Extensive talks between league, referees break down

With less than two weeks to go before the start of training camps, it is increasingly likely that the NBA will begin the preseason, and perhaps the regular season, with replacement referees -- a prospect called "inevitable" by the referee union's attorney -- after the latest talks between the league and the officials on a new contract broke down again Thursday. No new talks between the two sides are scheduled.

The brief hope that flared Wednesday and into Thursday when the two sides continued negotiations with one another after a week off was snuffed out Thursday afternoon, when the league rejected the union's latest counterproposal that addressed some of the non-economic sticking points keeping them apart. At the heart of the current dispute are retirement and savings issues, with the league looking to control costs of both going forward by asking to cut one significant retirement benefit from the officials' plan and modifying another. Another major issue is the league's desire, for the first time, to use Development League and WNBA officials in regular season games.

Currently, there's no give on either side.

"The NBA and the referees' union had discussions today," said Rick Buchanan, the NBA's Executive Vice President and General Counsel. "We didn't reach an agreeement. It's unfortunate and disappointing that we haven't been able to conclude this. We have three significant issues that are separating us -- two of which, along the way in the negotiations, the union actually agreed to and then turned around and reneged on the agreements."

Said Lamell McMorris, the referees' attorney: "Clearly, we've bought into the current economic times and we're willing to work with the league on cost savings. We get it. That's where the typical fallout is, on salaries...but we can't give up everything. We have to be able to leave these negotiations not only with dignity, but the ability to take care of families, children and to retire. There's no more we can give."

McMorris and all 57 of his referees stayed at a hotel near O'Hare Airport in Chicago all day Wednesday and through the middle of the day Thursday trying to reach agreement with the league in negotiations conducted via phone. The union rejected a league proposal late Wednesday by a unanimous vote, and came back to the league with another counterproposal Thursday morning. But the league rejected that, and the officials scattered, with McMorris returning to his Washington, D.C. offices.

"We remain open to continuing the dialogue and trying to come to a resolution with the league," McMorris said. "It's not like we're not willing to negotiate. It's just that the talks ended today. The NBA concluded there was nothing more to talk about if we weren't willing to budge on this specific systemic change they want to make with regard to retirement benefits...we felt like we've given a lot back. In the last 24 hours we've given an additional $1 million in concessions to the league. We're hung up on one item, and it has to do with a longstanding retirement benefit that the league is trying to take away, and we want to keep."

That benefit is the severance package that officials who either retire or quit currently receive in addition to the pensions that they receive upon retiring. An official with 20 years' service that decided to either retire or resign after this past season would, according to a source, receive a severance check from the league for approximately $450,000, based on the formula the league uses to determine the package. Such severance checks are capped at $575,000. The pensions can be received either in a lump sum beginning at age 58 or in annual annuities. The referees are the only league employees that receive this benefit.

The league wants to eliminate the benefit entirely for officials with less than 10 years of experience or for any new hires, and reduce the amount it would pay to officials with more than 10 years' experience that still would qualify for the severance. In doing so, the NBA claims it is no different from companies in other businesses that face large future financial obligations and are trying to find ways to cut costs wherever possible -- especially in this current volatile economic environment worldwide.

Two sources with knowledge of owner finances say that the league collectively lost hundreds of millions of dollars last season, with the prospect of even more red ink this coming season. Renewal orders for season tickets for fans and corporations went out in the spring for most teams, and although several clubs have instituted more generous payment terms and conditions, most teams are expecting the worst.

Last week, the Fort Lauderdale Sun-Sentinel reported that employees on the Miami Heat's basketball operations departments, from team president Pat Riley and coach Erik Spoelstra on down, agreed to 20 percent salary reductions for this season in order to avoid layoffs. The Heat had to lay off 20 employees in the spring from its business operations staff.

But the union is suspicious that in addition to saving money, the league might also be looking for a way of getting some of its older officials to leave without leaving itself vulnerable to potential age discrimination litigation.

