Official CBA/Labour Talks Discussion Thread

[gdroz]

I'm keeping my eye on all this stuff, and hope we get a season, but the NBA and it's Player's Union will get zero interest from me until they start playing again.

NHL sucked me in during last lockout, won't happen again.

+1

[7-Day Dray]

It is obvious here that most who support the union (players) never had a business, or understand how hard is to maintain a successful business (aka business acumen).

I've managed a business. Before being purchased by my family, it was owned by an idiot who almost ran it into the ground, in large part because he felt that as a business owner, he was entitled to make a lot of money...he paid himself a large salary, and leveraged the business to finance things like the expansion of his home or purchasing company vehicles for his own use. The market conditions were comically favourable (it was the only large company in the market, such that it was virtually impossible for him to alienate his clientele sufficiently that they'd go elsewhere), but he almost drove it into bankruptcy through his arrogance. If when it was on the verge of collapse, he'd demanded concessions from his employees to maintain the way of life to which he was accustomed rather than selling it to someone more competent, the cycle would've continued...he'd have seen it as an opportunity to paid himself ever more and more, until the business inevitably went under.

Right now, the NBA owners are asking the players for massive concessions because they've managed to **** up despite an ever-growing pie...they've placed teams in markets that cannot support them, they've used the teams as leverage for loans, they've bought on debt. And now they're stating that they are losing money, not because they have been undone by conditions, but because they have failed.

And if they won the massive concessions that they initially wanted, it would signal one thing to them: they have a get-out-of-jail-free card for the next time their arrogance gets the best out of them. That's not "running a successful business"; that's being lucky enough to own a franchise in a sport shielded from anti-trust law, where no amount of incompetence can take away their inalienable right to turn a buck.

[J-Roc]

It is obvious here that most who support the union (players) never had a business, or understand how hard is to maintain a successful business (aka business acumen).

I've managed a business. Before being purchased by my family, it was owned by an idiot who almost ran it into the ground, in large part because he felt that as a business owner, he was entitled to make a lot of money...he paid himself a large salary, and leveraged the business to finance things like the expansion of his home or purchasing company vehicles for his own use. The market conditions were comically favourable (it was the only large company in the market, such that it was virtually impossible for him to alienate his clientele sufficiently that they'd go elsewhere), but he almost drove it into bankruptcy through his arrogance. If when it was on the verge of collapse, he'd demanded concessions from his employees to maintain the way of life to which he was accustomed rather than selling it to someone more competent, the cycle would've continued...he'd have seen it as an opportunity to paid himself ever more and more, until the business inevitably went under.

Right now, the NBA owners are asking the players for massive concessions because they've managed to **** up despite an ever-growing pie...they've placed teams in markets that cannot support them, they've used the teams as leverage for loans, they've bought on debt. And now they're stating that they are losing money, not because they have been undone by conditions, but because they have failed.

And if they won the massive concessions that they initially wanted, it would signal one thing to them: they have a get-out-of-jail-free card for the next time their arrogance gets the best out of them. That's not "running a successful business"; that's being lucky enough to own a franchise in a sport shielded from anti-trust law, where no amount of incompetence can take away their inalienable right to turn a buck.

LOL at crapping on the NBA for expanding into markets which can't support them. Easy solution, contract those teams. Oh wait, the players would lose jobs, so that's off the table.

[mihaic]

It is obvious here that most who support the union (players) never had a business, or understand how hard is to maintain a successful business (aka business acumen).

I've managed a business. Before being purchased by my family, it was owned by an idiot who almost ran it into the ground, in large part because he felt that as a business owner, he was entitled to make a lot of money...he paid himself a large salary, and leveraged the business to finance things like the expansion of his home or purchasing company vehicles for his own use. The market conditions were comically favourable (it was the only large company in the market, such that it was virtually impossible for him to alienate his clientele sufficiently that they'd go elsewhere), but he almost drove it into bankruptcy through his arrogance. If when it was on the verge of collapse, he'd demanded concessions from his employees to maintain the way of life to which he was accustomed rather than selling it to someone more competent, the cycle would've continued...he'd have seen it as an opportunity to paid himself ever more and more, until the business inevitably went under.

Right now, the NBA owners are asking the players for massive concessions because they've managed to **** up despite an ever-growing pie...they've placed teams in markets that cannot support them, they've used the teams as leverage for loans, they've bought on debt. And now they're stating that they are losing money, not because they have been undone by conditions, but because they have failed.

And if they won the massive concessions that they initially wanted, it would signal one thing to them: they have a get-out-of-jail-free card for the next time their arrogance gets the best out of them. That's not "running a successful business"; that's being lucky enough to own a franchise in a sport shielded from anti-trust law, where no amount of incompetence can take away their inalienable right to turn a buck.

Good luck to your family's business, he who takes pleasure in others' mishap. Are you and your family paying your employees millions to throw a ball through a ring? Are you paying each of your employees millions of dollars? When you do, your comparison may hold.

[Fairview4Life]

Good luck to your family's business, he who takes pleasure in others' mishap. Are you and your family paying your employees millions to throw a ball through a ring? Are you paying each of your employees millions of dollars? When you do, your comparison may hold.

Can you explain why you think that makes sense?

[mihaic]

Good luck to your family's business, he who takes pleasure in others' mishap. Are you and your family paying your employees millions to throw a ball through a ring? Are you paying each of your employees millions of dollars? When you do, your comparison may hold.

