Larry Coon:
Welcome to the chat, everyone! Week three of the lockout is winding down, and it looks a lot like Week 2 did. Let’s talk about it.

jw, my opinion is that just as the NBA curently has no control over players signing contracts elsewhere, they likewise don’t have any control over player conduct during the lockout. In fact, the two issues are in the same paragraph of the standard player contract:

Larry Coon:
I don’t expect the luxury tax to remain in place, but that’s because of revenue sharing, not the soft cap.

You’re right that if there is a hard cap, then there’s no need for a luxury tax. But the tax was intended to accomplish two goals: 1) Dissuade teams from spending; 2) Function as a form of revenue sharing. However, the tax never accomplished the first goal — teams wrern’t dissuaded from spending, they simply saw it as part of the cost of doing business. So if it never met its first goal, and direct revenue sharing is a better means of accomplishing the second goal, there’s no reason left to continue with a luxury tax.
 

Larry Coon:
There’s Gary Payton, and then there’s everyone else.

But there are a lot of great stories about Bird, so he has to be considered one of them.
 

Larry Coon:
It’d be really tough to accomplish. There aren’t a lot of places to play in, and there probably wouldn’t be a lot of teams at first — meaning most players would still be left out in the cold.

But the biggest problem is that if the lockout ends, then the investors’ big investments probably go right down the drain. I’m not sure how many people would be willing to risk that kind of money.
 

Larry Coon:
Both sides have retreated to their respective corners between rounds. I was hoping they’d start up again by now, but it looks like it’ll happen around the end of the month or in early August. I care less about how it looks than about how it works. If strategizing for a month allows both sides to come to the table with new ideas, then so be it.
 

Larry Coon:
Teams have done this. The Lakers used to play a number of games in Las Vegas (in fact, Kareem broke the all-time scoring record there). The Clippers used to play part of their season in Anaheim. I think the Celtics and Bullets are two other teams that had a split schedule, and I’m pretty sure there are more.
 

Larry Coon:
I’ll answer your second question first. There are two sets of laws in effect in these kinds of situations — labor law and antitrust law. Those two sets of laws are normally at odds with each other (because labor law encourages the kinds of things that would otherwise be illegal under antitrust law), and this is resolved by having a labor exemption in the antitrust laws. As long as provisions are collectively bargained with a union, these activities are exempt from antitrust provisions.

The exemption continues even after a CBA expires, so right now the two sides are still working within the labor law. But at any time, they could decide to switch over from labor law to antitrust law. They do this by decertifying the union. When that happens, there is no longer a collective body for the employer to negotiate with, and the labor exemption dissolves. Once that happens, the antitrust laws take over.

Lockouts are a part of labor law, and not antrust law. By switching from the arena of labor law to that of antitrust law, the lockout potentially becomes illegal, along with the draft, maximum salaries, and a number of other provisions.

Now back to your first question — the players say decertification is more of a last-ditch resort for them. They only want to turn to the antitrust laws if it looks like they can’t get a fair deal in the arena of labor law.
 

Larry Coon:
They’ve got one more run left with KG & Ray Allen, so they need to try to reclaim some of the size they lost with the loss of Shaq, (potentially) Big Baby, and from the mistaken Kendrick Perkins trade. But they’re going to be capped out, and the new rules likely won’t provide a lot of help. I don’t even think the sign-and-trade provision will survive, which would allow them to flip Jeff Green for an asset, I’d ordinarily say someone like Chuck Hayes would be a good — if undersized — fit, and maybe in their price range, but I think they’d need more than that. I’m just not sure how they get it.
 

Larry Coon:
Nope. The NBA has the right to lock out the players. They don’t have the right to stop the players from earning a living elsewhere.
 

Larry Coon:
Chicago yells "Prank caller! Prank Caller!" and hangs up the phone.
 

Larry Coon:
There’d be no 2012 draft if there’s no CBA. The CBA is what says there’s a draft in the first place. If the lockout lasts two years, then any players who would have come out in 2012 would have to wait until 2013. The league & players may mutually agree to add more rounds on a one-time basis, but they may just leave it at two rounds.
 

Larry Coon:
The big problem is the split of the pie between the owners & players. I don’t see how smaller issues lead up to a solution to the big problem. It’s the other way around — how they split the revenue determines how they will solve the smaller problems.
 

Larry Coon:
They went trough this in 1998-99. They set a deadline in mid-January. At that point, they’d be able to salvage a 50-game season, which is the minimum number of games they agreed they could play and still call it a season. The deadline will be similar this time.
 

Larry Coon:
Amnesty provision? Potentially, yes — but it’s hard to say how a hypothetical rule will work.

But remember, even if a team gets cap relief through an amnesty provision, they’d still have to pay the player. Giving Arenas $60 million is a pretty steep price to pay in order to land Dwight.
 

Larry Coon:
The new CBA would retroactively amend all contracts to reflect the revised salary numbers. It’s legal because the players mutually agree to the CBA that includes this provision.
 

