Tag: NBA lockout

CORRECTED VERSION - NBA And Player's Association Meet To Negotiate CBA

NBA owners won. Big. But the players can live with it.


As the talk starts to build of all the little concessions the NBA players got in the last week to make an NBA labor deal happen in time for games on Christmas day, remember this:

The owners won.

In a massive way. This is an Attila the Hun sweeping through Eastern Europe kind of win — devastating and total.

David Stern and the owners came into these NBA labor talks saying they lost more than $300 million last season and $400 million the year before that. By getting the players to agree to what is in practice a 50/50 split of basketball related income (although the deal allows the players to get to 51 percent if revenue increases enough) the owners got the players to essentially accept a 12 percent salary cut that will cover those losses.

This will come to more than $3 billion back in the owners’ pockets if the deal lasts the full 10 years (both sides can opt out of the deal after six years). What’s more, the deal means the players will have shorter contracts with lower raises going forward. Plus, the system now ties the hands of larger market, bigger spending teams helping depress salaries that way.

The owners will tell you they didn’t get everything they wanted, some will vote against this deal. Those guys are fools — they got more than enough to balance their books. Combined with more robust revenue sharing — soon to be triple what it was — small market owners should be able to break even or turn a profit. They should be able to compete (they could before, ask San Antonio and Oklahoma City). If they can’t, well, it’s on them now. It’s not the system.

All that said, the players got enough small victories — and a couple key ones — that this is a deal they can live with.

Early in the lockout, PBT spoke with former NBA players union president Charles Grantham and he said the smartest move the union ever made, the thing they could not give up in these talks, was keeping the salary cap tied to league revenue. Early offers from the owners wanted to detach the two — players salaries would stay flat at about $2 billion a year and all of the money from expected growth in the league (such as a new national television deal coming in 2016) would go straight to the owners pockets.

The players won that fight. They will get a smaller share of that revenue, but as the league’s revenue grows player salaries will go up. Grow the game and grow how much money you make.

The other two hills the players were willing to die on were guaranteed contracts and a hard salary cap. The owners relented on those as well. Yes, the owners now have more ways to get out of bad contracts faster, and yes the new luxury tax rules make it much more costly for high-revenue teams to spend big, but the players won those fights on principle.

There were other small victories, such as getting the threshold to get to the 51 percent of revenue lowered to a makeable goal. The players got the extend-and-trade so their biggest stars can better control their exits from teams. They got a solid mid-level exception for tax paying teams.

That was enough. It needed to be enough because the players were going to start losing more money in salary than they were making back fighting over the scraps of this deal.

But this negotiation was all about the money, and the owners got a lot more of it. They won. The small market owners in particular should now be able to turn a profit. The players got a way to save face at the end but the owner won and won big.

With this caveat…

In 1999, after a lockout that lasted into January, the owners were thought to have won. They got a cap on max salaries, so that there would be no more deals like the one Kevin Garnett and Shaquille O’Neal had gotten. They got a percentage that capped players’ salaries in total at 57 percent. Everyone said the owners won, including the players.

A dozen years later, the owner were crying that the deal was unfair and killing them. You never know how things will play out. And you can bet in 10 years, when this deal formally ends, there will be owners saying what a bad deal this is for them and how it is killing them. Even if the fault is their own management.

Owners have a lot to prove in the life of this CBA

Mark Cuban, David Stern

It’s over, and now we have to look back and survey the wreckage. 480 games lost. Millions of dollars in league revenue, local economy revenue, player salaries. Fans hurt by the way the league and players left them behind in pursuit of more money. Momentum lost after the most exciting season in over a decade. And for what?

Was any of this worth the effort? Was any of this worth the price?

For the owners, it better be.

The owners started this lockout, ending the structure of the league 149 days ago. They stood in pursuit of a total victory, wanting to crush the union, to instill measures to send the players’ economic influence in this league back to the stone ages, while removing the kind of power they had shown over the past 18 months in things like “The Decision” and Carmelo Anthony’s move to New York. They used draconian tactics, forcing their way past precedents set by the last deal and flying in the face of well-reasoned arguments that competitive balance cannot exist in the NBA. They decided to show it was their league and they’d run it how they saw fit.

They’ve gotten their chance, now we’ll have to see whether the fragile peace can hold, and if any of what the owners believed was true turns out to be grounded in reality.

