Showing posts with label Lockout. Show all posts
Showing posts with label Lockout. Show all posts

Wednesday, May 16, 2012

NBA Lockout

One of the reasons the NHL players eventually accepted a hard salary cap: the league implemented revenue sharing for the first time. A similar system, used by the NFL, is often cited as the reason pro football can thrive in tiny markets like Green Bay, Wisconsin.

But NBA teams do not split local most local revenue, which could give a significant financial edge to teams in big markets. Some players -- such as Indiana's Danny Granger -- have cited that disparity as the reason teams like the Pacers haven't been able to compete at the highest levels.

The owners may not buy that argument, for a variety of reasons.

First off, you'd have a hard time drawing a direct correlation between market size, income and on-court success. No team makes (and spends) more money than the Knicks, and they've been awful for the better part of the last decade. Los Angeles is an enormous market, and the Clippers are arguably the least-successful team in American sports history. Meanwhile, the San Antonio Spurs are the league's model franchise, and the Oklahoma City Thunder are thriving.

Well, they're thriving on the court at least. As Tom Ziller of SBNation points out, the biggest determining factor of a team's financial success seems to be market size; where pure profit is concerned, it's better to be an inept team in Los Angeles than a successful team in San Antonio.

And you wondered why Donald Sterling stays in the business.

Also worth noting: the league does have a form of revenue sharing already in place: the dreaded luxury tax. Of course, the players would almost certainly prefer a more direct form of wealth redistribution -- like the 60-40 home-away split of ticket sales used by the NFL -- over a system designed to punish teams for exceeding certain salary levels.


View the original article here

Monday, November 28, 2011

NBA Lockout: A Reason to Be Thankful?

NBA fans have one more reason to be thankful this week. Reports from Yahoo! Sports and the New York Times have confirmed that settlement talks between the league and what used to be called the National Basketball Players Union have begun. I feel like a kid in some TV movie, hoping desperately that the spirit of nondenominational holiday goodness will stop my divorced parents from squabbling long enough to realize that they really do love each other after all.

It seems a very small group has been meeting since Tuesday, likely with attorney David Boies leading the discussion on the players' behalf. It is not clear who is representing the NBA in these talks; the league has not commented except to say that it is "in favor of a negotiated resolution." The first matter of business may be reaching a settlement in the anti-trust lawsuits filed by the players last week. The settlement could then become the framework of a new collective bargaining agreement.

The next few days will be crucial. NBA commissioner David Stern has repeatedly said that the league needs 30 days after reaching a deal to tip off the 2011-12 season, and parties on both sides would love to save the league's annual high-profile showcase of games on December 25. As of this Friday, there will be 30 shopping days left before Christmas.


View the original article here

NBA Lockout: Assigning Blame

Nov 15 2011

It seems increasingly likely that the 2011-12 NBA schedule will go the way of the dinosaurs, the 1994-95 NHL season and the 1995 World Series. The players have taken steps to renounce their collective bargaining rights and take the league to court. David Stern and the owners haven't blinked. The most powerful player agents continue to push their own agenda.

I've been fairly optimistic throughout this process, because it's very clear there's a deal to be made if both sides are willing to give a little. They aren't. So instead, we've got a battle between CEOs, professional athletes and trial lawyers - probably the three most competitive breeds on the planet. And I vastly underestimated their collective willingness to put winning ahead of making a deal that benefits all parties.

I won't make that mistake again.

Today is November 15th. I should be writing about a playing-time battle between Toney Douglas, Landry Fields and Iman Shumpert... or how Paul Silas is finding ways to play undersized guards Kemba Walker and D.J. Augustin in the same backcourt... or about Enes Kanter getting re-acclimated to competitive hoops after a full year in limbo.

Instead, I'm looking at the bleak possibility of a long winter with no NBA. And I'm looking for someone to blame. There's plenty to go around.

Blaming David Stern and the Owners:

It's easy to portray the owners as the bad guys in all this. After all, they're billionaires who spend their time swimming in piles of coin a la Scrooge McDuck. But that's an awfully simplistic view of what's going on. I think it's more than fair to say that the collective bargaining agreement that expired in June was tilted entirely too far in the players' favor. And while some of their losses have probably been exaggerated by clever accounting, it seems equally clear that several teams are having serious problems. And while David Stern has taken a great deal of criticism for continually citing the payroll disparity between the Lakers and Kings - doesn't it seem that a system that has a salary cap but allows one team to spend three times as much on players as another is at least a little bit broken?

