Only Players Can Save The NBA?
NBA players need to take their collective heads out of the sand and start sending a quiet S.O.S. (Save Our Season) to union executive Billy Hunter.
NBA player association representatives (“NBAPA”) seem to believe that they are in the posturing phase of negotiations and any real proposals they put forward will only be used against them once the real negotiating sessions start after league revenues are at risk. The NBAPA is wrong.
From the fans perspective, the worst thing that could have happened was the players getting their eight percent holdback money returned to them this year. Combining the return of holdback funds with the surprising financial planning of many NBA players to survive a lockout and the coming season looks lost long before training camps are even scheduled to open.
Why The Players Need To Save the Season
Most professional sports careers are short and a lost season’s salary cannot be made up even if the players win everything they want in a contract. The players’ representatives have publicly confirmed their belief that this season could be lost. They need to start acting like its true.
The NBA saw the financial success of the year-long NHL lockout and the NBA owners of NHL hockey teams have had little trouble convincing their brethren of just how profitable that strategy was. NBA owners are probably hoping, perhaps even planning, for a protracted work stoppage that will bring the players back to the negotiating table on the owners’ terms.
The one thing NBA owners are not expecting is for the players to make a serious proposal that attempts to address their stated concerns. Therein lays the only real hope of saving our season.
The Owners’ Real Demands
Cutting through all of the rhetoric and blather, the one idea that sums up the owners’ real demands is every team should have a realistic chance of becoming an NBA champion and, if well run, be profitable.
Whether the players wish to acknowledge it or not, for most of the teams in the NBA, neither objective is realistic. The owners’ concerns are genuine and need to be addressed for the long term health of the league.
What Should The Players Fight For?
The first step in any labor negotiation has to be holding onto as much of what you currently have as possible. Surprise, the NBA owners have already offered that with a $2 billion player salary guarantee, basically enough to protect every player’s contract.
The players’ representatives have seen the effects of the current NHL agreement and are concerned that the similar hard cap arrangement the owners’ want will eliminate the ability of average NBA players to get the lucrative long term deals they currently enjoy. They’re right. If the NBAPA wants to protect the average member and not merely represent a handful of stars, some aspects of the current collective agreement must be preserved.
The players need face the fact that this was never a partnership with the owners and for the most part ignore the financial information the owners put in front of them. They only need to look at attendance and ticket prices in some of the league’s markets together with the inability of many teams to attract or hold onto star level talent to recognize the need for change.
Make An Offer that Owners Have To Look AtTake that $2 billion in player salaries the owners offered for next season, throw in a 2 percent per year increase and we can just ignore all that messy percentage of basketball related income stuff. It’s a good offer.
The owners believe they can grow this thing faster than two percent year don’t they? This will give the owners the chance to grow out of the problems that they mostly created themselves. The players have never really believed the numbers the owners shown them anyways.
Set the salary cap to match overall player salaries and leave the current player salary exceptions in place. This protects the average player’s opportunity to get a better contract and the owners’ concerns about a level playing field and effective cost controls can still be addressed.
Set the player salary holdback at 15 percent and if player salaries exceed the agreed amount, increase the holdback next season to recoup the excess. The players should let the owners keep any shortfall in total salaries paid as an incentive to get the deal done instead of recouping it at the end of the season as they do now. (The owners almost never fail to pay out the minimum anyway.)
Change the luxury tax system to an escalating penalty that starts at one dollar per dollar over the cap and increases by one dollar per dollar over as team player salaries exceed the cap by each ten percent level passed.
At $2 billion, the proposed team salary cap would be $66,666,666.
Exceeding the cap by up to 10 percent or $1 to $6,666,666 costs luxury tax of $1 to $6,666,666
Exceeding the cap by 10 to 20 percent or $6,666,667 to 13,333,333 costs luxury tax of $13,333,334 to $26,666,666
Exceeding the cap by 20 to 30 percent or $13,333,334 to $20,000,000 costs luxury tax of $40,000,002 to $60,000,000
Exceeding the cap by 30 to 40 percent or $20,000,001 to 26,666,666 costs luxury tax of $80,000,004 to $106,666,664
While this is not a hard cap, teams like the Lakers would be more than 30 percent over the cap and facing a luxury tax bill approaching $100 million unless they make changes. The playing field between teams would be significantly leveled without eliminating the opportunity to add players and payroll to a team that believes they are just one player away or want to keep a roster together. It’s only money and it will work to keep most teams close the salary cap level.
A few teams will need the opportunity to buyout existing contracts to fit under the new system, but as long as players get paid, the NBAPA shouldn’t have any argument.
The Rest Of The Issues
If the players and the owners can agree on the money, every other issue pales in comparison.
The owners’ season killing salary rollback proposal is not required as a team salary cap of $66,666,666 accommodates most of the league’s franchises and their player obligations. The players should be willing to accept shorter guaranteed contracts which are the best way to reduce a team’s risk in signing bad deals. One idea would be to include a one-year team option in every player contract to reduce the risk of losing star players for nothing to free agency. Most of the old CBA should still work and the two sides can hash out the details of any particular clauses they don’t like.
The players can suggest a revenue sharing model between teams to complete the picture, but they need to remember they are not partners in this league and any team revenue sharing model should only be included in the CBA if it helps the league to get this done. (Which it probably would.)
Timing Is Everything
The NBAPA isn’t acknowledging it yet but they should realize from the NHL experience that once team revenues start falling off the table with the loss of preseason games, it will get harder and harder to make a deal with the owners. Their best chance to get the best deal available will come while teams can still earn a full season’s revenues. The owners’ proposal of a guaranteed $2 billion in player salaries is the best offer the players can expect and it will not be there after they start canceling games.
The reason Hunter is being quoted saying the entire season is at risk is because he knows this is the situation the NBA and its players are in. Hunter should also know these are not the same owners he has faced in the past and this new group will hold out as long as it takes to get what they want, unless the NBAPA pre-empts this pending disaster with an offer that changes their minds.
Hunter needs to ask himself if it better for his members to play this season and earn the same lucrative salaries as last season and have 10 years of labor peace with guaranteed modest salary increases or is it better to risk sitting out an entire season and trying to negotiate with the owners from a position of weakness like the NHL players association did.
The proverbial ball is in the players’ court, it is up to the NBAPA to save themselves and our NBA season.