Sunday, November 13, 2011

NBA Armageddon 2011: This could be the day

The NBAPA is scheduled to hold a meeting in New York City where President Derek Fisher and Executive Director Billy Hunter will brief the 30 team player representatives, and other players who will attend the meeting, on the owners latest and reportedly final offer.

If media reports are correct, the players are expected to reject the offer setting up the cancelation of all NBA games through Christmas.

Stern used the media as his personal bully pulpit over the weekend slamming the misinformation he believes is being disseminated to the players.

"The agents have come sweeping in with such mischaracterizations that my guys asked me if I'd be available for media," Stern said in a telephone interview with "I said, 'Whatever you want.' The agents are busy [saying] this is a terrible deal. No one talks about the deal itself."

The players reportedly believe the owners latest effort is their worst to date. Early last week the NBAPA agreed to resume negotiations with the NBA. The players agreed to lower their basketball related income demand from the 53% they had previously agreed on, to a 50/50 BRI split.

"Do the NBA CEOs think the union can't see that this 'new revision' is worse than the proposal they gave us last week," veteran big man Etan Thomas wrote in a piece that was posted on Saturday.

The two sides negotiated for close to 20 hours Wednesday and Thursday. The NBAPA emerged late Thursday evening saying they’d take the offer the owners made to their membership.

If the players accept the owners’ offer today, the NBA would begin a 72 game regular season and full playoffs on December 15.

“We both recognize the seriousness of what we're facing," Stern said. "I think both sides would like to begin the season on Dec. 15th, if that's possible. I think our teams want to start playing. That desire is matched by our players. We've done the best we can to cause that to happen. I think the events of the week and the offer that we presented had the desired impact of causing us both to focus intensely on whether there was a deal here to be done. We very much want to make the deal that's on the table that would get our players into training camp and to begin the 2011-12 season.

"I don't have a crystal ball. I just have the ability to hope that it will come to that and that our players will accept this revised proposal from the NBA.

“I met with Billy and said that, just as the clock had stopped at 5:00 on Wednesday, as we negotiated through to today, it would remain stopped through his meeting with his Board. Then at that time if we don't get a positive response, the revised offer, starting at 47%, based upon a flex cap, would be our revised negotiating position.

“We really appreciate the effort that the Executive Committee of the union put in being here. We don't expect them to like every aspect of our revised proposal. I would say that there are many teams that don't like every aspect of our revised proposal. But I did tell Billy that that proposal has the support of the chairman of the Labor Relations Committee, Adam, me, and the Labor Relations Committee itself, which includes the chairman of the board.” Stern offered

The apparent breakdown between the two sides is in the ‘fine print’ included in the revised offer. One of the more contentious clauses includes the right for an NBA team to send demote a player to the Development League and force the player to accept a pro-rated ‘minor league contract’ at a greatly reduced pay scale.

Two way contracts have never been a part of an NBA collective bargaining agreement. It’s only for a players first five years in the NBA but it’s an attempt on the part of the owners to send a message to the league’s younger players – play well or else. And remember the average NBA career is between three and four years, this really is a clause the players are forced to fight.

"They don't want to do a deal," one agent said of the owners' proposals. "And what they've underestimated is the resolve of the players."

If the owners are underestimating the resolve of the players, so too have the players miscalculated the resolve of the owners. Stern, who has had more than his share of anything agents have had to say, lashed out at the players Saturday evening making it clear he won’t be happy if the NBAPA chooses to decertify.

"We don't expect them to love every aspect of our revised proposal," Stern conceded Thursday. "I would say that there are many teams that don't like every aspect of our revised proposal.

"(But) we moved as far as we could and now we're at where we're at."

The agents can say whatever they’d like, the players can talk about how they’re ready to stand together as one but this hasn’t changed. A basketball player has a finite number of years they can play basketball. The average NBA salary is $5.1 million. If the 2011-12 NBA season isn’t played NBA players will lose millions of dollars they will never be able to earn.

"For us to take a bad deal at this point, as players, would be not good for the game of basketball and it won't be good for the players going on into the future," Dallas Mavericks player representative Jason Terry said Friday morning during an appearance on the "Ben and Skin Show" on 103.3 FM ESPN in Dallas.

"In life and society there are three classes: There's the upper class, the middle class and lower class," Terry said. "And what the owners are trying to do right now, what their proposal is, get rid of the middle class so you have one or two guys on each team making 'X' and the rest of the guys crunched down at a smaller number and then no middle ground."

O.J. Mayo echoed Terry's thoughts, saying he doesn't "think it's the best deal."

He added: "But I think some players are desperate enough to take anything right now."

According to a USA Today report the revised NBA offer includes the following changes from the owners’ previous offer:

• A 50-50 split of BRI between players and owners. It is a considered giveback, compared to the last CBA when players received 57% of BRI. It amounts to an average of $300 million a season, or $3 billion over the life of a new collective bargaining agreement, from players to owners.

• An increased luxury tax. For the first $5 million over the luxury threshold, a team will pay $1.50 for every dollar over the limit. For the next $5 million over the luxury threshold, team will pay $1.75 for every dollar over. For the next $5 million over the luxury threshold, team will pay $2.50 for every dollar over. For the next $5 million over the luxury threshold, team will pay $3.25 for every dollar over. For every $5 million after $20 million, the tax increases 50 cents: $3.50, $4, $4.50, etc.

The changes to the luxury tax create a defacto hard salary cap. The increased tax rate makes it financially impossible for an NBA team owner to increase his team’s payroll above the salary cap.

Billionaires own NBA teams but NBA owners became billionaires because they made good business decisions.

There are a few interesting clauses the owners are offering the players that could come back to haunt small market franchises. One clause creates a salary floor. NBA team payroll will be 85% of the salary cap in the first two years of a new CBA and 90% after.

NHL owners were quick to include a similar clause in their 2005 CBA. The NHL salary cap and salary floor is based on Hockey Generated Income. The Canadian dollar has increased by close to 30 percent in the last six years.

With six Canadian based NHL franchises, and a seventh just this season the NHL HGI has increased forcing the salary floor to increase dramatically impacting small market American NHL franchises.
Six years ago the Lords of the Ice didn’t imagine the Canadian dollar would grow the way it has and made a mistake. NBA owners had better make sure it makes sense before including a strong salary floor.

“It’s of grave concern to the league that there is an enormous amount of misinformation concerning our proposal, both on Twitter and in the more traditional media,” Adam Silver, the deputy commissioner, said Saturday night according to The New York Times. “We believe that if the players are fully informed as to what is and is not in our proposal, they will agree that its terms are beneficial to them and represent a fair compromise.”

If the media reports are correct expect the players to reject the proposal and Stern to announce the season is canceled through January 1.

Then expect Stern to put it on the line in the next few weeks. With the Thanksgiving Holiday ten days away it isn’t likely the two sides will meet again before early December. The two sides have negotiated for hours and hours over the last two to three weeks.

What is left to talk about? The NBAPA have agreed to a reduction in BRI from 57% to 50%, after saying they would never go below the 53% level.

If David Stern and the NBA owners were playing a basketball game the owners would be winning by 30 points with the game almost over. It would be ‘garbage time’ a time at the end of basketball games traditionally reserved for the players sitting at the end of the bench with the outcome long decided.

Time for the owners to make it right for the players, the players have made enough concessions.

For Sports Business News this is Howard Bloom

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