Is Today The Day?

Darius Soriano —  November 14, 2011

UPDATE: The players union has not agreed to the owners deal. On top of that, they’ve “disclaimed interest” in the union that was representing them in these negotiations in order to move forward with an anti-trust suit against the NBA. The goals of a such a suit are multiple, but from my (non-lawyer) understanding the major goal is to get the lockout lifted due to the fact that without a union representing the players, the NBA is no longer eligible for anti-trust exemption and thus, the lockout would be illegal.

I’ll have more information when I get it, but for now, join me in mourning. The battle has shifted from both sides negotiators to lawyers. The likelihood there’s a season just went down. A lot. Sigh.

————————————

*Shakes Magic 8 Ball*

“Reply hazy, try again later.”

Today, the player reps for each team gather in New York to hear the NBA’s latest (last best?) offer from their leadership. They’re likely to be joined by several other big-name players (Kobe is there, as is Carmelo) who will let their opinions be known on how to move forward and whether they should accept, decline, or counter the offer that’s currently on table. Up to this point in the negotiation process, this is the biggest day we’ve had as it’s very likely that whatever decision the players will make will either result in a deal being made very quickly or the odds of there not being a season at all going way, way up.

A few scattered thoughts on the proposed deal and what I think the players will do:

  • The key points to the deal on the table are actually available for everyone to read. It’s the layman’s terms version that’s been put out by the league (as a memo to the players) and has a bit of spin in it to help try to convince the players to agree to it, but you can read it for yourself to gauge whether or not you think this is a deal the players should agree to.
  • My takeaway is that it still includes some restrictions on luxury tax paying teams that the players are going to find difficult to agree to. A lower mid-level exception and the elimination of sign and trades are still present and, as I’ve mentioned before, those are provisions that limit players’ mobility to any given team. The players will forever be against any measure that restricts their ability to set a “market price” for their services and the reduced MLE does just that.
  • One issue I have with the document the league released was them citing statistics of how many times a certain type of transaction occurred (for example it’s stated that “Taxpayers used the sign-and-trade to acquire only 4 players during the prior CBA”) as if those stats should be interpreted by the players as reflecting things that aren’t meaningful and shouldn’t hold up a deal. However, I think the same thing could be said to the owners and I wonder why they’re sticking points from their end as well. I mean, if some of these transactions have only occurred a handful of times, why do the owners feel they’re needed in the new CBA?
  • This is why I think the players won’t accept the deal on the table as is, but will instead state to the owners (and the public) what changes they’d make and would agree to. This will let everyone know where the players stand, that they’re not the roadblock to a season happening, and that all the owners have to do is drop a few of there lesser demands in order to get a deal done. The players can make the clear point that they’ll accept a 50/50 BRI split and will take the owners deal almost as is, but some of these issues – ones that the owners themselves say weren’t a big part of the last CBA – they’d like to see stay as is. At that point the pressure shifts back to the owners while the players would have openly stated they’re willing to get the season started asap.
  • That said, I also would not be surprised if the players did not take that route at all and instead declined the owners’ offer outright. And personally, I would not blame them too much. That’s because the players are in a lose, lose, lose situation. They know they’ve already lost on this current deal – they’ve moved down 7% on their percentage of BRI, will accept shorter contract lengths, lower annual raises, and more punitive tax rates on the highest spenders. They know that the owners possess a strong negotiating position and that they’re not likely to make too many inroads in these current talks beyond, maybe, getting a few minor concessions. And they know that the owners have taken a negotiating stance that could barely be described as “good faith” (if at all) and going back to a work environment under those same owners is something that may be too difficult to live with.
  • Beyond those issues though, the players are also in a position where what they’ve given up will likely never be gotten back by this current crop of players and any future negotiations will put them in a position where it’s doubtful they’ll be viewed in a light anywhere near as favorable as they are now. Understand that the current deal reportedly has opt outs for both sides after 6 years. Well, lets say the league does well over the course of the next 6 years – after all, the current crop of stars, the continued saga of the Heat, and other story lines are sure to keep the league popular – but the players find that certain parts of this deal aren’t tenable long term and they think they need to be renegotiated. In this scenario, the players may want to opt out but with increased revenue sharing, a better TV deal, and growing revenues, the owners are perfectly happy keeping the deal as is. So, the only way to get out of the current deal form the players side is to opt out themselves. In other words, they’d need to go on strike in order to reengage in talks. And, ultimately, going on strike would be a PR disaster where any goodwill they’d have built up in these talks would instantly vanish. If there’s one way to be viewed as a selfish, greedy athlete, it’s to go on strike. Some view the players that way right now even though they’ve been the only side moving in these negotiations after the owners locked them out. Imagine what it would be like should the players be the ones saying they want more?
  • In the end, though, today is a day where we should know more. And while I want to see basketball again and want a deal to get done, all I can do is wait with the rest of you to see what happens. Hopefully it’s positive; hopefully the players can get a few of the things they want in order to claim even a small victory and we get basketball back soon. We’ll see.

