Sunday, November 27, 2011

Christmas Comes early for the National Basketball Association

Christmas came early for the National Basketball Association in the wee hours of Saturday morning in the form of a new collective bargaining agreement (CBA) with the National Basketball Players Association (NBPA).

What seemed next to impossible two weeks ago turned around in a matter of days. At the end of the day NBA Commissioner David Stern and NBPA executive director Billy Hunter came to the realization that the two sides had to reach an agreement for the “good of the game”. The two sides met for more than 15 hours the day after Thanksgiving before reaching their agreement.

“We’ve reached a tentative understanding that is subject to a variety of approvals and very complex machinations but we are optimistic that will all come to pass and the NBA season will begin December 25th, Christmas Day, with a triple-header. I won’t give you the details to tune in yet. We are very pleased that we have come this far. There is a lot of work to be done in a lot of places, with a lot of committees and player groups and alike but we are optimistic that it will hold and we will have ourselves an NBA season,” a tired but pleased Stern announced at 3:30 AM Saturday.

“I want to announce on behalf of those who are gathered here, Derek (Fisher) and Maurice (Evans), that we are happy that we have been able to resolve and reach a tentative litigation settlement with regards to many issues that are pending for the various courts. We are going to turn it all over to the lawyers here and let them work out the details and we’ll then be able to talk further as that process proceeds,” an equally tired and pleased Hunter countered.

Former ESPN and AP NBA Insider Chris Sheridan offered a few reasons as to why he believed the deal was done.

“On the financial split, the players will receive between 49 and 51 percent of revenues, depending on annual growth. The players had complained prior to Saturday that the owners’ previous offer effectively limited them to 50.2 percent of revenues, but the source said 51 percent was now reasonably achievable with robust growth.

“Owners dropped their insistence on what would have been known as the Carmelo Anthony rule, preventing teams from executing extend-and-trade deals similar to the one that sent Anthony from the Denver Nuggets to the New York Knicks last season. This means that if Dwight Howard, Deron Williams and Chris Paul want to leverage their way out of Orlando, New Jersey and New Orleans, they will still be eligible to sign three-year extensions with their current teams before being immediately traded elsewhere.”

The previous CBA had the basketball related income (BRI) at 57 percent in favor of the players. It’s no surprise the new CBA is basically the same 50/50 BRI split the NBPA said they’d never accept. Both sides had to realize months ago the final agreement would be near a 50/50 split, and should have worked much harder than they did before reaching the agreement Saturday. The NBA season could have started on November 3.

The new CBA is for ten years, but either side has the option of opting out of the agreement after six years. The league is planning on a truncated 66 game schedule that will start on Christmas Day. Training camps will open on December 9.

“Owners came in having suffered substantial loses and feeling that the system wasn’t working fairly across all teams and I certainly know that the players had strong view about expectations in terms of what they should be getting from the system so it required a lot of compromise on both parties part and I think that’s what we saw today. I think we saw a willingness of both sides to compromise yet a little more and to reach this agreement.” NBA Deputy Commissioner Adam Stern offered.

One of Stern’s stated goals was the league would be more competitively balanced. Free agency is still very much of part of how the NBA conducts business, but as far as Silver is concerned he has achieved his goal of a more balanced NBA.

“I think it will largely prevent the high spending teams from competing in the free agency market in a way that they have been able to in the past. As I have said, it is a compromise and it is not the system we sought out to get in terms of a harder cap but the luxury tax is harsher than it was in the past deal and we hope it’s effective. You never can be sure with how a new system will work but we feel ultimately it will give fans in every community hope that their team can compete for championships and that their basis for believing in their team will be a function of management of that team rather than, as I have said before, how deep the owners pockets are or how large the market is. Peter, do you want to speak to that point?”

San Antonio Spurs owner Peter Holt, a key in the negotiations, echoed Silver’s sentiments.

“That is a big part of it and I appreciate what Billy and Derek and the players have compromised on because it will allow us as a small market to be competitive and create more parity across all 30 teams. We are really excited. We are excited for the fans. We’re excited to start playing basketball for the players and for everybody involved. This is going to give us an opportunity we think it is, a contract as we work through it over the next many days getting all the details done, that is going to allow all of that. And so it is really exciting. It is going to be exciting whether you are in a small market or a large market. Fans are going to have a lot of hope and a lot of excitement going forward.”

And what does Billy Hunter feel about the dawn of a new competitively balanced NBA?

“The owners are independently wealthy,” he said. “They did not earn their riches from basketball. They can function if the season blows up.

“I did not want to be reckless. This is not like the United Auto Workers and General Motors. They work together: they make automobiles. If something happens, they will all suffer. I don’t like the idea of Armageddon. I was not prepared to play free and loose with my clients.”

The new CBA includes a salary floor. Teams will have to have a minimum payroll of 85 percent of the NBA’s salary cap in the first two years of the CBA and 90 percent each year thereafter.

One important concession the owners made to the NBPA is their new "Carmelo Rule," which would've put an end to extend and trades. Owners wanted to try and end the drama we saw last season with Carmelo Anthony and nip that in the bud with Chris Paul, Deron Williams and Dwight Howard.

Attorney Jeffrey Kessler who had emerged as a key “player” for the NBPA didn’t attend Friday’s decisive negotiations in person. A few weeks ago Kessler suggested Stern was treating NBA players like they were slaves on his plantation, suggesting Stern was a racist.

Kessler, denounced for his comments, participated in Friday's negotiations via conference call.

Gabe Feldman, Director of Tulane University’s Sports Law program, told ESPN the league needs to recognize the reconstructed union.

"That will truly be a formality," he said, adding that the union does not need to file a petition with the National Labor Relations Board.

So why then, ten days after David Stern evoked the term “nuclear winter,” did the two warring factions find peace?

At or near the top of any list as to why the two sides managed to work out their differences – David Stern and Billy Hunter are leaders and acted like the leaders they are. They got the deal done because they believed it had to get done.

The players were never going to miss an entire season. The average NBA career is just a shade over four seasons and the average salary, $5.1 million. The players could never afford to miss an entire season.

The owners would have been able to afford the loss of an entire NBA season but they ran the risk of alienating a fan base that seemingly didn’t care if the 2011-12 season was played.

The National Hockey League lost the 2004-05 season, the NHL has far fewer fans than the NBA does, but NHL fans are passionate and care about hockey. It’s possible if the NBA had lost the entire 2011-12 season the backlash would have been apathy.

Christmas came early for NBA fans, and Christmas Day will see the return of the NBA with a tripleheader of hoops.

For Sports Business News this is Howard Bloom

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