Lockout

[turk3d]

D-Williams playing overseas and others maybe following suit: may have impact on owners stance:

http://sports.espn.go.com/new-york/nba/ ... id=6745426

Ataman told the newpaper Besiktas isn't done chasing NBA players.

"If there's a possibility, we'll talk with Kobe (Bryant) if he'd like to play in Europe with Deron and with other guys to play we can talk with him," Ataman said. "If Kobe would like to play with us, we will also contact his agent and maybe with him."

Roger Mason Jr., a vice president with the players' union, told Newsday late Thursday that Knicks stars Carmelo Anthony and Amare Stoudemire have inquired about the rules and insurance information regarding playing overseas.

"I've talked to a lot of the star players, Chris Paul, Amare, Melo, I think that those guys are open-minded to everything," Mason told Newsday.

Ataman told the New York Times that Williams' deal would become official in the next 24 hours and that the club's president, Seref Yalcin, would join Williams for a news conference in the United States next week. Besiktas officials held a similar news conference in New York when they signed Iverson last October.

Sources say Williams would not be required to report to the Turkish club before the end of August or early September and that his deal with them would include an immediate out that allows him to return to the NBA as soon as the work stoppage ends.

Players under contract like Williams would typically need a letter of clearance from FIBA -- the sport's world governing body -- to play anywhere else. But the NBA Players Association has privately maintained for months that it intends to legally challenge any attempt by the NBA or FIBA to block a player such as Williams from playing elsewhere while the NBA has imposed a work stoppage.

"If they try to stop him," one source said of Williams, "the union will fight it."

"We're also very close to getting Zaza Pachulia," Ataman said.

A flood of defections to Europe would presumably put pressure on the NBA and its owners to relax some of their demands at the bargaining table after months of negotiations with little progress, but it remains to be seen how many established players actually follow Williams' lead.

NBA commissioner David Stern has said in recent months that the league would not try to stand in the way of NBA players going overseas during a lockout.

There remains considerable skepticism, though, among NBA executives and even among some agents and within the union, that there are enough teams overseas with the financial resources to tempt stars like Williams, as well as the willingness to let players walk away from an overseas contract on a moment's notice as Besiktas has pledged to do.

[Sleepy51]

In Deron Williams' case, I think he might have spent all his yearly salary. Why the hell would he risk being injured and have his contract voided? And to only earn $200k/month in Turkey?

To put pressure on the league to change their bargaining positions.

Deron earning $200K overseas is not threat to the NBA, but him getting injured overseas while his NBA contract is not in force (therefor no prohibited activities clause in effect) and them still being on the hook for his guaranteed deal (under the reasonable assumption that the new CBA does not wipe our old contracts) when he returns from Europe with a limp is the threat. The NBA has suspended the contract. There are consequences to initiating that act. Since the NBA is not paying him or allowing him to perform the contracted duties, then they also forfeit their rights under the contract while they are not meeting their obligations.

Until the lockout ends their protections against injuries sustained during "would be" prohibited activities (such as playing competitive basketball outside of NBA activities) would by subject to terms negotiated under the new CBA. It is highly unlikely that the players association would accept a settlement that puts thier members at risk for breach of contract claims during a period where the contract was unilaterally suspended by the contra-party.

That's why Mike Beasley can smoke all the weed he wants during the lockout. The NBA can't exercise their contractual rights while they are forgoing their contractual obligations (no pay, no rules.)

[turk3d]

Very good! Excellent points. That's why locking out the players (a hardball tactic taken by the owners I realize) was a foolish way imo to enter into negotiations. I think Williams is just the tip of the iceberg.

[Sleepy51]

Other things that Lockout enthusiasts should know:

The league has their national broadcast deal in place for the next 4 years. That deal started in 2008 after the worst rated NBA finals ever in 2007. The 2010-2011 season OTOH, was the highest rated NBA season ever and caps a trend of consistent ratings growth. The local cable deals that have been renewed lately have been at ASTONISHING multiples. Reportedly Lacob doubled the Warriors TV revenue in the new deal with comcast and the Lakers latest TV deal is for FIVE TIMES the previous revenue. FIVE TIMES. If the league can maintain any significant portion of the ratings increase from this last season, they will be in a position to force NBC/TNT renegotiate a broadcast rights extension or risk losing an extremely valuable property to another network (and you wonder where Whackjack learned it?) Not to mention all of the new media infrastructure that has been invested in over the last few years and are just now coming to fruition. Media revenue is about to go off the charts and comes at no increase in player salary overhead. It's all profit.

