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NBA's hard line on pay cuts could lead to hard lesson


What has been speculated about is now on the record, straight from the horse's mouth. Or, rather, the jockey's mouth.

When I walked toward the American Airlines Arena court with David Stern on Friday, before the last great creation of the current NBA business model was unleashed before the home crowd, the understandably road- and media-weary commissioner wouldn't answer the question on everyone's mind when it comes to the touchy collective bargaining negotiations: Do NBA owners seek to roll back existing contracts, imposing a pay cut on all 450 players as part of a new deal?

Commish David Stern plays coy, but his deputy commissioner Adam Silver opens up a little more. (US Presswire)  
Commish David Stern plays coy, but his deputy commissioner Adam Silver opens up a little more. (US Presswire)  
"I don't know," Stern said coyly. "Hey, Adam. There's a question for you ..."

Adam, of course, was Adam Silver, the NBA's deputy commissioner, point man on collective bargaining and jockey of Stern's horse, which he seems to regard as Secretariat-like in its chances to throttle the competition in these labor talks.

"Yes," Silver said, point blank.

And there you have it: On-the-record confirmation that the NBA is looking to do to its players what the NHL did in 2005.

"It's part of our proposal," Silver said. "It included a reduction of existing contracts in addition to a reduction of the maximums going forward."

In addition, has learned the across-the-board pay cuts sought by the owners were floated with a key caveat in their January proposal: If the players agreed to the rollbacks and ratified a new CBA in time for this season, the owners would have agreed to soften the blow. In other words, if the new economic model sought by owners had been put in place a full year in advance, the pay cuts would've been less severe, and would have included the possibility of some grandfathering of existing deals, two people familiar with the owners' proposal told The key condition was that the proposal needed to be adopted before the start of the monumental free-agent class that began on July 1, 2010.

One of those people said it was presented to the players as "a carrot" to induce them to negate the possibility of a lockout. The carrot, it turned out, tasted rotten to the National Basketball Players Association, which we know rejected the entire proposal during All-Star weekend. Given that this season already is under way with the old, soft-cap system and its exceptions still in place, the owners' offer to gradually impose the pay cuts and make them less drastic is no longer on the table, sources say.

"The union's response to all of our proposal has been, 'No,'" Silver said. "And as you know, they countered with a proposal that looks a lot like the existing deal."

Seeing as how Silver, Stern and I were about to watch the home-court debut of Miami's three-headed, max-player monster, I thought it appropriate to ask: What would happen to LeBron James, Dwyane Wade and Chris Bosh under a hard-cap system in which they'd bring with them contracts totaling $42 million in 2011-12 -- likely about 75 percent of the hard cap the league envisions? After teaming up to create a title contender in Miami and launch the NBA into a revenue and exposure stratosphere never before seen in its history, would they all be expected to take a pay cut?

"That's what they did in the NHL," Silver said. "That was the system they had. All existing contracts were cut a certain percentage."

Yes, 24 percent. After an entire season was lost to a lockout that may have permanently crippled the sport.

So, this is going to go really well, as you can see.

The issue of across-the-board pay cuts is touchy and especially complicated in this case because owners in various places on the league's revenue spectrum aren't in complete agreement as to how to accomplish it. All owners in every sport want a hard cap. Owners with teams that are making money and loaded with talent that's compensated well beyond the current cap -- via exceptions and luxury-tax obligations the NBA wants to eliminate -- want some level of grandfathering of existing deals, sources say.

The point being that Pat Riley, having pulled off the greatest free-agent coup in NBA history, doesn't want his superstar trio regretting their decision because they're forced to give back 20 to 30 percent of the contracts they just signed. (Wade, James and Bosh already agreed to take less money than allowed under the current CBA, to give the Heat the flexibility they needed to add complementary pieces.) Nor do owners of the Lakers, Magic, Mavericks, Celtics and others want to start buying out players who don't fit under the hard cap even after the entire roster takes pay cuts.

That's right, under one model being proposed, it is conceivable that some teams' payrolls will still exceed the hard cap even after the rollbacks. In this case, any excess salary would either have to be grandfathered in -- a complicated endeavor that involves robbing Peter to pay Paul Pierce -- or eliminated through buyouts, which is an equally messy alternative.

Players union chief Billy Hunter has been quiet of late on the labor talks, and the union so far has elected not to go as public with details of its proposal as league officials have. That is expected to change in the coming weeks, as the NBA's draconian ideas and cries of poverty become more and more incompatible with reality: record TV ratings, healthy ticket sales, robust sponsorship deals, gazillions of video streams and consumption of the NBA product at levels and by means never before seen or imagined.

In the meantime, business already has been affected by the labor uncertainty. Teams will soon begin negotiating with sponsors and trying to sell season-ticket renewals for a 2011-12 season they can't guarantee will be played. Numerous 2007 draft picks due for extensions by midnight Tuesday won't be getting them, since executives and agents haven't the slightest idea what the new market value of those players will be. Kevin Durant, Joakim Noah and Tony Parker have signed extensions, but Carmelo Anthony still has hope he can force a trade to New York or New Jersey. With the owners intent on rolling back existing salaries, whether Anthony signs a three-year, $65 million max extension with Denver or another team may very well be a moot point. With rollbacks, he'd wind up in the same place financially regardless of when he agrees to the deal.

So after an otherwise remarkable first week of the NBA season, with TV ratings and interest soaring from coast to coast and from big markets to small, we are reminded once again how temporary all of it could be.

Before joining, Ken Berger covered the NBA for Newsday. The Long Island, N.Y., native has also worked for the Associated Press and can be seen on SportsNet New York. Catch Ken every Saturday, when he hosts Eye on Basketball from 6-8 p.m. ET on

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