Official CBA/Labour Talks Discussion Thread II

[Reignman]

If the NBA formed today and the initial proposal was 50/50 nobody would arguing for any other side.

The problem is that many fans and the players don't realize that this CBA negotiation has nothing to do with the previous one, that one EXPIRED in July.

This is a new deal being made from scratch based on the current economic climate and the profitability of the league.

This isn't like a non-unionized worker going in for his annual review expecting a raise. This is the downside of being in a union, your contract actually ends and you have to negotiate a new one.
Players should know this isn't like buying weed from your local dealer where you can scream "less than last".

[Reignman]

That really depends on what the final deal looks like. Missing even profitable games today in favor of a much more profitable CBA for the next 15 years could be considered an investment. I think most of this is about owners grabbing as much as they can before implementing revenue sharing. And ultimately if they are playing a brinksmanship game with players there was never going to be an agreement until some game checks got missed. To be sure that they got the best deal they could at this CBA expiration, they needed to test and break player resolve. I agree with Hunter when he says this has all been scripted.

Actually, the owners would lose much more than just the money from lost games. By losing a season they would be sacrificing an entire segment of viewers for a longtime or potentially ever. Taking a risk like that takes a lot of motivation.

[Sleepy51]

That really depends on what the final deal looks like. Missing even profitable games today in favor of a much more profitable CBA for the next 15 years could be considered an investment. I think most of this is about owners grabbing as much as they can before implementing revenue sharing. And ultimately if they are playing a brinksmanship game with players there was never going to be an agreement until some game checks got missed. To be sure that they got the best deal they could at this CBA expiration, they needed to test and break player resolve. I agree with Hunter when he says this has all been scripted.

Actually, the owners would lose much more than just the money from lost games. By losing a season they would be sacrificing an entire segment of viewers for a longtime or potentially ever. Taking a risk like that takes a lot of motivation.

Having the upper hand in the next 15 years CBA is a pretty big motivation.

I think Stern and the owners count on the built in resentment that a lot of fans hold towards player wealth (and inexplicably not towards TARP babies like Robert Sarver's wealth.) I think the league takes it for granted that fans will return whenever there are playoffs to watch. And I'd bet they are right. The NBA just came off of it's highest rated season ever, there are superstars in all 5 of the largest television markets and compelling storylines to draw casual national fan interest. They may be taking a risk, and certainly missing a full season exacerbates that risk and maybe would even change some of my perspective on their economic motivations, but missing half a season? Very few people in any market with a half decent NFL or NCAA football team cares about NBA games for that part of the season anyway.?

[BorisDK1]

Did you get caught up on the 05 and 06 financials yet?

I'd like to not assume anything based on your lack of a response.

The issue is whether payroll amortization is at the heart of the NBA's presentation of its losses as presented to the NBPA. The league has insisted that only depreciation of capital expenditures has been included in those statements of loss (player salary is not, of course, a capital expenditure). Pretty tough to argue that those shouldn't be considered, if we're considering net losses.

[lucky777s]

Accounting debates are really not much fun.

I would like to look past what item gets put on what line of a financial statement or tax return.

I recall reading that the league, the nba itself, had gotten an increase to a very large line of credit this past year in order to specifically help franchises that were 'losing money' and that many teams had taken advantage of this credit.

Would the other owners really allow the league to finance 'fake' losses that, presumably, greedy owners would be using as cheap leverage for other business? That doesn't make sense to me. The nba is not set up to be a financing arm for owner's private interests. If that owner went under wouldn't the other owners still be on the hook for the LOC?

To me this is a hard figure that must somehow tie into legitimate losses or the fund would never have been set up by the league.

[Reignman]

That really depends on what the final deal looks like. Missing even profitable games today in favor of a much more profitable CBA for the next 15 years could be considered an investment. I think most of this is about owners grabbing as much as they can before implementing revenue sharing. And ultimately if they are playing a brinksmanship game with players there was never going to be an agreement until some game checks got missed. To be sure that they got the best deal they could at this CBA expiration, they needed to test and break player resolve. I agree with Hunter when he says this has all been scripted.

Actually, the owners would lose much more than just the money from lost games. By losing a season they would be sacrificing an entire segment of viewers for a longtime or potentially ever. Taking a risk like that takes a lot of motivation.

Having the upper hand in the next 15 years CBA is a pretty big motivation.

I think Stern and the owners count on the built in resentment that a lot of fans hold towards player wealth (and inexplicably not towards TARP babies like Robert Sarver's wealth.) I think the league takes it for granted that fans will return whenever their are playoffs. The NBA just came off of it's highest rated season ever, there are superstars in all 5 of the largest television markets and compelling storylines to draw casual national fan interest. They may be taking a risk, and certainly missing a full season exacerbates that risk and maybe would even change some of my perspective on their economic motivations, but missing half a season? Very few people in any market with a half decent NFL or NCAA football team cares about NBA games for that part of the season anyway.?