Another interesting wrinkle here is that the highest rated NBA season ever (= more profits) coincided with the Heat's highly "unpopular" superteam formation and having teams from the top 5 population markets being in the playoffs. The lesson: a top heavy league (think MLB: Yankees vs. Red Sox) is absolutely financially viable and even lucrative. When they all see the numbers on the next TV deal, parity for the small market teams will become irrelevant. The small market teams will realize that they will make MORE money as also-rans in a revenue sharing based league than they can possibly make standing on their own as small market once in a blue moon contenders just like in MLB.

This lockout is a cash grab before the big market owners finally have to chop up the pie with their small market counterparts which is at this point all but inevitable. The owners are leveraging the end of this CBA to trade out their "losses" as the investements of the last 10 years begin to bear fruit. The owners have even proposed a flat dollar salary limit for this next CBA (no longer as a percentage of BRI.) They owners are about to experience a revenue explosion and are trying to cut the players out of it . . . because hey, all they do is play the stupid children's games. The billion dollar economy belongs to the passive investors who want to take on ZERO risk.

F em in the other ear.


http://probasketballtalk.nbcsports.com/ ... ion-deals/
http://content.usatoday.com/communities ... -roll-on/1
http://blogs.forbes.com/mikeozanian/201 ... ting-fees/

[Sleepy51]

That's why locking out the players (a hardball tactic taken by the owners I realize) was a foolish way imo to enter into negotiations.

That's a point that has been completely ignored in the blame laying here. The owners went full clipper right out of the gate. They didn't extend the CBA for any period to get through the FA season, or draftee signing period or even strategically to get past the viable date for players to sign on for Euroleague seasons. As soon as the CBA expired they just dropped the hammer.

I would guess that the League felt more urgency to use current financial data in negotiations before 2011-12 projections become relevant as season ticket sales, TV deals and new media revenue continued to roll in and wash out the claimed losses (other than the tax break loss that makes up most of their claims to begin with.)

Oh, and the Sixers are close to being sold today. The lowly "unprofitable" sixers found a buyer who is negotiating for somewhere around $280MM. Comcast bought the 76ers for about $125MM in 1996. How is an entity that is supposed to be losing money worth 124% more, or about 6% per year average annual return?

Operating income is BS. It is a red herring. At the "controlling interest" level you do not buy a business just for the annual cash flows. You buy control of a business to GROW that business and sell it for capital appreciation later. That often requires multiple years of no earnings and no profits as you invest in building that business. If you want to invest for the sake of consistend dividends, the NBA is not that type of investment. It is a growth opportunity. All of the NBA teams have experienced substantial capital appreciation under this CBA.

http://sports.yahoo.com/nba/rumors/post ... nba-368223
http://sports.espn.go.com/nba/news/story?id=6634304
http://www.forbes.com/lists/2010/32/bas ... 21387.html

[turk3d]

Yeah, ignoring your asset appreciation and them claiming that you've lost money is ridiculous unless you're dealing with a bunch of business morons on the other side of the table )even those business morons will hire some "experts" to do their negotiating for them). It would be like investing in stocks that you paid $10.00 per share 5 years ago which are now worth $50.00 per share and say you've lost money on them because you haven't cashed in yet (maybe even worse since even after they sell, they still are claiming they lost money after a huge profit realized). lol.

[marthafokker]

I doubt the Union boss really care to make the conditions of playing oversees part of the new CBA agreement. The owners will certainly push to allow voiding players' contract if career injures occurs if the union boss pushes.

As much as the players want to believe they can play oversees without consequences, the owners will void the contract anyways and fight it in court. In most cooperate lawsuits, the courts usually rules for the cooperation and not the employees. Just ask Wally world employees. We all know what Wally world did was illegal, but still the court sided for Wally world. And if you say, but Wally World employees are not professional athletes, then I point you to the NFL ruling yesterday.

