Tag: Collective Bargaining Agreement

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Maybe revenue sharing isn’t the answer for owner, players

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If there is one thing that both the players and owners almost, kind of agree on in the new Collective Bargaining Talks is the concept of increased revenue sharing.

The players see it as a way to help make small market teams competitive — allowing those teams to pay higher salary and avoid issues such as contraction (a loss of jobs). Small market owners want more money for obvious reasons, and NBA Commissioner David Stern said big market owners are willing to discuss the idea so long as there are safeguards to make sure that money is re-invested in the team and not just pocketed.

Behind it all is thinking of the NBA like the NFL model, where there is extensive revenue sharing, great parity on the field, increased competition and a rising tide lifts all boats. Whether that is a model which really works for the NBA — where one player like a LeBron James or Kobe Bryant can alone radically alter a game in a way no one football player can; and where stars have long driven the sport — is another debate.

But revenue sharing does not work for the players or owners, argues Adam Fusfeld at Business Insider.

He notes that that while big market teams such as the Lakers and Bulls have made money, so have franchises in Sacramento, Utah, Cleveland. Also, having that money does not automatically produce wins — see the Knicks or Clippers, two profitable but losing teams.

But the data shows that those deep-pocketed owners in New York and Los Angeles might as well keep their cash. The size of the market isn’t what makes teams profitable, and the size of the payroll isn’t what makes them winners….

Washington, in the nation’s ninth largest media market, had a nearly identical won-loss record to Indiana over the five-year span, but earned $87 million more in operating income. The Wizards generated slightly more income, but also spent $7.6 million less each year on player expenses. If the Pacers simply reduced their payroll to equal that of the Wizards, their $26 million loss would transform into a $12 million profit.

In this five-year span, eight franchises – Phoenix, San Antonio, Denver, Detroit, New Jersey, New Orleans, Chicago, and Utah – finished with more wins than Indiana despite paying substantially less in player salaries between 2005 and 2009. Of those teams, only the Nets lost more than $1 million per year.

Small market owners gripe that it’s impossible for them to stay afloat without sustained on-court success, while large-market teams rake in profits no matter what. But how does that explain the Dallas Mavericks? Mark Cuban’s $75 million loss dwarf those of Pacers’ owner Herb Simon.

Sure, Mark Cuban and Knicks’ boss James Dolan can afford to incur those losses, but they are losses nonetheless. In essence, the Pacers, Bucks, and other small market teams are griping over rival owners’ riches.

And that’s the true inequity in NBA financials.

Some owners are willing to bankroll losses to assemble the best roster they can, while others aren’t.

This disparity continues. Peter Guber and Joe Lacob purchased the Golden State Warriors and have promised to run it smarter, but also said they are not going to spend over the NBA luxury tax line. Meanwhile Mikhail Prokhorov purchases the New Jersey Nets and money is no object.

With both the Detroit Pistons and New Orleans Hornets available for purchase, the debate about the types of owners the NBA has and needs is a very relevant one.

How Carmelo Anthony trade talks are like CBA negotiations

Phoenix Suns v Denver Nuggets
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Right now there is more posturing around the NBA than after a Chris Bosh dunk.

It is coming on two fronts — the Carmelo Anthony trade talks and the negotiations for a new Collective Bargaining Agreement between the players and owners.

Two very different things that have one thing in common — with no imminent deadline everyone is posturing. Deadline pressures drive deals, and right now there is plenty of time in both those situations. So everyone plays hardball and asks for the ridiculous. And that’s not going to change until hard deadlines impose reality on the sutuations.

For example, there is the latest rumor on the Anthony trade front — Denver is asking for five future first round picks from New Jersey as part of a Carmelo Anthony trade, according to Adrian Wojnarowski of Yahoo.

If this is true — and with all the rumors swirling around the Carmelo Anthony trade talks right now we are skeptical of everything — then it confirms reports the Nuggets are overplaying their hand. If true, it would make sense to hear the Nets are backing away from negotiations.

But there are still two months until Denver has to make a deal — right now Nugget management can afford to ask for the moon. Nets management can play the “we’re not interested” game. Carmelo Anthony and his people can privately demand New York only because the chance of losing out of millions in free agency is not yet a reality.

But as the deadline gets closer, Anthony may well reconsider the swamps of New Jersey. Denver will temper its demands and other teams will make their real best offers. (Maybe, it is possible that teams start lowballing the Nuggets as they realize Denver is under pressure, that is the risk the Nuggets are taking.)

The good news is that with Anthony, there is an end in sight — the Feb. 24 trade deadline.

With the CBA negotiations, it’s more nebulous. Right now owners can take the hardline of wanting 1/3 player salary rollbacks while the players can say that the song should remain the same. Right now the threat of lost paychecks and lost team revenue is not a reality.

Technically the current CBA expires and the lockout begins on July 1. But that deadline is not the real pressure point because a lockout in the middle of summer just means no Summer League and free agency gets pushed back. The casual fan doesn’t really care about that and will forgive those.

