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Steve Aschbruner

System issues, not money split, now defining labor strife

Posted Oct 14 2011 12:24PM

NEW YORK -- The so-called "system changes" that NBA owners have called for during the league's lingering labor dispute now appear to have leapfrogged the split of revenues as the No. 1 issue of the NBA lockout. Finding common ground on that sometimes-complicated set of proposed changes to the old collective bargaining agreement is now the greatest challenge in hammering out a new deal between owners and players and salvaging as much of the 2011-12 season as possible.

The league's labor dispute, in other words, suddenly is less about answering the "how much?" question and more about filling in blanks on the who, when, where and how of divvying a pot of $4 billion among 29 owners (the league currently owns the Hornets) and 400 NBA players.

Oh, and now more than ever: how soon.

With the NBA's move to cancel the first two weeks of the regular season, after seven more fruitless hours of negotiations between the owners and the players Monday night, a new reality emerged: What had seemed to be the primary source of disagreement in recent weeks -- the split of basketball-related income (BRI) that dictates the dollars taken away by each side -- got pushed to the side by issues such as the luxury tax on exorbitant payrolls, the length of contracts, the size of raises and the number and details of salary-cap exceptions.

What was expected to be the heavy lifting of a new CBA -- the revenue split -- now seemed easier, even from the union's demand for 53 percent and the owners' renewed commitment to 47 percent (down from a 50-50 deal floated by NBA commissioner David Stern a week earlier). Both Stern and union president Derek Fisher, on the sidewalk outside a Manhattan hotel Monday, made the math of finding middle ground over what amounts to a $240 million difference in Year 1 sound simple enough, even from their dug-in positions.

What seemed harder, all of a sudden, was finding compromise on and nailing down a variety of system provisions that -- from the owners' perspective -- dictate the competitive balance of the league, giving hope to more fans in more cities. From the players' side, those structural issues affect job security and mobility, and thus the kinds of careers they carve out in their relatively brief NBA stays.

In a way, it was almost refreshing that the fight had moved off money to something more fundamental. Coverage of the previous few weeks had suggested that, if the owners got a split of BRI they could be happy with, their high-minded talk about protecting the league's have-not markets would get swept away.

But here were the owners -- with New York's James Dolan, representing one of the NBA's financial whales, in the room -- standing strong for the alleged common good.

Meanwhile, the players' willingness to miss games -- and paychecks -- seemed anchored in principle, even when the numbers made it clear that a lesser deal over a full season would get them more cash than a better deal with a shortened (or entirely lost) season.

Not anchored in pragmatism, certainly, but in principle.

So where are they now? Not meeting, for one thing. No talks were held Tuesday, none had been scheduled for Wednesday or Thursday and on Friday, union executive director Billy Hunter was going to attend a regional players' meeting in Los Angeles. Within the next 10 days or so, barring a meeting, a breakthrough and a handshake deal, another two weeks of the NBA season will fall. Taking with it another payday for the players and, in losing November entirely, about $800 million from the initial $4 billion pool.

Are the system issues really worth that damage, financial and otherwise? Apparently. After Monday's meeting, union attorney Jeffrey Kessler said: "The BRI isn't going to doom the season. The hard cap will doom the season."

A hard salary cap remains a "blood issue" to the union, something Fisher and Hunter have said the players never will accept. A system bolstered by increasingly severe luxury-tax levies, they contend, will approximate a hard cap enough that it inflicts the same sort of pain.

But what, really, would it do to the manner in which the players' share of BRI gets distributed? If the amount of dollars that go to player compensation stays the same under any system, why does it matter if the league gets there by keeping the 30 team payrolls more tightly grouped?

Last season, under the old CBA, payrolls ranged from the L.A. Lakers up top (about $90 million, excluding the luxury tax) to Sacramento at the bottom (about $45 million). A near-hard cap would, in theory, push them much closer (a perfect hard cap would have distributed the players' $2.17 billion share in 2010-11 as 30 teams each paying about $70 million).

A series of changes, theoretically, would occur:

• At some point, the Lakers would stop spending and players who would have wound up in L.A. would have to seek employment elsewhere. That, in theory, would be good for the league's lesser lights, and not just because the Lakers would be less formidable. Talent might end up in markets that couldn't otherwise attract it just because that's where the available money would be.

• The number of guaranteed contracts likely would drop, almost exclusively within the league's middle-class of role players. Stars would be fine -- in fact, stars would be more likely to stay put, satisfying the owners who were upset with Miami's free-agent haul of both LeBron James and Chris Bosh last summer to join Dwyane Wade. Young players still working for rookie-scale deals would be covered too, thanks to their affordable salaries, and so would minimum-contract guys.

But as one Eastern Conference general manager said, those in between -- the league's middle class -- would get clobbered.

• Teams that aren't stocked with talent, but faced with spending up to a higher "floor," would have to sign newcomers who might or might not be worth it, or give more money to players on their current roster. A player whose proper value is $2 million might become a "$3 million player" overnight.

It's an unanswered question as to how that franchise would suddenly be considered more competitive.

Many of the workings of a system preferred by the owners would hinge on other moving pieces, too. For example, many payroll exceptions will there be, and of what value?

And, of course, there's the matter of the sudden implementation of the new deal. If the split was 50-50 in 2010-11, the players' share would have been $1.9 billion -- $270 million less than it actually was. So that extra $20 million that the Lakers or the Mavericks spent on players wouldn't get paid out by other teams, it would vanish completely, crushing role players.

As one of the league's most influential agents said Tuesday, "The system is tied into the numbers. The players can't agree to go this far back in BRI and then have a system that becomes that much more restrictive also. If the BRI stayed at 57 percent, I think there'd be room to talk about some of these system issues, no question."

The thing is, the BRI isn't staying at 57 percent. Which means there will be even more talking -- and maybe only talking, rather than resolving -- about the system issues to come.

Steve Aschburner has written about the NBA for 25 years. You can e-mail him here and follow him on twitter.

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