Over the course of the next six years (the players will undoubtedly opt-out before the ten-year agreement is up), the owners have a lot to prove. They have to prove they can profit under the new system, that their biggest enemy is not themselves and their own inabilities to control spending and make wise decisions. They have to prove that competitive balance can be achieved and that small markets can now compete with larger ones for free agents and on the floor. Failure to do so will render their philosophy in this debacle a falsehood and pave the way for a further, potentially longer lockout six years down the road.

The split of BRI should help, but there’s still  the capacity for teams to fail. And that’s not because of the drain from the players or wasteful positions the league mostly eliminated with layoffs. It’s because if you run your team badly, no one wants to watch them. It’s because you can’t profit if you don’t run your business well, and in the NBA, running your business well is winning games. So the league needs to prove all this talk about competitive balance will result in small market teams competing for championships. The Oklahoma City Thunder may wind up proving that the same way the Spurs did in the last agreement, by simply running their team well. But given that New York, Chicago, LA, and Boston are set to compete for at least two more years of this agreement (and most people consider Miami a large market even if it does not qualify as one under metrics), it’ll be a steep climb. Are we going to see conference champions in Indiana, Milwaukee, Memphis, Portland? Because if not, if things remain the same, the owners will have some explaining to do.

Games didn’t need to be lost. The season didn’t need to be shortened. A deal could have been struck months ago. The owners already won this battle in September, but they kept pushing until they had nearly no option left. They got what they wanted, a system more under their control and a bigger cut of the pie. The players got what they wanted, the opportunity to earn their money. The fans got what they wanted, a season, even if it is shortened. Now it’s time to see whether everything the owners went to war over was worth it at all.

What we know about the deal that ended the lockout so far

NBA And Players Representatives Meet To Discuss Possible Settlement

It’s less than eight hours after a bleary-eyed group of executives and attorneys shuffled into a small conference room at a New York office building to deliver the news: a tentative deal is in place. The lockout is over.

Now begins the process of unraveling what happened and how, and determining what the new CBA will take shape as under the new detail. We have the first of those details this morning, via NBA.com’s David Aldridge on NBATV and Chris Sheridan of SheridanHoops.com. The early signs are that the owners made significant concessions to the players (after already winning the feast) in order to get a deal. In short:

  • The players got a concession on Basketball Related Income, which no one saw coming. The owners’ proposal always called for a band of 49-51 for the players, depending upon revenue. (The players would get 51 percent if revenues exceeded expectations, 49 if they fell below, and 50 percent if they met expectations.) But the players were never going to hit 51 without the greatest basketball-economic explosion in history. Instead, the threshold for the players to reach 51 percent has reportedly been lowered to a point where that figure is reachable for the players.
  • In addition, the players got one of the biggest elements they were looking for, as the extend-and-trade ban was lifted. This means that Chris Paul, Dwight Howard, and Deron Williams can all exercise the same kind of leverage to get the extra year on their deals that Carmelo Anthony exerted. It means more player movement.
  • Teams above the cap will have a four-year Mid-Level-Exception granted every year. The owners had wanted it to alternate between four and three-year deals each season.
  • Tax teams will have the sign-and-trade available, though there will be limits, which aren’t known yet.
  • Escrow payments were raised to 10 percent, which the players wanted, against the owners’ desire for 8 percent. They are currently at 10 percent.
  • The deal is a ten-year agreement with an opt-out for either side after six years. See you in six seasons!

The deal represents kind of a “fake” win for the players and a fake series of concessions from the owners. They already chopped off seven percent of BRI, increased penalties for tax teams, got the “repeater tax” put in place for teams that pay the tax year after year, and pretty much everything else they wanted. They set such an extreme position that they were able to concede on the issues they did and still walk away winners. But the concessions were major, especially those regarding player movement. The owners finally caved to get us a season, even if they’d already won the battle.

The owners got what they wanted, the players got to save some face, and the fans get a season. How u.

Why a deal now? Pressure from the calendar, mostly

NBA And Players Representatives Meet To Discuss Possible Settlement

After two years of negotiations, after 149 days of NBA lockout, after so many marathon negotiating sessions that we all lost track, the NBA reached a deal about 3 a.m. Saturday morning.

That’s great news, we were all sick of taking BRI and escrow and luxury taxes.

But after all that, why now?

Because the calendar became the real pressure.

That’s not what the sides were saying afterwards.

“The reason for the settlement is the fans, the players who would like to play, we’ve got others who are dependent on us,” said NBA Commissioner David Stern. “Our goal was to reach a deal that was fair to both sides and got us playing as soon as possible.”