That said... there's a certain virtue in quitting while you're ahead, but that seems lost on the owners. They could have locked up a deal with a 50-50 split of basketball related income weeks ago, but continued to insist on draconian changes to the luxury tax and free agent rules, essentially creating a hard salary cap in disguise. They had a 20-point lead in the final minute, but they kept shooting three-pointers.

Blaming Billy Hunter and the NBPA:

In the overly simplistic view of the negotiations, the players are the victims. The league claims $300 million in losses? Well the NBPA, out of the collective goodness of its heart, has offered to take a $350 million pay cut. That should make everything right, right?

A couple of problems with that argument. The players made that concession very early in the process... and then became passive. It seemed the union was content to let the owners make proposal after proposal - letting David Stern set the agenda for all discussions - only to cry foul whenever the league attempted to reduce the payroll disparity between the Knicks/Mavs/Lakers/Celtics and the Hornets/Kings/Pacers. The union's bargaining position seems to be, "How about we give back some money and keep everything else the way it was?"

Followed by, "But wait. We offered to give back some money. How about we keep everything else the way it was?"

It has been clear for months that the union didn't have much leverage, and that their only real play was to consider decertification and the threat of an anti-trust lawsuit. But even with that, the NBPA let David Stern take the lead. The NBA filed a pre-emptive lawsuit asking a federal judge to block any decertification as a negotiating ploy. That move could render yesterday's move moot, but it had an added benefit; it set New York as the venue for future litigation, and the New York courts are seen as far more friendly to management than other districts. The union finally did move to disband... but waited until mid-November to do so, all but insuring that a large chunk of the season would be cancelled.

I'm not a labor law expert, but I have trouble seeing the union's disclaimer of interest as anything but a negotiating ploy - and therefore, a "sham". But even if it does stand up in court, why wait so long to go this route? And what can you gain? Anything you recoup - a percentage point or so of BRI or a little more flexibility in player movement - will almost certainly be cancelled out by the game checks you'll lose by not getting the season started.

Blaming the Agents:

While they theoretically represent the best interests of their clients, it's hard not to see NBA player agents as a third faction in this dispute, motivated by very different interests.

In simple dollars-and-cents, it makes sense for the players to get back to work as soon as possible. NBA careers are relatively short. Losing a month's worth of game checks is far more damaging to most players than getting an additional half-percent of BRI will be over the life of the next CBA.

The agents, on the other hand, can afford to take a much longer view. They can make back this season's losses over time; they'll still be in business when most of today's players are retired. It's hard not to see that as a motive when they push for the most aggressive stance in negotiations.

Blaming LeBron James, Carmelo Anthony and Chris Paul:

Wondering why the owners are so eager to place restrictions on player movement - particularly among superstars? James and Anthony are exhibits A and B. To recap:

  • James' pending free agency was the primary motivation for every personnel move made by the Cleveland franchise for years. James then took his talents to South Beach - a move many believe was planned two or three seasons in advance. The Cavaliers franchise lost about half its market value in the process.
  • Anthony used the Larry Bird exception to the salary cap - a clause put in place to help teams retain their own top players - as a means to force a trade to a team of his choosing.

Let's be clear - both players were well within their rights. But James' Decision and Anthony's Melo-drama showed exactly how much power the players could exert over their teams' when given the opportunity. It's not hard to see why the owners are seeking a more restrictive system.

Blaming Gilbert Arenas and Eddy Curry:

Meanwhile, Arenas and Curry have become cautionary tales, living examples of the evils of long-term guaranteed contracts.

  • Arenas signed a massive contract, ruined his knees, and then brought a handgun to the Wizards' locker room. But the only way Washington could be rid of him involved taking on a rapidly-fading Rashard Lewis - who still has two years and $45 million remaining on his deal.
  • Curry, on the other hand, basically ate his way out of the league, appearing in ten games total during his last three seasons with the Knicks.

If you're looking for reasons why the owners want an amnesty provision in the next CBA and a way to waive bad contracts without destroying a team's salary cap, look no further.

Blaming Isiah Thomas:

The mid-level exception was intended as a way for teams over the salary cap to add key players, as the Pistons did in 2002 by signing Chauncey Billups. But as Newsday's Alan Hahn points out, for every Billups deal there are five examples of the MLE being wasted on an end-of-bench guy. Thomas is responsible for two of the most notorious examples: Jerome James and Jared Jeffries.

