Tag: hard salary cap

NBA Labor Basketball

It’s official: NBA cancels games through November. Ugh.


Even when you know it’s coming, it doesn’t make it any less painful.

There will be no NBA games in November.

David Stern said in his press conference following the dissolution of labor talks (again!) that all games through Nov. 30 would be canceled.

That also means there will be no 82 game NBA season this year, he said.

“It’s not practical, possible or prudent to have a full season now… in light of the breakdown of talks there will not be a full NBA schedule this season,” Stern said.

This cancelation will hit the players in the pocketbook — their first paycheck for this season was due on Nov. 15 (they get paid on the 15th and 30th during the season).

A number of owners had wanted to make the players miss paychecks, to feel that pain, knowing that is their ultimate leverage. The players have been dug in for more than a year knowing this was coming and many say they are fine. Still missing a paycheck is missing a paycheck.

The sticking points in talks remain the split of basketball related income (league revenue) and how a more stiff luxury tax will fit.

The big date looming on the horizon is Christmas, a showcase day for the NBA where marquee teams play on national television. For the more casual sports fan, that is like the NBA’s second opening day. It’s when they really start watching. It will take about 30 days to get up and running from the day the two sides reach a handshake deal, so you do the math. It’s not long.

NBA continues ridiculous “two steps up, one step back” dance

Empty Amway Arena

We’ve given each other some hard lessons lately
But we ain’t learnin’
We’re the same sad story that’s a fact
One step up and two steps back
                                                            — Bruce Springsteen

This whole thing is ridiculous.

The NBA labor talks broke off again in a huff on Friday, with both sides refusing to take the final steps needed to close a deal. What that means is that more NBA games will officially be cancelled, games likely at least through the end of November.

The union wanted the owners to give more on the system issues — specifically exceptions allowed for teams paying the luxury tax — and without getting that would not move enough on basketball related income (BRI) to make the owners happy. The players remain at wanting 52.5 percent of the BRI, the owners call for a 50/50 split (although the owners take a lump off the top in expenses.

These tweets from Adrian Wojnarowski of Yahoo sum it all up:

Privately, owners saying union left impression they would accept 50-50 if system issues were resolved, and that’s why NBA returned to talks.

Union won’t accept 50-50 split with many changes of luxury tax/exception system. Players thought NBA would concede a little, get deal. Nope.

They’re not even on the same page. Ridiculous.

Stern said in his post-talk press conference that future offers from the owners would reflect the losses the owners are feeling from no revenue coming in — meaning the owners will offer less, not more in the future. Great.

This is less and less about the money, and more and more about principle on the two sides. And that is bad for fans. As Tim Donahue of Eight Points, Nine Seconds (one of the better lockout bloggers) has said: People will fight for money but they will die for principle. The players feel the deal is unfair, the owners feel the players don’t understand their plight and the owners need a more resounding victory to be profitable. Plus, the owners have all the leverage.

Here’s what I mean about it being less and less about the money, it’s a tweet from Darren Rovell, CNBC’s sports  business reporter.

For the NBA players who follow me: Missing a month of the seasons costs $400M. Going from 52% to 51% on 7 year deal costs $280M!

Donahue tweeted he thinks those numbers are a little off due to projected revenue growth, suggesting a percentage point of BRI is more like $477 million over 10 years. Rather than argue let’s take that number. That means with $400 million in salary out the door we are saying this fight is down to near $77 million, or $7.7 million a year. (That assumes that if the players went to 51 percent the owners would take 49, that may not be the case.)

Are the players willing to miss a month of games over less money than John Salmons made last year? Yes, because they feel they are being wronged. They feel the deal offered is unfair and people will not sign off on a deal they see as unfair even if it hurts them to do so. The owners, on the other hand, have all the leverage and plan on using it. They have won the negotiations, but not by enough to make them happy. While I think the owners deserve the lion’s share of blame in this lockout, everyone has blood on their hands.

So here we are. It’s ridiculous, but here we are.

Don’t be shocked if the two sides start meeting again this weekend or early next week (union president Derek Fisher is reportedly flying back to Los Angeles, not a good sign for those hoping for an immediate resumption of talks).

The pattern throughout these negotiations have been several intense days of talks with incremental gains, things abruptly break off, then in less than a week they are back at it. No reason to think we will not see the same thing again this time.

