Opening Statement: We have proposed a framework in our current collective bargaining negotiation that would raise the cap, minimize the level at which the tax clicks in, thereby making more money available for player salaries, and in order to make sure that some of our proposals couldnít be categorized as economic, we not only suggested to the players that we would raise the cap and in effect lower the tax rate, but that we would keep the same
NBA Commissioner David Stern on collective bargaining negotiations: 300k
essential economic system in place that provides, we believe this year, 57 percent and indeed we would guarantee that number, which in the course of any normal increase in revenue over the life of any six-year deal, would result in the average player salary being raised from 4.5 million to 5.5 million. We view ourselves as really negotiating over non-economic terms. Length of contract, drug testing and the minimum age for entering the NBA, which is currently at 18. There are hundreds of other things, but I did want to make it clear that contrary to media reports, thereís no place where there was a four-year proposal by us on the table in terms of contract length. Itís longer than that, and thereís been no suggestion that there wouldnít be guaranteed contracts. Thatís where we are.

Commissioner Stern again addessed the state of labor negotiations, three months after speaking on the issue at NBA All-Star 2005.
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Q: Are the drug policy and the age limit going to be a problem in the new agreement?

Commissioner Stern: I donít know if the age limit will be a problem but we have proposed a raising of the minimum age beyond its present 18 and we have proposed, as we told congress, four random tests per year including one offseason as well. I would guess it would not ultimately be a problem, given the enormous amount of attention this subject has been getting.

Q: Have there been any talks with the union?

Commissioner Stern: If we said there are no ongoing talks we would not be exactly accurate. We continue dialog with the players and we anticipate setting up a meeting in the near future.

Q: Did you feel you had an agreement on maximum length of contracts?

Commissioner Stern: I donít know where we can get back to. We felt we were very close to an agreement. I donít want to get into the ďwho shot whoĒ other than to say that the reason this thing boiled over into the public was that at the time we felt that there had been a significant backsliding from where we thought we were. Each side is free to decide that they would like to move away from the deal. But then we were getting media phone calls saying why is there no meeting scheduled, and we felt it was necessary to say that the reason thereís no meeting scheduled is because we have backslid from where we were and have no idea where weíre going. We did think we were close to a deal based on a variety of proposals. The players were firmly within their moral and legal rights to say they didnít want to make that deal for any reason. And so now we donít have anything. My main concern is that as we move along. Yesterday we got a communication from a large seller of our merchandise that canceled any orders from this point forward, because their view is the NBA is looking unreliable. And what weíve said to the players is that thatís the offer the owners are prepared to make. If we begin to suffer business losses, itís not going to be that the deal thatís on the table is always available. Weíre very anxious to try to make a deal. We may or may not be able to. We were very anxious and thatís why we pushed our owners to guarantee the 57 percent, lower the tax and raise the cap, all of which are designed to enhance free agency. And from out perspective, what that did is take away the argument that lowering contract years was an economic issue. What it really becomes is an issue of who gets the money thatís guaranteed into the system. If we guarantee that thereís going to be 57 percent every year paid to the players then there will be 57 percent paid. But if a player is in year seven and not quite earning it, thatís taking money out of the system. What weíre talking about is which members of the union the money will be paid to, but we guaranteed it and that was an important negotiating point, because we wanted to make it clear these other issues werenít about money. They were about the game. Just as we believe age is about the game, drug testing is about the game and contract length is about the game. Thatís where we are and frankly weíre optimistic that our players will come back and talk to us in an intelligent way.

Q: What would you say to supporters of the union that say that teams that are run well can manage the cap and make money in this league and thereís no need to fix what isnít broken?

Commissioner Stern: Thatís a fair point and I guess what I would say to you is that by virtue of offering to guarantee the 57 percent, weíve accepted a very important part of that proposition. What that leaves a little short is the issue of the pressures that teams have which are not so easily resolved, to make a player a max player, whatever that is. What we would like to do is to reduce the length of max contracts. Owners have certain intense pressures, and so what weíre trying to do is re-define the max contract to ensure that within the context of our unit, where weíre going to pay the money, it just goes to the players that are most deserving of it. Thatís why the guarantee was so important to us as an economic matter.

Q: Are you concerned about a lockout?

Commissioner Stern: Of course Iím concerned. Weíve had our own experience with that and itís something we would not like to do. But make no mistake about it, the only way to make a deal is to be able to not make a deal, and if this thing drags on, there are a number of owners who think that the offer on the table is not necessarily the offer that they would like to see accepted. They would like to see something harsher. As commissioner, and what I like to think, as a leader here, I agree with those that say that if we can keep the economics of this deal intact, pressure though it may be on the bottom line, recognizing that franchise values are stable and hopefully rising, if we can tweak it, and in my view, tweaking is okay we accept the economics, but now letís talk about contract length, drug testing and entry age, all of which deal with perception and reputation issues, and I think thatís important. And on the entry age, let me say that the perception of the NBA looking at players that are high school seniors is not a great perception. Iíd like to get NBA personnel out of high school gyms. We can talk about Kobe and LeBron and Kevin Garnett and Jermaine OíNeal, or we can talk about Lenny Cooke and Leon Smith and Korleone Young and a host of others. The better business good and the better community good is to raise the minimum entry age from 18 to a higher number. And thereís no right and no wrong. Itís just a matter of negotiation.

