Blog Entry

NBA owners prepare for CBA showdown

Posted on: July 14, 2009 4:29 pm
Edited on: July 14, 2009 6:20 pm
LAS VEGAS -- NBA owners gathered Tuesday at the Palms Hotel & Casino for a critical Board of Governors meeting to prepare for collective bargaining negotiations that will begin next month.

There were no crucial votes on the agenda, no pressing matters requiring immediate attention. But given raging uncertainty about how their basketball and other businesses will bounce back for the rest of 2009 and 2010, plus the potentially sweeping changes in the league's salary structure and revenue sharing model that owners will seek in the new CBA, this was no play-cation at the Palms. This was serious.

"I just sense that it’s wise of us to look at how this economy’s going to affect our economy, because we’re going to lose some sponsors," said Minnesota Timberwolves owner Glen Taylor, one of the executives appointed to the league's negotiating committee. "So to me, what we’re working on is some what-ifs. If (revenue) is down 2 percent, 5 percent, what are we going to do? That’s what we’re going to work on and just be prepared if those scenarios happen. That’s what we’re going to work on (Tuesday)."

The current CBA is set to expire on June 30, 2011, and owners are widely expected not to exercise their option to extend it for another season. Although that's a two-year horizon, both sides realize how difficult the negotiations will be -- and how important it is for the health of the sport to avoid a lockout. Starting the process early is a show of good faith on both sides, and an admission of how protracted the process could become.

In preparation for what is expected to be a spirited debate among large- and small-market owners over how to improve the league's revenue-sharing model, the negotiating committee represents a cross-section of franchises. According to sources, the following owners and executives have been named to represent the league in negotiations with the NBA Players Association: Peter Holt (San Antonio), who is chairman of the committee; Clay Bennett (Oklahoma City); Jeanie Buss (Lakers); James Dolan (New York); Dan Gilbert (Cleveland); Wyc Grousbeck (Boston); Stan Kroenke (Denver); Larry Miller (Portland); Robert Sarver (Phoenix); George Shinn (New Orleans); Taylor (Minnesota); and Bob Vander Weide (Orlando).

The negotiating committee representing the players, according to sources, will be as follows: Derek Fisher (Lakers), who was re-elected president; Adonal Foyle (Orlando); James Jones (Miami); Keyon Dooling (New Jersey); Maurice Evans (Atlanta); Roger Mason (San Antonio); Chris Paul (New Orleans); Theo Ratliff (Philadelphia); and Etan Thomas (Washington).

Among the key issues on the agenda, according to Taylor, will be taking stock of where teams are in terms of season-ticket and sponsorship renewals compared to this point last year. During the NBA Finals, commissioner David Stern said those renewals were on pace with last summer, but the majority of commitments from sponsors and season-ticket owners come later in the summer months.

"I'm meeting with sponsors right now and a lot of them are putting us off because they’re not so sure where they’re at," said Taylor, who has been in Las Vegas to watch Minnesota's summer league team and meet with Dan Fegan, the agent for No. 5 overall pick Ricky Rubio. "So they’re just delaying, and that’s frustrating. Normally, we would have a better feel right now."

As reported July 8, league-wide ticket revenues declined $2.66 million in 2008-09, with the data revealing a widening gap among large- and small-market teams. Nine teams experienced at least a $4 million decline in gate receipts last season, led by the Nets -- a large-market team that saw ticket revenues decline $11.4 million in its lame-duck arena in New Jersey.

"When the economy goes bad like this, it’s probably going to affect the small markets even more," said Taylor, whose team saw a $2.6 million decline in ticket revenues last season, according to the NBA data obtained by Minnesota also shared a dubious honor with Atlanta and New Jersey as the three teams giving away an average of more than 5,000 free tickets per game.

Given that trend, the owners also will begin formulating their strategy for negotiating changes to the salary structure and revenue-sharing models. Under the current agreement ratified in 2005, NBA teams share national broadcast revenue and non-luxury tax paying teams share payments from teams whose payrolls exceed the tax threshold. Small-market teams will push for a more aggressive revenue sharing model, while the healthier franchises are expected to resist. The owners need to emerge from their Las Vegas meeting with some semblance of consensus before labor negotiations begin in earnest sometime next month.

