NBA Work Stoppage / Collective Bargaining Thread

[leswizards]

Tweets provided by Hoopalotta in the championship thread:

RT @wondahbap:What kind of concessions do you see both sides making?

LarryCoon Owners ask for an arm & leg, settle for just a leg. Owners are going to win this -- it just depends on how much they get. I don't think it goes as far as a hard cap. If I had to guess, I'd say the revenue split happens after expenses, with new definitions for what counts as BRI and what counts as a pre-split expense.

If the players lose, they are a bunch of morons. If I was the head of the union, I would be developing a strategy to encourage every free agent who can to sign a 1 year deal in Europe the year of the lookout. Those who can't get a 1 year deal, I would be preparing with advertisers like Nike, McDonald's, Coke, etc to sponsor teams for a barn storming tour of the USA with games being played in college arenas and small city arenas without NBA teams. If they followed this strategy, theoretically, they could destroy the owners in a lockout.

[montestewart]

Tweets provided by Hoopalotta in the championship thread:

RT @wondahbap:What kind of concessions do you see both sides making?

LarryCoon Owners ask for an arm & leg, settle for just a leg. Owners are going to win this -- it just depends on how much they get. I don't think it goes as far as a hard cap. If I had to guess, I'd say the revenue split happens after expenses, with new definitions for what counts as BRI and what counts as a pre-split expense.

If the players lose, they are a bunch of morons. If I was the head of the union, I would be developing a strategy to encourage every free agent who can to sign a 1 year deal in Europe the year of the lookout. Those who can't get a 1 year deal, I would be preparing with advertisers like Nike, McDonald's, Coke, etc to sponsor teams for a barn storming tour of the USA with games being played in college arenas and small city arenas without NBA teams. If they followed this strategy, theoretically, they could destroy the owners in a lockout.

The European contracts might work to some small degree. I thought the same thing about barnstorming (I initially wrote branstorming; could be), but only comically. The big names would be big draws from the start, but it would probably take some time (if it ever happened) to gain the broad institutional following that would generate sponsor sales on the level of the NBA. The Miami Heat could tour and play the Washington Generals, but what could the Nets do? The owners are business people, the players are employees. The owners as a group have cash reserves. Some of the owners might even lose less money (or perhaps even somehow earn money) during a lockout. Do players other than Lebron, Wade, Howard, etc. have anything comparable? Players are notoriously bad money managers as a group. What will the do when the money stops?

None of that is to say that smart player leadership can't result in a better deal for the players, but their best deal may still involve significant concessions.

[MJG]

If the players lose, they are a bunch of morons. If I was the head of the union, I would be developing a strategy to encourage every free agent who can to sign a 1 year deal in Europe the year of the lookout. Those who can't get a 1 year deal, I would be preparing with advertisers like Nike, McDonald's, Coke, etc to sponsor teams for a barn storming tour of the USA with games being played in college arenas and small city arenas without NBA teams. If they followed this strategy, theoretically, they could destroy the owners in a lockout.

I'm not sure how that destroys the owners. The players are the ones whose livelihood depends on the NBA, not the owners. They're the ones who lose if they have to uproot themsevles to Europe for significantly less money. The owners might even be happy to take a year off from the expenses of an NBA team, since for many of them, it's an annual loss.

[johnbragg]

The top players would have that leverage. Team Lebron vs Team Kobe or Team Wade vs Team Iverson or Team Melo vs Team Durant 3-on-3 with pretty much anybody filling out the rosters would sell like a Rolling Stones or Madonna tour, in many of the same venues.

Those guys could potentially get as much touring as they would in the NBA if max contracts get cut down.

[FreeBalling]

If the salaries get even more inflated the arenas will not sell out b/c of high ticket prices, concessions sales get inflated to cover costs and in a down economy that's not the best strategy. IMO

[johnbragg]

Freeballin-I'm talking about the top 4-6 players, the guys whose salaries are essentially reduced now by the max contract system. Kobe puts more butts in seats than Pau Gasol, but the CBA economics don't reflect that. The CBA could cut Gasol's pay in half, and Gasol is still better off in the NBA than anywhere else he could be.

Not so for Kobe, Lebron and maybe Wade.

[hands11]

Look. These guys have to realize that the big bucks they get is only the result of the total revenue generating system. In the end, some group of people need to run the business side and take the risks. These players would be smart to be good partners to the group that has a long history of bring in the revenue that pays their multi-million dollar contracts.

