waives him. The player then returns to the team he was traded from and immediately re-signs. It's pointless, it's ridiculous, it needs to go away. Either we need more lax agreements on trade rules to allow these deals to go through without needing those players traded, or a measure to prevent the teams from re-signing that player. I don't believe it's any sort of unfair advantage like some coaches do, any team can pull off the same type of deal. But it still seems skuzzy and takes away from the integrity of the game for very little advantage, in a way that could be avoided. Player movement needs to be maintained under the new CBA (beware the hard-cap), but this is one facet that could use a little more restriction. 

From Ben Golliver:

Season-Ending Injury -- In recent years, both the Golden State Warriors and Portland Trail Blazers have dealt with serious rashes of injuries that, at times, made it difficult to field a full roster of healthy players. The NBA currently has an emergency system in place to help teams who lose multiple players to extended injuries: the league grants a "hardship exemption", which temporarily creates a roster spot until a player comes back healthy. This system is a bit cumbersome, forcing teams to sign and waive players regularly and really only serves as a stopgap solution when disaster strikes multiple players. A better idea would be to allow a team to slap a "season-ending injury" designation on a player, subject to league approval. Once approved by the league, that player would be removed from the team's 15-man roster for the rest of the season, freeing up a spot for the team to sign a replacement player. The current system penalizes a team twice when a player suffers a season-ending injury: They suffer both the loss of the player and the difficulty of replacing him. This tweak wouldn't fix the first issue (nothing can heal injuries) but would alleviate the second problem. If a team had a rash of injuries at a particular position, they could go out and find the best available replacement player at that position rather than scrambling together unconventional lineups made up of their current healthy players. Ideally, teams would be able to do this up to two times a season.

International Buy-Outs -- Ask almost any top European player and they will say that it is their dream to play in the NBA. Ask almost any NBA executive and they will tell you they are committed to scouring the globe to find the best available talent. The only thing standing between the two sides in this globalized, modern reality? Complicated buyouts inserted into European contracts and an arcane NBA rule which says teams can only contribute $500,000 to help a player out of his contract. The current system is incredibly inefficient and leads to worst-case scenarios like the Ricky Rubio situation, which dominated headlines for multiple years, tying up the Minnesota Timberwolves and causing his stock to plummet on draft night because teams were uncertain about his contract status. With the rising size of buyouts, there's no question the $500,000 limit needs to be raised. To where? $1 million? $2 million? One idea is to simply not cap the contribution amount in any way. There is serious merit to this idea. European players already sacrifice financially when they come to the United States because they are subject to lower-dollar rookie deals when drafted. Often, stars are taking a pay cut to follow their dream. Asking them to contribute their own money to the buyout on top of that to make the transition is excessive. If an NBA team wants a player, it should bear the full financial burden of acquiring him. Will European teams respond by increasing their buyouts even further? Possibly. But competition between European clubs for a young star's services should keep the buyouts at a reasonable level if it's clear that player is using his time in Europe as a stepping stone to the NBA.

Revenue Sharing -- An NBA.com article wrote that there is a "chasm" between the owners and players in their labor negotiations. There's a similar canyon between small-market owners and big-market owners in terms of revenue generating potential, especially when it comes to television deals. The NBA has preached its commitment to creating a new system where all 30 teams have the opportunity to compete for a title -- a noble goal. That can only happen when all 30 teams have a more equal ability to spend on player salaries. On their new TV deal, the Lakers will make $150 million a year, more than enough to cover their $90 million payroll (which is tops in the league). A small market team might be lucky to make $10 to 15 million per year on its TV deal, which equates to roughly one-third of their payroll. Expecting the Lakers and other big-market teams to make up all the difference between the two poles is excessive, but surely there's a compromise that can be reached to make the division more equitable. The only viable alternative is contraction, which is a far worse eventuality for the league, even if its big-dollar teams might not think so.

From Royce Young:

No more inactive lists -- Can anyone really explain the point of this to me? Why are teams allowed 15 roster spots but three of those guys can't dress? What sense does that make? 

Those final three guys aren't going to play much anyway, but take a team that has a project big man on the roster. Every night, he's in a suit. But in certain blowout situations, it would probably be nice to get him two or three minutes of run. Except you can't, because he's wearing dress shoes and a tie.

I suppose it requires a bit of strategy in the end for a coach to select guys to be active, but that's just silly. Maybe it's an owner thing. If coaches could dress 15 guys, more teams would fill up the roster meaning more salaries for an owner to pay. But that's a horrible reason for it.