"We’re going to have a private meeting to talk about that," Taylor said. "It is a big issue. I just think to keep up the small markets, to keep them competitive, is in the league’s interest and in the big markets’ interest. ... I’d rather have something in place and be preventive than wait until it’s after the fact."

Category: NBA

Since: Sep 11, 2006
Posted on: July 15, 2009 5:59 pm

Weekend at Bernie's

Maybe that is the answer to the Larry Miller problem.

Since: Mar 28, 2007
Posted on: July 15, 2009 5:20 pm

NBA owners prepare for CBA showdown

Not trying to be cold here, but someone explain to me why there is a franchise in Memphis, a second franchise in New York (New Jersey), 2 teams in LA, and 2 teams around San Fran. (Golden State and Sacramento). There are 4 or 5 franchises that are re buildiing in small markets. Why would people go to an arena to see the Clippers play, when they can go down the street and see the Lakers?

actually they play in the same building, so they don't even have to go down the street.

Since: Dec 28, 2006
Posted on: July 15, 2009 4:57 pm

NBA owners prepare for CBA showdown

Sacramento is really not part of the bay area, so they are two distinct markets.  Distance between Sacramento and Golden State in Oakland is not too far different than the distance from Toront to Detroit to Chicago to Milwaukee...

Since: Mar 28, 2007
Posted on: July 15, 2009 2:28 pm

NBA owners prepare for CBA showdown

Also, Larry Miller is deceased which begs the question who is rep'ing the Jazz or which franchise has replaced that franchise on the negotiating team?

Since: Aug 24, 2006
Posted on: July 15, 2009 1:47 pm

NBA owners prepare for CBA showdown

Correct me if I'm wrong, Mr. Berger, but I do believe Etan Thomas is now a member of the Minnesota Timberwolves, and no longer a Wizard.  Might want to change that.

Since: Dec 21, 2006
Posted on: July 15, 2009 6:43 am

NBA owners prepare for CBA showdown

The league would probably be a lot more competitive if they got rid of a few teams and spread that talent over the remaining 28 teams (or less).  Few people would say that there is as much talent in the NBA as there was when the NBA was experiencing that golden period in the 80's and 90's.  I think the talent is comparable at the very top, but top to bottom, there is a huge gap between the top and bottom.  There are players starting in today's league that would have been hard pressed to make a team back in the day.  Obviously, things would have to be seriously bad for the league to even consider something like that, but it might actually improve their product for the remaining fans, even if it alienated the dozens of kings fans.

Since: Nov 24, 2006
Posted on: July 15, 2009 3:48 am

NBA owners prepare for CBA showdown

Why would people go to an arena to see the Clippers play, when they can go down the street and see the Lakers?

And since when did the Lakers and Clippers start playing in different buildings?  Wink

Since: Nov 24, 2006
Posted on: July 15, 2009 3:46 am

NBA owners prepare for CBA showdown

Even if the cap goes down to 52-53 mil, there is no way in a million years you see any true stars head to Europe.  There are no teams in Europe that can offer what any NBA team can offer.  Do not buy into the "50 mil a year" nonsense.  It was a hypothetical question brought up by a reporter who has nothing to back it up with.  They interviewed the owners of the richest team in Europe (Olympiakos if Im not mistaken), and even they said there is no way on Earth they would give someone 50 mil a year.  Not even close to that actually.  The "Superstars to Europe" is the biggest myth in the league right now.

Since: Jul 11, 2009
Posted on: July 15, 2009 1:29 am

NBA owners prepare for CBA showdown

I wholeheartedly agree that the NBA should contract teams, but you're almost never going to see that happen.  The NBA would rather give funds to teams than contract, because that would be a sign of weakness on their part.  For years I've been saying they should get rid of some teams, and I have no idea why they gave Charlotte another team after they lost the Hornets.  It's a great idea, but one you'll never see come to fruition.
I also can't see the NBA going without a salary cap.  What they need to do is move in a more NFL direction and eliminate guaranteed contracts, or at least the number that one team can have.  Players would compete a lot harder in January games if they felt the owner could terminate them at any time.  

Since: Dec 12, 2006
Posted on: July 14, 2009 8:52 pm

NBA owners prepare for CBA showdown

I say we get rid of the kings and the clippers..

Go wolves.

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