I don't think the owners are wanting to go the for the kill at the expense of losing a segment of their audience. I just think they want a CBA that is friendlier to them. The last 2 CBAs were EXTREMELY player-friendly. I mean, think about it like this, in the early 90s Michael Jordan was making 3 mil per year during his first 3 championships. Today, a guy like Mo Pete makes "only" 3 mil per year.

The owners want to ensure that the majority of teams remain profitable and they want enough of a cushion so that small market teams do not have rely on revenue sharing to remain viable.

Put it this way, if the league really prospers then the pendulum will swing in the players favour (again) and they will fight for a more player-friendly deal. It's the way the world turns.

[floppymoose]

The statement of Mr. Hunter is said to have occured during the All-Star break, some 4 months prior.

I had understood you to be claiming the union had never cast doubt on the league conclusions being drawn from the financial data. My response was a refutation of that claim. If that wasn't what you meant, then never mind.

[lucky777s]

To address the 'player amortization' issue I would just say one thing.

If the union saw the books and it was as clear as so many internet posters seem to think it is that phantom losses make up much of the 300 mill claimed by owners then I do not believe for one second the union would have given up so quickly and easily on their 57%BRI. They would likely never have moved below 55% if the bulk of losses were not legit.

[floppymoose]

If the union saw the books and it was as clear as so many internet posters seem to think it is that phantom losses make up much of the 300 mill claimed by owners then I do not believe for one second the union would have given up so quickly and easily on their 57%BRI. They would likely never have moved below 55% if the bulk of losses were not legit.

And you believe that... why? If the players know the owners are willing to miss games and deny them paychecks, does it matter if it's for a good reason or a bad one? Either way the players might decide it's in their interest to give some incentive to the owners not to "go nuclear".

For what it's worth, I think the players buy some, but not all, of the owners heartbreaking story of financial angst. In which case, by your reasoning, they should offer to reduce their share some, but not all, of the amount the owners want. Ya?

[Sleepy51]

The last 2 CBAs were EXTREMELY player-friendly. I mean, think about it like this, in the early 90s Michael Jordan was making 3 mil per year during his first 3 championships. Today, a guy like Mo Pete makes "only" 3 mil per year.

I will not disagree with you here one bit. I was dragged into this thread to talk about the owners numbers, but big picture, I agree that too many players are overpaid. I not only want mediocre player salaries to come down, I want player jobs to disappear through contraction.

The owners want to ensure that the majority of teams remain profitable and they want enough of a cushion so that small market teams do not have rely on revenue sharing to remain viable.

This is where I disagree. I think they want a CBA where pretty much every team would make a profit no matter how inept the nincompoop is running it BEFORE Revenue sharing. I think they want to be able to market NBA franchises as "idiot proof" investments.

As as a fan of an organization that has long suffered under a profitable and incompetent owner I know exactly the danger that holds for NBA fans.

I want player salaries to come down through the exercise of restraint, good judgement and responsible risk assessment by owners. I like the Dwade approach. Screw a CBA. Pay the best players what they are really worth, pay run of the mill players what they are really worth and let the winning and losing sort our profitability by courting fans with success.

I'm never going to get what I want though. SO in this sports universe, I at least would like owners to be under SOME financial pressures to make good decisions. If the CBA solves all of the business questions for them with a low BRI % and revenue sharing, some of them they will never learn to make better basketball decisions. I believe in competition. And if you remove the pressures of financial competition from ownership and management you will get worse ownership and management over time. Moral Hazard.

Some of these guys NEED to fail.

[lucky777s]

And you believe that... why? If the players know the owners are willing to miss games and deny them paychecks, does it matter if it's for a good reason or a bad one? Either way the players might decide it's in their interest to give some incentive to the owners not to "go nuclear".

For what it's worth, I think the players buy some, but not all, of the owners heartbreaking story of financial angst. In which case, by your reasoning, they should offer to reduce their share some, but not all, of the amount the owners want. Ya?

I absolutely believe it because the players WON the last bargaining agreement big time. Why would they be so quick to give up so much of the BRI now if they did not believe there were legit losses. Makes no sense. They lost paychecks last time to get that deal. If your logic were correct they never would have gotten that deal last time for fear of losing cheques.

[Sleepy51]

Did you get caught up on the 05 and 06 financials yet?

I'd like to not assume anything based on your lack of a response.

The issue is whether payroll amortization is at the heart of the NBA's presentation of its losses as presented to the NBPA. The league has insisted that only depreciation of capital expenditures has been included in those statements of loss (player salary is not, of course, a capital expenditure). Pretty tough to argue that those shouldn't be considered, if we're considering net losses.

