Blog Entry

Stern: Tuesday is turning point in labor talks

Posted on: June 17, 2011 8:02 pm
Edited on: June 18, 2011 12:28 am
NEW YORK – NBA commissioner David Stern declared Friday that an unofficial drop-dead date is looming next week in the accelerating negotiations to prevent a lockout.

“Tuesday is a very important day in these negotiations,” Stern said after emerging from a 4 1-2 hour bargaining session in which progress was in the eyes of the proposer.

Stern touted what he described as a “very significant” concession that was proposed Friday in which owners backed off their insistence on eliminating fully guaranteed contracts. The players, however, did not view this as a major step forward in the negotiations, saying the owners remain entrenched in their position to slash player salaries by as much as $700 million annually – and that owners have the ability under the current system to offer contracts that are less than fully guaranteed.

“They moved to giving us back guaranteed contracts, which we already had,” said Wizards guard Maurice Evans, a member of the players’ executive committee. “That’s not a move. How can you call that a move?”

However the latest twists and turns are viewed by either side, Stern left no doubt that an expanded bargaining session scheduled for Tuesday in New York – featuring a larger contingent of owners and players, and also player agents, who will be key to signing off on any deal – would be crucial to determining whether there is enough momentum to complete a new labor deal before the current one expires on June 30.

“I really think that the time to have an optimistic or pessimistic view is at the close of the day on Tuesday,” Stern said.

At the end of a nearly 20-minute briefing with reporters Tuesday night in a conference room of the Omni Berkshire Hotel, Stern answered “yes” when asked if a breakthrough was needed Tuesday to assure there would be enough time to get a deal done. The key sticking points remain the negotiated split of revenues that would be paid to the players and the system by which the money would be delivered – a hard cap, which the owners remain insistent upon, or a soft-cap system that more closely resembles the rules already in place.

“If we made a big breakthrough on one or the other, we would have such positive momentum that we could, I think, look forward to a faster track than we’ve been dealing with,” Stern said.

In addition to Stern, deputy commissioner Adam Silver, National Basketball Players Association executive director Billy Hunter and legal staff from both sides, Friday’s bargaining session included nine members of the owners’ labor relations committee, the players’ executive committee (including Hornets star Chris Paul), as well as Knicks star Carmelo Anthony, Bucks guard John Salmons, and Timberwolves guard Sebastian Telfair.

“I would say we’re not on the same page right now, but there’s some good conversation going on,” Anthony said. “Both sides are trying to come to an agreement.”

The logistics surrounding Tuesday’s bargaining session in New York leaves little doubt that it will be a turning point in a process that formally began with the owners’ initial proposal in January 2010, just prior to All-Star weekend in Dallas. League executives will be in New York for Thursday night’s draft, and dozens of players will be in the city for the NBPA’s annual meeting. Stern hinted that if enough progress were made Tuesday, the session could be extended by several days – perhaps even into the weekend – as the clock continues to wind down toward the June 30 deadline to avoid a lockout.

“Even though the clock is ticking and the runway is shortening, we think that it’s worth our time and effort to go back to our individual offices and do a lot of crunching of numbers and ideas and to return on Tuesday,” Stern said. “… We're hoping that we will receive from them a proposal directed to the economics.”

As a matter of timing and logistics, Silver announced that the league would be canceling Las Vegas Summer League this weekend – though the move is not meant to send any signals to the players.

“It was purely a function of the calendar and drop-dead dates with hotels and the arena,” Silver said.

Stern said the owners’ decision to back off their insistence on eliminating fully guaranteed contracts as part of the 10-year deal they’ve proposed was in response to a presentation from the players and their attorney, Jeffrey Kessler, about their insistence on protecting such guarantees.

“Of all the issues, the guarantee is one that is very, very important to individual players,” Stern said, describing what was conveyed to the owners and their lead negotiators during the presentation.

This must have been music to the owners’ ears, because their priority from the beginning has been to reduce player salaries by at least one-third. The method of delivery – via a hard cap with shorter and less guaranteed contracts – would seem to be a secondary issue to the overall dollars. Based on the players’ current 57 percent share of revenues, they would go from $2.1 billion to $1.35 billion under the owners’ original proposal – the basic structure of which remains in place, according to multiple sources familiar with the negotiations. That’s a reduction of about $750 million annually, regardless of whether the money is guaranteed or not.

“It’s not as big a move as it would have been if the hard cap was not linked to it,” Kessler said of the owners’ revised stance on guarantees. “That really undermines, from the players’ standpoint, what it means. … They didn’t move on hard cap, that’s for sure.”

Said Evans: "We’re far apart. They’re still negotiating from their proposal from two years ago, and we’re negotiating from the current system we have."