Darius Soriano

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40 responses to Is Today The Day?

  1. Darius,
    The sign and trade in a less flexible cap the owners are proposing would be used much more often. Both sides obviously have experts that are as smart as me. What might happen is only one or two team will be able to go into the luxury tax (hopefully one of them would be the Lakers). With no sizable mid level less free agents would have any real options at all to go to let’s say the Lakers ;) . So you will then have more free agents starting to ask for sign and trades as a vehicle to get the cash they want at the place they want.

  2. The sign and trade provisions have been rarely used but it’s use is excellerating. The players have learned that this provision provides them leverage to demand trades and have forcefully used them. Melo is one recent example. Utah’s movement of D-Will was an attempt to protect themselves from the destabalizing influance of this newfound power the players have increasingly implied. So, the owners’ argument is this has been rarely used up until now but we see it increasing. As a Lakers fan, I would love to keep that tool in the players’ box as I think the Lakers are one team that could afford to retool using the sign and trade, either with Chris Paul or Dwight Howard and in the future with other mega-stars that developed in small markets. I can understand why the league wants to protect itself from our team, and others in large markets, from capitalizing on this tool the players have gotten better at using.

  3. @Aaron Great minds:) … except regarding Fisher

  4. If there was any chance for a deal, by clamping down on the mid-level the owners shot it down,since so many players are affected by it.

  5. No Deal.

    I officially hate the NBA.

  6. Although I am usually a pessimist, I’m still not convinced this ‘nuclear’ option will actually be deployed. The players certainly have enough votes to force a vote on the *question* of decertification (they enough votes to force a vote), but once that step is completed, will >50 percent of the players actually vote to decertify? Even if they claim they will, once they get in that (metaphorical) ballot box, I find it unlikely that most of them will opt to forego the season and suspect this is a final gambit to try to get a better offer.

    Yes, I realize I am in the minority with this opinion.

  7. 6- I see where you are coming from. But time is an issue here. There is surely a drop dead date in the minds of David Stern and the owners. With this move by the union the Christmas games are basically dead. This move would most likely pushes a hypothetical start of the season into January. Add in the fact the two sides let large gaps of time go between bargining sessions and it really doesn’t look good.

  8. 3)
    You know it ;) . Nobody is perfect.

  9. Rusty Shackleford November 14, 2011 at 12:37 pm

    Am I correct in my understanding that there isn’t any rule that would keep the two sides from making a one-year deal to give them more time to work on the next one that will be in place for the usual period?

  10. Quote from David Stern:
    “If I were a player … I would be wondering what it is that Billy Hunter just did.”

    If David Stern were a player… even his mom wouldn’t be watching the NBA.

  11. The sportswriters, etc, who are paid to cover the NBA keep presenting decertification in a negative light (their livlihood, to some extent, depends on a season too).

    I don’t practice labor law but there does seem be some interesting issues if the players take it to court:

    Take the issue of player movement. If you are an accountant and you work for a company, that company can say you will work for them in Cleveland or you will not work for them at all. However, that company does not hold a monopoly over the whole accounting profession, you can work for another firm in Los Angeles.

    The NBA at present, holds a monopoly over professional basketball in the United States (inferior leagues not counting). Although a player agrees to accept league rules and the collective bargaining agreement when a contract is signed, could the courts find the current restrictions on player movement too restrictive? Remember Curt Flood and the reserve clause.