So you have not reviewed the 05 & 06 financial statements or did you just not understand them?

[knickerbocker2k2]

There's a lot wrong with this paragraph. First, how do you come to the conclusion the owners are not negotiating in good faith? They've stated their stance from the beginning and are working towards that goal. In fact, Hunter has stated publicly that Stern notified him 2-3 years ago about what was going to happen. If anything the players should've expected this to happen.

Exactly my point. They have being making noise about willing to cancel the whole season. They started with draconian position of 46%, hard salary cap, and all these extreme positions everyone knew was not going to be reality. They only got off their starting position in the 11th hour. The players were essentially negotiating with themselves because they were willing to climb down from 57% to 53%. They have also made concessions in regards to length of contracts, and other changes to the structure of the league. Essentially they have given back the $300M they say they have lost in the past season. Yet according the latest reports owners are giving take-it-or-leave-it ultimatum of 50/50 split.

Also, in ANY CBA negotiation, making the other side "feel pain" is always the way you win. The first side to flinch is usually the first to lose. In this negotiation the owners have clearly been prepared to dust the entire season to get what they want. The players are not prepared for that. Maybe the top 10% of players but not the other 90%.

This is my whole point. I take good faith to mean both sides trying to resolve issues by getting to both of their best offers early on (so we don't miss any games). The owners view in negotiations is hold off their best offer b/c they can get a better one once the players start missing checks. So essentially the current offer is good, but hey they get better one once the player start missing checks. So you won't see owners best offer until we miss lots of games. This is why I think currently only the players are serious and you wont see the owners negotiating until we are pretty much at the last possible moment to save the season.

[BorisDK1]

I had understood you to be claiming the union had never cast doubt on the league conclusions being drawn from the financial data. My response was a refutation of that claim. If that wasn't what you meant, then never mind.

No, I was just saying that subsequent to what Mrs. Sawdye said somewhere around June 30, the NBPA has not attempted to refute what she said.

[BorisDK1]

So you have not reviewed the 05 & 06 financial statements or did you just not understand them?

Not in detail yet, no. I'm at work. I'm busy, can't do it now. I've already hashed this out once with Fairview, anyway.

[lucky777s]

I take 'good faith' to mean making an honest effort to get a deal done.

If the owners truly believe the need 50% BRI to have a healthy, growing league then I do not think they need to offer any more than that to players to be acting in 'good faith'.

It makes no sense for owners to offer a figure they think will compromise the stability of half the franchises in the league. Contraction hurts the union and players most of all.

I have also never heard anyone mention how the most valuable teams, like NY, could ever be properly compensated for the loss in their franchise value if a true revenue sharing (including local tv money) ever came to be.

[floppymoose]

I absolutely believe it because the players WON the last bargaining agreement big time. Why would they be so quick to give up so much of the BRI now if they did not believe there were legit losses. Makes no sense. They lost paychecks last time to get that deal. If your logic were correct they never would have gotten that deal last time for fear of losing cheques.

You seem to think you are arguing against something I said, but I can't find it.

The amount of BRI they have offered to give back is less than the $300 million the owners say they lost last season. So by your reasoning, the players must think the owners are losing some money, but less than $300 million.

[floppymoose]

I have also never heard anyone mention how the most valuable teams, like NY, could ever be properly compensated for the loss in their franchise value if a true revenue sharing (including local tv money) ever came to be.

The compensation comes from having games to play against those teams that would otherwise be contracted.

You compare the revenue both ways, and decide where the right balance point is on number of teams to have, how many can be in weaker markets, and how much revenue to share. It's very possible for the most profitable answer for the league to be that strong market teams should subsidize weak market teams more than they do now.

[Sleepy51]

So you have not reviewed the 05 & 06 financial statements or did you just not understand them?

Not in detail yet, no. I'm at work. I'm busy, can't do it now. I've already hashed this out once with Fairview, anyway.

Must have been some bad hash, because you were talking down to me thinking that the 2004 statement was the only data in the conversation. Your information was incorrect.

[BorisDK1]

Must have been some bad hash, because you were talking down to me thinking that the 2004 statement was the only data in the conversation. Your information was incorrect.

As I informed you, I'm at work and kind of swamped. I've had a very disjointed (and one-sided) conversation with Fairview on that very data before. I note that you couldn't be bothered to go back and look. (If you can accuse me of laziness, the opposite is certainly up for discussion.)

I've reviewed the 2005-6 Nets' financials. Any chance you looked at their Statement of Cash Flows, where they hemorrhaged ~ $27 million in FY 2005 and $40 million in FY 2006 in cash?