Several of the "system issues" that still separate the players and owners involve the mid-level exception and whether or not teams should be allowed to use it when over the luxury tax threshold. You can thank Zeke for that.


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Thursday, November 3, 2011

Lockout Links

Today would have been the first of the 2011-12 NBA season. Instead, it starts Month Four of the NBA Lockout, which began way back at midnight on June 30 and has now officially out-lasted the Kardashian-Humphries marriage.

The latest round of labor talks broke down last week with the sides still unable to agree on a split of basketball related income. But in what seems to be the standard NBA news cycle these days, the end of talks has been followed with a series of more optimistic stories. Here's the latest from around the Web on the talks and when we can expect the NBA to get back to business.


View the original article here

Saturday, October 22, 2011

Owners' Ultimatum Scuttles NBA Lockout Talks

With the help of a federal mediator, the NBA and NBPA seemed to be inching towards a settlement that would end the lockout that has paralyzed the league since June. The players were looking for a 53 percent share of basketball related income. The owners were offering something closer to 49 percent. That's not that big a gap, right?

Wrong.

Possibly emboldened by the fact that NBA commissioner David Stern was home with the flu, the owners collectively decided that they've already been too generous in their offers, and that a 50-50 split of league revenue was a "take it or leave it" offer. Ever conscious of appearances, the owner chosen to relay this message was Portland's Paul Allen - the Microsoft mogul with a personal net worth estimated at $13.2 billion.

Why the change of tune? Spurs owner Peter Holt reportedly told the players, "you haven't suffered enough."

Classy, that.

The union seems willing to discuss a 50-50 arrangement, but only if their other conditions - issues relating to the salary cap, player contract lengths and year-to-year increases and the like - are met. But the owners wouldn't even discuss those "system issues" without an agreement to split BRI evenly. And with that catch 22 firmly in place, talks fell apart.

I've been in the owners' corner for some time now. Or, perhaps more accurately, I don't see how the players can generate much leverage in this situation... and fighting for an extra percentage point of BRI doesn't make much sense when a couple weeks of cancelled games wipes out any financial gain. But I certainly wouldn't sign a deal under these circumstances.

(And to those pushing decertification of the union and a battle in the courts, understand that such a strategy would almost certainly wipe out this season, and wouldn't necessarily win the players a better deal.)

What happens next? It seems there are two possibilities. David Stern could re-emerge from his sick bed, get his owners in line, and pick the negotiations where the mediator left off. Or some of the more moderate owners - Jerry Buss, Mark Cuban, Mickey Arison and James Dolan have repeatedly been mentioned as wanting to make a deal - could step up and stop allowing their most hawkish brethren to drive the process.

Either way, it seems inevitable that more games will be cancelled.


View the original article here

Friday, October 21, 2011

NBA Lockout: I'm From the Government, and I'm Here to Help

A federal mediator will attempt to jump-start the stalled NBA labor discussions this week.

George Cohen, head of the Federal Mediation and Conciliation Service will meet separately with representatives from the league and players union today, and bring both sides together tomorrow in an attempt to end the three-month lockout that has already forced the cancellation of about regular-season 100 games and the entire preseason schedule.

Cohen's shooting percentage is pretty impressive; according to his bio, 86 percent of the cases mediated by the FMCS were settled. But as Newsday's Alan Hahn is fond of pointing out, the FMCS got involved in the NHL's 2004 lockout talks just days before the plug was pulled on the entire season.

NBA commissioner David Stern took to the airwaves last week to discuss the league's position on a wide range of lockout-related topics, from finances, growth projections and splitting basketball related income to competitive balance, salary caps, luxury taxes and player contracts.

The players union hasn't done near as good a job staying "on message" - Wizards center JaVale McGee emerged from a meeting on Friday and told reporters "There's definitely some guys in there saying that they're ready to fold..." though union leadership disputed that contention.

Tuesday will be a very important day for the league. David Stern has said that if Tuesday's meetings don't yield a settlement - or at least significant progress towards one - he doesn't expect the league will be back in action by Christmas.


View the original article here

Saturday, October 8, 2011

NBA Lockout

At its heart, this dispute is about money. (Shocking, right? Hope you were sitting down for that revelation.) The owners think the players are getting too much of it. The players are pretty happy with their share of the pie, and aren't about to give any back.