[turk3d]

One thing you're missing here martha which is extremely relevant is the Owners antitrust status (one of the points that Sleepy brought up earlier in the discussion). They are not afforded the same rights as your typical corporations are when it come to this kind of thing. If the owners lose this, then all bets are off and not only will they have to deal with the Union in court, but likely the government as well. Believe me, this is something the league does not want.

There's a slippery slope they need to walk (which they seem to be neglecting) that could get them in all kinds of troubles and wind up losing a lot of the overall benefits that owners of sports franchises currently realize. The tax hit they would have to take (as a result of losing their current antitrust status) would be enormous.

[marthafokker]

If that is the case, the owner better demand this being straighten out. ie. Union will pay for insurance if they get injured.

Which owner wants to loss 100Mil (Kobe as an example) to an injured player that insurance will not pick up? Have the franchise stink up for the next couple years because that players' salary might still be on the CAP.

If I am an owner, I will keep the doors lock until this is finalized. And lock it for a 2nd year, or 3rd year if it need be.

[turk3d]

It's a dangerous game they're playing which is the case in big time business deals like this one, kind of a form of high stakes poker if you will. The owners need to be careful because a long term protracted lockout benefits no one (and even less for the owners since it appears that the players may even have some alternatives). It seems like the players may wind up calling the owners "bluff" with the help of some outside interests.

If I understand correctly, the players will still be receiving paychecks from the owners up until November and picking up even an extra 5M or so (as is the case being reported regarding Williams) would be a nice chunk of additional change to sustain them beyond November even should the lockout go beyond that.

This could very well be dangerous water that the owners are treading in. I wonder if the possibility of the NFL reaching a settlement might have some sort of an impact as well in this. If I'm right and the players will continue to get paid for a while, then basically the players are gambling with the owners money for the time being.

[Sleepy51]

If that is the case, the owner better demand this being straighten out. ie. Union will pay for insurance if they get injured.

Which owner wants to loss 100Mil (Kobe as an example) to an injured player that insurance will not pick up? Have the franchise stink up for the next couple years because that players' salary might still be on the CAP.

If I am an owner, I will keep the doors lock until this is finalized. And lock it for a 2nd year, or 3rd year if it need be.

This is a guess but I would expect that the European teams will probably be asked (by agents) to foot the bill for significant insurance coverage. The European teams may then in turn ask the NBA to participate in the cost of that coverage in exchange for the no-buyout provisions upon resumption of NBA play. But, the NBA has for all intents and purposes surrendered their interest in the activities of the players for the duration of this lockout. No pay, no contract. The players would have to agree to a modification of the existing contracts for the owners to find relief for events that occurred while the contract was not in effect, but that would have to be negotiated after the fact. Today, the rules are what they are. If there is a high profile contract in play due to an injury this summer, it is highly unlikely that the player's union will sell out any particular superstar simply for the added financial benefit of the league. There isn't a lot of leverage for the owners on this point.

It's a tough position for either faction to be on the downside of, but most likely, prior contracts will be resumed after the lockout and buyer beware. Keep in mind, injuries aren't the only risks. What if a guy just gets fat? old? unmotivated? By locking the players out, teams will have assumed the risk that they don't get the players back in the same condition as they sent them away. The career ending injury is just the extreme of a spectrum of risks that the owners have engaged.

[Sleepy51]

If I understand correctly, the players will still be receiving paychecks from the owners up until November

Where did you get this? I hadn't seen it. It was my understanding that the league ceased operations as they pertain to player contracts as of the expiration of the CBA. If they are still paying compensation then they would likely retain some rights.

[turk3d]

If I understand correctly, the players will still be receiving paychecks from the owners up until November

Where did you get this? I hadn't seen it. It was my understanding that the league ceased operations as they pertain to player contracts as of the expiration of the CBA. If they are still paying compensation then they may retain some rights.

I can't remember where I saw it but I'm pretty sure I saw it somewhere on one of these threads, probably in the general section. But I did find this;

http://m.espn.go.com/nba/story?storyId=6727360&wjb=

When do players start missing paychecks?

The regular NBA pay schedule has 12 biweekly paydays, starting Nov. 15 and ending May 1. But some players are paid over 12 months, and will continue to be paid their 2010-11 salaries through Dec. 1.

