Posted Nov 6 2011 10:34AM
NEW YORK -- It had been billed as the most pivotal day/night of negotiating yet in the NBA labor dispute between the owners and the players -- and Saturday's eight-hour session lived up to that billing in spectacular, volatile, unnerving fashion.
By the time representatives of the warring sides stepped into a time machine overnight -- NBA commissioner David Stern and deputy Adam Silver meeting with the media before the clocks changed back to Standard Time, union president Derek Fisher talking after the hour fall-back at the midtown Manhattan hotel -- the league's four-month-old lockout appeared closer than ever to ending.
And closer than ever to blowing up the 2011-12 season completely.
Stern, without actually using the words "best, last offer," laid out the terms of what essentially would be that from the owners. He said that federal mediator George Cohen initiated the terms as "what-if?" questions to the players, and specified five topics that in the league's view would close gaps in the two sides' bargaining positions.
The biggest of them: a "band" in the split of basketball-related revenue pegged to growth projections that would deliver somewhere between 49 percent and 51 percent of approximately $4 billion to the players. Other issues included limitations on teams whose payrolls put them in luxury-tax related to the mid-level exception and sign-and-trade deals; the toughening of the luxury tax itself, especially for repeat offenders; and tweaks to the mid-level exception for non-tax-paying teams.
The commissioner said that the proposal as described would be available to the National Basketball Players Association until "the end of business Wednesday." After that, the owners' offer would get worse, most notably dropping to a 47 percent BRI share for the players and a "flex cap" salary cap similar to that in the NHL (effectively a hard cap).
"We hope that this juxtaposition will cause the union to assess its position and accept the deal," Stern said.
The NBA has sought concessions from the players from the start of these negotiations in both economics and system issues. The stated goals have been to improve the league's profitability and its competitive balance. Twenty-two of the 30 teams lost money last season, according to audited figures made available to the union, with a net loss of $300 million for the league. Also, the owners say they want to close the gap in payroll spending that has allowed some teams to pay two times or more what others spend, claiming that will give more teams' fans the hope of winning seasons.
The commissioner was asked if the terms of the owners' proposal accomplish both goals, which are the reason for this lockout in the first place.
"Well, they certainly would come closer than our current system," Stern said. "And they're, I think, the best we could do at this time. We're prepared to live by them if they're accepted by the players."
Stern's mood was flat and he admitted he was tired. But in the owners' official move to 50 percent of BRI -- and purportedly to 51 percent, though details of the necessary growth weren't clear -- the framework of a new collective bargaining agreement appeared to many in the room to be in place. Thoughts of a deal with the players by Nov. 9 -- and a season that would begin a week or so into December -- danced through the heads of reporters and fans alike.
Then Fisher stepped to the podium in an adjacent room. And the tone changed as if a storm cloud rolled in.
"Today is another very sad day for our fans, for our arena workers, for our parking lot attendants, for our vendors," Fisher said. "A very frustrating, sad day."
Fisher said that the players, who previously had sought a 52.5 percent share of BRI (down from 57 percent in the last CBA), moved to 51 percent Saturday. That included a portion that would be dedicated to a new benefits program for retired NBA players. Jeff Kessler, outside counsel for the union, later specified that the current players' cut would be 50 percent, with 1 percent for the alumni.
It's unclear just when the retired players got a seat at the bargaining table, but let's put that aside and repeat the above before proceeding:
• The owners proposed a band of BRI for current players that would center on 50 percent.
• The players proposed a split that would deliver 50 percent to them, with an additional 1 percent (approximately $40 million annually) for retired players.
Yet from that, the two sides might be headed toward a longer lockout, more canceled games, additional lost revenue on both sides and perhaps -- if the owners dig in with diminishing offers and the players pursue their doomsday option of union decertification -- something far more apocalyptic.
In framing the owners' proposal as he did, Stern clearly was signaling to the union's members -- a diverse group of about 450 players that includes well-heeled stars, "middle-class" role players, journeymen playing for minimum salaries and rookies -- that there is a deal to be made, games to be played and a season to be had. It would, of course, necessitate a vote to avoid the Wednesday markdowns.
Fisher, however, said in the wee hours of Sunday that no such vote was in the offing. (Union executive director Billy Hunter did not meet with reporters, worn down from the long session.)