There is a lot that is changing out there in the real world. The capitol leverage on top of leverage on top of leverage, musical chairs, kick the can down the road, we don't need to off set tax cuts and we can just pile up depth for our kids to pay back later model, has taken a serious kick in the balls. People are dramatically changing the way they do things. They are learning the lessons that where learned by people like those who went through the great depression.

These teams and this league made a ton of money based on the franchises increasing in value year after year after year and that was happening in a huge economic bubble(s). First it was a wall street bubble and then when that crashed, people just transferred that model to housing, which is way worse because the assets are not liquid. The NBA salary bubble is connected to these other bubbles. People having the money to buy expensive jerseys and expensive seats is based on disposable income. Well, people don't have that extra cash like they used to. People have to actually save some from their income instead of spending it all or in a lot of cases, more than it all. People can no longer just expect that they can buy a house for 250K and five years later it will be worth 500K. That was a fantasy world.

Capitol investments have risk. Signing a player to millions of dollars over many years is a huge risk so the owners need to figure out the best set of rules to operate under that balances risk and reward so they can maximize revenue. That is what is best for the players. Now if another league is willing to offer to pay more money, good for them. I watched this happen a few times with football but those leagues never made it. Apparently, running a profitable league like the NFL isn't as easy as it looks.

Personally, I wouldn't pay a dime to go watch these guys play in a lock out. I side with the owners. I want to see things change for the good of the sport and the league.

[johnbragg]

Personally, I wouldn't pay a dime to go watch these guys play in a lock out. I side with the owners. I want to see things change for the good of the sport and the league.

Maybe that's you, Hands, but I think that Wade, Magloire and Steve Blake vs Melo, Erick Dampier and Jordan Farmar 3 on 3 would sell out FedEx Field.

It's probably not an option now, because the biggest stars are under contract. But I think that the top stars--Kobe, Lebron, Wade, KG, Carmelo Anthony--should have looked into it. They haven't, and so now the top stars will have very little leverage in the CBA negotiations. The All-NBA level players have very little recourse if the hundreds of NBA scrubs decide to accept a deal that is much harsher on the top of the payscale than the bottom. Amare Stoudamire can't really say anything if suddenly he's making $8M instead of $18M a year. Lebron, Kobe, Wade, Howard could be in the position Jordan, Magin and Bird were in for much of their career, where they were contributing far more value to the league than they were getting in salary.

[nate33]

The owners have all the leverage. They could field a league without any of the 400 players who are currently on rosters and fans would still come to see "their team" play.

NBA players should be happy that they're being paid millions of dollars with no risk to play a frickin game. There are very few fields of endeavor where the 20th best (or so) in the world can get paid 9 figures without fear of financial risk. The best rocket scientists don't make $100M. The best doctors don't make $100M. The only people that make $100M are athletes, hollywood entertainers and capitalists who have skin in the game.

(Another member of the $100M club are the elites within the finance industry who effectively exploit the Fed's monopoly on the printing press to steal money from the citizens.)

[johnbragg]

Of course the NBA would still continue without Kobe, Lebron, Carmelo and D-Wade. Denver and Miami would take a hit, but everyone else would carry on like not much had happened. But I still say that if you took the top 4 or 5 players out of the league, and put them in a competing venture, that The Venture would pay the top 4 or 5 as much or more than they are making now, if handled properly. Everyone else, from Amare and Joe Johnson down to the 15th man, can't say the same.

Which means that the top 4-5 players have a negotiating interest at odds with the other 450 members of the NBAPA.

[montestewart]

Of course the NBA would still continue without Kobe, Lebron, Carmelo and D-Wade. Denver and Miami would take a hit, but everyone else would carry on like not much had happened. But I still say that if you took the top 4 or 5 players out of the league, and put them in a competing venture, that The Venture would pay the top 4 or 5 as much or more than they are making now, if handled properly. Everyone else, from Amare and Joe Johnson down to the 15th man, can't say the same.

Which means that the top 4-5 players have a negotiating interest at odds with the other 450 members of the NBAPA.

If these players were part of a separate barnstorming/exhibitions showcase disconnected from a competitive league like the NBA (one in which there's at least some chance that they might lose), do you think they would have the same marketing opportunities? Wade, Kobe, and Lebron all likely make more money off the court. Does the NBA vehicle give their "brands" a lot of free advertising?