Teams are only required to pay 20 percent of a player's salary on regular league paydays. The remaining 80 percent can be paid according to whatever schedule the team and player agree to. A few players receive a large lump-sum payment July 1, the first allowable date.

So some players will miss their first paycheck July 1. All players will miss their first paycheck no later than Nov. 15.

As for to what degree (if any) it affects the leagues rights, if they're being paid for previous years work, I don't see how it would (although that wouldn't necessarily preclude the league from trying to argue it anyways). I don't see how it would affect next year's work (or work they haven't even done yet since they're currently being locked out).

[Sleepy51]

If I understand correctly, the players will still be receiving paychecks from the owners up until November

Where did you get this? I hadn't seen it. It was my understanding that the league ceased operations as they pertain to player contracts as of the expiration of the CBA. If they are still paying compensation then they may retain some rights.

I can't remember where I saw it but I'm pretty sure I saw it somewhere on one of these threads, probably in the general section. But I did find this;

http://m.espn.go.com/nba/story?storyId=6727360&wjb=

When do players start missing paychecks?

The regular NBA pay schedule has 12 biweekly paydays, starting Nov. 15 and ending May 1. But some players are paid over 12 months, and will continue to be paid their 2010-11 salaries through Dec. 1.

Teams are only required to pay 20 percent of a player's salary on regular league paydays. The remaining 80 percent can be paid according to whatever schedule the team and player agree to. A few players receive a large lump-sum payment July 1, the first allowable date.

So some players will miss their first paycheck July 1. All players will miss their first paycheck no later than Nov. 15.

As for to what degree (if any) it affects the leagues rights, if they're being paid for previous years work, I don't see how it would (although that wouldn't necessarily preclude the league from trying to argue it anyways). I don't see how it would affect next year's work (or work they haven't even done yet since they're currently being locked out).

Pay dates can be independent of actual compensation periods.

It looks like that is just a flexible pay dates schedule but for a compensation period that ended before the CBA expired. The players being paid over 12 months are being paid FOR the Nov-May work year. It does not appear to be new compensation into a new contract year. Essentially, the money that Deron would be paid through December was already earned by his services performed through May 1st. He can jerk off on David Stern's toupee all summer long and they still owe him that money from his 2010-2011 service. He's just on a different pay schedule.

[Twinkie defense]

For those who believe that the threat of European contracts put pressure on the League, I think you are mistaken. It seems obvious to me that the PLAYER, not the team, will bear the burden for any career-threatening injury sustained during the lockout. And that is why players are so eager to get insured for injury as part of any overseas play (and similarly, that is why NFL players have been so reluctant to do anything that may get them injured this summer, Ochocinco aside).

Basically, since there is no collective bargaining agreement, there are no player contracts. Now no doubt, as part of the new CBA - if there is a new CBA - the players and teams will agree to honor contracts made under the old CBA. However even those old contracts are likely to change after the fact as a result of the new agreement, for example through an across the board rollback of salaries. (NFL players are pretty smart to get the majority of their money up front huh?).

A contract made under the artificial constraints of a collective bargaining agreement is not the same as a contract you make with your cell phone service provider. When the CBA was pulled out from under those contracts, those old contracts in effect ceased to exist - which is why the players are even able to sign other contracts overseas, and why the League would never try to stop them from doing so... at their own risk.

The only realistic threat that NBA players signing contracts in Europe (or elsewhere) creates for the League is that something else - Euroleague, D-League, a new ABA, etc. - takes the place of the League in the hearts and minds of fans. Now that seems pretty unlikely - but if the players really want to leverage the League, maybe they should start talking to Carlos Slim about setting up a new SuperLeague (TM).

[turk3d]

The thing about it is that (for those who are on say, a 12 month pay schedule) will still be having incoming income for quite a few months meaning that it will be a lot easier for them to sustain themselves during this time. Of course, it depends on the individual player and what their pay schedule happens to be since it seems that it varies from player to player.

This bodes well the more players who are on this extended schedule since we know how likely it is that with many of them those paychecks have a tendency to burn a hole in their pockets. We also know that by stretching out the payments it probably offers some tax advantages as well.

For a guy who's already received full pay, it's quite possible that he's already broke if he doesn't manage his money well which puts him at a huge disadvantage and all the more reason to go out and find work somewhere else if he can. Just another interesting dynamic to this entire situation.