    Also, if a sign a contract in 2008, for 5 years with an opt out clause after the third year, it is clearly understood when that contract is entered into that the player will be able to fairly enter the free agent market. If one side (the owners) tries to unilaterly restrict freedom of movement to try to keep players with one team, after players have entered into contracts, is this a violation of the anti-trust laws, etc.?

    Like I say, I am speculating, but my hunch is the owners have plenty to lose.

  12. The owners should have seen this coming. As I’ve argued elsewhere, players had very little leverage in these negotiations. The owners attempted to exploit this with a sharp reduction in BRI%, a virtual guarantee that the average BRI% will never exceed the 50% rate, an escalating luxury tax, loss of mid-level exceptions for teams paying luxury tax, and a reduction in the minimum salary and length of contracts. In essence, this proposal would effectively eliminate the “middle class”, leaving each team with one or two superstars (with super salaries) and near-minimum level players.

    If the players agreed to this proposal, they would effectively cede all negotiating leverage for all FUTURE CBAs as well. There would be no way for them to significantly reclaim what they have lost. As a result, their only option is to turn to the “nuclear” option of union decertification.

    Decertification does not mean there will be no season; only that the league can no longer negotiate with the players as a group. Players would theoretically be free to sign individual contracts with teams, for whatever amount and length of time. This is unlikely to happen since fans will probably not support any “replacement team.” While the NBA continues to get paid for its TV contracts, it will now have to start refunding the networks for unplayed games. This, coupled with other losses (such as loan payments, arenas costs, staff salaries, taxes, etc.) may be enough to force some hard-line owners to relax their demands.

    Interestingly, in the NBA FAQ section about the lockout, they posed the question: “Would hoops fans really want to see an NBA with just 12 teams, anchored in the nation’s biggest markets only?” This might not be a terrible thing.

  13. I want to expand a little upon my comments @6:

    Let’s look at some ‘classes’ of players who might credibly function as crypto-Benedict Arnolds, i.e., who might publicly (and loudly) support the union but who might easily stab it in the back when given a chance to *(anonymously)* vote to decertify:

    The Ageing Star: KG, Duncan, even Kobe. On their final contract, on max $, they will see virtually no benefit from a better CBA but will forfeit a huge year of earnings (and one of their last ones of their career), plus a chance to further solidify their legacy through a ring or padding their career stats. In Kobe’s case, this means chasing KAJ for most points ever, plus chasing MJ for rings. In TD’s case, it means his last season and and attempt to distance himself from Malone as the best 4 ever.

    The overpaid mediocrity: This has two subsets– overpaid nonstars like Brian Cardinal and Luke Walton and overpaid ‘stars’ like Arenas and Rashard Lewis. Guys who will never in a million years be offered the same kind of money they would forfeit by foregoing this season. Of course, the later they are on their excessive contracts, the greater the likelihood of secretly voting against decertifying– imagine you are giving up a 20M season and facing a 3M season the following year.

    The ‘Barely in the League guy’: If you’re Brian Cook or some other stiff riding the pine until your contract expires, you are giving up some much needed $ before you wash out of the league. Perhaps you are on your rookie deal and are forfeiting, say, 600K of your 1.8M total contract. Unlike the Chris Pauls of the world, that absolutely affects your ability to choose a house and avoid working security jobs in the near future. Again, the closer you are to the end of your last deal, the more likely you are to secretly vote against the union.

    The ‘Prime of My Career/Got it Made’ Guys (LeBron, Dirk, Melo, also Kobe). Guys who have great contracts on the teams they want to play for– no improvement possible by a CBA and losing out on a big payday on a great situation.

    So who does this leave to fight for the CBA for reasons beyond ideology… other than agents, of course, who are thinking in terms of 100s of future contracts, not merely the next one so have far more to gain than even the youngest, brightest star?

    Up and Comers like Blake Griffin.

    Young Stars such as Durant who should have 2 max contracts ahead of them, plus in Durant’s case, he plays for a team he conceivably might want to S&T out of if their upward arc doesn’t hold, so flexibility to force the S&T in a couple of years might very well be a big issue for a guy like him.