But Stern disputed the notion that the owners have not moved from their original demands on salary reductions, though he declined to get into specifics. And sources said the owners expressed for the first time Friday a willingness to discuss with the players how they would be paid in the “out years” of their proposal – meaning the seven years after a three-year transition period owners have proposed to soften the blow of these drastic cuts.

“There’s been considerably more movement from our first proposal than you understand,” Stern told reporters.

In addition, Silver said the players made a move in their position Friday in terms of how much of basketball-related income (BRI) they would be paid under a new agreement. But he added, “Even they would characterize (the move) as having been very small.”

Part of the problem for the players, aside from how much of a pay cut they are willing to accept, is computing how the new structure would work out for them if revenues rise, as the NBA is predicting they will. When the two sides reconvene next week, the apparent willingness on the owners’ part to negotiate how rising revenues would affect player salaries in the final years of the deal could represent a far more significant development than their decision to back off on the idea of eliminating guarantees.

For example, owners could incentivize the players to accept a revised computation of BRI that increases the players’ share as revenues increase. But the owners’ projections of rising revenues are based on rules that have never been in place, making it difficult for the players to trust the projections.

“We can’t talk about one part in a vacuum because it impacts the entire system,” NBPA president Derek Fisher said of the owners’ reversal on banning fully guaranteed contracts. “We haven’t been, or at this point are inclined to say whether that’s a huge thing. Because without other things, it doesn’t mean much.”

How much is at stake next week? If you liken the negotiation to a million-piece jigsaw puzzle, all parties involved admitted that two or three key pieces need to be in place by the end of the day Tuesday.

“One piece controls several hundred thousand pieces,” Fisher said. “So essentially, we could put together a million-piece puzzle in a very short time if we can get two or three pieces in the right place. And that’s what we're focused on doing.”

Since: May 29, 2010
Posted on: June 19, 2011 12:27 am

Stern: Tuesday is turning point in labor talks

As a NBA fan, I despise the Heat and the collusion between Wade, James and Bosh, but I LOVE the arms race that this has produced in the NBA.  As a fan, I love trades and free agent signings.  It fires and captivates my imagination YEAR ROUND.  Hard caps and getting rid of exceptions will kill this for sure.  The NBA will disappear off the media map during its offseason.  Teams not lucky enough to strike it rich in the draft will be condemned to long periods of mediocrity with no hope of escape.  Where is the evidence that hard caps lead to parity?  Hard cap existed in the 80's and 90's and there were more multiple championship winning teams then than there are now.  Celtics, Lakers, Bulls were all dynasties and were in the finals year after year.  There is more parity in the NBA now then there ever has been.  Why?  Because teams have the flexibility to make moves.

Since: May 29, 2010
Posted on: June 19, 2011 12:06 am

Stern: Tuesday is turning point in labor talks

Dallas may be a large city, but its not an exclusive market, nor is it a basketball hotbed.  Dallas has to compete with Houston and San Antonio for Texas basketball fans, which are few and far between.  High school football is more popular in Texas than pro basketball.  What the NBA needs to implement is revenue sharing, so large media market teams share revenue with smaller market teams- that's what pro football does.  I'm so sick of fans yelling about not letting the NBA become MLB.  If the teams with the highest payrolls win it every year, then why don't the Red Sox and Yankees win it every year?  They don't.  San Francisco won it last year.  Arizona and Florida have won it.  Tampa Bay has produced very competitive teams with low payroll.  The MLB offseason is more interesting than the regular season.  Why?  Because teams have the freedom to make moves and sign players.  This engages the fanbase to maintain interest year round.  O.K. let's put a hard cap in and get rid of the mid-level and bi-annual exceptions, well good luck building your team through the draft, which works out about 10% of the time.  Ask the Clippers about that.  Ask Portland about that.  I'm all for reducing the max contract salary and length, but I'm not for reducing teams abilities to make moves.  Most NBA teams are owned by Billionaires who use them as tax write-offs.  They know they are not going to make money off of them.  They buy them to feed their ego's.  Keeping the fanbase engaged in the offseason is crucial for success.  I remember the late 80's and early 90's when the Celtics were aging and couldn't do a thing to improve their lot due to a very restrictive cap structure.  After the draft, there was no need to pay attention to the Celtics until November.  You could not call a talk radio show and engage in trade talk because the cap system was sooooo restrictive that no significant trades could be made and no significant free agents could be signed because they never, ever got to free agency because if they did they knew hardly any teams would be able to sign them.  I remember when Sam Perkins became a free agent and that was HUGE news because players of that "caliber" never became free agents in the NBA.  Sam Perkins??? Nice player, but hardly exciting.

Since: Aug 19, 2006
Posted on: June 18, 2011 10:24 pm

Stern: Tuesday is turning point in labor talks

David Stern is going to mop the floor with the players. If they don't get in line they will be out of work. James and Bosh walked on MAX deals so I would pull that option instantly.
The players better wake up fast.
I totally support the owners.
Players don't feel a recession... owners stick their necks out.  