Get rid of inactive spots and just make it a simple 15-man roster where everyone is eligible. If a guy gets hurt, add a disabled list type of place so that guy doesn't hog a roster spot, but allow everyone to dress. It definitely makes a lot more sense than forcing three guys to wear suits. 

Eliminate the second round of the NBA draft -- On the surface, this idea doesn't seem like it should matter much. All second-round contracts aren't guaranteed and all teams have are the rights to a player. But restructuring the draft to eliminate the second round helps players find a home. 

Instead of a team using the 34th pick on a good college junior because he's a good third point guard to have on the roster, if everyone was simply a free agent in the second round, that player could find a fit that's a lot better for him. 

Most second rounders don't make it anyway, but there are always five or six that are quality pickups for a team. Some get signed, some don't. And the ones that don't end up going to Europe or the D-League, sometimes because they're a small forward and were picked by the Heat. If the contracts aren't guaranteed anyway, what purpose does the second round really have other than it's decent TV?
Posted on: July 2, 2011 1:24 pm
Edited on: July 2, 2011 2:36 pm
 

Lockout Timeline: How we got here

Posted by Matt Moore

How did we get here? How could things have gotten this badly this quickly? Didn't we just have a CBA agreement in 2005? Why didn't talks start sooner?

These are the questions we ask ourselves as the NBA begins its second lockout in 12 years this weekend. To help us understand how we got here, in contrast to Ken Berger's work on where we're headed, we present this timeline of relevant CBA dates. This is not a complete listing of every development, but hopefully provides some context of how we got from a stable and happy NBA, to one which may not play another game until fall of 2012.

January 20th, 1999: The NBA lockout ends after nearly seven months of non-talks. The two sides had been locked in bitter negotiations and went 36 days before engaging in the first bargaining session after the lockout. In a negotiation considered a win for the owners, the rookie scale was introduced along with the mid-level and veteran exceptions.

June 2nd, 2005: The NBA and NBPA come to an agreement on a new CBA, avoiding a lockout for the second time in six years. Under the new agreement, max contracts are shortened and raises curtailed.

July 22, 2005: The NHL owners' contingent secures a monumental victory over the NHLPA after a year-long lockout, securing a hard cap and keeping revenue sharing off the table. This has two effects on the NBA ownership. One, they see that a league can implement a hard cap in the modern era if its willing to go the distance. Two, NBA team owners who also own stakes in NHL franchises are convinced that a lockout, regardless of how long it takes, is worth it if they are able to secure changes for guaranteed profitability.

February 15th, 2009: In light of an ever-worsening economic downturn, Billy Hunter and David Stern appear at a joint press conference during All-Star Weekend in Phoenix and reveal they are in talks to reopen the collective bargaining agreement. At the press conference, both sides make it clear they are looking to get out in front of the expiration of the current deal in 2011.

Hunter: "We all understand that we live and benefit from the success of the NBA. The last thing we want to do is see it lose its vitality. We will do everything possible to reach a deal.

Whether or not that means we will reopen before the expiration of the current contract's conclusion is another question. But I can say to you that we are anxious to reach a deal."

Stern: "Just to talk about frameworks and understandings and say when we get to the last day and then it is either one side or the other, it leads to bad things."

The two sides were aware, even at that point, of how far apart they were, and vowed to work to start negotiations, substantitive negotiations, to avoid the question of a labor stoppage coming down to right before the expiration of the CBA in 2011. This is more than two years before the expiration date.

Substantive negotiations do not begin until May of 2011.

More on NBA Lockout
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Ken Berger Ken Berger
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February 19th, 2009: The New York Times speaks with former agent David Falk in advance of his book release, who makes bold and severe statements about the upcoming talks. Falk becomes one of the first to publicly forcast the owners' push for a hard cap.

“I think it’s going to be very, very extreme,” Falk said, “because I think that the times are extreme.”

February 27th, 2009: The AP reports that the NBA has lined up $200 million in loans to teams facing financial hardship during the economic crisis.

March 8th, 2009: ESPN and the Star-Tribune report that Glen Taylor, owner of the Minnesota Timberwolves, along with then-head-coach Kevin McHale were "rebuked" by the league office for comments made about the labor agreement. Most notably, McHale provided the first look at just how severe of changes to the existing agreement the owners would be looking for in negotiations, saying how the players should prepare for "major changes."