Q: Weíve heard optimistic, hopeful and alarming to describe the state of negotiations with the players. Do you have a word to describe it at this point?

Commissioner Stern: It depends. If the players like the deal weíre proposing, then Iíd be optimistic. Iíve heard some public expressions and characterizations of it and me in somewhat unflattering terms and I think thatís why itís important for me to be making these statements, because I donít want the media to be misinformed. I want everyone to understand whatís on the table and what may be impacted in a negative way if we donít make the deal. I happen to think itís a pretty good deal, because I have some owners who dislike it as much as some agents and players. I accept their views all around, but what weíre trying to do is craft a deal that makes sense for this great sport and continues the relative roll weíre on. These are great playoffs. The sponsors are returning to our games. The rating are strong and people are getting a chance to see a variety of very interesting and different styles in our conference finals. And, despite all this talk about this not being such a good draft, thatís being promulgated by our GMís, who donít want anyone to know about the underage players or the international players or the college players that they have on their lists. When it all plays out, I think youíre going to see thereís a lot of talent in this sport and in this world of basketball. So, weíre in a good place, but if we canít make a deal, I want it very importantly said, that this is the kind of framework that weíre not making a deal over.

Q: What is preventing the NBA from taking the D-League and making it a full-fledged minor league system?

Commissioner Stern: Thereís nothing wrong with a full-fledged minor league and weíve actually moved into the Southwest, adding four D-League teams and my guess is weíll move that up to a 15-team league in a relatively short period of time. But, itís still keeps us telling kids weíre going to draft you out of high school. Thatís what you should be planning for, whether youíre 17 or 16 or six, the NBA is the place you go after high school, and frankly, as a business matter, thatís not a good business decision in my view. Iím not going to get on a social platform. This has nothing to do with dealing with the college. If kids want to go to college, thatís fine. This is not telling young men that they should go to college. No one has to tell Bill Gates that he has to go to college. No one should tell a basketball player that he should go to college. What we want on behalf of the NBA to tell kids, they better plan to do something after high school that is not the immediate road to the NBA. If they want to play in minor league, if they want to go to college, if they want to go overseas, if the want to anything they want to, thatís fine. Our age is 18, the NFLís is 21. We think that something in between makes sense.

Q: Why is basketball different from baseball in that regard?

Commissioner Stern: Itís not, necessarily. It depends on what your role model is. My role model is football, where the age is 21. Baseball has a system where if youíre not drafted immediately, and you go to college, you canít be drafted for three years. I donít know if thatís good, bad or indifferent. I actually think that I like the idea of perhaps a 19-year-old or 20-year-old limit. Itís easier to administer and most of all, it gets us out the business of scouting 16-year-olds and gets me out of the business of fining teams for working out 18-year-old players. Itís not a good place for this league to be. Itís not good for our reputation, and itís really not a very good message for a sports league to send out.

Q: Is there a concern over physical maturity when discussing an age limit?

Commissioner Stern: Our negotiations are not about physical maturity. There are demands in our league that have to do with 171 days and 82 games. Itís tough and stressful and some players react to it better than others. But, weíre trying very hard, with respect to a minor league, with respect to dealing with our players, the younger players. We think we can make it all work, but we would like very much to get a little older. We think that would be an intelligent business decision.

Q: What have you heard when youíre pitching the age limit thing overseas, where more players would be affected by it?

Commissioner Stern: I think you make a very good point that has been largely lost in the debate, that the impact on international players is going to be equally large, as the impact on American players. The Pau Gasols, the Tony Parkers, the Dirk Nowitzkis. From the basketball infrastructure, Iíve had people say to me that there are a number of international players that came into the NBA too soon, went back home and actually never developed as a result of making themselves available and flunking out of the NBA, that if they had a year or two more to develop, that would be extraordinary for them, their leagues and the NBA. From agents representing international players, Iíve read that this is a terrible thing for international players. For the NBA, I think we should treat everyone the same. You have an age limit and it applies to everybody, wherever theyíre born, and you try to do the best you can.

Q: Why is the 1999 agreement broken and why does it need to be changed?

Commissioner Stern: Itís not broken economically. Weíre prepared to guarantee 57 percent. We think there really is something about our age, our current drug testing procedures and the length of our contracts, which within the context of our same system, would make sense to change, and thatís what this negotiation is about. I would not be accurate if I didnít tell you there are a hundred other issues that weíre negotiating and some of them involve our own teams, because weíre struggling to make sure we have a competitive environment among existing NBA teams. So, there are some points that actually designed to continue to enhance competition among our teams. There are a lot of issues we are trying to deal with. The relationship among NBA owners and the relationship among players and the relationship between the NBA and its players. We really think that weíve carefully thought this out, and despite the rhetoric of our owners that say we have to make it more profitable, I think weíve revealed ourselves perhaps maybe too weakly or too meekly, where we say 57 percent works, at least for not upsetting the league, but if the players donít want that and our business begins to suffer, then 57 percent will not work and weíll see who will survive in a showdown that we donít want, we donít need and would not be good for anyone associated with the sport.