Tag:Billy Hunter
Posted on: August 5, 2010 4:31 pm
 

The lockout discount

Posted by Matt Moore

Ken Berger's report on the upcoming meeting of the players' union and ownership is probably only going to go as well as the last meeting did. Here's a little dramatic re-enactment of that exchange:

Players' union: "Psshaw!"

Owners: (GUFFAW!)

Players' union: "As if!"

Owners: (Rabble rabble!)

Etc.

But among the information KB passed along , there is the one that keeps coming to life:

Like partygoers ordering the last few rounds of drinks on the Titanic, owners doled out more than $1 billion in salary commitments during free agency. Five-year deals north of $30 million for the likes of Channing Frye, Drew Gooden, Amir Johnson and Travis Outlaw were among the head-scratchers -- or, as one person on the players' side of the debate called it, "the height of stupidity" for owners heading into a labor fight.

In politics, I'm told there is a drive to create easy-to-digest slogans. And "You gave Darko Milicic $20 million" is the union's new rallying cry. And it's certainly a valid one. But wrapped up in all this two-faced jesterdom is a question that started bugging me. KB notes that teams gave out up to a billion dollars in free agent money this summer. But then later, there's this sobering, theoretically unrelated note, again, something we know but that bears repeating:


"There's a concept known as the self-fulfilling prophecy," one of the people involved in bargaining said. "When you have both parties saying there's going to be a lockout, the likelihood of it happening is very high. ... My interpretation is, I don't think either one of these guys is ready to move."

So just to go over this once more. The ownership group lays out $1 billion dollars the summer of free agency and takes on water for it. At the same time, the ownership group is steadfastly moving towards a lockout with seemingly no concern over how long it will go on. Anyone else picking up a paradigm here? The owners gave out a considerable amount of money over a given number of years... but are almost positive they will not be giving the full amount.

A lockout season prorates the players' pay. With players paid twice a month, if the lockout lasts into half the season, that scrapes off half that first year's salary. Take a swing at how much less those salaries become depending on how long the lockout lasts? Meanwhile, the ownership group negotiates for a tougher deal which will curtail spending in the future. So we've got a primary element of the union's case that probably won't be true. It won't stop the union from being able to use it as an argument, but then, the more the union uses it, the more likely a lockout becomes, which of course, drops the price off the contracts.

Even if the lockout only lasts a month into the season, that could drop millions off a team's payroll. Combine that with whatever revisions the owners force the players to concede, particularly those top-end players, since they aren't making their presence felt at the meetings, and there's a pattern forming here. The owners seem like they're a step behind. But it's possible that Berger's source was right:


"[The owners] are not remotely worried. They're fully prepared to shut the thing down."



The union's campaign slogan may ring true in theory, but it's possible the owners are a step ahead, regardless of how these talks develop.
Posted on: July 30, 2010 8:45 pm
 

CBA talks mean two houses divided

Posted by Matt Moore

Ken Berger's column today touches on the future of the league through the ever-narrowing window of the upcoming CBA talks. The column itself specifically touches on the viability and reception of an NFL-style franchise tag in the NBA. But a salient point might get lost in the column, one that belies another level of complexity in the talks that will occur over the next 12+ months.

From KB's piece :

 

“The league would love to have [a franchise tag] in place to maintain competitive balance,” said Gabe Feldman, director of the Sports Law Program at Tulane University. “The small-market owners would love it, but the big-market owners wouldn’t. It’s not just a struggle between the owners and the players. It’s a struggle between the owners and the other owners.”

 

The point belies something lost in the offer-counter-offer-counter-counter
-offer talk between the union and owners, and the ongoing PR fireworks that have laced these talks since last All-Star Weekend. There are really four sides to these negotiations. The players' union, the league, the big-market owners, and the small-market owners.

The league will first and foremost side with the owners. They have a responsibility to ownership to protect their interests. But the league is also torn on the interests of the big-market teams versus the small-market teams, who have competing interests within the owners contingent.

For example, a franchise tag as Berger outlines would have helped Cleveland keep LeBron for another year, buying time to make another run at a title, provided the Cavs targeted an “exclusive” tag for James. Even a non-exclusive tag would have prevented the Big 3 from forming by demanding two first round picks in exchange for James, making the sign-and-trade for Chris Bosh that much harder, especially if Toronto also oped for a franchise tag on Bosh.

And that's great for Toronto and Cleveland, but the teams that have led the labor negotiations have been the very teams that would hate a franchise tag, those teams that were in contention for LeBron this summer. New York. Chicago. New Jersey/Brooklyn. LA Clippers. And the Miami Heat. It's those owners, along with those in Boston and LA who have the most to lose from restructuring, that could prevent change at this level.

But the franchise tag is a concept. There's a very real battle that will be fought during these negotiations, one that could drive a wedge of confusion into the owners' obtuse fortress.

Revenue sharing is a players union issue. At least that's how the union sees it, and it has been pushing for changes to the revenue sharing system aggressively. David Stern said at the All-Star game that revenue sharing was a priority for the league, but also made it clear that it would be a separately negotiated process internally with the owners, not something the league would allow the players to negotiate during the CBA talks.

This is likely to be a major issue of contention, to the point where the union may have to employ labor law in order to force the issue onto the table. But the owners may not just be having to fend off this push from the union. Forces within the owners group may have a rising contingent of newer owners who are unhappy with the current model, which essentially gives the big market teams significant advantages at every turn, trapping small-market teams at the bottom in a rich-get-richer, poor-get-poorer model. There are obvious exceptions in San Antonio, Oklahoma City, and Orlando, but both the Spurs and Magic have spent a considerable amount of money in order to overcome that gap, and the Magic have yet to claim a title while the Thunder are merely projected towards success.

As a few examples, in the NFL, which is clearly the most successful sports league in America, television revenue is split among all the teams while in the NBA, the home team negotiates its own television deal. The NFL home team splits the gate 60/40 with the away team, while the NBA home team keeps all its revenue.

An adjustment like this may seem indicative of a move towards welfare ownership that could lead to bad ownership allowing to float, but it's hard to argue that's a worse arrangement than the massive gap between the small market teams and the big markets. Newer ownership, though, has made noise about wanting to move away from the status quo.

Meanwhile, as the owners are trying to shore up their own front, they are likely to tailor their proposals to the union to benefit the non-superstar players while restricting the top percentage of players. Appealing to these players with concessions could help them with their overall goal of capping exorbitant spending (on non-Darko players, of course). This sets up a scenario of there being five separate entities in the CBA talks. The superstar players, the role players, the big-market owners and the small-market owners, with the league trying to keep tabs on everyone in the hopes of getting a resolution (that obviously favors their constituents, the owners).

Things are going to get a heck of a lot messier before they get better.

 
 
 
 
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