The league then authored a memo, according to reports, instructing teams not to make "any unauthorized statements" regarding the CBA, nor to speak with any player regarding the CBA or relevant discussions thereof.

March 20th 2009: Stern tells ESPN that he and Hunter have agreed to begin "substantive discussions, perhaps as early as May" in advance of the CBA's 2011 expiration. Notably, Stern says that when the current deal expires, it will not be "owners taking a hard line, it's going to be [both sides] dealing with new financial realities.

The owners will not offer a formal proposal until January of 2010, nearly 11 months later.

September 18th, 2009: The NBA officials' representative in the midst of a lockout of referees claims that NBA management received raises during the financial crisis the league has used to illustrate the need for overhauls of both the officials' and players' CBA. The referees' lockout is later resolved in what is considered another win for the owners.

December 18th, 2009: Ken Berger of CBSSports.com reports that the league and players will meet over All-Star Weekend in Dallas with the first official proposals to be exchanged. It will have been a year since the Hunter-Stern presser vowing to proceed with negotiations early. Both sides continue to say the last thing they want is a lockout.

January 29th, 2010: The first substantive signs that the negotiations will become bitter and that the owners plan to take a hard line come to light as Berger reports that the owners' position is one of "(the players) need us more than we need them." Berger reports that the owners are "unified" and "determined to crush the union."

February 12th, 2010: Both sides realize after the first exchange of proposals just how far apart they are. Billy Hunter says afterwards that the owners actually pulled their proposal because it was so extreme. The terms "heated" and "contentious" are used,  Berger reports. It is the first indication how nasty this will become.

February 13th, 2010: Stern speaks at All-Star Weekend. Stern ridicules the assertion that the owners' proposal was "taken off the table." Later reports reveal how severe the owners' initial proposal was. Instead of considering this the extreme measure as an opening to a negotiation, the league represents this as the cold hard truth of what to expect in negotiations. The word lockout starts being bandied about.

July 2nd, 2010: Berger reports that the players provide their first counter-proposal to ownership, five months after the owners' proposal at All-Star Weekend. The players' proposal not only lacks the substantive changes suggested by the owners in their initial proposal, but in fact seeks to provide more flexibility and earning potential for players. Even as an opening offer to set the marks for the negotiation, it's unrealistic at best.

We are inside of a year remaining in the CBA. The owners will not respond to the proposal in kind for over nine months.

August 12th, 2010: Star players become involved in the talks for the first time since All-Star Weekend, but while the tenor of the conversation is improved, there is still a "gulf, not a gap" an executive tells Berger.

Notably, the players' association makes its first concession in regards to the total money spent on salaries. This is important as it sets the tone for the players being more willing to compromise, while the owners remain solid in their initial positions. This will later seemingly provide ammunition for the owners to believe they can eventually get the union to cave, if drastic measures are implemented.

October 21st, 2010: The league makes it known how severe their desired changes are, giving the estimate of $750 to $800 million in reduced salaries for the players. Everything is on the table for them, from contraction to revenue sharing, but the league makes its expectations crystal clear.

November 14th, 2010: Ken Berger of CBSSports.com reports of upcoming meetings scheduled for November 18th, described as "two-on-two" sessions with the heaviest hitters, involving Stern, Adam Silver, Hunter, and Derek Fisher. The hope is that smaller meetings will create more substantive progress.

March 30th, 2011: Ken Berger of CBSSports.com reports that the NBA has sent financial data from the teams for the 2009-2010 season to the NBPA. The disclosures reveal substantial losses in how they are calculated. The players' association will later deny the accuracy of the data and the conclusions gathered from it.

April, 2011: Ownership finally provides another formal proposal. It has been nine months since the players' last proposal.

June 8th, 2011: Players say there have been no changes at all in the owners' demands. 

June 21st, 2011: The owners' latest proposal seems like a compromise, moving away from a hard-cap to a "flex-cap" and softening their position on the BRI split, slightly. Players feel these measures are red herrings. 

June 22nd, 2011: Hunter tells reporters that the owners demands "can't be met."

June 28th, 2011: The owners and players agree to one final meeting, hours before a lockout. It will have been two and a half years since talks began at All-Star 20009.

June 30th, 2011: Owners notify players that the two sides are too far apart. The lockout begins at 12:01 a.m. EST, Friday, July 1st, 2011.
 
 
 
 
The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com