    And that’s it, as far as I can tell. Even guys like DH12 won’t be too badly affected by this deal as the the prohibition against Sign and Trade to luxury capped teams doesn’t kick in for a couple of years.

    So… I get why the agents are telling their clients to fight (but I see this more about the agents than the players) – and philosophically I am on the union’s side – but when it comes down to what I presume to be an anonymous vote in favor of decertification (again, this is in distinction from the vote calling for a vote for decertification, which is pro forma), I can see a lot of Judases in the works.

    Even Kobe has publicly stated his support for taking the deal, stabbing his best friend Fish in the back at a pivotal time in the negotiations. He’s no politician, and I assume he’s since recanted (although I haven’t read that he has), but I hardly think he’s alone either…

  14. The owners, in their hubris, wanted the players to give medium to large on each and every term in the agreement. They wanted a 16% raise in their BRI share (50 is 116% of 43) (12% loss for players–50 is 88% of 57). The players make this league and were right to say no.

  15. Kobe is not stabbing anyone in the back. He is not calling Fish incompetent He simply stands to lose way too much money if the season is cancelled – and he also knows that the deals will not get better. Fish knows this too. The issue for Fisher is that as the player’s president, he has to do what’s best for all players – current and future. So, in a way, he’s in a lose-lose situation as its in his best interest to get his salary as his non-basketball income is likely no where near his basketball income.

  16. Maybe I’m a bit too left-wing, but I honestly don’t understand how an average fan can support the owners in this one.

    Anyway, i’m all for a contracted 12 team league… although that would most certainly mean no more 81 pts a game… and maybe that’s a good thing…

  17. The longer this drags out, the more I want the players to win. Unfortunately, they will not. In this down economy, large corporations and wealthy business entities have beaten labor AND consumers into submission and have dictated all the rules. I won’t confuse the NBA players for being part of the 99%, but the 99% should root for them because the NBPA is still a labor force, one being treated unfairly by its employer. In this land of opportunity – the supposed epicenter of freedom in the world – such behavior should be shunned.

  18. Ouch, this hurts.

    I’m not surprised it’s come to this, but still …

    I’m on the player’s side, but if I had to bet, my bet would be on the owners. They have much more money and therefore much more staying power.

    Ugh!

  19. Now the players actually have a shot of getting a fair deal. And to those who think the current players should take the current offer… You are right. They should. But players in the past made sacrifices for them and they in turn should do the same for the NBA players in the future. That’s why the agents should be in charge. They have the long term benefits of the players in mind.

  20. The owners were killing the union during the entire two year negotiation. The player’s association has given up 7% of the BRI and huge system related issues like shorter contracts, harsher luxury tax rules, and a decreased mid-level contract.

    They have dominated and should have given the union a few system related issues that the player’s association requested.

    Because Stern and the owners decided to decapitate and embarrass the wounded creature they have essentially created a very dangerous foe that will kill itself in its final fight.

    Most of the owners are greedy and spiteful.

    The players are not going to win the war by disbanding the union. They will not get a better offer, they will lose $2 billion this year in wages, and they will lose a year off their precious careers. But even more costly is the possibility of losing guaranteed contracts.

    Yet, I agree with the players for their decision as they fought for the future and to take away power from the owners.

    WINNERS:
    Lawyers, lawyers, lawyers
    All other sports

    LOSERS:
    Owners
    Players
    NBA employees
    local businesses
    FANS
    F’ING EVERYONE

    I HATE EVERYTHING ABOUT THIS.

  21. Maybe no one cares, but if I read the owner’s last offer correctly, then the following figures would be approximately true

    (Note: A team’s own “Bird” free agent would be exempt from all of these provisions)

    No team could have a payroll under $52 million (90% of $58 million sal-cap). No team can exceed the sal-cap to sign free agents. Hence, no team under the salary cap can offer a free agent more than $6 million unless it renounces some of the free agents on its existing roster.

    Teams over the salary cap can sign a free agent to the MLE (about $5 million), but cannot go into luxury tax territory (about $70 million total payroll) to do so. Hence, any team with a payroll between $58 million and $65 million can only offer the MLE to any free agent.

    Teams over $65 million in payroll but under the luxury tax can offer no free agent more than the bi-annual exception (about $2 million for 2 years). Using the MLE put them lux-tax territory, which is not allowed.