The amount of money the players receive in salary is set, in the existing collective bargaining agreement, at 51 percent of "basketball related income" or BRI. BRI includes just about every revenue stream, from tickets to parking to broadcast rights to concessions, though revenue-sharing payments and expansion fees are excluded. (For a complete rundown, check out Larry Coon's invaluable Salary Cap FAQ site.)

Owners are quick to point out that the BRI formula is based on gross revenue; when they spend additional money to promote ticket sales, etc., they eat into their own share of the pie but the players don't take the same hit.

That's one of the reasons -- according to league accounting -- that NBA teams lost a combined $370 million last season.

The players aren't buying that story, essentially accusing the league of using Enron-esque accounting to generate those figures. They may have a point; after all, if NBA teams are such money pits, why did the Warriors sell for a record $450 million last summer?

The battle over these numbers figures to be one of the biggest and hardest-fought. After all, the owners and players can't decide how to divide the revenue pie until they determine how big a pie they're sharing.


View the original article here

NBA Lockout: Are NBA Teams Really Losing Money?

Jul 5 2011

According to the NBA, 22 of 30 franchises are losing money. According to the NBPA, that assertion is... well, "baloney" would be a polite way of summarizing.

Who's right?

There's an increasingly-large pile of evidence to suggest that the league is guilty of... at the very least... creative accounting.

Exhibit A: Deadspin takes on the New Jersey Nets

Deadspin.com obtained three years' worth of financial data from the New Jersey Nets. It's not hard to imagine why such a team might be losing money; it can be difficult to generate fan interest when everyone knows you're moving. Still, Tommy Craggs' breakdown does a good job of showing how tax lawyers and aggressive accounting can take a slight profit and turn it into a substantial loss.

Exhibit B: Larry Coon Balances the Books

Writing for ESPN.com, noted NBA salary cap-ologist Larry Coon explains how expenses totally unrelated to the day-to-day operations of a team figure into profits and losses. For example:

$41.5 million of the Nets' $49 million operating loss in 2005, and $40.2 million of its $57.4 million in 2006, is there simply to make the books balance. It is part of the purchase price of the team, being expensed each year. This doesn't mean they cooked their books, or that they tried to pull a fast one on the players. It is part of the generally accepted accounting practice to transfer expenses from the acquisition to the profit and loss over a certain time period. However, it's an argument that doesn't hold water in a discussion with (Billy) Hunter and the players association, who would claim that the Nets didn't really "lose" a combined $106.4 million in those two years, but rather that they lost $7.5 million and $17.2 million, respectively.

Exhibit C: Nate Silver's Skepticism

Another respected number-cruncher, Nate Silver of FiveThirtyEight, also raised a skeptical eyebrow at the league's claims of financial woe. Using data from Forbes magazine and other financial publications, Silver estimates that the league as a whole is still profitable - but that high-revenue teams like the Lakers, Knicks and Bulls might be making enough to cover losses elsewhere.

Interestingly, Silver compares the NBA's current financial situation to that of Major League Baseball, just before the 1994 strike. According to Forbes, about one-third of the league was in the red in 1993, and half the league's profits came from just four teams. But instead of implementing a salary cap, baseball came out of that negotiation with an enhanced revenue-sharing structure that seems to be serving the league very well.

I suspect the players union - and quite a few of the owners - would sign up for a similar system right now.


View the original article here

Friday, October 7, 2011

NBA Lockout Update

Imagine a bridge that reaches 90 percent of the way across a deep chasm. You can walk most of the way across - so close, you can almost feel the earth on the other side. But you just can't get there. Ninety percent of a bridge is about as helpful as no bridge at all.

The same could be said for the NBA and NBPA's lockout negotiations. The sides are closer to an agreement than they've been at any point - but their difference of opinion is still wide enough that the league is set to cancel the remainder of the preseason. And the first two-week portion of the regular season is next on the chopping block.

The sides have reportedly made substantial progress on many issues. The union appears willing to accept a new payroll structure that replaces the current soft salary cap with an escalating luxury tax intended to curb payroll growth, and has been offered an "out" in any new CBA after seven years - which would give the players the opportunity to renegotiate at a time when the league should be enjoying the benefits of a new and potentially-lucrative television deal.

