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Gaps between owners' and players' positions remain large

By Steve Aschburner, NBA.com
Posted Jun 23 2011 9:15PM

NEW YORK -- The last time "lockout" was on the lips of so many NBA players, team owners and fans, Kevin Garnett still really was a kid, befitting an early nickname that has fallen by the wayside over time.

He was 22, three years removed from his senior prom, an historic player as the first selection in 20 years to go directly from high school to the pros and -- thanks to a staggering $126 million contract extension that hadn't even kicked in yet -- one of the culprits fingered for a lockout that slashed the 1998-99 season to just 50 games.

Thirteen years, some 1,000 games, 12 All-Star selections, $265 million in earnings and one NBA championship ring later, Garnett has a different perspective on the labor dispute between the 30 franchise owners and the 450 or so members of the players' union. He is 35, closing in on the end of a Hall of Fame-worthy career, an elder statesman and a leader, not just of the Boston Celtics but -- despite rivals who cringe over some of his words, tactics or intensity -- also among all NBA players.

Garnett was one of the last to huddle up with his union brothers Thursday in a Manhattan ballroom but also one of the most important. Garnett, a fistful of other stars and player-reps of all 30 teams stood tall and strong as union president Derek Fisher and executive director Billy Hunter gave what amounted to a solidarity statement as negotiations of a new labor agreement edges closer to its June 30 deadline. And a long, chilly summer, in NBA terms.

Others led the way for him. Now it is Garnett's turn.

"Michael Jordan, Hakeem Olajuwon, Charles Barkley, them guys coming to the meetings we had was big," he said. "Jordan talking to a small group of us -- him and Terry Porter -- just telling us about unity and staying strong and being together as players. Y'know, how when we're here, we have to all be in this. This is our livelihood, this is what we love to do."

Folks on both sides of the dispute feel that way. The NBA has been particularly loveable lately, with most indicators -- TV ratings, franchise valuations, Web site traffic on NBA.com, international interest, merchandise sales, ticket sales (in many markets, anway) -- trending up. Success seems to be everywhere -- except in the gloomy reports shared by the league that 22 of the 30 teams lost money last season and that the red ink, cumulatively, approaches $300 million.

A broken system, it's been called. Unsustainable. And less costly to shut down completely than to operate as is, hemorrhaging losses.

That's why, with one week left before the labor-talks deadline and one summer after the NBA -- with free agency, not even games -- eclipsed baseball in popularity, the league is on the verge of boarding up its own windows and going dark.

"It's unfortunate, to be honest," Garnett said. "Because we have great momentum right now. The league [does], as far as anticipation and the many stories and the careers that you've been following, Dirk [Nowitzki] finally winning. It's just unfortunate that we're all going through this right now to solidify us to a point."

The issues are significant. The gaps between the owners' and players' positions, considerable. The prospects for a deal in the next week -- or enough progress to stop the clock and push forward at the bargaining table -- slimmer with each passing hour. The principals were set to meet again Friday, with the owners then headed toward a Board of Governors meeting in Dallas Tuesday at which they likely would vote to authorize a lockout.

"The cupboard is getting barer and barer," NBA commissioner David Stern said earlier this week of the owners' ability or inclination to alter their proposal to the union's liking. "Ten proposals that have gone back and forth, at least. ... It's all out there. The owners to a person feel that this is what we have to give. And since we're getting very close to June 30... ."

The owners, from the start, have sought both financial and systemic remedies. Their three major goals were to institute a hard salary cap in place of the NBA's traditional "soft" cap, to shorten contract lengths and to eliminate or reduce contract guarantees. The last of those came off the table recently and Tuesday, the league revealed its "flex" salary cap proposal (a targeted payroll amount of $62 million per team with still-to-be-determined minimums and maximums sandwiching it).

