Tuesday, October 04, 2011

NBA Armageddon 2011: back to the future

While it’s premature to suggest the NBA will cancel the entire 2011 season, it’s also foolish to believe it will tip off anywhere near the currently scheduled start date of November 1st.

There is plenty of time for Commissioner David Stern and Players Association to get a deal done in time to save the season, like they did in 1999. After a five hour meeting in December 1998 with union head Billy Hunter, Stern announced if the league and its player didn’t agree to a new collective bargaining agreement by January 7, 1999, then NBA season would be cancelled.

The league and its players managed to settle enough of their differences to save the season one day before Stern’s deadline.

Here is an overview of those negotiation proceedings courtesy of the NBA:

Jan. 4, 1999: Owners reject the union's final proposal in the first full negotiating session in nearly a month. Stern announced the NBA might consider the use of replacement players for the 1999-2000 season should the dispute linger that long. Given how that strategy failed both the NFL and nearly MLB, Stern was saved from committing a big mistake.

Jan. 5 1999: Players converge on New York for a scheduled vote the next day on the decision to reject the owners' latest proposal. Unbeknownst to many, Stern and Hunter are meeting through the night to seek a compromise (the secret meetings that led to a gun to their heads settlement)

Jan. 6, 1999: With one day to spare before Stern's mandated deadlinethe players vote on the final offer. It passes 179-5.

How much resolve does any players association, with the exception of the Major League Baseball’s really have? Players’ professional careers last, on average, less than five years. Threaten to cancel a season and watch the players fold.

After the lockout came the fallout. Training camps were truncated into a few weeks' time and players scrambled to get into shape without hurting themselves. There were some casualties, including out of shape Shawn Kemp and Vin Baker.

Teams played just two hastily scheduled preseason games, limiting coaches' ability to install systems or adapt to new personnel. Free agency got rushed as well and teams were built on the fly. Joe Smith's illegal contract in Minnesota was a direct result of the frenzy. The season began on February 5, 1999.

Michael Jordan retired for the second time, and final time as a Bull, about a week after the lockout ended. Many players never earned back what they'd lost -- veteran forward Charles Oakley suffered mightily when his $10 million balloon payment vanished under the new rules -- and both sides suffered hits from negative publicity.

Phil Jackson, sitting out that partial season, suggested that an asterisk be applied to the San Antonio Spurs' championship -- The Finals didn't end until June 25 -- but the fact is, the playoffs were the most unaffected part of the NBA's campaign.

Fans were courted back with open practices, public scrimmages, autograph signings and other promotions intended to salve the emotional wounds. That likely would be tried again and, in many ways, there is a new generation of NBA fans on whom to use this tactic.

There also might, however, be a fool-me-once, fool-me-twice reaction to it all.

"It took us about six or seven years to get back to where we were prior to the lockout in '98," Hunter reflected back in July. "The detriment to the game is going to be significant. If there's a year-long lockout, the players stand to lose about $2 billion. The owners stand to lose just as much, in addition to diminishing the value of the franchise. ... There may be fans, particularly in this economy, that may walk away and never come back."

While the NBA has had labour disputes in the past, the 1998-99 NBA labor battle was the first time the NBA lost any games as a result.

SI’s Richard Rothschild looked back at some of the other NBA labor related skirmishes.

1995: Players break ranks.

• When the owners instituted a lockout after the 1995 NBA Finals, the start of the next season appeared at risk. But secret negotiations between Stern and his assistant Russ Granik with players' union president Buck Williams and union executive director Simon Gourdine ended the lockout after 80 days.

• Not every player was happy. Some of the high-priced superstars led by Michael Jordan and Patrick Ewing forced some changes, including dropping a luxury tax. But Ewing and Jordan went too far in their effort to decertify the union and seek more radical changes such as abolishing the draft. The move to decertify was defeated by the players in a 226-134 vote.

• Jordan quickly moved on. His Chicago Bulls registered a record 72-win season.

1970s: The Oscar Robertson Suit

• Named for their union leader, this action barred a merger with the smaller American Basketball Association as an illegal barrier to better salaries. As long as there was an ABA, NBA players could demand top dollar.

• The suit was settled when players were given an increase in benefits, boosts in minimum salary, medical benefits and per diem money, plus increased player shares from the playoffs and All-Star Game. Four of the ABA teams merged with the NBA in 1976 but players were allowed to negotiate with more than one team.

