Official CBA/Labour Talks Discussion Thread

[S.W.A.N]

What does this mediation do for negotiations? Anyone think this is a good or bad thing?

well it can't be a bad thing...

perhaps mediation, with some pressure from the white house, gets a deal done..

[dacrusha]

What does this mediation do for negotiations? Anyone think this is a good or bad thing?

well it can't be a bad thing...

perhaps mediation, with some pressure from the white house, gets a deal done..

I can't imagine it being as good a thing for the owners; the players have been giving all the concessions thus far (rolling back BRI by 4%, cutting max contract length etc.) and all the owners have done is decrease their BRI demands from a 10% cutback to 7% and softened their stance on across-the-board salary cuts.

Clearly, one side is willing to give back relative to the last CBA and the other side is locked in a 'take all you can get' mode.

[Fairview4Life]

Loads of articles about competitive balance and payroll vs. winning.

http://wagesofwins.net/2011/08/10/nba-o ... e-balance/

http://www.jeremyscheff.com/2011/07/the ... d-by-team/

http://wagesofwins.net/2011/09/23/nba-p ... mpossible/

http://offthedribble.blogs.nytimes.com/ ... dy-has-it/

http://espn.go.com/espn/commentary/stor ... gic-flawed

That is a lot of words and numbers.

[I_Like_Dirt]

Okay, I should have been more specific and stated that to buy a franchise you cannot move that team.

Also, if you believe Forbes magazine, Ellison would be more than happy to buy the Hornets for $450 under one small condition: "My source says Ellison would be more than happy to pony up $450 million for the Hornets (including a relocation fee for the Warriors) given the improved economics for NBA teams that will be the result of the new collective bargaining agreement."

So are you sure you want to use this example for keeping the existing CBA?

http://www.forbes.com/sites/mikeozanian ... -san-jose/

New Orleans was run into the ground by an owner who was terrible at running an NBA franchise and kept moving the team from small market to small market and left both cities less interested in the NBA once he was done with them than they were before they had an NBA team. He racked up losses and ran the team into the ground and despite that fact the franchise would suddenly be worth $450 million with a new deal. Suddenly that franchise has massively increased in value just because of a new deal. That isn't proof that ownership is losing money right now, but it is pretty strong evidence that the owners are making money and are out to get as much more as they can possibly get since a better CBA makes their franchises gain over $100 million in value. If the NBA is going to make that kind of coin on a new CBA, clearly they're out for a lot more than just their $300 million in losses, even if you use their numbers. The article doesn't say the kinds of improved financials that would be required, but revenue sharing could definitely work towards improving the financials even without a new CBA that radically cuts back player salaries.

[Indeed]

Okay, I should have been more specific and stated that to buy a franchise you cannot move that team.

Also, if you believe Forbes magazine, Ellison would be more than happy to buy the Hornets for $450 under one small condition: "My source says Ellison would be more than happy to pony up $450 million for the Hornets (including a relocation fee for the Warriors) given the improved economics for NBA teams that will be the result of the new collective bargaining agreement."

So are you sure you want to use this example for keeping the existing CBA?

http://www.forbes.com/sites/mikeozanian ... -san-jose/

New Orleans was run into the ground by an owner who was terrible at running an NBA franchise and kept moving the team from small market to small market and left both cities less interested in the NBA once he was done with them than they were before they had an NBA team. He racked up losses and ran the team into the ground and despite that fact the franchise would suddenly be worth $450 million with a new deal. Suddenly that franchise has massively increased in value just because of a new deal. That isn't proof that ownership is losing money right now, but it is pretty strong evidence that the owners are making money and are out to get as much more as they can possibly get since a better CBA makes their franchises gain over $100 million in value. If the NBA is going to make that kind of coin on a new CBA, clearly they're out for a lot more than just their $300 million in losses, even if you use their numbers. The article doesn't say the kinds of improved financials that would be required, but revenue sharing could definitely work towards improving the financials even without a new CBA that radically cuts back player salaries.