Also, the owners are seeking a 50-50 split of some modified definition of league revenues, different from the current 57-43 split favoring the players of basketball-related revenue. Stern and deputy commissioner Adam Silver said that, in their deal (10 years is the owners' preferred term), player compensation would be at least $2 billion annually, minus an escrow amount (currently 8 percent) withheld from players' paychecks.

The union has not been persuaded.

Hunter and Fisher maintain that, despite the semantics, a "flex" cap still is a hard cap with a team-by-team ceiling on salaries. Keeping escrow money -- currently returned to the players unless their total share exceeds that 57 percent -- and phasing in the owners' system would short the players an estimated $7 billion over those 10 years. Also, the union revealed that the owners are trying to hang onto $160 million in escrow money for 2010-11, which falls under the current CBA and was due to be returned.

Alternatively, the union Tuesday offered a reduction in the revenue split to 54.3-45.7, the equivalent of a 4.7 percent pay cut that would save the owners $500 million over a five-year contract (the players' preferred length). Neither side has publicly discussed their stance on contract lengths or most other specifics of an eventual deal.

So, boiling it down, the sides are separated by about $3 billion over a five-year agreement: the players' $500 million giveback vs. about $3.5 billion over five years in the owners' 10-year plan. Then there is the hard cap vs. "flex" cap impasse. That's a philosophical difference to which a dollar value has yet to be attached.

"I think it's great that all things are going well with our league," said the Knicks' Roger Mason Jr., a member of the NBPA executive council. "Ratings are up, attendance is up. To us that means revenues are up. We also understand that economic times are a little different right now.

"We have sympathy to that and that's why we're trying to negotiate in good faith. But a $3 [billion] or $4 billion difference is not reflective of the losses that the league has, in our opinion. ... We understand there's a handful of teams losing money. We just think that's a little outrageous."

What is more clear than ever, though, is that both sides -- right now -- are more unified than ever. Silver stressed the owners' togetherness after Tuesday's session and the wall of players, from superstars to blue-collar types, behind Fisher and Hunter Thursday made that point even before words were spoken.

Money issues are the most important. But both sides have been digging in rhetorically as well, staking out turf that doesn't immediately lend itself to easy compromise.

"We believe and there's no question the data shows a correlation between salaries and success on the court," Silver said. "What we've said to them is, we want a league in which all 30 teams can compete for championships. And another by-product of that is, it will raise more revenue. Because greater competition will mean better business, for us and the players."

The players, meanwhile, seem focused on honoring the hard-fought gains of their predecessors. And they aren't eager to be partners in fixing losses or saving badly managed organizations when they weren't partners in the escalating franchise values or, if forced into a 10-year deal, possible gains in the league's next TV contract.

Said Fisher: "When you think about NBA players in the makings of the history of the game, who have sacrificed a great deal more than we did to prop this game up over the last 30 or 40 years, for us to just roll that back and give that back is something we can't see happening."

In the summer of 1998, talks broke down a week before the June 30 deadline and did not resume for another seven weeks. That would be the worst-case scenario now for both sides.

Wait. Both? Make that all sides. In what often gets categorized as a dispute between millionaires and billionaires, there will be a lot of people of more modest means -- concessions workers, arena staff, employees at businesses that thrive when the NBA is up and running -- who could feel ill effects from a lockout.

"We're workers," Mason told me. "We get paid to play. The owners are the ones imposing the lockout. We have a tremendous amount of sympathy for the business that basketball creates, whether it's people who are directly assigned to teams or restaurants and bars and situations near arenas. We're definitely sensitive to that."

There is little they can do about it, though, until a deal is in place, turning around the "Open For Business" sign on the NBA's door. Unless, of course, negotiations turn unexpectedly fruitful Friday and in the short days remaining.

Is a deal, and labor tranquility, still possible? Can a lockout be averted, left as a war story for the old guys like Garnett to tell?

"You try to stay optimistic. I'm an optimistic person," Mason said. "But if you ask me about the signs, the signs tell me we're going into a lockout."

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