1964: All-Star brinkmanship

• The lack of a pension agreement and a desire for union recognition caused the best players in the game, including Bill Russell, Wilt Chamberlain, Jerry West and Oscar Robertson, to threaten a strike hours before the start of the 1964 All-Star Game at Boston Garden.

• This was one of the few occasions when the NBA would receive national television exposure in the early '60s, and league President Walter Kennedy didn't want a nationwide embarrassment. He personally guaranteed the players that a pension plan would be discussed at the next owners' meeting. The players agreed to take the floor minutes before tipoff, and Kennedy ultimately persuaded NBA owners to approve a pension plan.

What led to today’s current labor impasse? On June 21, 2005, the NBA and players union agree on a new six-year collective bargaining agreement. Some of the elements of that agreement included:

• An age minimum of 19, with the stipulation that American players be one year removed from high school. International players are eligible for the draft if they are at least 19 in the calendar year of the draft. Contracts for first-round draft picks are also revamped, shifting from three years guaranteed with a team option for a fourth year to two years guaranteed with a team option on the third and fourth years.
• The luxury tax in effect every season. Previously, the luxury tax was in effect only in seasons where league-wide salaries exceed 61.1 percent of basketball-related income.
• Maximum contracts are reduced -- from seven years for free agents re-signing with their current team and six years for signing with a new team -- to six and five years, respectively.
• Formation of the NBA D-League.

On February 15, 2009 during a joint press conference held during that year’s All-Star Game festivities Stern and Hunter announced it was time to reopen the current CBA – two years ahead of the expiration of the deal.

"We all understand that we live and benefit from the success of the NBA. The last thing we want to do is see it lose its vitality," Hunter said. "We will do everything possible to reach a deal. Whether or not that means we will reopen before the expiration of the current contract's conclusion is another question. But I can say to you that we are anxious to reach a deal."

Said Stern: "Just to talk about frameworks and understandings and say when we get to the last day and then it is either one side or the other, it leads to bad things."

That’s when the fun really began.

On February 27, 2009 the Associated Press reported the NBA had arranged for $200 million to be distributed in loans to 12 teams that have expressed interest in the funds as they face financial hardship during tough economic times. On December 18, 2009 the two sides agreed to meet during the 2010 All-Star Weekend in Dallas – where all hell broke loose.

On January 29, 2010 Stern and ownership sent a proposal to Hunter and the players, calling for a hard salary cap and a reduction in the players' share of basketball-related income from 57 percent to well under 50 percent. During the All-Star weekend Stern suggests, “the NBA is projecting league-wide losses of about $400 million for the season and that a new financial model is needed.”

On October 21, 2010, in his annual pre-season ‘State of the NBA,” Stern announces the NBA is projecting losses in excess of $350 million for the 2010-11 season.

"We would like to get profitable, have a return on investment," Stern said. "There's a swing of somewhere in the neighborhood of $750 [million] to $800 million that we would like to change. That's our story and we're sticking with it."

This was followed with a veiled threat that the NBA is ready to look at contracting franchises unless the players’ agree to a new business model.

"I think that's a subject that will be on the table with the players as we look to see what's the optimum way to present our game, and are there cities and teams that cannot make it in the current economic environment. I'm not spending a lot of time on it," Stern said.

Nearly a year later and nothing unexpected has taken place.

On May 24, 2011 the players union filed a lawsuit with the National Labor Relations Board to try to prevent a lockout.

"We have urged the Board to investigate this matter quickly and to seek an injunction against the NBA's unlawful bargaining practices and its unlawful lockout threat," the union said.

"There is no merit to the charge filed today by the Players Association with the National Labor Relations Board, as we have complied -- and will continue to comply -- with all of our obligations under the federal labor laws. It will not distract us from our efforts to negotiate in good faith a new collective bargaining agreement with the Players Association," the league said in a statement.

On August 1, 2011 after meeting for the first time in two months, the NBA filed unfair labor charges against the players union.

"For the parties to reach agreement on a new CBA, the union must commit to the collective bargaining process fully and in good faith," said NBA deputy commissioner and chief operating officer Adam Silver.

Hunter responded: "We urge the NBA to engage with us at the bargaining table and to use more productively the short time we have left before the 2011-12 season is seriously jeopardized."

Which brings us to the place we were 12 years ago. Preseason games have been cancelled and David Stern threatening to the cancel the season if serious progress isn’t made.

It will be months before David Stern’s threats can be taken seriously. Plenty of time to save at least half an NBA season.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: NBA.com and SI.com

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