Yes, and what holding them back is the debt/value ratio at 69% (omg, and that's the reason why they are losing money, out of control on expense by the owner, little to do with the players).
http://www.forbes.com/lists/2010/32/bas ... 28959.html

[YogiStewart]

apparently Stern's saying that if there isn't a deal by Tuesday, there won't be basketball until after Christmas.
yikes.

[xAIRNESSx]

Loads of articles about competitive balance and payroll vs. winning.

http://wagesofwins.net/2011/08/10/nba-o ... e-balance/

http://www.jeremyscheff.com/2011/07/the ... d-by-team/

http://wagesofwins.net/2011/09/23/nba-p ... mpossible/

http://offthedribble.blogs.nytimes.com/ ... dy-has-it/

http://espn.go.com/espn/commentary/stor ... gic-flawed

That is a lot of words and numbers.

Expert: Virtually No Correlation Between Payroll And Win Percentage

I don't buy this argument. Everyone's favourite example for this is the Knicks. Of course mis-management can screw you over as well, but don't tell me money won't buy you a better team. It's laughable that they mention the Knicks only got better after lowering their salary.

[BorisDK1]

Yes, and what holding them back is the debt/value ratio at 69% (omg, and that's the reason why they are losing money, out of control on expense by the owner, little to do with the players).
http://www.forbes.com/lists/2010/32/bas ... 28959.html

Debt/value ratio doesn't really tell you anything about a company's indebtedness relative to its operations, though. "Value" is simply an arbitrary amount that the market is/was willing to pay for the company: whether it should pay that much or not is up for discussion. If you want to discuss the actual damage caused by debt financing to a going concern, you should look at the Interest Coverage Ratio: Interest Coverage Ratio = Earnings before Interest and Taxes (EBIT) / Interest. Chances are you'll find that NOH had a negative ICR, because it's likely they were already losing money prior to interest being considered. And that does speak to the necessity of controlling costs on the labour end for this franchise.

But even that tells you only so much about an organization's ability to handle its debt. The best way is to divide Operating Cash Flow / Debt. And that's where New Orleans has trouble: its cash flow is just too weak due to having small crowds at low ticket prices, mostly. While I'm sure that NOH was overly indebted, I'm more sure that that could have been easily covered had people bothered to buy tickets.

[S.W.A.N]

So frustrating as a fan of the former Vancouver Grizzlies to see teams sitting in cities like New Orleans...

I am sure its a great city, and there was a time where they could of been profitable in that location, but a lot has happened to there economy in the last 10 years and they are no longer in a position where they warrant having a franchise.

You take that same New Orleans team, put it in Vancouver and you have a healthy profitable venture with no need for assistance from the league. Probably 2-3 other american cities can say the same.

[Indeed]

Yes, and what holding them back is the debt/value ratio at 69% (omg, and that's the reason why they are losing money, out of control on expense by the owner, little to do with the players).
http://www.forbes.com/lists/2010/32/bas ... 28959.html

Debt/value ratio doesn't really tell you anything about a company's indebtedness relative to its operations, though. "Value" is simply an arbitrary amount that the market is/was willing to pay for the company: whether it should pay that much or not is up for discussion. If you want to discuss the actual damage caused by debt financing to a going concern, you should look at the Interest Coverage Ratio: Interest Coverage Ratio = Earnings before Interest and Taxes (EBIT) / Interest. Chances are you'll find that NOH had a negative ICR, because it's likely they were already losing money prior to interest being considered. And that does speak to the necessity of controlling costs on the labour end for this franchise.

But even that tells you only so much about an organization's ability to handle its debt. The best way is to divide Operating Cash Flow / Debt. And that's where New Orleans has trouble: its cash flow is just too weak due to having small crowds at low ticket prices, mostly. While I'm sure that NOH was overly indebted, I'm more sure that that could have been easily covered had people bothered to buy tickets.

Yes, but their over gate receipts wasn't that bad.
Based on revenue, the bottom 16 teams are in the range of $89m - $119m (NOH sits in the middle at $100m), which includes Atlanta ($105m), Orlando ($108m). Therefore, I think there might be something missing from the owners (they are trying to hide some revenue from the players, no way Orlando/Atlanta can survive with higher player salaries).

