Owners Hinting At Their Position for next CBA Negotiations

[Mezotarkus]

http://www.realgm.com/src_wiretap_archi ... _salaries/

The following proposals may not survive the negotiation process but are sorely needed in my opinion. Enough of the Jerome James, Larry Hughes, Kenyon Martins, desagana diops, Stephon Marburys, Steve Francis, Chris Webbers, Eddie Jones, Raef Lafrentz, Allan Houstons, and other ridiculously overpaid players.

One GM told ESPN that the owners are looking to shorten the maximum length of a contract to four or five years. He added that they have actually discussed trying to guarantee only the first two years of a four-year deal, and that the third and fourth years would be guaranteed only if a player reached certain performance-based incentives the previous season.

“Those concepts are being discussed,’’ another GM told ESPN. “Is there a sentiment among some [owners] that they’d like to have it like football? Yeah. But I think that’s out of bounds.’’

Billy Hunter, who heads the players association, is unlikely to go willingly with these salary reductions.

“There’s going to be a lockout,’’ the owner said. “There’s not even a doubt in my mind about that. Billy’s not going to make a deal like that. Teams are already saving up money for a strike.’’

[FGump]

THIS IS NOTHING NEW ...very ordinary opening salvos in the war of words leading up to negotiations

Players' Typical Starting Position: owners are getting way too rich, they should pay us tens of millions apiece, and if in their exuberance they get in a bidding war for someone like Lebron and offer him a lifetime contract at 100 mill per year and bankrupt their franchise, it should be allowed because the players make the game attractive

Owners' Typical Starting Position: players are getting paid way too much, their salaries should be "more reasonable," and we should own their rights for 10 years if we want but only be obligated to pay them for a year at a time, because without the owners there is no game

The Next CBA: somewhere in the middle, like always

[Mezotarkus]

FGump, yes we understand negotiation 101 (its sort of like legalese 101). But thanks for erecting a strawman to knock down. ESPN obviously needs to go back to journalism school before they post another one of these superfluous news items right?

[Three34]

Legalese? Isn't that when two girls fancies each other?

[Friend_Of_Haley]

I think the idea with having the first few years of a contract guaranteed is a good idea, although I'd make if 3/5, not 2/4. Its a decent compromise. There should be some type of cap hit though for cutting a guy with a non guaranteed year. My suggestion would be remaining contract value times years remaining divided by original contract length.

I don't really the idea of incentives creating non guaranteed years to turn guaranteed just because how would you determine what standards to use? A coach could keep a guy out of the game or keep the offense designed to not get him the needed incentives. I think a better solution is to allow early contract extensions. As long as the contract extensions don't extend past 3 guaranteed years and 5 years total, it doesn't effect much really. Hate hate hate the incentive idea though.

[FGump]

Mezotarkus, quit trying to puff yourself up as some sort of legal expert every time you post. You've demonstrated your propensity to "play a lawyer on the internet" and we get it. If you feel you have some insight to contribute, bring it. If not, give it a rest. Kids.

As to the article, my point was not to question the journalism but rather to offer my view on what weight to give these "grain of salt" words. If you agree, then if you don't want me to frame the context for everyone next time, it might behoove you to add that commentary when you post the nonsense being reported. If you take the words as somehow indicative of anything rather than just wild pre-negotiation spewing, feel free to share with us why you think this is something to be taken seriously.

[Dunkenstein]

We all know that both sides posture at the beginning of a negotiation. And that the final agreement ends up "somewhere in the middle". So an article like this is interesting to me because it's showing me for the first time what the league's opening position might be.

This is the first CBA negotiation that I can remember that the posturing has started this far in advance of the end of the current CBA. This is also the first time I can remember where the owners are not only losing money on an annual basis, but also dealing with falling equity values of their teams.

I spoke to a highly placed person on an NBA team last week, and he said the team is firmly expecting there to be a lockout. No one in the league is expecting this negotiation to be any where near as smooth as 2005.

[FGump]

Dunk, I know as this is reported, it sounds like "where the league will start from." But is it?