The stumbling block is money - specifically, the portion of basketball related income (BRI) that the players will receive in the new deal. Under the terms of the CBA that expired in June, the players received 57 percent of BRI. The owners' initial proposal sought to reduce that share to something in the neighborhood of 45 percent. As things stand, the owners are offering 47 percent, and the players are demanding 53.

The owners have characterized their offer as a 50-50 split of revenue, but that proposal includes a major re-working of the BRI formula to include expenses. Under the last deal, BRI included a wide range of revenue streams but did not deduct any expenses. The fact that players enjoy the benefits of increasing revenue without sharing in the risk - increased marketing expenses needed to fill seats and generate that revenue, for example - has long been a contentious issue in these negotiations.

With talks breaking down, powerful player agents are expected to renew their push to decertify the NBPA and take the league to court. But they do not seem to have enough support from union the rank-and-file to go that route. Not yet, anyway. Decertification would give the players more options in a court fight with the league; some believe that would mean additional leverage in the ongoing negotiations. But lawsuits could take months - even years - to resolve. NBPA leadership has said they'll consider that option, but Billy Hunter and Derek Fisher remain committed to reaching a new deal at the bargaining table.

League commissioner David Stern has announced that the league will cancel the first two weeks of the regular season if a deal is not reached by Monday, October 10.


View the original article here

Thursday, September 29, 2011

Lockout Talks Hit Crucial Stage

Talks between the NBA and NBPA continue in New York today, and have reached what many consider to be a critical but potentially productive stage.

Discussions apparently took a big leap forward when the league unveiled a new proposal that does not include the dreaded "hard" salary cap. They've substituted a revised luxury tax system with far more punitive charges for exceeding pre-set salary levels, the levels themselves and the penalties involved have not been revealed as of yet.

I'm highly skeptical of such a system. Bear in mind, the league implemented the current luxury tax structure thinking the dollar-for-dollar tax on salaries above a certain level would act as a brake on payrolls. But many teams simply accepted the tax as part of the cost of doing business. Will higher taxes do a better job of slowing salary growth? For some teams, probably... but as Tim Donahue points out, the Lakers and Knicks have a massive edge in revenue, even compared with successful big-market teams like Houston, Chicago and Boston. Even a three-for-one tax wouldn't hurt Jerry Buss' profit margin all that much.

Obviously, many of the details have yet to emerge. But as described, it is hard to see this proposal as anything but a hard cap on everyone except the Lakers and Knicks.

Of course, that may be the point. The players have insisted all along that they will not accept any deal with a hard cap. Technically, this deal doesn't. If it is combined with a percentage-based split of league revenue - one that allows the players to share in the league's growth over the life of the next CBA - this could become the basis for a deal.

Time is running short - the scheduled start of the season is just over a month away. If there's no deal by the end of this week, the likelihood that regular-season games will be lost grows exponentially.


View the original article here

Friday, September 23, 2011

Training Camps Postponed, Preseason Games Canceled, NBA Lockout Going Strong

NBA training camps have been "postponed indefinitely" and the first week of the preseason schedule has been cancelled due to the ongoing NBA lockout, the league announced today.

We have regretfully reached the point on the calendar where we are not able to open training camps on time and need to cancel the first week of preseason games," said NBA Deputy Commissioner Adam Silver. "We will make further decisions as warranted.

This doesn't necessarily mean we won't have a complete 82-game season this winter. Opinions on the matter vary, but the general consensus seems to be that a full season is possible so long as the sides come to an agreement before mid-October. The regular season is slated to begin on November 1.

So far, only meaningless preseason games have been canceled - but that doesn't mean today's announcement is insignificant. As Bleacher Report's Moke Hamilton points out, the preseason is when NBA players start collecting their 2011-12 salaries. Knocking roughly three games per team off the schedule represents a total savings of about $50 million.


View the original article here

Sunday, September 18, 2011

NBA Lockout

The owners are also likely to push for a reduction in both the length and size of NBA contracts in the next labor agreement. This could be the area where the owners make the greatest gains; while the "hard cap" concept doesn't resonate with the fans, even casual observers of the league can see the insanity of Joe Johnson -- a good player, but no one's idea of a superstar -- making $119 million over six years.

The owners will also look to remove some of the guarantees that are built in to today's NBA contracts. They'd love to move to NFL-style non-guaranteed deals that can be terminated at any time for any reason, but that seems too radical a departure from the current system to ever pass muster with the players. Perhaps some sort of more-aggressive buyout system -- one that would allow teams to get out from under albatross contracts like Eddy Curry's and Kenyon Martin's -- would work.

