Sunday, October 23, 2011

NBA Armageddon 2011 – it’s about to get ugly

National Basketball Association Commissioner David Stern called in sick. Bombastic Cleveland Cavaliers owner Dan Gilbert suggested that NBA players trust he knows what he’s doing.

NBA Players Association President Derek Fisher suggested the NBA owners were lying to the media. Labor negotiations had broken down after it appeared the two sides might reach an agreement.

Just another day in the ongoing NBA labor talks.

“These talks and meetings and the mediation process did not end because of ultimatums made by us. They were clearly made by the league and by the NBA and they tried to pre-condition the rest of our talks trying to get us to agree to a 50/50 split on the BRI and what we clearly said is, "That is not a place we are willing to go right now, if ever." However, we are ready to continue some talk on the system and the issues and if we can reach some agreements there, it could have some impact on what the final number could be, but they said it's a take-it-or-leave-it situation." Fisher told NBA TV's David Aldridge, after Aldridge asked Fisher about the suggestion said that the NBA had lied to the media as to why the latest round of negotiations had broken down.

“I think from the NBA standpoint and from our labor relations committee, we felt we made several significant compromises, proposed compromises, in an attempt to get a deal done. We understand the ramifications of where we are. We're saddened on behalf of the game. We recognize that we're disappointing millions of fans, not just in the United States but around the world. We're having a huge impact on thousands, if not hundreds of thousands, of jobs in this country related to NBA basketball. So I just want to assure everyone that we don't take anything we do lightly at all, but we have certain core beliefs that I'm going to let Peter address, which we think are absolutely necessary to achieve before we continue to play NBA basketball, and ultimately we were unable to bridge the gap that separates the two parties, and at this time we have no further discussions scheduled with the union.” NBA Deputy Commissioner Adam Silver offered in place of David Stern who missed Thursday’s session after coming down with a very bad case of the flu.

San Antonio Spurs owner Peter Holt, who joined Silver in addressing the media, offered this on why things broke down, “We've been talking for the last couple years; particularly obviously the competitive issues are as big an issue for us as owners of these teams as the economic issues are, and particularly for the small markets. And so on both sides of those issues, we went back and forth and have been going back and forth for two years, and we're still pretty far apart.

“And this is extremely important for all elements involved. I'm talking about the players, the owners, and particularly our fans, and we want to get to the point where all 30 markets have an opportunity, nothing guaranteed, but an opportunity to be competitive and an opportunity to make a few bucks. We all understand that down in San Antonio I'm not going to make the kind of money that New York or LA is going to make. But we're trying to get it where we have a system where all 30 teams have those opportunities.

“And so we're just very far apart, and it was a disappointing last 30 hours or 40 hours or whatever amount of time. We've met over 45 times in the last two, two and a half years, and we can't seem to quite bridge the gap, and so it was very disappointing for us, and with that we're sitting here with no meetings scheduled.”

With talks at a standstill an all-star roster of players finalized plans for a six game international tour expected to start October 30 in Puerto Rico. There will also be two games in London, one in Macau and two in Australia.

An ESPN report suggested the tour, being organized by Atlanta businessman Cal Darden, would pay players salaries ranging from six figures up to a million dollars.

Players expected to participate include NBA MVP Derrick Rose, Kobe Bryant, LeBron James and Dwyane Wade.

The owners and the players met for more than 24 hours with federal mediator George Cohen before talks fell apart.

“The issue that led to us breaking off Thursday evening was an issue we've struggled with since the beginning, and that is the split of revenue between the union and the owners, and I know there was a lot of back and forth in the last two weeks over where we stood, and as you heard from David Stern, our last former proposal was at 47, and their last proposal was at 53 percent. We did make clear to them yesterday that we were willing to go to 50 percent in an effort to compromise and that despite the fact that we already suffered enormous losses that we were trying to look over the impact over a long term deal and that we could see our way at a 50 percent deal to growing in essence out of the economic issues we have now, and the response back from the union today was they made a slight move from 53 to 52.5 percent of BRI, and that's where we broke off. They made it clear that if our position was that we were unwilling to move beyond 50 percent, there was nothing else to talk about, and that's when the discussions broke off Thursday.” Silver said Thursday evening.

