Union anticipates lockout, disputes NBA's revenue figures
Billy Hunter looks around the basketball landscape and sees nothing but good news. The free-agent craze generated by LeBron James, Dwyane Wade and Chris Bosh has contributed to a summer spending spree and unprecedented fan interest. League revenues hit an all-time high last season, a time when the sport was reeling from a severe recession -- after doomsday predictions of massive declines. This summer, teams have already sold more 2010-11 season tickets than they have in any entire season in league history.
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| 'As of this moment, I'm preparing for a work stoppage,' Billy Hunter tells CBSSports.com. (Getty Images) |
By the time Stern and Hunter sit face to face in a bargaining session aimed at staving off what seems like an inevitable lockout, it will have been at least four months since the most recent bargaining session. A process than began two years in advance somehow has stalled, and the pressure will be on once the rest of the summer flies by to reach an agreement before the current labor agreement expires on June 30, 2011.
"As of this moment, I’m preparing for a work stoppage, because I’ve had no discussions with David about collective bargaining since probably April of this year," Hunter said Wednesday in an interview with CBSSports.com. "When we get back to the table, that will be first time in four or five months that we’ve had any type of discussions. Once we get into next season, the pressure will be on each of us to get something done."
That pressure comes from the momentum the NBA has coming out of the most compelling and highest-rated Finals since Michael Jordan retired, coupled with the offseason boost achieved by the free-agent hysteria surrounding James. The basketball version of the Beatles will be on tour next season, as James, Wade and Bosh try to topple the Celtics and Lakers. It would’ve been more interesting to me if Miami’s Big Three had spread out, but that’s a matter of taste. Any way you slice it, the NBA is in the national sports conversation like at no other time since Jordan hit his last championship shot 12 years ago.
"The frenzy and excitement created by this free-agency period has brought more attention to the NBA than I can remember since the advent of Michael Jordan, and I don’t even think Michael created this kind of stir," Hunter said. "If you look at the overall health of the league, things look pretty sound and healthy heading into the 2010-11 season."
But it’s worth remembering that within months of Jordan achieving the zenith of his incomparable career with that sixth championship, the NBA was crippled by a lockout that wiped out nearly half the ‘98-‘99 season. Owners don’t fill the balance sheet with buzz, and thus don’t care much about it. And there is a strong, unified contingent of owners who are determined to change the NBA’s salary structure or shut the sport down with a lockout.
The owners’ position becomes more untenable by the day, but that’s never stopped them before. They were genuinely frightened, as all of us were, by the financial crisis that crippled our economy -- the effects of which will be felt for years or even decades. But pro sports in America is a resilient business, and the 2.5 to 5 percent decline in NBA revenues never occurred. In fact, revenues grew about 1 percent during the 2009-10 season to nearly $3.8 billion -- the highest level in league history. As a result, the precious salary cap -- which assigned 51 percent of the revenues for the players -- went up to $58.044 million, which is about $8 million more than the worst-case scenario predicted by the league last summer.
After the Board of Governors meeting in Las Vegas Tuesday, Stern tried to argue the inarguable -- that despite a rise in revenues and a decline in player salaries, the NBA still lost as much money as he previously projected. Stern now says the league was $370 million in the red in 2009-10, and that’s unchanged from when he dropped a $400 million bombshell at the All-Star Game in Dallas.
"That’s what it was when I summarized," Stern said. "I rounded it to four."
Hunter said that figure is "nowhere near" accurate. "It’s a severe exaggeration," he said.
Which brings us to the key problem for both sides: Nearly a year after touting their early start to the bargaining process, they still can’t even agree on how much NBA teams are making or losing -- despite the exchange of enough financial documents to have a decade’s worth of ticker-tape parades. The owners have made one proposal which attempts to impose a hard salary-cap and drastically reduce player salaries. Though Hunter won’t discuss details publicly until he’s had a chance to negotiate with the owners, the players’ proposal is mostly status quo.
Hunter said the players’ proposal contained more departures from the current agreement than eliminating base-year compensation -- which makes it difficult for players to be traded after receiving a significant raise -- and relaxing the guidelines for restricted free agents, which were elements of the proposal reported by CBSSports.com earlier this month. But in a series of separate media interviews Wednesday, Hunter wouldn’t discuss the details, with one exception: revenue sharing.
"While we admit that there may be six or seven teams that are in need of some assistance, their needs can be rectified through revenue sharing, which is what I’ve been pushing since we commenced negotiations with the NBA in August of last year," Hunter said. "Revenue sharing has to be on the table and has to be part of the whole bargaining process."
Stern and deputy commissioner Adam Silver disagree, saying that revenue sharing is an ownership issue that has never been collectively bargained with the players before.
"That may be true," Hunter said. "But these are different times, and they call for a different approach. We’ve never been confronted with the type of demands they’re making, either. If we’re forced to consider their demands, then there has to be some reciprocity. And the reciprocity is that we have to have the same kind of consideration with regard to revenue sharing."
So there you have it: The first quid pro quo of these efforts to keep the NBA from wasting all of its momentum with a lockout. Hunter wants NBA teams to share gate receipts and local TV revenue, as NFL teams do. He wants it agreed to as part of the owners’ pact with the players. If the owners want any cooperation on the changes they’re trying to make, revenue sharing is where the discussion begins. The question is: If the owners refuse, is it a deal breaker?
"It’s too early in the game to say that," Hunter said. "… I guess it depends on what the overall deal looks like as to whether that would become a deal breaker."
So here they are, a year away from D-Day and seemingly no closer to compromise than they were a year ago. But Hunter clearly believes that the players have the momentum and the owners are in retreat -- running from their problems while shelling out approximately $1 billion in new contractual commitments in the first week of free agency. Whatever the underlying reasons for the spending -- a bad system or pure greed -- they’re certainly not acting like owners who’ve been losing at least $200 million a year since the current agreement was ratified in 2005, with few changes to the system that was born out of the ‘98 lockout.
"It doesn’t make sense to me, on one hand being concerned and having GMs that go out and spend," Hunter said. "Are you telling me you’ve got a group of owners willing to withstand losing $200 million a year and only now are beginning to understand it 13 years later? That doesn’t make sense. That dog won’t hunt, brother."
Happy hunting to both of them. It’s going to be a long 12 months.
