Tag: hard salary cap

NBA basketball

Pointing out hypocrisy of NBA owners lockout position


Let’s be clear about two things. First, the NBA owners are going to win the lockout. Big. Just how big remains to be seen, but even if they took the players terms last Friday they would have had a massive win. It’s just not enough for them.

Second, they are fighting to save themselves from themselves.

The owners speak of a couple things in justifying their need to lockout the players and hurt the game. One is “competitive balance,” something that will never really exist in the NBA and has never been part of its success in the past (was the league balanced when Michael Jordan and the Bulls led it to new heights of popularity?).

The other thing the league and owners push is the right for every team to make money. Which really means want the teams to be able to control costs better and get more revenue in the door (through revenue sharing).

When it comes to controlling costs and competitive balance, they speak of the bad contracts that weigh teams down. Hence the “amnesty clause” that would allow them to waive a bad deal and restore some financial sanity to the game.

Except it’s not about that, as Henry Abbott pointed out at TrueHoop.

Meanwhile, the 20 players (ESPN analysts think will be waived with an amnesty clause) are due nearly $500 million combined over the rest of their current deals. Those NBA owners will likely, as a league, pay an extra $500 million just to tweak rosters here and there.

In other words, before all the kings’ horses and all the kings’ men have put the league’s economic model back together again, owners have already asked themselves: Would they like the right to pay players an extra $500 million to be a bit more competitive?

And to that they have said a resounding “Yes, we’d love to!”

Remember, the owners still have to pay whoever they waive with the amnesty clause, those contracts are still valid. Said deals will be dramatically reduced (by 75 percent) on NBA books, but that is a paper savings and is still cash flow out the door for the owners.

Then, once you waive a guy, you have to pay someone to come on the roster and take his place. Owners are not going to try and fill that spot with a rookie or minimum player, they are going to go after a good free agent who ca contribute. Someone who makes $5 million a year or more, most likely.

They are going to spend money to be more competitive. Willingly. Eagerly.

But we sit here on Nov. 1 locked out because the owners are driving a harder bargain to balance the league’s books on the backs of the players. We are without games because the owners don’t think they’ve gotten enough financial concessions from the players yet. Right. Remember players were a fixed cost (57 percent of league revenue), it was the cost of everything else that went up for the owners, in many cases debt service on money borrowed to buy the team in the first place.

What the amnesty clause really shows is the owners will not blink at spending more and doing it fast if they think it helps them win. The owners are hypocrites on this and in the end they are the ones to blame for this lockout and lost games.

Lockout spin of the day: Owners aren’t kidding about 50/50

David Stern, Adam Silver

Right now, David Stern and the owners are trying to scare the players, to push them into agreeing to a 50/50 split of basketball related income (BRI, the revenue the league takes in).

The players got 57 percent in the old deal and think they have given up enough coming down to 52.5, that the owners have to give something back, too. The players see this as a negotiation between partners and want some give and take.

The owners want the money and the power, and are going after them like Tony Montana in Scarface, David Aldridge reports at NBA.com.

The players aren’t going to get 52, or 51, or 50.5, or 50.000001, and if they hold out for those numbers, they’re not going to have a season. You’d have to be crazy not to see that now, so it’s this for the players: take the deal this week or next, or lose the season. If they are willing to die on principle, they wouldn’t be the first. But they will die, in the metaphorical sense….

The players say it’s unfair that they’ve moved so far, from 57 percent of BRI in the old deal to 54.5 percent, and then 53, and 52.5, that they’ve already agreed to $180 million per year in salary givebacks, $1.8 billion over 10 years if they accept the league’s terms.

But this isn’t about fair. This is about the NBA putting its house back in order — naked, real-world realpolitik. If you understand nothing else about these negotiations, understand this: this isn’t just about money, at least not totally; this is about re-establishing who’s in charge.

Is that spin and scare tactics by the owners? Sure. That doesn’t mean there’s not truth in it.

That brings us back to what we’ve talked about before here at PBT — LeBron James and how things went down in his move to Miami, and how that led us to here. James had the power — teams came to him to kiss his ring and make their pitch. Teams spent years clearing out cap space to make a run at him and Chris Bosh. The players controlled that summer, the owners didn’t like it.

Now the owners have the leverage and they are going to win. Completely and totally. They offered the players a deal: a 50/50 BRI split but the owners win on system issues, or 47 percent of BRI and the players get some system issues back. The players want both. The players are betting that the owners will give up a little more on BRI eventually, maybe 51 or 52, plus some system issues. That’s where we stand right now.

The players have some wins in these talks. The biggest was keeping the salary cap tied to league revenues — as the league makes more, the players make more because the cap will go up. That was a principle worth fighting for. But a couple of percentage points? With every day and every dollar lost by the players — and how this lockout impacts fans and will drive revenues down — it becomes a fair question to ask when the players need to just give in and get back on the court.

Frankly, that time is very soon.

A NBA labor deal is close, here’s what is still in the way

Billy Hunter David Stern
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Over the weekend, we told you that much of the framework of the NBA’s new Collective Bargaining Agreement is in place. Contract lengths, the luxury tax, and amnesty clause, a mid-level exception and a “stretch” exception are all basically in place. The New York Times called it the deal “95 percent” done. When asked Thursday, David Stern said he knows what the final deal will look like.

So why don’t we have a deal? Let’s finish this thing and play some hoops.

Because it’s like a football drive — you can cover 95 yards but the last five yards are the hardest to get. (Especially if Tony Romo is your quarterback.)

What still stands in the way? Here are the issues as broken down by the Times and Sports Illustrated.

• Basketball related income split. This is still the big one — how to divide up the NBA’s revenue. Officially the players have come down to 52.5 percent (down from the 57 percent they got in the old deal) while the owners are at 50 percent, up from their mythical 44 percent starting spot, a number they pulled out of thin air. The owners are holding firm and the players are not budging. Each percentage point is about $40 million last season, which means the divide for next season is $100 million and over the course of the contract more than $1 billion.

It’s the money that is key, fix the BRI split and the rest will be done fast.

• Player options in contracts. Last year LeBron James opted out of his deal with Cleveland and went to Miami. Orlando is worried that Dwight Howard is going to opt out of his deal. New Orleans is worried about Chris Paul opting out of his deal.

The league wants to do away with player options on contracts. The players like their players to have options. No deal on this yet.

• Salary annual increases. From Sam Amick at Sports Illustrated.

Previously, Bird (rights) players were given 10.5 percent annual raises while non-Bird players were given 8 percent raises. The NBPA has proposed annual increases of 7.5 percent and 6 percent, while the NBA is proposing annual increases of 5.5 percent and 3.5 percent.

The Bird exception is what a team can use to go over the salary cap to re-sign its own free agents.

• Sign and trade contracts. This is what LeBron James did to Cleveland, what Chris Bosh did to Toronto and one things owners have allowed to keep in the new CBA. However, the owners do not want teams over the luxury tax to be able do sign-and-trades. The players want the rich teams to be able to spend wildly.

They are not that far apart on these things. There is a deal there to be had.

Well, once they sit down and start talking again.