Since: Sep 19, 2006
Posted on: June 18, 2011 10:13 pm

Stern: Tuesday is turning point in labor talks

as a fan of the NBA, I'm not happy with the outrageous ticket prices it costs to sit in the 100 level and anywhere near floor, it can cost easily between $200 to $1200 and that just stinks.  If the league can reduce total payroll and the owners can reduce their ticket prices, that is all I care about.  It would also make the league more fun (more parody) if there was a balanced league (hard cap).  In addition, guaranteed contracts in the nba is a joke.  There are many players who receive big contracts and then get injured or lose their hunger to play hard and increase productivity.  The bad contracts kill teams and their plans for many years.  Either make contracts so they are more like the nfl or reduce the years and max salary.  I would be really pissed if the ticket prices stayed the same while nba salaries also decreased, then we're all just gettin shafted by the owners.

Since: Oct 29, 2007
Posted on: June 18, 2011 8:45 pm

Stern: Tuesday is turning point in labor talks

I am really sick of all this.  Millionaires versus Billionaires.  I love the NBA but I also used to love baseball (as far back as the St. Louis Browns) but after their last strike, I have not watched an inning (more than a decade).  If football and basketball think that fans will continue to support them after a strike, think again.  There are other things to do.  Basketball is at its peak in popularity for more than a decade and wants to blow it up (give me a break!)  Even football with all the fantasy leagues thinks it is above the public scrutiny.  Bye. Bye.

Since: Oct 1, 2006
Posted on: June 18, 2011 8:18 pm

Stern: Tuesday is turning point in labor talks

teejay, Dallas is a big market.  It is the ninth largest city in the US and the metro market is #4 behind LA, NY, and Chicago.  As for San Antonio you might be surprised but it is the 7th largest city in the United States but the 25th largest metro area. 

Since: May 29, 2010
Posted on: June 18, 2011 2:53 pm

Stern: Tuesday is turning point in labor talks

Where is the evidence that the current structure leads to the big market teams dominating?  San Antonio won three titles since 1999, Dallas won it this year, Boston in 2008- Boston is not a huge market.  Why hasn't New York won it under this current system?  Players are always going to want to play for L.A. and Miami regardless of a hard or soft cap.  Portland has one of the wealthiest owners in the league and he's shelled out top dollar for players in Portland and they haven't even come close to winning.  It's not all about money.  I hate to tell you this too, but the health of the NBA depends on the success of the large market teams.  David Stern would put a gun to his head if a Portland Trailblazer / Toronto Raptors final ever came about.  Can you say 0.0 T.V. ratings?  We also currently have a luxury tax, so smaller martket teams reap the benefits of larger market teams spending.  I don't see any evidence under the current CBA chokes smaller market teams.  Oklahoma City is an up and coming team.  The current structure will allow them to add talent to that core and gain further success.  If the NBA institutes are hard cap, oh well, you better get used to the Durant and Westbrook combo because that's all they'll be able to have.

Since: Dec 25, 2006
Posted on: June 18, 2011 1:52 pm

Stern: Tuesday is turning point in labor talks

TeeJay- But a soft cap is a joke for maintaining a balanced league. The big market teams will just circumvent the cap and spend money to win while smaller market teams will have to hope they hit the lottery in the draft to stay competitive. All the big market teams just spend money. If things keep going the way they are the NBA is going to turn into the MLB where the big market teams dominate in spending and wins.

Since: Sep 13, 2008
Posted on: June 18, 2011 11:47 am

Stern: Tuesday is turning point in labor talks

I was curious when US, THE PAYING FANS, get to sit with the Players Union and the League and discuss tickets prices (that surely won't drop even if salaries are cut), parking costs, drinks and food, merchandise, etc. There are some out there that would say, "Don't go then", but without US, these owners are crying losses in revenue every year. The players get their millions, owners get their billions, and fans get the price increases, crap parking, and $8 drinks for our kids to watch wealthy people fight over OUR hard earned money! Then we have players like LeBron and retired players like Charles Barkley making jabs about our blue collar lives. If you take away basketball, how many players would be able to do what most of us CAN do? While they were getting their egos stroked by hangers-on and people looking to make money off them, we are out streesing about gas prices, the housing market, the lack of employment, and how to scrape up the money to take a family to support these spoiled jerks. Awesome summer ahead for the NBA.

Since: Mar 9, 2009
Posted on: June 18, 2011 11:40 am

Stern: Tuesday is turning point in labor talks

I see nothing in these talks about how the price of a ticket will come down or how much a hotdog costs at NBA games. They dont give a crap about the fans. I hope they lock out and they never come back. Same as the NFL. The owners can invest their money elsewhere and the player can go back to the streets and sling crack. Maybe then they will see how great they had it. WAR EAGLE.

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