    Teams over the luxury-tax threshold could only offer free agents the lux-tax-MLE ($3 million/year for 3 years).

    In short:

    Free agents can only get the following contract offers:

    $6 million
    $5 million
    $3 million
    $2 million

    In any normal business, this would be called “price fixing” and would be very illegal. Only the collective bargaining arrangement shielding the league from antitrust lawsuits makes this possible.

    This bad for the players, because it would pretty much wipe out any bidding for their services. We’ve got four different contract prices: pick one and like it or lump it.

    I also think it’s bad for the league. A team in the throes of stinkitude should be allowed to go way under the cap and clear salary room for good players. The “final” proposed CBA would force bad teams to shell out money for bad players.

    I’ve said it elsewhere and I still believe it. This was never about money or competitive balance.

    When the league and players were close on BRI, the differences amounted to $3 million/team/year. The NBA was not holding up approval because mediocre backup point guard contracts were making them bankrupt.

    The only ground the league gave on the systems issues was NOT imposing a true hard cap (although note how the lux-tax line serves as a hard cap in free agent signings) and throwing the players a bone on the MLE numbers. Otherwise, the NBA got pretty much everything it wanted (shorter contracts, smaller raises, cheaper signing exceptions, etc.)

    This was about power and eliminating the ability of players to pick where they wanted to play. This was payback for LeBronapolooza and Melo’s levering his way to the Knicks.

    While I am disappointed that there most likely will be no NBA season, I can understand why the players felt they could not accept the player movement-killing terms of the NBA proposal.

  22. #14: Nobody “wins” in the short-term from a lockout. After all, everyone – including the owners – sacrifice income when games don’t get paid. As #20 argues, it’s about the future player, not the present.

    Right now, the NBA makes $930m/yr from broadcast rights, divided evenly among the teams. Based on the recent increase in TV ratings, some experts predict that the next TV contract will be 25% greater, or an additional $300m/yr! Interestingly, the most recent owner’s proposal for a 10-year CBA included a mutual opt-out after 5 years, or after 2016. When does the current TV contract expire? 2016.

    The owners’ most recent proposal was designed so that only a few teams would lose money. If the next TV contract increases as much as expected, the league would be set to make record profits after 2016. By fighting for a greater BRI% now, the players are setting themselves up for the long-term, just as the owners are.

    Decertification will be a lengthy process. Yet the THREAT of decertification might be enough to prod enough hard-line owners to soften their stance. If this season is cancelled, owners will have to return $930m this year. If the union can successfully decertify, and if the owners continue the lockout, they will open themselves up to potential lawsuits for 3x damages.

    These negotiations have been similar to watching a no-limit poker game. The owners have been squeezing the players over the past few months. Faced with dwindling chips, the players have gone “all-in” and are forcing the owners to make a gut-check.

    I wouldn’t be surprised if this move forces the owners to sweeten the offer, BEFORE the union actually decertifies. Interestingly, David Boies, one of the attorneys, is hoping for this solution as well.

    http://espn.go.com/blog/truehoop/post/_/id/33284/players-new-legal-leaders-speak

  23. The players hired David Boies, the best litigator in the country, to represent them.

    I wouldn’t count Mr. Boies and the players out on this one.

  24. Buzz Lightyear,
    Thanks for your analysis. It was very informative about how the players might be looking at how this will all play out.

  25. If this thing goes to the courts history will look back at these NBA players as we do Curt Flood. The current CBA offer makes NBA players basically indentured servants. They would basically have no choice where they can work. They would get drafted by a team and more than likley if the team wanted to keep them would have no choice but to stay. They would also have severely artificially lowered contracts. Part of me that wants the owners to be humiliated wants this thing to go to court where I believe the NBA would be killed financially and publicly. However the owners are too smart and will now settle within the next 6 weeks.

  26. I just realized I haven’t said one important thing. I do not in any way blame the owners. Are they severly in the wrong? Of course. But If I were them I would be doing the same thing. It’s their job to try and take as much money from the players and to leverage as much power away from them as possible. If anything I blame the players for being dumb and weak. Instead of listening right away to the smartest people working for them (their agents), they imidiatley started giving ground on every issue. As soon as the owners proposed their initial offer the agents right away said they should decertify. The players showed weakness and tried to negotiate in good faith against blood thirsty, war tested owners who do this for a living.