But this time there is more urgency. Games are being lost and every day games and these games cannot be just put back in the schedule.

Then looming a few weeks away is a deadline to make sure there are games on Christmas Day. That’s an NBA showcase, the first day of national broadcast network games, it’s a day of marque matchups. Miss Christmas and that’s when you really start to lose the average sports fan. Both sides say they want to avoid that, to get a deal done.

Yet here we are. With no new talks scheduled and a stalemate. Ridiculous.

What has to happen Friday for NBA to have labor peace

NBA Labor Basketball

We are close. Very close.

By Monday we could be talking about what the Heat/Lakers/Celtics need to do in free agency, not luxury tax details. There are real signs of hope. David Stern watched the NBA players’ union press conference Thursday from the back row of the room, and both he and union head Billy Hunter were laughing and saying to each other “tomorrow.”

So what has to happen? What has to be covered Friday for there to be a handshake and a deal?

Here are three key hurdles.

• Basketball related income (BRI). This is the elephant in the room — how you divide up the league’s revenue. How you split up the money. It has not been discussed the last two days and Hunter said it will be the first thing discussed Friday morning. Pray it is a long meeting, because if it is a short it means they discussed BRI and remain so far apart they walked away from the table.

BRI is the league revenue, all the money that flows into the league from ticket sales and national television contracts, as well as part of the money from luxury suites, local television and radio, even parking and concessions. In the old deal, the players got 57 percent (of what is left after the owners take a cut off the top for expenses).

Last we left off, the players came down to 52.5 percent, the owners were at 50 percent. That’s looks close but it is still about $100 million a season. If neither side will budge off their line then the talks are dead again. But if the owners gave in on some system issues — for example softening the luxury tax and keeping Bird rights (so teams can go over the cap to resign free agents) — would the players come down closer to 50 percent? Will the owners come up a little? Can they agree to a band that slides up and down depending on revenue? They are close, there are ways to make this happen.

But how to split up the money is what this whole thing is about in the end. It’s not going to be easy.

• Exceptions for luxury tax teams. One thing the owners want in the new agreement is a way to rein in big spending teams, to level the playing field (or so they think). One is a new luxury tax that increases the more teams spend, one that would escalate fines the more years teams are paying the tax.

The remaining stumbling block here is what are the exceptions to the tax, according to Adrian Wojnarowski of Yahoo.

Before tackling the revenue split, the biggest hurdle left to solving the system issues appears to be with the use of midlevel and bi-annual exceptions for tax-paying teams.

While details were still unclear how a punitive luxury tax system would work for teams exceeding the salary cap, one league source involved in the talks told Y! Sports on Thursday night: “The tax is not the issue. The exceptions are where the fight is.”

• The hardliners not messing things up. This is what has happened when deals have been close before — Kevin Garnett comes in and stares down the owners and says the players will not go below 53 percent of BRI; or owners like Dan Gilbert and Paul Allen push for more from the players and don’t give any more. Even keeping the union’s attack-dog lawyer Jeffrey Kessler out of the room the last few days seems to have mattered (he is in Russia on other business). Keeping those guys at arm’s length until there is a handshake matters — you can sell this deal once it is in place, but those guys could mess it up before we get to that point.

There are other little things to be covered — for example the draft age limit has not been a topic yet — but those are relatively minor and not deal breakers. The three above are the reasons we would not see a deal in the next 72 hours or so.

And if we don’t see a deal then, it may be a long, cold winter without NBA hoops.

Progress breeds optimism, labor deal “within striking distance”

NBA & NBA Players Association Announce New CBA

Friday could be the day.

But if not Friday it may be this weekend — the NBA season is close to being saved. Maybe not all of it, but most of it, enough to have an asterick-free, credible NBA season. Progress through two more days has everyone, even the participants, hopeful.

NBA Commissioner David Stern says it would be a failure if there is not a new NBA labor deal reached in the next few days.

“There’s no guarantee that we’re going to get a deal done but we’re going to give it a heck of a shot,” Stern said in a post-talks press conference (broadcast on NBA TV).

That statement was made after more than seven more hours of talks on Thursday. That followed a marathon 15-hour session Wednesday, and Friday morning the two sides will be back at it at 10:30 a.m.