[BanndNDC]

I don't know. I kind of see the owner's position as being very strong. the economy is in the tank. it is not going to recover soon. more than likely we are in for a period of long slow adjustment. salaries are quite high. ticket prices are high. there is a new economic long term reality, things need to change.

on the other hand, arbitrary and unilateral adjustment of previously agreed to contracts is demanding way too much (and will lead to lawsuits, regardless of whether the union agrees to it). and is a stereotypically abuse of bargaining power. hopefully it's all just a bunch of pre-negotiation posturing but right now it looks like that neither side is going to be reasonable and a work stoppage will occur. i hope both sides realize the extreme risk they are taking.

[sashae]

If those 5 players were not part of a competitive league landscape that had enormous corporate dollars backing them, they'd be part of the And1 Tour -- yes there'd be more money associated with it, but not the same level of league dollars, etc, because the level of competition they're facing doesn't deserve that sort of money.

As alluded to before, a lot of folks do root for the laundry, not just the players -- if Kobe is playing for the Mountain Dew Allstars vs Wade on the Mentos Freshmakers people aren't exactly going to be clamoring for jersies.

The economics of the game are broken, and need to get fixed. It's going to be a total and utter shame to see a lockout, but if it fixes the longterm health of the game (and allows people to attend games for less than the stupid sums of money required to get in now) all the better.

[johnbragg]

As for adjustment of contracts, the NHL did it after their lockout. The NBA did it two CBA's ago, reducing every player's salary by 10% (escrow money) if league salaries were too high. I didn't think that that was legal, but they did it. Apparently if the union signs off on it, it's legal.

So I expect that the next CBA will reduce players salaries, possibly taking the same % off of everybody or possibly having a "graduated income tax" like the IRS does, where a $1M player gives back 10%, a $5M player gives back 20% and a $20M player gives back 50%.

If one megastar went on a barnstorming tour, it would fail. But as long as Wade and Lebron were colluding, they should have colluded with Kobe to be free agents in 2011, so that they had some leverage against the NBA and the NBAPA. Team Kobe vs Team Wade is automatically competitive no matter who else you put on the floor with them.

There would not be as much money as there is in the NBA system, but there would also be fewer people taking a piece of the pie. No owners, no $8M backup centers, no scouting departments, etc.

It's all academic now, since the stars are under contract. The lockout could end at any time, so no one would commit financing for these games that might have to be cancelled if the CBA gets negotiated.

[montestewart]

I agree that players like Kobe, Wade, etc. are worth more than the max in their primes, based on what they actually give to their teams, but in most cases, they also bring that to branding and marketing, and more than make up for it in selling themselves as a product. Even taking a larger cut in exhibition series, I wonder if the disconnect from a broader competitive circuit would undermine their other business ventures (maybe they even have endorsement deals that forbid such endeavors). Since Duncan is perceived as bland and doesn't seem to get many big endorsement deals, he probably suffered more than other superstars from the max cap. But he's still rich by my standards.

[hands11]

I don't know. I kind of see the owner's position as being very strong. the economy is in the tank. it is not going to recover soon. more than likely we are in for a period of long slow adjustment. salaries are quite high. ticket prices are high. there is a new economic long term reality, things need to change.

on the other hand, arbitrary and unilateral adjustment of previously agreed to contracts is demanding way too much (and will lead to lawsuits, regardless of whether the union agrees to it). and is a stereotypically abuse of bargaining power. hopefully it's all just a bunch of pre-negotiation posturing but right now it looks like that neither side is going to be reasonable and a work stoppage will occur. i hope both sides realize the extreme risk they are taking.

They will not be able to break contacts but they can decide how they are calculated against the cap and the tax. On the books and off the books accounting. That is something they can change.

[hands11]

Personally, I wouldn't pay a dime to go watch these guys play in a lock out. I side with the owners. I want to see things change for the good of the sport and the league.

Maybe that's you, Hands, but I think that Wade, Magloire and Steve Blake vs Melo, Erick Dampier and Jordan Farmar 3 on 3 would sell out FedEx Field.