This could be an area where owners and players can find common ground. As we saw last summer, even top players are willing to take less money if it means landing in the right situation -- LeBron James, Dwyane Wade and Chris Bosh all took less money from Miami than they could have earned otherwise.


View the original article here

Saturday, September 10, 2011

NBA Lockout

The NBA has followed up the "Summer of LeBron" with its biggest season in years. Television ratings are up, and fans are buzzing in markets -- like New York -- that have been quiet for years.

Enjoy it while it lasts. This may be the last you'll see of LeBron James and Amar'e Stoudemire and Kobe Bryant and the rest for a while.

The NBA's collective bargaining agreement (CBA) -- the document that outlines just about every aspect of the league and its relationship with its players -- expires after this season, and the owners are looking for changes.

Big changes.

The owners are looking for what they call "cost certainty" -- which translates loosely as "we'd like to continue raking in big bucks, but we're not so keen on sharing the dough with the players." The players, on the other hand, are very happy with the status quo -- and why wouldn't they be, when the current system ensures players like Eddy Curry continue to get paid well over $11 million this year.

At this point, a lockout is a virtual certainty -- but that just means the league will shut down operations after the NBA Finals, until a new CBA is in place. Depending on how negotiations go, the first casualties will be the 2011 NBA Draft and the summer leagues. The longer discussions drag out, the more cancellations we'll see. In 1998-99, the league and NBAPA didn't reach a settlement until mid-January. The 1998-99 season didn't start until February 5, was shortened to 50 games, and the all-star game was canceled entirely.

Worth noting -- it was during that lockout that most of the current labor agreement was put in place.

Will we see a similar delay to the start of the 2011-12 season? Or something worse, like the lockout that ate the entire 2004-05 National Hockey League season? Here's a look at the issues the negotiators will have to settle before next season can tip off.


View the original article here

Wednesday, August 31, 2011

NBA Lockout

NBA payrolls have been capped since 1983, but there have always been mechanisms for getting around the salary restrictions. The best-known exception is the "Larry Bird Rule," which allows teams to exceed the salary cap to re-sign their own players.

The league's owners will reportedly push for a "hard" cap in the next CBA -- similar to the structures used in the NHL and, until recently, the NFL.

The players have vowed never to accept a hard cap. But then, so did the NHL's players -- before a lockout wiped out the entire 2004-05 season.

The players' argument against the hard cap is fairly simple. No one is forcing you guys to sign Drew Gooden to a five-year, $32 million contract, or give Joe Johnson a deal that will pay him over $20 million a year when he's 35.

The owners motivation, though, is equally simple. We need protection from ourselves... or, more specifically, from the dumbest among us. When the Bucks gave Gooden that deal, it set the market for moderately-talented rotation power forwards at $6 million per annum. What happens, then, when Blake Griffin's rookie contract expires? He's gotta be worth two-to-three times what Gooden is making, right? One bad deal can cause league-wide inflation.


View the original article here

Wednesday, August 24, 2011

NBA Lockout

The players could attempt to decertify the union in an attempt to stave off a lockout. You'd need a labor law expert to explain all the implications of that ploy, but here's a quick summary of what that would mean.

"Decertification" of the NBAPA would mean the union would no longer have the authority to negotiate on behalf of the players -- essentially making every NBA player an independent contractor. Such a move would give the players some flexibility; they could challenge the salary cap as an anti-competitive measure under anti-trust law, for example. But they'd also be giving up any collectively-bargained benefits (pensions, minimum salaries, etc.) It's an option for the players, but it's probably a last resort.

Sports law expert Michael McCann explained decertification in more detail in an interview with Sports Illustrated.


View the original article here

Sunday, August 14, 2011

NBA Lockout

At its heart, this dispute is about money. (Shocking, right? Hope you were sitting down for that revelation.) The owners think the players are getting too much of it. The players are pretty happy with their share of the pie, and aren't about to give any back.

The amount of money the players receive in salary is set, in the existing collective bargaining agreement, at 51 percent of "basketball related income" or BRI. BRI includes just about every revenue stream, from tickets to parking to broadcast rights to concessions, though revenue-sharing payments and expansion fees are excluded. (For a complete rundown, check out Larry Coon's invaluable Salary Cap FAQ site.)