For his part Fisher made it clear the NBAPA wants to continue negotiations.

“We would be talking about everything. Myself, our executive committee and our staff has spent the past two plus years and these past few weeks here. Personally, that was time away from my kids and my family. This is serious.

“There are a lot of livelihoods at stake that far outreach NBA players and that's been a major concern of ours this entire time. That's why we continue to make the concessions that we have made; it's more about them then us. But that's not a place the NBA wants to go right now and I think we have said all along that we felt there was a predestined plan to lock us out as long as it takes to get us to where they wanted us to go. Right now as players, we are not willing to go to that place to try and continue these negotiations. But, we are willing to continue to talk. We are here and we will be here as long as it takes to get a deal done."

Cohen didn’t have a great deal to offer but did say "no useful purpose would be served by requesting the parties to continue the mediation process at this time."

What can NBA fans expect in the next few days?

• The NBA will cancel games through December 18 (if not December 25) in the coming days.

• The NBA All-Star tour will be announced in the next 48 hours. The tour will be a disaster; none of the games will be played in NBA cities (NBA arenas are controlled by NBA owners and teams). All-Star games aren’t what basketball fans are looking for (anywhere in the world). The players (hopefully) will get paid. Promoter Cal Darden will lose millions of dollars.

• Talks between the two sides will resume, but not before November 1 (at least any meaningful negotiations). The players are very angry at the owners right now; it wouldn’t make sense for the two sides to meet until both sides have had a chance to calm down.

• There won’t be much movement from the players until after November 1.

• The owners appear to have the resolve to wait out the players. Much was made of Portland Trailblazers owner Paul Allen attending the meetings. Allen is one of the world’s richest people. NBA owners are billionaires. If the NBA season isn’t played NBA owners will be fine. The same isn’t true for NBA players. NBA players can’t afford to miss an entire season.

Media reports suggest the two sides aren’t that far apart. At Thursday’s NBA press conference Silver was asked if it makes sense for the NBA to face losses in excess of a billion if the players are ready to accept a Basketball Related Income split of 52.5/47.5% in favor of the players. The previous CBA split was 57/43 in favor of the players.

“First of all, on the math, since we're proposing a ten year deal, that's a billion dollars, not $100 million to begin with. And number two, I guess you can always argue to one side, you moved, so why don't you move again; you moved, so why don't you move one more time. Again, our perspective is that we had made a move, a formal proposal back a week and a half or so to 47 percent. We thought that move was significant in terms of the economics we need to have 30 teams able to be in a position with revenue sharing to potentially be profitable. We then felt that and again, with facilitation from George Cohen that a move to formally split the difference because now we've proposed it and we're not falling back on concepts or hallway discussions or whatever else has been mentioned over the last two weeks, we've formally proposed to them that we would be willing to split the difference between 47 and 53 and move to 50 percent. I mean, there was some nuance discussed with them, as well, about a concept and a band, and that band concept is something we've been discussing with them around several different numbers for many months now.

“But the response we got back from them was that they were at 52 and a half in fairness to the union, they didn't say that there was no additional movement that they would make. They indicated that there was still an ongoing negotiation, but they wanted a commitment from us that we were open to continuing to move up in terms of the percentage of revenue beyond 50 percent, and what Peter and our other owners made clear to the players was that that was as far as we were willing to go, 50 percent of BRI.”

"It's extremely difficult because of the impact they have on each other. And for us as players, unless we have a feel for what type of system that will exist and what the revenue split will be, it's very difficult to say, "Ok we will agree with this number." Which is why we floated and consistently discussed a more balanced approach between where the NBA is in terns of 50, where we are at 53 and based on the success or lack of success on our gain, to determine which percentages are distributed to the players as opposed to going to the fixed hard place that we obviously can't agree on right now." Fisher reacted.

Stay tuned – this dark ride has only begun.

For Sports Business News this is Howard Bloom

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