“Rather than pursue this in court, it was in both of our interests to compromise,” said Billy Hunter of the NBA players association.

But this was more about the pressure of the calendar making it time to get a deal done.

Both sides had said from the start that they understood the momentum the league gained last season, with television ratings the highest they had been since the Jordan era as just one sign of that. There was a real energy to build off of — and to grow revenues.

And for a lot of more casual basketball fans, Christmas is when they start following the league. Christmas is the first day of national broadcast network games — it was like a second opening day with marquee matchups on a huge stage. Missing that was going to be a real blow.

Sources on both sides told us the pressure was really mounting to get a deal done. The players did not want to lose a season of salary ($2.2 billion), the owners did not want to lose a season of revenue (at a greatly increased rate from the last labor deal). Neither side wanted to deal with the damage of a complete lost season, or even most of one. Fans were clearly getting more and more restless and turning away.

What is the point of fighting over how to divide up the revenue pie if the pie itself gets smaller?

A sign of that pressure from the calendar was the fact cooler heads finally prevailed in these talks. Saturday the talks almost blew up again when players attorney Jeffrey Kessler — David Stern’s nemisis in these talks — was on a conference call and said the players demanded 51 percent of the revenues. Stern and Spurs owner Peter Holt rejected the idea fast. In the past, that might have ended the talks, but this time they stayed in the room and pounded out a deal.

With all that pressure, and a foundation laid by those months of negotiations, they reached a deal. A deal neither side really likes, which is how a good compromise turns out.

But getting it done was more about the timing than anything else.

NBA owners, players reach tentative deal, games to begin Dec. 25

Billy Hunter David Stern

Finally, we are going to have NBA basketball again.

After more than 15 hours of negotiations Friday into Saturday morning (following a week of secretive talks), the NBA owners and players have reached a handshake deal on a new collective bargaining agreement the sides announced. (Ken Berger at CBSSports.com broke the story.)

“We’ve reached a tentative understanding,” said NBA commissioner David Stern at a hastily put together 3:30 a.m. press conference. “(The deal) is subject to a variety of approvals and very complex machinations. We’re optimistic that will all come to pass and the NBA season will begin Dec. 25.”

That will be a Christmas Day start with a triple-header followed by a 66-game season, providing both the owners and players ratify this deal.

There are a lot of details still to be worked out — first up are all the “B” list issues such as draft age and drug testing, things the sides do not all agree on but are not serious enough to block a deal. Then the players’ union has to be reformed (remember they dissolved to allow for antitrust lawsuits to be filed) and finally the owners and players will have to vote on a final version of the agreement.

All of that is going to take 10 days to two weeks. The lockout will not officially be over until then.

Training camps and a free agency period will begin simultaneously on Dec. 9, Stern said.

At that press conference neither Stern nor NBPA director Billy Hunter were willing to talk about a lot of details of the agreement because neither had spoken to their entire constituency yet. However, this deal is likely close to the last offer from the owners and Stern to the players. There may have been a little movement, but not a lot from the offer the players rejected less than two weeks ago.

The players got a little more than 50 percent of league revenue (BRI) but not 51 percent, according to Chris Broussard of ESPN. It is apparently going to be a band in the 49-51 percent range, but will essentially fall as 50/50. In the previous labor deal the players got 57 percent of the league revenue and that was ultimately the big issue in these talks — the owners say they were losing money and wanted a bigger cut of the more than $4 billion in annual revenue the NBA generates. With this they should about cover the $300 million the owners claim to have lost last year.

Talks Saturday took a turn towards blowing up again when players attorney Jeffrey Kessler — the real pit bull for the union — was on a conference call with the talks and said the players demanded 51 percent of the revenues. There was a feeling that might blow the whole talks up, but cooler heads prevailed.

One thing the deal will do is prevent larger-market, big-spending teams from competing in the free agent market as they had in the past, said NBA deputy commissioner Adam Silver. Again there were no details but with a stronger luxury tax and other punitive measures it will be hard for teams to spend up to and around $90 million a season. The deal also raises the salary floor — those small market teams need to spend up to 85 percent of the cap the first two years and 90 percent after that.

This would be a 10-year deal where both sides can opt out at year six.

Neither side loves this deal, which is how a good compromise should end. There are owners and players that will vote against it, but it is expected a majority of both will pass it.

In the end, Spurs owner Peter Holt summed it up best:

“We want to play basketball. Let’s go play basketball.”