Owners are quick to point out that the BRI formula is based on gross revenue; when they spend additional money to promote ticket sales, etc., they eat into their own share of the pie but the players don't take the same hit.

That's one of the reasons -- according to league accounting -- that NBA teams lost a combined $370 million last season.

The players aren't buying that story, essentially accusing the league of using Enron-esque accounting to generate those figures. They may have a point; after all, if NBA teams are such money pits, why did the Warriors sell for a record $450 million last summer?

The battle over these numbers figures to be one of the biggest and hardest-fought. After all, the owners and players can't decide how to divide the revenue pie until they determine how big a pie they're sharing.


View the original article here

Sunday, August 7, 2011

NBA Lockout

What will the summer of 2011 bring NBA fans? Probably a great deal of heartburn. At this point, a lockout seems inevitable; the owners have shown very little interest in negotiating with the players thus far, and seem to be digging in for a major battle.

The first casualty of the owner/player cold war will be the 2011 NBA Draft. Top college underclassmen and elite foreign players aren't going to declare for the draft if there's a chance they'll have to sit out an extended labor battle. There are already strong rumors that Duke's Kyrie Irving and North Carolina's Harrison Barnes -- consensus top-three picks both -- will return to school for their sophomore seasons due to concerns over the labor situation. Mass defections could make what is already projected as a weak draft class even weaker.

Any lockout will also put free agency on indefinite hold, leaving Carmelo Anthony (assuming he hasn't been traded and signed an extension), Yao Ming and others in limbo.

Because these things are rarely settled until there's some deadline pressure, I expect the negotiations to proceed at a glacial pace for much of the summer, speeding up in September when teams would ordinarily be hitting training camp.

My guess is an agreement will be reached in late September or early October -- late enough in the year that the 2011-12 schedule will have to be compressed, but not so late as to have a major effect on the season. Both sides have too much at stake to risk major cancellations. The league is doing well right now; the owners and players gain more by capitalizing on the game's high profile. Besides, the NFL could also be headed for a labor dispute -- there's a chance the NBA could have the late fall all to itself.

The deal itself? I don't think the owners will get a hard cap. I'm not sure they really want one. I do think they'll use the threat of a hard cap to get concessions on the players' percentage of BRI, the size and length of max contracts, and the number of exceptions to the cap. It wouldn't surprise me to see changes to the contract buyout process and a tougher personal conduct policy.

The owners' big concession could be revenue-sharing, though I'm not sure that's something that will be written into the CBA. The league probably won't want to tackle an issue that will pit big-market owners against their small-market counterparts; David Stern will want his owners presenting a unified front. Instead, look for a new revenue-sharing deal announced in parallel with the new CBA.

Once the i's are dotted and the t's crossed, we'll see a quick free-agent signing frenzy and training camp, thrown together in a matter of weeks, with the season starting just after Thanksgiving.


View the original article here

Saturday, August 6, 2011

NBA Lockout

The NBA has followed up the "Summer of LeBron" with its biggest season in years. Television ratings are up, and fans are buzzing in markets -- like New York -- that have been quiet for years.

Enjoy it while it lasts. This may be the last you'll see of LeBron James and Amar'e Stoudemire and Kobe Bryant and the rest for a while.

The NBA's collective bargaining agreement (CBA) -- the document that outlines just about every aspect of the league and its relationship with its players -- expires after this season, and the owners are looking for changes.

Big changes.

The owners are looking for what they call "cost certainty" -- which translates loosely as "we'd like to continue raking in big bucks, but we're not so keen on sharing the dough with the players." The players, on the other hand, are very happy with the status quo -- and why wouldn't they be, when the current system ensures players like Eddy Curry continue to get paid well over $11 million this year.

At this point, a lockout is a virtual certainty -- but that just means the league will shut down operations after the NBA Finals, until a new CBA is in place. Depending on how negotiations go, the first casualties will be the 2011 NBA Draft and the summer leagues. The longer discussions drag out, the more cancellations we'll see. In 1998-99, the league and NBAPA didn't reach a settlement until mid-January. The 1998-99 season didn't start until February 5, was shortened to 50 games, and the all-star game was canceled entirely.

Worth noting -- it was during that lockout that most of the current labor agreement was put in place.

Will we see a similar delay to the start of the 2011-12 season? Or something worse, like the lockout that ate the entire 2004-05 National Hockey League season? Here's a look at the issues the negotiators will have to settle before next season can tip off.


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