What new ground was broken in CBA talks?
Posted on: August 12, 2010 9:00 pm
NEW YORK -- With star-studded attendance and a conciliatory tone, collective bargaining talks Thursday between the NBA's owners and players changed the attitude, if not the substance, of the debate. Even with union vice president Mo Evans calling the players "partners" with the owners -- what's next, LeBron James and Dan Gilbert double-dating? -- the two sides are still far from a deal to avoid a lockout after the 2010-11 season.
But quietly, modest breakthroughs were made Thursday on several big-picture points relevant to the new financial structure owners and players are trying to create. According to sources with knowledge of the negotiations, here are the key points that owners and players actually agreed on -- or at least, agreed to disagree:
* First, there seems to be agreement on both sides that something needs to be done to improve the competitive balance of the league. How to do it, however, remains hotly contested. The players believe many of the owners’ woes can be solved through broader revenue sharing, for which they included a plan in their proposal. The owners continue to believe that how the owners divvy up hundreds of millions in annual losses doesn’t solve the problem that expenses are too high. According to sources, the owners seem to be hunkered down in their pursuit of shorter contracts with less guaranteed money – and they appear to be focusing on those issues even more than reducing the 57 percent share of basketball-related income (BRI) that the players receive. In the owners’ view, shorter contracts and the ability to restructure them midway through – a provision that exists in the NFL’s CBA – would help teams become more competitive faster. The players acknowledge the problem with the current system when teams burdened with bad contracts get “stuck in the mud,” according to a source, and need 3-4 years to clean up the mess. But the players disagree with the owners’ desire to shorten contracts and limit guarantees, even with the long history under the current CBA of players with declining ability becoming contractual albatrosses for their teams. Tracy McGrady and his $24 million salary getting dumped on the Knicks as an expiring asset last season is an extreme, but not rare example.
* With top players such as Paul Pierce, Ray Allen and Richard Jefferson taking significant pay cuts on new deals this summer, there also seems to be common belief that payrolls will decline during the 2010-11 season for the second consecutive year – even after the biggest free-agent spectacle in league history. Since some rosters aren’t complete and the NBA’s fiscal year hasn’t closed yet, the amount of the decrease isn’t known, and the two sides differ on what the amount will be. The owners seem ready to acknowledge a 1 or 2 percent decline, while the players believe 5 percent is more realistic.
* Regardless of the amount of the payroll decline, one team executive said owners were rattled by the bold free-agent coup pulled off by star players this summer – with James, Dwyane Wade and Chris Bosh teaming up in Miami – and have become focused on limiting player movement as a result. Any efforts to curb players’ free-agent rights would be staunchly opposed by the union. But there is a real sense from the owners, according to this executive, that they’re determined to write provisions into the new CBA that would provide stronger disincentives for free agents to leave their teams.
“If there’s anything I’d love to see happen in collective bargaining, it’s for the term ‘free agent’ to go away and I’d love to see the term ‘mid-level’ go away,” the executive said. “There’s nothing free about it, when you’re making the mid-level, you’re making more than two-thirds of the league. Mid-level sounds like mid-major, Holiday Inn, Applebee’s. It’s inappropriately termed.”
* Sources also revealed new details of the players’ proposal, which National Basketball Players Association executive director Billy Hunter has declined to specifically discuss publicly. In perhaps the first concession of the year-long negotiations, sources say the players have proposed issuing owners a credit on their books for capital improvements to their arenas. The Knicks, who are investing as much as $850 million to renovate Madison Square Garden, would benefit handsomely from such a provision. The players presented this as a way to encourage owners to modernize old arenas and thus create additional revenue streams.