I have a real hard time believing what was said here will be an actual starting position, as it seems beyond the extreme. (IOW is this just an owner or GM proverbially throwing crap against the wall to see what sticks?) On the other end, I'm also hearing - but not quite believing - that league revenues aren't down very much (I don't get to monitor payroll, but I can observe empty seats). It all doesn't really seem to add up.

What does it look like from your vantage point? Do you think franchise values are truly falling beyond the normal ups and downs of economic cycles? I see Tom Hicks getting the Texas Rangers sold for reportedly more than $500M for a Rangers' franchise that has never been a winner ... and a year ago his aim to get better than 400M was widely regarded as pipe-dreaming.

PS - I'm not one who thinks year-to-year losses are irrelevant as long as "franchises are gaining value" - because I'm well aware persistent annual losses will ultimately cause franchises to lose value.

[Mezotarkus]

Legalese? Isn't that when two girls fancies each other?

lol nice one

[Mezotarkus]

NBA teams' operating costs rose from $3.280 billion in 2006-07 to $3.553 billion in 2008-09. Of the $273 million in increased costs, $213 million comes from higher player salaries. Salaries are rising at ~5-6% per year while revenues are growing at a lower rate. Salaries as a percentage of total league were 54% in 2007 and were 57% last season. The system is supposed to operate at an equilibrium but the current system of long-term guaranteed contacts has made the owners held hostage by needing to spend to preserve revenue base while carrying contract detritus from ill-fated decisions of their own and others. The owners are going to come out guns ablazing given the economy and the leagues ticket pricing review process putting downward pressure on their revenue streams also. The ESPN story might reflect one owner's view but don't be surprised if many owners share his or her view.

[FGump]

"contract detritus" .... That's a good term and it would be at the core of the negotiations ...but to some degree, isn't it always? Its existence doesn't change anything - in essence that money is still "player pay," it's paying those who aren't producing, but at the same time, the whole system is built to underpay those who do produce. If you are an owner in a collective bargaining situation, it's going to be a fantasy to build a system that ensures everyone is underpaid.

So the real issue is to find the right balance that allows for (a) fluctuations in production, (b) fluctuations in value, and (c) ensuring that while some end up being overpaid and others underpaid, the players as a whole still get an equitable share of the pie when all is said and done. Then, within all that, there has to be a way to consider how to keep franchise stability (ie roster stability) to a degree, to foster fan bases and their ability to identify with players as a means of growing that revenue for all. It's a tricky juggling act.

[Dunkenstein]

Do you think franchise values are truly falling beyond the normal ups and downs of economic cycles?

Yes I do. But then again the value of just about everything in this country is falling beyond the normal ups and downs of economic cycles.

For the first time in my memory Forbes valuations of most NBA teams went down this year. In the past, valuations never went down, even during down economic cycles.

There are several teams up for sale, but their owners can't get near what they think their teams are worth, or what they could have gotten for them two or three years ago. Bob Johnson is publicly trying to sell the Bobcats, and Chris Cohan is quietly trying to rid himself of the Warriors. Neither has received an offer they're even willing to consider. And Michael Heisley has given up trying to sell the Grizzlies because of the horrible long-term arena lease he has on top of mediocre gate receipts.

Ted Leonsis has ROFR to buy the Wizards from the Pollin family, but the two sides apparently aren't close to agreeing on a price.

In the past I've believed that owners could withstand some operating losses, because they were more than made up for by gains in equity values. But with losses in equity values, we're seeing teams firing assistant coaches, half their scouting departments. They're looking at any way to reduce their operating costs. That's why I think they are more serious than ever before that players' costs have to be contained, and are starting early in sending that message to the players.

And I think that the owners are starting to indicate that they're looking at doing more than what they have done in the past several agreements: reduce raises by a couple of percentage points, shorten maximum contract lengths by a year, etc. I think they're going to tackle what they perceive as the most onerous aspect of their current salary structure: long, high-paying guaranteed contracts of non- or under-performing players. I'm beginning to believe that the major battle in the upcoming negotiations will be over guaranteed contracts--a topic that has never before been tackled in an NBA collective bargaining negotiation.