There is a real sense of optimism that a deal is near, a framework that would start the clock toward the opening of training camps and the start of the NBA season around Dec. 1.

If you want a really good sign, Stern stood in the back of the players association press conference and laughed with union head Billy Hunter on issues. The two sides don’t go near each other’s press conferences when there is acrimony.

Reports are that progress was made on the luxury tax issue on Thursday, which had been one of the key sticking points of the talks so far. The owners had wanted a more punitive tax that kept big spending teams in line, the players wanted something more akin to the old system. We don’t know what that progress looks like but there are multiple reports of the gap on that issue being closed. We have heard that things such as the Bird rights (allowing teams to go over the cap to re-sign their own free agents) and allowing teams in the luxury tax to make trades will be part of the new deal, increasing player options on where to play and for how much.

“I think we’re within reach (on system issues), within striking distance of getting a deal,” Hunter said.

There are still big hurdles ahead, ones that could mean negotiations will need to go through the weekend or even into next week.

For one, the two sides have yet to talk about the split of basketball related income (BRI) — the revenue that comes into the league through ticket sales, television deals and just about everything else down to hot dog sales in the arenas. That has remained a key sticking point, the owners wanted a 50/50 split (which isn’t a true even divide, the owners take expenses off the top), while the players have not gone any lower than 52.5 percent. There had been a sense that if the “system” framework was in place BRI would be easier to divide, but that is not necessarily the case.

Stern said he expects everything to be discussed on Friday, and Hunter told Chris Sheridan BRI would be the first thing discussed Friday. (Which means a long meeting Friday is a good sign.)

One other challenge — once a deal is reached, Stern and Hunter need to sell the deal to their hardline constituencies. That has blown up previous progress in these talks (we’re looking at you, Kevin Garnett and Paul Allen).

But right now there is a real optimism around the league that a deal is close. Team general managers have cancelled scouting trips to be ready for a free agency period, team ticket sales offices have started making calls to renew seats and agents are starting to pitch teams about their clients (through back channels).

It feels like a deal is coming sooner rather than later. But after this long and bitter fight that has seen the first two weeks of the regular season cancelled, until Stern and Hunter are shaking hands on a podium nothing is certain.

NBA owners, players back at bargaining table Thursday

NBA lockout Stern Hunter
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This is good. There is a growing sense of optimism from both the NBA owners and players sides that a deal is there to be had — and now they are both actually working hard toward it.

Less than 11 hours after they walked away from the bargaining table at 3 a.m. Thursday morning, representatives of the NBA owners and players returned to the conference room of a fancy New York hotel to complain about their financial pain.

Sure, there’s some irony there, but in a 15-hour session yesterday the two sides made progress on key system issues. Issues such as contract length, the mid-level exception and other issues that will be the framework of a new labor deal saw progress.

How much progress depends on who you ask. You’ll hear “some” in certain quarters, “significant” in others. Either way, it’s progress and we’ll take it. Especially after talks blew up last Thursday and a storm of pessimism swept over the NBA landscape.

But know there are three key hurdles yet to clear.

First is the luxury tax. The owners want a more punitive tax to keep the highest-spending teams in line, the players do not. Zach Lowe sums it up well at Sports Illustrated.

Sources close to the talks indicated last Thursday that the league had softened the tax ratios, but that the multiplying penalties for routine payers remained. A source close to the talks tells me that remains true today-that the league has stood by the multiplied penalties for teams that pay the tax three or more times during a five-year span.

Second remains the split of “basketball related income, or BRI, which is the revenue that flows into the league. There are those that believe that if a system framework can be put in place, the BRI will slide right into that and not remain such a huge issue. Or to be honest, if the players feel they can get enough give from the owners on the system issues they’ll come down closer to or at the 50 percent the owners want. The players’ only real leverage is to give up points of BRI to get system gains. That’s what they are trying to do, but the players have yet to come down from 52.5 percent of BRI — which is a $100 million difference from the owners offer. That’s a lot of cash. This will not be that easy to close.

Finally, whatever deal is struck is going to leave both sides unhappy. Which is how a good negotiations usually ends. But both Commissioner David Stern and union head Billy Hunter are going to have to sell this deal to their hardline constituents. When larger groups have gotten involved in the past is when talks have blown up. That is a risk again.

But, for the second straight day they are talking. Which is good.