Said Fisher: "Our job is to take a deal to our players that we're comfortable presenting and we feel will get passed and will receive the votes to get basketball back up and running. At this point, we don't have a deal to propose."
While the union might not be willing to have its players vote on the NBA's proposal, it could see a number of them moving toward votes on decertification. Two votes would be necessary -- one requiring 30 percent of the players' assent to initiate the process, another 45 days later requiring a simple majority to actually dissolve the union -- for the players to pursue anti-trust litigation against the league.
Such a move could give them leverage, if the league -- which so far has downplayed fears of decertification and even has gone to court challenging it -- began to take seriously the financial damages that could be awarded (triple the players' approximate $2 billion share of revenue) and the chaos that likely would torpedo the season. But decertification has been described by experts inside and outside this dispute as a "nuclear option" that could shut the NBA down for a full year -- or longer.
What's so bad about the owners' proposal that the union leaders would decline to put it to a vote of the players?
First, Fisher and Kessler said that the growth necessary for the players to get 51 percent of BRI is unrealistic and unattainable. That means the owners' band offer would float from 49.8 percent to about 50.2 percent, a union spokesman clarified later.
Also, it was clear that the NBPA sought to trade its "extremely significant" move on the economics from 52.5 percent to 51 percent for more favorable system issues. Kessler made it clear that without consideration on those issues, the players would not do a deal below 52.5 percent.
Here are some of the biggest differences:
• The owners want tax-paying teams to be limited to a "mini" mid-level exception starting at $2.5 million on deals of no more than two years and available every other year. The union wants only the alternate-year restriction on tax-payers; otherwise, mid-level contracts could start at $5 million for up to four years for everybody (actually, alternating as four-years deals, then three-year deals in subsequent seasons).
• The owners want tax-paying teams to lose sign-and-trade privileges. The union wants tax-payers to have some access to that.
• The two sides have agreed on a tougher luxury tax in general: $1.50 levy on the first $5 million by which a team exceeds the tax threshold, $1.75 for $5 million to $10 million, $2.50 from $10 million to $15 million and $3.25 beyond that.
They differ in the added penalty applied to teams that spend into the luxury tax three times in any five-year period. The league wants to boost the taxes by $1 at each cutoff, while the union is urging 50-cent boosts up to $10 million.
• Other differences remain on the so-called "cliff" faced by teams that barely venture into luxury-tax territory (forcing them to forfeit payouts of other violators' tax money), and in the annual raise percentages built into multi-year contracts.
"On the economics, we believed the conversation should have been over," Fisher said. "And we're standing here being given an ultimatum that the NBA will move to 47 percent by Wednesday with a flex cap if we don't accept what they call 51-to-49 but really 50 [percent], with a system that is not a fair system."
Kessler was especially animated about the differences and the owners' overall approach.
"They came in here with a pre-arranged plan to try to strong-arm the players," the union attorney said. "They knew today they were going to stick to 50 [percent] essentially ... they were going to make almost no movement on the system and then they were going to say, 'My way or the 47 percent highway.'
"These are professional basketball players, the finest athletes in the world. How do you think they feel about threats? How do you think about efforts at intimidation?"
The fact is, it's not even known how some of the owners feel about Stern's proposal. The meeting Saturday included two who don't sit on the labor relations committee -- presumed hawk Charlotte's Michael Jordan and Miami's Mickey Arison -- along with reported hard-liner Paul Allen (team president Larry Miller usually takes Portland's committee spot). The band mechanism might already be too rich for their liking.
A source familiar with the owners' stance said: "Stern does not have the votes above 50 and he is trying to find a way to make it acceptable, or at least enough to get it approved. But if Billy can't move on this, then neither negotiator has the ability to make a deal right now. It may take a while."
A long while, which would be contrary to what Fisher described as his union's first priority.
"We hear, No. 1, our fans, the people that drive this game," the Lakers guard said. "It's our talents and abilities, but it's really our fans that drive this business. We've heard them loud and clear and that's why we continue to try to make moves to get this deal done that in a lot of ways are not in our best interest.
"It just doesn't seem to be good enough for this particular group of team owners."
Or to be fair, coming back the other way, good enough for this particular group of union leaders.
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