[killbuckner]

I think they definitely should make it legal for teams to offer players contracts where only the first 2 seasons are guaranteed but that future seasons would only be guaranteed if performance incentives are met. Of course this is already legal- its just that when another team offers 3 guaranteed years then the 2 year guaranteed contract is never accepted. I just don't get the belief that teams should be limited in the duration of they contract that they VOLUNTARILY give someone. If teams don't want to give players 5 year guaranteed contracts then stop giving players 5 year guaranteed contracts.

[Mezotarkus]

I think they definitely should make it legal for teams to offer players contracts where only the first 2 seasons are guaranteed but that future seasons would only be guaranteed if performance incentives are met. Of course this is already legal- its just that when another team offers 3 guaranteed years then the 2 year guaranteed contract is never accepted. I just don't get the belief that teams should be limited in the duration of they contract that they VOLUNTARILY give someone. If teams don't want to give players 5 year guaranteed contracts then stop giving players 5 year guaranteed contracts.

Agreed though the only way this can work is if the league sets the performance measures. Otherwise, owners, in the heat of competing for free agents, will set low ball performance measures such that years 3+ are effectively guaranteed.

[radrmd216]

Like people have said the long term guaranteed contracts with built in raises are ruining the league. A hard cap could work but there might not be multiple championships winners anymore. The NBA is different from basketball in that one player can have such much impact on a basketball game. The NFL wasn't supposed to have multiple championship winners, but the Patriots have won a few and the a team like the Colts have been good for a very long time, so maybe there could be great basketball in the NBA.

I hate the idea of incentives though, since so many factors can influence the ability to reach incentives. I would keep the rookie scale with the last two years of the contact being like baseball with the use of an arbitrator. I think also an arbitrator should be used if an all-star type player is in the 3rd year of his contract and thinks he is underpaid or a team thinks the player is overpaid.

The owners and players should have a say in the latter years of a contract if they feel the contract is overpaying them or the player is not earning his contract. I don't think the there should be a hard cap since that would probably eliminate bird rights. I think shorter contracts for less money would work without having to resort to a hard cap. Also part of team's revenue should go to things like the D-league.

[Mezotarkus]

Looks like the owners are rattling their sabers for a hard cap.

http://www.realgm.com/src_wiretap_archi ... _2011_cba/

[see4miles]

Wow. This guy tells it like it is.

The NBA is so tainted by the ref scandal, the ongoing ref (non) calls and the Raheed Wallaces (and I like Sheed as a player) but the next TV negotiations ain't gonna be pretty.

I think Stern has no choice but to go apocalyptic or his owners will all be losing money soon enough.

http://msn.foxsports.com/nfl/story/talk ... re-madness

[DFO]

Just a few simple questions for y'all. How many actual NBA games do you pay to go see live and in person? If ticket prices were more reasonable would you see more games? Do you find yourself priced out of the market?

In a perfect world ticket prices would be slashed by 40%, player salaries by 50% and I guarantee there would be A LOT more demand for tickets. We have all seen the empty lower bowls in Miami and Memphis and a lot of other cities.

[Mezotarkus]

http://www.realgm.com/src_wiretap_archi ... sociation/

From CBS

NBA owners have sent an initial proposal to the NBA Players Association and they are pushing for a "hard" salary cap, CBS Sports has learned.

In addition, owners are requesting a drastic reduction in player salaries.

The proposal was sent to the union earlier this week and seeks a reduction in the players' share of basketball-related income from 57 percent to well below 50 percent, according to a report.

Owners also are seeking some aspects of a hard cap -- a departure from the current luxury-tax system -- and a reduction in the length and amount of max contracts.

According to Ken Berger of CBS Sports, the two sides will meet during All-Star weekend for their first face-to-face bargaining session as they try to reach an agreement before the current deal expires in 2011.

[Mezotarkus]

Players initial response to owner's alleged offer? "Ludicrous"

http://sports.espn.go.com/nba/news/story?id=4895310

"I think it's a proposal that's far-reaching," said Foyle, the union's second-in-command behind president Derek Fisher. "This [new proposal] has gone too far. It wants a hard cap, it basically will create no middle class, and which, in effect, means none of the Bird rules would apply," Foyle said, referencing the so-called Larry Bird exception that allows teams to exceed the salary cap to retain their own free agents.