NBA AM: Can An NBA Labor Deal Be Reached?
Where Things Stand: Going into the weekend there was guarded optimism that both sides of the NBA’s labor fight with its players might finally be closing the gaps on a deal and the fight could be coming to a close.
The reality of lost regular games was as real as it had ever been and it seemed both sides were again ready to make a deal.
After more than 13 hours of talks that spanned both Friday and Saturday an end to the 94-day long Lockout was not only lost, but the specter of lost regular season games looms real this week.
So where do things stand today?
Both sides will resume talks in a small “three-on-three” setting after a weekend full of larger group sessions. Players’ Association director Billy Hunter said that the large groups were a distraction as times but necessary to fully review the concepts on the table.
“When you’ve got 40, 50 people in the room, it’s kind of difficult,” Hunter said to Howard Beck of The New York Times. “We probably spent as much time caucusing outside the room with our respective groups than we did inside the room actually talking. Because when we’re inside, things sometimes get a bit tense.”
The tension Hunter mentioned is very real, sources close to the process say there have been numerous shouting matches in this process with HEAT star Dwyane Wade’s shouting match with David Stern being the most widely reported.
Wade allegedly told Stern: “You’re not pointing your finger at me,” Wade shouted. “I’m not your child.”
Sources said there was more to the exchange than that, and that wasn’t the first such shouting match in the very contentious meetings.
With smaller groups gathering today there is a hope that some ground can be covered before a larger meeting scheduled for Tuesday.
There is a belief among NBA insiders that if the framework of an agreement is not in place by Wednesday night, that regular season games will be lost setting in motion financial blow back that could alter both sides’ stance on the talks.
Most of the advertising and season ticket agreements allow for cancellation and refunds if regular season games are missed. That means a good third of the NBA’s money could opt-out and walk away the day the first game is cancelled, making the financial hit teams would face very real this week.
Equally, once the first regular season game is cancelled the first wave of checks to NBA players is in jeopardy as players are paid the second week of the season for the first two weeks played in most cases.
Up to this point a large number of players have either continued to get their checks for 12-month payment agreements they signed over the last two years or they have been banking on savings put away for this process. On November 16th, they will officially miss their first check and the road to that date starts with the cancellation of regular season games.
NBA Commissioner David Stern was clear that reports of an “all or nothing” season were erroneous, and that his side would continue negotiating in good faith towards a deal.
However there are more and more people saying the NBA doesn’t want to try and cobble together a fractured season again as they did in 1999, making this week all the more important.
Ultimately a cancelled season would be decided by the NBA Board of Governors, not David Stern, so it would take at least 16 owners opting to cancel the full season and Players’ Association president Derek Fisher has said he doesn’t think the votes are there, at least not yet.
The talks today really could be the final straw, if both sides emerge today at a stalemate the inevitable cancellation of regular season games won’t be far behind.
What’s The Problem? David Stern likely summed up the situation best when he said there are three core issues – Split of Revenue, The System and Revenue Sharing.
The NBA disclosed fully their revenue sharing plan to the players and for the first time in this process agreed to couple that sharing plan to the labor agreement. This was something the player felt had to be connected to the labor deal because they were being asked to give back hard fought percentages in their split of revenue.
The remaining two issues are complex and have points hard for both sides to agree upon.
On the revenue side the Players are willing to move their share of the pie down from 57% where it has been for a number of years to 53% – that amounts to a $164 million per year give back in total compensation paid to the Players. Over a 10-year labor agreement that is easily more than $1.6 billion swing to the Owners’ side of the table.
The NBA Owners have been pushing for a 47% share to the players.
A 47% share to the players would result in a $410 million per year giveback by the Players. No one in the process believes 47% will pass a player vote, with most saying anything lower than 51% would be a losing fight.
The obvious middle ground is a 51% to 52% split. 52% would amount to an annual giveback of $205 million.
Sources close to the process said the Players might go that low, but only if the system remains mostly unchanged.
If the Owners want to change the system, the Players feel they have to get as much guaranteed revenue as possible because of the uncertain effect a radically re-tooled system would have on player salaries and benefits.
Ultimately the split of revenue matters most to the Players’ Association, where the physical system matters most to the individual players.
There have been a lot of things floated about system changes and there are many terms the Players don’t morally oppose.
The Players don’t like the idea of shorter contracts, but they would concede to that issue to make a deal. The idea of a four-year deal for players staying with their team and three years for players leaving their team is workable.
The concept of reducing the Mid-Level Exception has been an inevitable sacrifice everyone in the process has seen coming. The Players won’t simply concede to the Owners’ idea of the value dropping to $3 million and only being a maximum of three years in length, although sources said that too is a workable area in the Players line of thinking.
Where the talks come apart is the new “Super tax” system the Owners have proposed which everyone involved on the Players’ side calls a hard cap by another name.