It's probably not an option now, because the biggest stars are under contract. But I think that the top stars--Kobe, Lebron, Wade, KG, Carmelo Anthony--should have looked into it. They haven't, and so now the top stars will have very little leverage in the CBA negotiations. The All-NBA level players have very little recourse if the hundreds of NBA scrubs decide to accept a deal that is much harsher on the top of the payscale than the bottom. Amare Stoudamire can't really say anything if suddenly he's making $8M instead of $18M a year. Lebron, Kobe, Wade, Howard could be in the position Jordan, Magin and Bird were in for much of their career, where they were contributing far more value to the league than they were getting in salary.

Did you mean to put that in green because that is kind of funny. If that is all it would take to sell out the Booth, they would be doing it.

[johnbragg]

Hands11 wrote:
Personally, I wouldn't pay a dime to go watch these guys play in a lock out. I side with the owners. I want to see things change for the good of the sport and the league.


Johnbragg wrote:
Maybe that's you, Hands, but I think that Wade, Magloire and Steve Blake vs Melo, Erick Dampier and Jordan Farmar 3 on 3 would sell out FedEx Field.

It's probably not an option now, because the biggest stars are under contract. But I think that the top stars--Kobe, Lebron, Wade, KG, Carmelo Anthony--should have looked into it. They haven't, and so now the top stars will have very little leverage in the CBA negotiations. The All-NBA level players have very little recourse if the hundreds of NBA scrubs decide to accept a deal that is much harsher on the top of the payscale than the bottom. Amare Stoudamire can't really say anything if suddenly he's making $8M instead of $18M a year. Lebron, Kobe, Wade, Howard could be in the position Jordan, Magin and Bird were in for much of their career, where they were contributing far more value to the league than they were getting in salary.


Hands11 wrote:
Did you mean to put that in green because that is kind of funny. If that is all it would take to sell out the Booth, they would be doing it.

Which part? Do you really not think that Iverson and 2 scrubs vs Lebron and 2 scrubs, one time in Washington, would not sell out Fedex Field? And I didn't stutter, I know the difference between Fedex and the Phone Booth. They would do it if they could, but they can't, legally. Kobe can't play basketball for money for anybody but the Lakers. Dan Snyder can't run a $100,000,000 one-on-one tournament with NBA players without going through the NBA, it would break all kinds of contract rules. (He could run a tournament like that, but only free agents could participate. Which is why Kobe, Lebron and Wade should have seriously considered being free agents during the lockout--so they could legally explore creating non-NBA big money hoops options.)

OR do you think that this is still an option? Because even I don't.

Or do you think that Lebron and Kobe will have leverage in the lockout?

Or do you think that Kobe, Lebron and Wade are creating less value for the league than their salaries?

By the way, I agree that the salary structure of the league needs to change. The league has been giving Kobe money to the Pau Gasols, and it's out of hand. That doesn't mean that the new system will be fair to the biggest stars.

[REDardWIZskin]

I think that I would have to side with the playerss, they are already paying significantly less money now than they were paying in the 90's when it seemed like almost EVERYONE even guys like our own Juan Howard was making 100 mill or close to it. back then a max contract was exorbitantly more than it is now. I think they just want to have more freedom to get out of contracts and/or keep more money for themselves.
These NBA franchises are like fortune 500 companies it is only common sense for them to try and maximize profit yields while doing as little as they can to keep it that way. Let's face it most's owners now days don't even have interest in winning i.e. Clippers.
The soap opera fan fare surrounding basketball as well as the increased international competition has made the sport as popular as it has ever been.
There areas of business in the economy that are struggling during the economy but this is not a major one of them. even if people stopped buying tix completely there are still the multimillion dollar contracts from everyone watching on TV networks.
If there is another restructuring of the contracts then ALL ticket prices and merchandise should be cut by at least 30% otherwise I just see it as a way for the owners to keep more in their own pockets.

Lets not forget who makes the real money here. The players are rich but the owners are wealthy.

That being said i don't think a lockout will actually occur there is too much money to be made. But then again probably what people were thinking during the shortened season in 97.
Would be a sad day for me for sure

[verbal8]

I think the problem with the salary structure is the amount of below average players who on long-term deals with average to above average salaries. I think the problem got even worse this summer. I think there does need to be slightly less money going to the players overall.

Hopefully the owners realize that the damage to the league and team values would outweigh the benefits of locking out players. I think the NHL blew an opportunity to expand their popularity with the last labor issue. I think the NBA is gaining momentum as a global league and I think that could be affected by a protracted labor dispute. Maybe part of the answer is to slightly tweak the distribution of the current revenue streams(tickets and TV rights), but shift more of future streams to the owners.