NBA Labor Showdown: Who Blinks First?
HOOPSWORLD’s Joel Brigham writes:
We’re at a critical point in the 2011 NBA lockout, the point at which players and owners either make some real progress extremely quickly and save the season, or the point at which both sides feel like they’re getting the proverbial short end the of the stick. Now we get into a long and frustrating staring contest to see who blinks first.
Not that there’s any drama in such a competition, because we all know whose eyelashes are going to be doing the fluttering. Many players, despite their gigantic salaries, live paycheck to paycheck, while owners of professional sports franchises are usually rich with or without their teams.
Simply put, the players are going to need money before the owners are, and not everybody is open to moving furniture like Delonte West. The players are going to give up more than the owners because the owners know that as soon as games start getting missed, many players will grow desperate to get back to work. And let’s face it—an NBA player making $5 million a year versus $7 million year isn’t anything the general American public is going to boo-hoo over.
So yes, the players blink first, and they blink because, unbelievable as this may seem, they don’t all have emergency funds set up to sit out a year. That’s why 50+ NBA players are heading to Europe, and why twice that many are considering it. These guys need to pay the mortgages on their homes. They need to make their car payments and take care of their kids’ tuitions and in some cases pay child support and/or alimony like a huge chunk of the rest of the country. These players are people just like the rest of us, and when it comes right down to it, if we were in a similar pinch we’d probably fold, too.
Teachers go on strike. Construction workers go on strike. Any profession with a union has that right, and while a lockout and a strike aren’t exactly the same thing, the results are the same—working people give up their paychecks for a short period of time to defiantly miss work and prove a point that the bigwigs need the working class as much as the working class needs the bigwigs.
It’s the beauty of unions, but that can quickly lead to the ugliness of negotiations. It’s very easy to stand united early on in a strike (or a forced lockout), but eventually funds run low, bills stop getting paid, and these real human beings start feeling the pinch of the lost salary or wages.
Of course, middle class America can’t help but think, “Get over it, players. You’re still going to be making way more money than you deserve, even if you give up 8 or 9 percent in the BRI split,” or “Get over it, owners. You’re still going to be rich even if your sports team is a financial failure.”
But neither of those really is fair. Think about your own job and the money you’ve worked so hard to earn. Years of work have earned you various raises and promotions, and if your boss threatened to cut your salary by ten percent, and lock that max number in for the next decade, you’d be irate. It doesn’t matter if you make $50,000 or $10 million a year. As people, we don’t like being cheated out something we feel like we’ve earned, so we fight for it.
Eventually, however, the fight goes out of us when the money stops coming. Getting your salary cut by 10% for the next ten years is bad, but by skipping work for a year, you’re losing 100% for twelve months. Isn’t that essentially the same amount of money? And when it comes down to it, the longer the players wait, the more money they lose, even if they hold onto a higher percent of BRI.
When that realization sets in, players will lose the desire to stick to their guns. They’ll just want their paychecks back and to return to work.
It’s about money. It’s always about money, and since the owners have so much more of it than the players, we can guess pretty easily who will cave in first, and why.
HOOPSWORLD’s Mark Nugent writes:
The NBA lockout hasn’t affected the players or the owners yet, but in time (most likely in November, when games and paychecks begin being missed) both sides could begin feeling the sting of what winter feels like without the NBA.
Both sides will lose money, some four billion dollars if the entire season is cancelled. Both sides have said there is still time to make a deal, but the latest rumors have the sides significantly apart on some of the major issues, like the split in basketball related income (BRI) and a soft salary cap versus a hard salary cap. The players have vowed they won’t accept any deal that includes a hard cap.
Let’s start by making one thing clear: the owners aren’t going to blink first. They have the money and ultimately have the power. Twelve of the NBA’s owners appear on Forbes’ latest top 400 richest people in the United States list. This isn’t a group that is going to worry about missing a few months or even an entire season in order to get the economic deal in place that they have been negotiating for all summer long.
With that said, though, there may be ways the players can get the owners to move off a strict hard cap. If the players offer to change the middle-level exception (MLE) from a five-year deal to a three-year deal, for example, it would help the owners cut long-term costs while still allowing players the flexibility to change teams in free agency. That is a significant give-back by the players and could help convince the owners not to push for a hard cap.
Also, Bird Rights (the right of a team to exceed the salary cap to re-sign their own free agents) is a big issue for both sides. This issue may be grandstanding for the owners, because every team in the league wants an advantage when it comes to signing their own free agents. It’s also good for the league to have big stars consistently associated with their particular teams.
If Bird Rights isn’t in the new Collective Bargaining Agreement (CBA) it will negatively affect most teams. Losing Bird Right’s will make it easier for superstar players to leave the team that drafted them, much like LeBron James did last summer. No owner wants to go through that.
The latest rumor has the owners wanting only one player per season to be allowed to sign via Bird Rights. It’s not ideal for the players, but this is something they may have to accept if they want to make a deal.
The players may also have to accept losing the bi-annual exception, which allows a team to exceed the salary cap every other year to sign a veteran player. At some point, the cap is going to have to become harder, and one of the least painful ways the players can do this is by losing the bi-annual exception.
The biggest issue, though, is money. The owners are businessmen, and they achieved the level of success necessary to own a NBA team by making smart business decisions. If the players are willing to give up enough of their percentage of BRI then it’s likely the owners will be willing to accept some version of a soft cap system and they will make a deal.
The latest offer from the players has them moving from 57% of BRI to 54%. That’s not enough to get the owners to accept the soft cap system. If the players refuse to accept a hard cap, they are going to have to go to at least a 50/50 split on BRI and perhaps allow the owners to deduct some new expenses from the total revenue pool that could push the players’ share as low as 49% or 48%.
If the players are willing to make the current cap system slightly harder and give back 7% of their total earnings, it will be nearly impossible for some of the brightest businessmen in the United States to pass up that deal.