Larry Coon:
The biggest issue is the amount of money that goes to the players, and teams still have to pay the players they cut via the amnesty provision. It’d help individual teams a little, but make the league-wide problem worse — I presume they’d waive one guy in order to sign another guy, so now you have many teams with extra contracts on their books.
 

Larry Coon:
I don’t think the league would put in rules where teams with high payrolls would be forced to dump productive players right away. I think we’ll still see a soft cap where teams can BE over the cap, but don’t have a lot of options to spend more money while they’re there.

Even if there IS a hard cap, we’ll see teams help by some combination of salary rollbacks, an amnesty provision and/or a grace period.

Larry Coon:
Yeah, as far as I’m aware, the majority carries for the owners as well.
 

Larry Coon:
Part of the problem is that they don’t see themselve as average Americans — and they’re not. They are an extraordinarily talented product, in an industry that reaps billions of dollars.
 

Larry Coon:
I don’t think they need website traffic numbers to realize the impact the lockout is having.
 

Larry Coon:
Union membership consists of all active players, whether they’re currently under contract or free agents.
 

Larry Coon:
The league, for obvious reasons, keeps this information closely guarded. Local TV revenue is a big chunk of the difference, but it extends much farther than that. One league exec told me that a team like Milwaukee couldn’t make as much hosting a Finals game as the Lakers could make hosting a regular season game.

You can find a list of the things included in BRI by looking here: LINK
 

Larry Coon:
From what I hear, it’s a meeting primarily to talk about more meetings — i.e., to plan the course they’re going to take. It’s more procedural than anything else. The real work will get done when the full groups get together.

Actually, the real work will probably get done late in the process when it’s just David Stern and Billy Hunter.
 

Larry Coon:
As much as the league would enjoy that, the players would have a significant problem with it. Most of the players — i.e., most of the voters on any proposal — are NOT the franchise players who would be taken care of in such a deal.
 

Larry Coon:
No. The pick is conveyed under a specific set of conditions, and neither side can change those conditions unilaterally. The Clips made the deal knowing that they’d eventually have the pick unconditionally if the Wolves continued to be a bad team, which is part of the reason they made the deal in the first place. The Wolves can’t change the terms just because it’d work out better for themselves.
 

Larry Coon:
There are several "exceptions" to the cap, which are mechanisms that allow teams to spend money when they’re already near or over the cap. One of those exceptions is the mid-level, but there are others as well.You can find a full list of them here: LINK

To acquire Carter the Magic used the trade exception, which eseentially says teams can make trades when they are over the cap, as long as the salaries of the players they acquire aren’t more than 125% of the salaries they send out. The Magic adhered to this rule when they acquired Carter.

And no, even if your premise was correct, it wouldn’t follow that the Magic should now be able to spend freely on free agents.

Larry Coon:
They do have an independent accounting firm go over the books. If there was anything amiss from an accounting perspective, then that firm would have blown the whistle.

The problem is, the dispute between the players & owners isn’t about that. Nobody is saying the league is lying about the numbers, or that they aren’t following the standard accounting rules. It’s more of a philosophical discussion.

The players are saying, "Some of those losses wouldn’t be there if you didn’t make bad decisions. We had no say in those decisions, so we don’t want to pay the price for your mistakes." An example is the interest on the league’s long-term debt. The players are essentially saying, "We didn’t tell you to whip out the credit card to pay for that. We’re fine with covering the expense itself, but not the interest payments because you chose to finance it."

The owners are essentially saying, "But we wouldn’t have needed to finance these expenses if we weren’t already paying you 57 percent of the gross revenues. You’re only reaping the benefit when money comes in the door; you’re not sharing in the burden when money goes out the door. And the two are connected — we need to spend money to make money."

These are the kinds of discussions that can’t be adjudicated by a third-party accouting firm that’s looking at the books.
 

Larry Coon:
Ordinarily I’d be saying, "If you think Kobe is willingly going to pass the torch to ANYONE, you’ve got another thing coming. Whoever wants the torch is going to have to pry it out of his hands." But this year at the All-Star game, Kobe made reference to being on the way out, and guys like Derrick Rose being on the way in.

Ultimately, the "torch" goes to the guy who can lead his team to titles. None of the guys you named have done that yet. Let’s see who earns it over the next couple years.
 

Larry Coon:
Honestly, I don’t think anything is bizarre or outlandish. I think it’s all a part of negotiation. Both sides have their own perspective on the situation, both want the best possible deal for themselves, and both are willing to spin it in order to make themselves look better.

Both sides go into negotiations asking for more than they think they’re going to get, and eventually they start serious horse trading and meet somewhere in the middle. Right now we’re still at the point where the two sides are asking for the moon and the stars, and haven’t begun to make serious concessions toward a deal (although the owners moved more than I thought they would prior to July 1).

That’s all for today, everyone. Talk to you again next week.