[KG1585]

http://newyork.cbslocal.com/?podcast_url=http%3A%2F%2Fwww.podtrac.com%2Fpts%2Fredirect.mp3%2Fnyc.podcast.play.it%2Fmedia%2Fd0%2Fd0%2Fd0%2FdY%2FdY%2FdT%2FdO%2FYYTO_3.MP3%3Fauthtok%3D5561587383908634814_lHWukweMKDTBlYG4bbEijqAF3g&podcast_name=David+Stern&podcast_artist=Mike+Francesa&station_id=91&tag=&dcid=CBS.NY

Stern interview, very interesting points.

[BorisDK1]

Yes, but their over gate receipts wasn't that bad.
Based on revenue, the bottom 16 teams are in the range of $89m - $119m (NOH sits in the middle at $100m), which includes Atlanta ($105m), Orlando ($108m). Therefore, I think there might be something missing from the owners (they are trying to hide some revenue from the players, no way Orlando/Atlanta can survive with higher player salaries).

They are not "trying to hide money": that is highly, highly illegal. Like, "shut the whole operation down while you go away for a couple of decades" type of ramifications. It's a serious crime with harsh penalties, and I'll guarantee you forensic accountants for the NBPA pored over the NBA's books. If there was even a HINT of false financial statements (FFS) coming from the NBA, it would have found its way into the harsh light of day months ago.

[mirrornick]

I just got into it with some Dumb Knick fan on their boards. I said no point of arguing with a Typical American. Can their MOD do anything ?

[xAIRNESSx]

People usually get upset when you generalize...

[S.W.A.N]

After reading hunters interview tonight and listening to stern's interview all I can say is poor union.

I know they both lie like rugs and spin the stories to their advantage, but damn Stern is just so much better at it that Hunter.

As much as I dislike the agents sticking their noses in, after tonight I feel sorry for them. They are probably all thinking that they could do a better job than hunter. And some of them are probably right.


Hunter totally lied about where the 50/50 came from, so Stern called his bluff and put the whole conversation on the record and named all the participants in the room so they all have to pretty much admit it now.

Stern even gave the information on what proposed luxury taxes they want.
Hunter has been vague and un-informing, does he actually have a proposed luxury tax that the players think will be fair and yet punitive enough to be effect?

You already have a distinct disadvantage (the whole millionaire vs billionaire thing) but to start losing the media war is a disaster for the players. They had two years to prepare for this fight and have done a lowsy job so far.

I think the owners are dirty rotten crooks trying to take every penny they can, but I sure think they doing a better job of things than the union.

Regardless of how much the union loses this go around I will be glad when its over.

[theonlyeastcoastrapsfan]

Also, the players collectively are guaranteed that they'll get their % of BRI, whether there's a hard cap or soft cap. So no matter hard or soft cap, punitive tax or not, if the BRI split is 50% and and revenue is 5 billion players will collectively get 2.5 billion? So what is the source of their opposition? Teasm will still need to sign players and try and compete, more parity may even increase The total BRI and make more money for everyone.

Since all the players can't be on the super teams, are they being bullied by the big stars? I mean say 60 of the 400 are going to be on the globetrotters, and at the rest will be on the generals and the unions is fighting for that? Even if they feel teams will be hesitant to spend, the same amount of money will still be going out the door to the players. And isn't that what the players want, for the Owners to make better and more judicous decisions with their money, because I could have swore that was their answer to everything anyway? How can the be against owners having to be cautious with this spending when the foolish spending of the owners is their primary platform, and what they say is the cause of the issue. Do you think maybe, just maybe they know that this system the hold so dear is part and parcel to those decisions, and that's why they're so reluctant to see it changed. Sounds hypocritical. Imo, players are just butt hurt over the fact that their perceiving themselves as losing this fight. And their lack of legit platform, and perhaps capacity among the union, has got them feeling like they're being bullied. I think this is just not a good situation for them at the time being, and so the deal may go in the owners favour this time. Last time, I believe it was in the players favour. Well most players, I think the real superstars and rookies, got hosed to some degree, while average players and the almost real superstars made out very well. Just like I think this round, the "average rank and file owners" will make out better than the super owners. In both cases simply because there are more average to elite. There is a very good argument I've seen Nate Jones make on twitter that I'm inclined to agree with, as well as Dwayne Wade, that if there was no max, player contracts may be more in line with their value,a nd average players may not make as much. Your top level star will make most of a teams cap. Simalar to what David Falk wanted last time. I think they may actually have been a better way to go. But I don't even think that's on the table, and for the time being that ship has sailed.