Sources close to this process continue to say there will be no deal if it involves a hard capping system in the NBA, whether that’s through a defined cap number or some mechanism that taxes teams into not spending.
The Players feel if an owner wants to spend, he should be able to. They also feel that any capping system would result in more non-guaranteed deals and more roster decisions being made for cap reasons than basketball reasons. They also feel more non-guaranteed deals would result in more selfish play that would derail what the NBA has become.
There is something to note on this front.
In virtually every labor deal over the last 20 years the NBA has tried to institute a hard cap system only to buckle in favor of making a deal.
The Players have stated several times they would do a deal with the same salary/luxury tax system as the last labor deal, but attempts to massage in a harder more restrictive system combined with a radical reduction in revenue share was not going to happen.
So is there a middle ground to be achieved?
Yes. If both sides want it, a deal is visible.
The Players will come down to 52%, if the old salary cap/luxury tax system is retained.
The Players will concede on length of contract and maybe the valuation of the Mid-Level exception.
The Players will fight hard for the Bi-Annual exception, mainly because there were 255 players that received checks in the NBA last season that earned under $2 million.
Said another way almost half of the votes needed to ratify a labor deal would view that concession as removing their next contract.
Is there a deal to be made, absolutely. A deal would get the NBA most of what is was looking for and it would get the Players’ Association something they could get ratified.
If the Owners’ continue to push for more, not only will a deal not be made, but the process will change its tone very quickly.
Kobe’s Deal In Italy: By now most you already know that Laker star Kobe Bryant grew up in Italy. His father played professional in Italy and the Bryant family lived in Italy for seven years until Kobe was 13. Bryant speaks fluent Italian and has long said after his playing days are over that he might buy a team in Italy.
So it shouldn’t come as much of a surprise that Kobe, while pondering a deal to play in Italy, wanted to make sure that the games he played benefited the entire Italian league, not just Virtus Bologna who was offering him a deal.
Word is the contract will be worth $3 million and it will have Bryant playing in 10 games over a 40-day span. There is an NBA opt-out which would allow him to return to the NBA once the lockout is lifted.
The wrinkle in the deal was that Kobe wanted as many games played in Italy as possible, which resulted in Virtus Bologna petitioning Lega Basket Serie A to allow teams to alter their schedule as to accommodate Bryant playing in the largest of Italian league arenas. Most teams were open to that idea but some were not; however it seems that both sides of the equation want to make a deal.
There have been reports that Bryant and Virtus Bologna could announce something today, and that Bryant could be in Italy sometime next week.
The Summer Of Charity Games: This weekend Chris Paul hosted a charity game in North Carolina which featured Paul and a number of his NBA friends. The game was streamed online and according to Paul in a recent Twitter post drew more than 1 million viewers.
Think about that for a moment. Did you know about the game? Most people didn’t and it drew 1 million web visitors.
LeBron James has a similar exhibition game scheduled for Saturday the 8th in Miami.
How many stream views will that generate?
With labor unrest front and center in the NBA, the drawing power of NBA players seems to remain high despite the nastiness of the labor fight.
If the NBA’s lockout drags on, the reality that players have more options to generate revenue than they did in 1999 becomes very real.
Imagine if the NBA’s top stars decided to do a traveling exhibition tour and streamed it online for a modest per game fee.
Chris Paul drew a million streams without much publicity. At $4.95 a head, that would have been a nice payday for those involved in a single game.
What is a 10-city tour worth, not only in web streams but in terms of tickets sales?
Now more than at any time in professional sports, players have the ability to market and manage themselves, and with web streaming becoming so easy to pull off, the NBA’s hammer of lost games might not be nearly as heavy as it was in 1999.
Players will never be able to generate the kinds of dollars they earn in the NBA or the same level of exposure, but they sure can keep themselves busy and earn a few dollars along the way.
If Chris Paul can generate a million web streams… what could Kobe Bryant draw? How about Kevin Durant’s game in Oklahoma City… Dwight Howard hasn’t debuted his plan yet and you know he won’t sit out the publicity tour much longer… Amar’e Stoudemire in New York?
It has become an interesting summer.
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NBA Chats: There are three NBA Chats scheduled for today starting with HOOPSWORLD’s Bill Ingram at 11am. Bill’s chats do fill up fast so getting in early is always wise. HOOPSWORLD’s Anthony Macri will host his weekly NBA Chat at 3pm EST. Coach Macris works with NBA Players year round in developing their game, so drop in your questions for Coach Macri now. HOOPSWORLD editor Jason Fleming rounds out the day with his weekly NBA chat at 8pm EST. You can always find the next NBA Chat here: http://www.hoopsworld.com/upcoming-chats/ and if you are looking for Previous Chats try here: http://www.hoopsworld.com/previous-chats/