  27. That article makes a good point about Stern.

    Stern’s legacy is on the line in all this. Over the years all we heard was how Magic, Bird and Stern saved the league in the 80′s (with Stern being the brains). Stern has tried to present an image of partnership with the (largely African-American) players, and the NBA has gotten so warm and fuzzy with it’s promotions that I’m sure many, many fans want to barf.

    On the other hand, Stern has expanded the league too far, too many owners paid too much for franchises and now the chickens are coming home to roost. (Were any of these new owners told, don’t worry, the new CBA would solve their problems?). But Stern failed to understand the new generation of players.

    Perhaps Stern once had the power to broker a deal, no more.

    Now he faces a court battle where the league tries to roll back all the gains professional athletes have made in the last 40 or so years.

    The downside is that a long overdue hit to the legal monopolies of the professional sports leagues may occur, changing forever the structure of professional sports, smashing Stern’s legacy, making him the General Custer of commisioners.

    Sadly, just as the game was becoming global, a real partnership with the players could have benefited everyone, and the opportunity was missed.

    As for me (I must take unpaid furghlough days, while waiting to see if I will have a job in a year), I don’t care about either side, I just miss watching a Laker game on a cold winter night.

  28. Hunter and Fisher would have taken this step much earlier,but had to show the majority of players that they tried their best to make a deal, even though they knew the owners were on a power trip. I hope this will put enough pressure on the owners,so that Buss, Cuban,and a few others will pressure the hawks and take control of the situation, promote a mediated solution directed by the Court.

  29. exhelodrvr,
    That article has lots of fuzzy wording, but it basically sides with the owners, because it frames their case as being unable to do anything different because they were so fractured.

    What he doesn’t mention is that part of that fracturing is due to the fact that a group of owners wanted to bring the players union to its knees. There was no real discussion of any compromise until fairly recently and several owners were of the mind that the NHL situation would also be good for the NBA.

    That attitude, more than anything else, was what poisoned the atmosphere and that is almost totally the responsibility of the NBA owners.

  30. Maybe the union felt they had to establish a clear case regarding the owner’s failure to engage in good faith bargaining and therefore a case in July was not feasible. It would make sense, in any anti-trust lawsuit, that having a strong case that the side with the monopoly (the owners) was only interested in a very one sided deal and was not acting in good faith, greatly increases the chances of winning.

    Perhaps the hard-liners overplayed their hands.

  31. 32)
    That’s exactly what they are and were thinking. They had to decide if they wanted to help their case and decertify now or do it earlier and have a weaker case and less leverage but not miss any games. The agents wanted to decertify from the start and the NBAPU did not.

  32. Craig,
    The bigger issue for the players, IMO, is not who should have given in more, it is will they (both current and future players) be better off in the long run after this. I expect that the CBA they end up with will be worse for them than what they could have had two days ago, and at the cost of most/all of a season. Close to half of all players have an NBA career of three years or less, that is a huge loss for them.

  33. I think the players are fools. While I could spend tons of text explaining why I think this is the case, I will let a pro do it for me:

    http://espn.go.com/espn/commentary/story/_/page/wilbon-111114/the-nba-labor-impasse-reached-particularly-objectionable-economy

    I think there is a lack of humility on the part of the players here. They fail to see that, while they are a *very* important and *crucial* part of the league and the teams, the bottom line is that they are *employees* of the owners. As such, they need to understand that they do not pay for the training facilities where they practice, they do not pay for the salaries of the office personnel, or the leases on the arenas, or negotiate the tv/marketing deals, or the marketing deals, or pay the salaries of the other team members. I know that a lot of us, as hard working class folk, want to identify with the players, but the reality is that players are not “working class folk.” They are professionals who get paid MILLIONS to do a job. Sure, the owners are being hard headed, but I can’t say I blame them. I mean, each has hundreds of millions of dollars invested in a team. What financial investment (other than sweat capital) do the players have?