[youngaffer]

Okay, I should have been more specific and stated that to buy a franchise you cannot move that team.

Also, if you believe Forbes magazine, Ellison would be more than happy to buy the Hornets for $450 under one small condition: "My source says Ellison would be more than happy to pony up $450 million for the Hornets (including a relocation fee for the Warriors) given the improved economics for NBA teams that will be the result of the new collective bargaining agreement."

So are you sure you want to use this example for keeping the existing CBA?

http://www.forbes.com/sites/mikeozanian ... -san-jose/

New Orleans was run into the ground by an owner who was terrible at running an NBA franchise and kept moving the team from small market to small market and left both cities less interested in the NBA once he was done with them than they were before they had an NBA team. He racked up losses and ran the team into the ground and despite that fact the franchise would suddenly be worth $450 million with a new deal. Suddenly that franchise has massively increased in value just because of a new deal. That isn't proof that ownership is losing money right now, but it is pretty strong evidence that the owners are making money and are out to get as much more as they can possibly get since a better CBA makes their franchises gain over $100 million in value. If the NBA is going to make that kind of coin on a new CBA, clearly they're out for a lot more than just their $300 million in losses, even if you use their numbers. The article doesn't say the kinds of improved financials that would be required, but revenue sharing could definitely work towards improving the financials even without a new CBA that radically cuts back player salaries.

LOL.

On one hand you acknowledge that NO lost money.
On the other hand you say that this isn't proof of teams loosing money. You go so far as to say "it is pretty strong evidence that the owners are making money".

You got me with that stunning logic.

[dhackett1565]

Also, the players collectively are guaranteed that they'll get their % of BRI, whether there's a hard cap or soft cap. So no matter hard or soft cap, punitive tax or not, if the BRI split is 50% and and revenue is 5 billion players will collectively get 2.5 billion? So what is the source of their opposition? Teams will still need to sign players and try and compete, more parity may even increase The total BRI and make more money for everyone.

If you look at the history of the CBA negotiations over the past couple decades, the soft cap has driven the BRI split up out of control, from below a 50-50 split, to an effective split of 65% at one point because of overspending (I feel driven by the cap exceptions the players fought to have put in place), and has driven the agreed upon BRI split (defined in the original salary cap) up from below 50, to 51.8% to 55%, to 57%... Where does it stop?

The players want a soft cap so they can keep ballooning that BRI split through the system. If they accept a hard cap, they will only grow their salaries proportionally to the revenues. And they are not satisfied with that. Both sides are greedy folks, not just the owners.

[I_Like_Dirt]

Gaffer, I think you need to reread my post. I didn't say it was proof that ownership lost money. Any business runs that way deserves to lose money until it's run better. I think it's pretty obvious that ownership's losses, whatever they are or aren't, are being significantly overstated right now at the very least. If ownership wants to bail out teams that are run into the ground, that's their business. I also think that the owners right now are looking to avoid revenue sharing entirely by getting as much as they can from the players. If the kind of deal the owners are holding out for increases the value of teams that are in awful markets and have massive debt by over $100 million, then it's a deal where revenue sharing probably not required for any sense of competitive balance.

[BorisDK1]

LOL.

On one hand you acknowledge that NO lost money.
On the other hand you say that this isn't proof of teams loosing money. You go so far as to say "it is pretty strong evidence that the owners are making money".

You got me with that stunning logic.

Well, he's basing the entire financial picture on franchise value. He's not looking at the operating reality of the franchise. His logic is sound based on the data he's considering, but when the data considered increases, I think the interpretation has to change.