"One can interpret, by some of the changes that they are attemtping to make, as it pertains to certain retirement benefits, that they are sending a signal to the older officials that they want them to retire," McMorris said. "Instead of going to referee A, and saying 'You're too old, you have to retire,' they are getting creative with some of their proposals...Everyone in our organization would be effected. It's a benefit that effects all of us. In totality, when you add up all their proposals, that's when you conclude that there's an effort to get rid of older officials. Once some of these benefits are gone, it is their intention that they would never return. And that is non-negotiable."

The league claims that the union agreed to the proposal last month but went back on its word. After a heated meeting with the union last week that ended abruptly, NBA Commissioner David Stern left the face-to-face discussions with the union to Buchanan. The NBA says it has made two subsequent proposals to the union in the last week to try and close the gap without success.

A second issue is the NBA's proposal that it be allowed to use D-League and WNBA officials in regular season NBA games. In previous years, the league has used its summer leagues and preseason games to give D-League and WNBA referees experience working NBA games. Now, the league wants to extend that program to the regular season. The league claims that it reached agreement with the union for 75 assignments for the D-League and WNBA referees during the regular season, and only during the first three months of the regular season.

The league says it is only looking to give some of its younger officials another platform from which to be evaluated, and not as a message to the existing officials, who might understandably view a new group of referees as potential replacements -- though four officials who retired after last season do need to be replaced. The NBA claims that the union agreed to the new system last week but said this week it would not.

A third issue is the league's desire to move the officials from their current defined pension plan to a contribution plan resembling a 401(k) retirement plan. Vested officials would have their existing benefits transferred into the plan and then have a percentage of their salary going forward go into a retirement account, similar to what other NBA employees have. The two sides are still exchanging information on this proposal.

The two sides agree that they're pretty close to a deal on the economic issues, after the union's additional givebacks on top of already agreeing to a freeze on salaries next year and a modest increase in 2010-11, and cuts in the referees' travel budget and per diem pay. The league has agreed to giving the officials just a two-year contract instead of the usual five-year deal so that if the economy improves in the next 24 months, the referees might be able to make back some of the money they stand to lose on this deal quicker.

"We're closer there than we were," Buchanan said. "There were some things where we closed the gap...but we're still apart (on the non-salary issues)...If the union wants to make a deal here, it won't be hard to make, and we still have time to do it."

For now, though, the bottom line is that the referees' training camp, which is scheduled to begin on Sunday, won't have the veteran officials taking part. If it occurs, it will be with replacement officials. Buchanan would not go into detail about from where the replacement officials would come.

"The Commissioner has said that we have games to play, and we need referees to play, and we will," Buchanan said. "We'll have the next best set of officials ready to go."

The last time the league used replacement officials was early in the 1995-96 season, when the league locked out its officials for more than two months and players chafed at what they considered sub-standard officiating.

As a reminder, the union sent out an informational memo Thursday detailing the numerous fines and suspensions handed out by the league during the period when replacement officials were used in regular season games. According to the memo, the NBA issued more than $200,000 in fines and suspended players for a total of 26 games for fights in November of that year, compared to $147,000 in fines and 22 games in suspensions for all of the 1994-95 season.

In addition, the memo detailed injuries to Chris Webber and Shaquille O'Neal that the anonymous author claims may have been prevented if the regular referees had been on the court to keep physical play from escalating. The memo also quoted prominent players, including Michael Jordan and Scottie Pippen, who decried the job the replacement officials were doing and welcomed back the veteran referees once they agreed to a new deal on Dec. 7.

The league pointed out Thursday that rules changes that have limited the physicality of the mid-'90s make the game much different than it was 14 years ago. But the union, obviously, believes its officials are second to none, and will be missed when they're not on the court.

"You've got a new generation of NBA players that have no clue what replacement officials look like," McMorris said. "They're gonna find out about the quality of the officiating."