The pressure really comes as we get into September — when the opening of camps might be pushed back and, more serious yet, games become lost. When games are lost, fans are lost. That is when paychecks and gate revenue are missed. That is the real deadline pressure.

And it takes deadline pressure to make deals happen, to impose reality on a negotiation. Right now we don’t have that, so we have a lot of posturing.

Rudy Gay offers more honest take on contraction

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LeBron James came off as full of fertilizer — first he talks about how cool it would be if you could “shrink the league.” Then when that sparked a debate about contraction he said he didn’t even know what the word contraction meant.

As Kelly Dwyer said so well at Ball Don’t Lie, contraction means “shrink the league.” James needs to be honest to his convictions, not just backtracking after listening to his PR people and handlers. Plus, he was just plain wrong about the 1980s.

Rudy Gay in Memphis talked to our man Matt Moore, working for the CBS Facts & Rumors blog, and gave us a far more honest and nuanced answer when asked about contraction (something relevent to Memphis, one of the teams that gets mentioned in those discussions).

“Yes and no. If I was speaking like I was with the NBA, I’d say yes,” Gay told CBSSports.com Monday night. Of course, with more guys, more power teams, there’s more focus on those teams, rather than the Indiana Pacers or New Jersey Nets.”

At the same time, Gay feels like the great players in this league who already go unnoticed next to the biggest names the league markets would suffer if they were all crammed on teams fighting for top billing.

“I say no, for us as players. It’s kind of tough when the NBA is focused on one team (the Miami Heat) like it has been this year. This league has a lot of great players, like Joe Johnson, Derrick Rose, and even Kevin Durant’s not even getting that much attention. Even Caron Butler, who plays next to Dirk Nowitzki. Even myself, O.J. Mayo, Zach Randolph, it’s hard when they have power teams that have so much focus, it’s hard for us players. But we’ll keep on proving it and eventually these guys will get noticed.”

That may be the honest answer — that while it makes sense on some levels it doesn’t really make sense for the players so they don’t want it. Which is why David Stern threw it out on the bargaining table in the first place, to give him something to use as leverage (“Okay, we’ll take contraction off the table if the union removes….”).

American Express returns as NBA sponsor, a sign of the league’s surging popularity

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There was a time when American Express commercials were as much a part of NBA telecasts as Marv Albert. But five years ago, after the Jordan era and the Laker three-peat were history, the company walked away.

Monday they will announce they are back in — American Express is returning as a league sponsor, the New York Times reported.

Mark Tatum, the executive vice president for global marketing partnerships at the N.B.A, said, “The resurgence of the Knicks, the Heat, the Spurs, the Lakers, the Celtics: there are very exciting story lines and people want to be associated with the N.B.A. right now.”

This is good news on one level — we once again may get to see the likes of  Phil Jackson buying lottery scratchers or Don Nelson buying German dictionaries (to communicate with Dirk Nowitizki) with their Amex cards. It’s a sign — along with boosts in television rating — that the league is having resurgence.

It also makes you think that for all the posturing going on right now about a new Collective Bargaining Agreement, a lockout that costs the league even one game would be a bigger setback than even the hardline owners and players realize. That a lockout would come at a time of the highest levels of popularity for the league since the Jordan era. That a lockout would have millionaires and billionaires battling over to split up the public’s money during the worst recession in generations. That the setback would be more than just the usual five years (how long on average it takes a sport to recover television ratings and game attendance after a lockout).

Amex returning reminds us that a lockout would be just plain stupid.

Latest CBA posturing move: NBA players voting to decertify the union


It sounds ominous, but it’s no more ominous than all the other bad signs out there. This is really more about posturing and having your ducks in a row before heading back to the negotiating table.

Players from at least two NBA teams have unanimously voted to decertify the NBA Players Association, the players union, according to the Dallas Business Journal. They also explain why the players would vote to blow up the body that is negotiating for them.

If the NBPA were to decertify, it would, in effect, operate as a trade organization but cease to be a union. If the league then tried to lock out players, the NBPA could sue the NBA under U.S. antitrust laws and contend that the league was conducting a group boycott, which is illegal. It could not sue the NBA if it remained a union with collective-bargaining authority for its members, under the labor exemption to antitrust laws.

“If the owners are going to lock the players out, the players want to have the option of decertifying the union and asserting their antitrust rights to stop the lockout,” said a source close to the NBPA. “This would keep the game going, not just for the fans but for the players and everyone else.”

Of course it’s not that simple, it’s never that simple. For one, to decertify the union means saying (and proving if challenged) that the union has failed in its duties. Good luck with that. Know that this is a fairly common move in negotiations. But in the public relations game the players could say, “we want to come back to work, it’s those grumpy old owners that won’t let us.” Whether they take that step to decertify the union is another question all together, but it’s out there.

Just to reiterate — a lockout is coming in July. Accept it, become at one with it. The real question is does a deal get worked out before games would start in late October.