[turk3d]

For those who believe that the threat of European contracts put pressure on the League, I think you are mistaken. It seems obvious to me that the PLAYER, not the team, will bear the burden for any career-threatening injury sustained during the lockout. And that is why players are so eager to get insured for injury as part of any overseas play (and similarly, that is why NFL players have been so reluctant to do anything that may get them injured this summer, Ochocinco aside).

Basically, since there is no collective bargaining agreement, there are no player contracts. Now no doubt, as part of the new CBA - if there is a new CBA - the players and teams will agree to honor contracts made under the old CBA. However even those old contracts are likely to change after the fact as a result of the new agreement, for example through an across the board rollback of salaries. (NFL players are pretty smart to get the majority of their money up front huh?).

A contract made under the artificial constraints of a collective bargaining agreement is not the same as a contract you make with your cell phone service provider. When the CBA was pulled out from under those contracts, those old contracts in effect ceased to exist - which is why the players are even able to sign other contracts overseas, and why the League would never try to stop them from doing so... at their own risk.

The only realistic threat that NBA players signing contracts in Europe (or elsewhere) creates for the League is that something else - Euroleague, D-League, a new ABA, etc. - takes the place of the League in the hearts and minds of fans. Now that seems pretty unlikely - but if the players really want to leverage the League, maybe they should start talking to Carlos Slim about setting up a new SuperLeague (TM).

You make a good argument here Twinkie, but I think you're wrong. They do have a contract in place and it is the owners who have reneged. And if it can proven that the owners have acted in "bad faith", then in the long term, when this is litigated (and I'm sure it will be if they cannot come up with a compromised solution which satisfies both parties) then the owners will ultimately lose imo. And if this goes on for a long time, eventually someone will step in and come up with an NBA replacement, particularly if whatever they put together for the short term turns out to be relatively successful.

[Twinkie defense]

After re-reading an early post or two I think we are actually in agreement on the principle, if not the potential end result. The principle: no contracts right now. The end result: the CBA will have to account for a number of variables relating to contracts made under the old CBA. I am 100% sold that there will be some player givebacks on these old contracts. Will the Nets still pay Deron if he twists his ankle in Turkey and they end up having to amputate? Maybe. Maybe not. The bottom line is that is still to be determined... and I think it would be pretty risky for a player to simply assume it will all work out in the end. And if I'm Prokhorov I say let Deron or Besiktas deal with that.

In terms of moneys still to flow to players for last season - there is a portion of player salaries that are set aside in escrow each season, since there is a maximum cap on the percentage of revenue they can receive. So potentially, if revenues end up low compared to total player salaries, that money goes back to teams. But if there is some money in escrow that is still due to the players, I would expect that to get paid out once all of the financials from the recently ended season are finalized.

[Twinkie defense]

I don't think the owners have acted in bad faith or reneged though... the players and the League agreed to a time when the collective bargaining agreement would come to an end, and the end came. They (League + players) could have extended the old CBA, they could have agreed to a new one in advance of the expiration date, or one side *or the other* could have simply stopped business until a new agreement was in place.

They should have gotten a new agreement in place before the old agreement expired, but I'm not surprised they didn't do that, since there was really no compelling reason to get a deal done until there is a threat of the overall revenue pie shrinking. And in fact, a lockout is logically consistent with the owners' stance - they say they can't continue with the old agreement because they're losing too much money. If they then extended the old agreement and started handing out more "bad" salaries, that undermines their position that the old deal was so bad.

[turk3d]

As for the second paragraph, I don't know and so don't really have a response to it at this time. As for the first one, I'd like to add (and I think this point has been emphasized by a number of us and probably can't be emphasized enough) any players playing overseas will HAVE TO be insured or it likely will be a no-go since yes, an injury could serious affect their ability to collect on their remaining deals (if they have one). I

n the case that it's someone who's contract has expired (or even doesn't have one such as a draft pick) I think that they too would be wise to get insurance for themselves but I also think that in their case it would be less expensive (vs trying to get insurance for the remainder of a mult-year contract) and probably a bit easier. But yes, insurance will be essential. That is why if you read any of the articles on this, you'll see that the insurance issue is being brought up and is still being discussed before any deals get finalized. This is all right now in its preliminary stages.