  34. #36. Where I disagree with you is that just as you point out the average worker can’t identify with professional players due to the difference in what they earn, I think that same point should be extended to the players role in the NBA. They’re not just *employees* as you put it. They’re the product; their services are being sold to consumers and their exploits are what drive the advertisements, television contracts, and merchandise sales that *do* pay the salaries of office personnel, the leases on arenas, and the salaries of their teammates. There is no “NBA revenue” to divide without the players. Just as there is no “NBA revenue” without the infrastructure that the owners provide. They’re *partners* in this – a point David Stern has made countless times in his reign as Comish.

  35. Darius,

    I see your point. I guess the way I see this, even if there is a partnership aspect to the relationship, the owners still have a greater financial burden than the players. The owners have to pony up cash for all of the infrastructure that makes the teams tick and take all of the financial risk that comes with guaranteed contracts. So, while they are partners and the player’s labor is what makes the league tick in the eye of the consumer, I don’t see this as a partnership of equals as the players do not bear the same financial risk as the owners. If risk was truly shared, then the players would have a financial penalty to pay in the event the league had a season with financial “losses” or owners could rescind a limited number of contracts each year if a player underperformed. And, as far as I understand, that does not happen. So, in my mind, the owners have the most to lose year after year (and thus the greater risk), so they should reap the greatest profit. I hope that makes sense.

  36. Sure, it makes sense. But I’ll always argue that ownership of any business is risky. Businesses fail all the time and no business is *guaranteed* profit. So, while I understand there’s risk from the owners’ side, it’s also what they signed up for. They’re all incredibly wealthy men that should understand the inherent risks in business well. For them to not acknowledge those risks apply to this business is disengenuous. And by seeking a system which guarantees profits on give backs from player concessions (relative to the last CBA) isn’t something I can fully condone. Well run businesses deserve the chance to be profitable, but the key is “well run”. Show me that all these franchises are well run but still losing money and I’ll be open to fiding real fixes.

    Also, I think we need to get back to the point that player salaries are tied the revenues the league generates. So, it’s a bit deceptive to say that team losses should definitely be recouped via the reduction of player wages. That’s not to say the players can’t afford to give back – but they have done that already to the tune of a 7% reduction in BRI which is the eqivalent to nearly all the documented league losses last year ($300 million).

    Based off that, tell me now who’s giving, who’s taking, and who’s reaping the benefits of the proposed deal on the table?

  37. Manny P claims: “The owners have to pony up cash for all of the infrastructure that makes the teams tick and take all of the financial risk that comes with guaranteed contracts.”

    Not True! Municipalities often hand out huge sums of money to entice owners of sports teams. Similarly, for example, the Mayor of the City of San Jose is prepared to give the owner of the A’s land valued at about $14,000,000 to move his franchise to San Jose, if MLB allows the move.

    Also, owners are allowed to write off business losses, so it sounds to me that us slobs that pay taxes also help them bear the burden of bad contracts.

  38. R – To my knowledge, except for maybe the Knicks, no team outright owns their arena. So, while a city may offer an incentive for a team to stay in a city (such as a “new arena”), the team owners still have to pay a lease for the use of the arena. Also, remember that infrastructure also includes training facilities, which are typically off-site from the arena since the owners do not own the arena. There’s also an army of people that assist the teams, such as team doctors, physical trainers, etc. Even if a city offered a $14m tax credit to a team (and, outside of Sacramento, must do not currently offer that), that amount will not cover most team’s payrolls – not to mention their overhead costs. So, the share of the financial burden (and risk) rests with the owner – as it rightfully should.

    My point is that the owner’s take a significantly bigger financial risk than the players and, therefore, should be rewarded more handsomely than the players. I know Darius and others here disagree and take the position that the fairer approach is that the players should share revenues since they are the reason people actually watch the games and, hence, why the league is so successful.

    Ultimately, I think the players do not have sufficient leverage to prevail here. Going off and starting up a new league is not a realistic idea and the owners know that guys like Melo, Kobe, Lebron, Dwight will cave in once they start missing 2 or 3 paychecks (which would mean a loss in earnings in the *millions* for each of them). Sure, they can go play in Europe, but I can tell you that income taxes there are higher than here and BB salaries are a fraction of what they are here.