Can you explain why you think that makes sense?

Why don't you explain first why that doesn't make sense.

[Fairview4Life]

Good luck to your family's business, he who takes pleasure in others' mishap. Are you and your family paying your employees millions to throw a ball through a ring? Are you paying each of your employees millions of dollars? When you do, your comparison may hold.

Can you explain why you think that makes sense?

Why don't you explain first why that doesn't make sense.

First of all, it was your statement to back up. But if you want an explanation, saying the players make millions is meaningless in the context of the record revenues being generated in the NBA, and the fact player salaries have been pegged at about the same % of BRI since something like the mid 80's. Your comment is also meaningless in the context of the quote Schadenfreude was replying to. Whoknows made no distinction between the types of business owner. He just said that most of the people supporting the union don't have business acumen and have never had a business. Schadenfreude countered that, and explained why his experience as a business owner (or managing one while being being related to the owners) would actually lead him to side with the union in this instance. The type of business and size of revenues and salary mean absolutely nothing since he was pointing out the comparable problems generated by ownership. Saying they make millions to play a game has no bearing at all in the context of this thread.

Good enough?

[mihaic]

[quote="Fairview4Life]
Can you explain why you think that makes sense?[/quote]

Why don't you explain first why that doesn't make sense.[/quote]

First of all, it was your statement to back up. But if you want an explanation, saying the players make millions is meaningless in the context of the record revenues being generated in the NBA, and the fact player salaries have been pegged at about the same % of BRI since something like the mid 80's. Your comment is also meaningless in the context of the quote Schadenfreude was replying to. Whoknows made no distinction between the types of business owner. He just said that most of the people supporting the union don't have business acumen and have never had a business. Schadenfreude countered that, and explained why his experience as a business owner (or managing one while being being related to the owners) would actually lead him to side with the union in this instance. The type of business and size of revenues and salary mean absolutely nothing since he was pointing out the comparable problems generated by ownership. Saying they make millions to play a game has no bearing at all in the context of this thread.

Good enough?[/quote]

Yeah.

Responding to a lot of your post, sorry but I did not follow all that context about the discussion between those two guys. I was simply responding to a schadenfreude post.

For the rest: If you managed a business or a part of it, you would know that the more you pay an employee: a. the lesser your profits are (duh!) (or in today market your business sustainability, which may apply to a number of NBA owners) and b. the more they, the empoyees, think they are entitled to so you set up future expectations which again may be usustainable.

You would also think that as an owner you have to be in control of your business. This is exactly why unionized places are ripping off the public (or client) as ultimately the client pays for it. Remember: this is not the owner, nor the employee that pays for it. Many posters here go on and complain why their tickets cost so much or how they don't want to pay 2 dollars a month to Bell or Rogers towatch their game, but yet rip the owners for wanting to contain their payroll and pay less millions to their employees.

PS: And I doubt your schadenfreude friend pays well his employees as he claims, if he really believes in his poster name (being amused seeing other's accidents). If he does, his user name is misleading, and many of his posts are too. He resembles more of a vulture based on his posts, but then again, on this board people probably login to attack or piss off other people while getting annoyed in the process.

That being said I am all for decertification of players. I think this league needs a big shake as it became so uncompetitive.

[Parataxis]

For the rest: If you managed a business or a part of it, you would know that the more you pay an employee: a. the lesser your profits are (duh!)

Actually, no.

There is no direct co-relation between employee pay, and profitability. Remember, if you pay more, you'll generally get higher quality employees. This can increase profits beyond the increase in salary. It's why companies are happy paying their CEOs millions - they believe that they'll make more money with a CEO who demands millions of dollars, than with some guy who's happy to do it for $100,000.

The same can be true about basketball teams. Better players (more money spent on them) can often translate into higher revenues, and higher profits.

You would also think that as an owner you have to be in control of your business. This is exactly why unionized places are ripping off the public (or client) as ultimately the client pays for it. Remember: this is not the owner, nor the employee that pays for it. Many posters here go on and complain why their tickets cost so much

Player salaries have no effect on ticket prices, sorry. The only two things that affect ticket prices are supply (about 19,000 a game, by 41 games, give or take) and demand (how many people want to buy tickets and how much they're willing to pay for them).

Players could be making ten bucks a game, but if the fans were willing to sell out an arena at $100/ticket, that's how much they'd cost.

[knickerbocker2k2]

That being said I am all for decertification of players. I think this league needs a big shake as it became so uncompetitive.

I think part of the reason some people are on owners side is they think out of this deal the league will become more competitive, and Raptors will have better chance. Sorry to break the news to you but this league has never being competitive. In the last 30 years few teams have dominated this league. It was never competitive nor will it be as competitive as other leagues. The primarily reason being that 1 player has so much effect on the success of that team. Thus whoever has the best player in the league will usually win. Look at the past 30 years. With the rare exception the winning team had the leagues best player that year.

Secondly decertification will only hurt those cheap owners. Imagine a league where there is no draft and new entrants go the highest bidder. If you thought Miami was bad with the big 3, imagine the scenario where NYK/LA/CHI having the big 5. Raptors with their cheap owners will be at the bottom like everyone else. Ironically with competitive open market, the players share of BRI will easily surpass the current 57%. This why I think the union made a mistake by negotiating with the owners. It is becoming increasingly obvious owners plan was to at least miss portion of the season before really negotiating. If they started with decertification like the NFLPA, owners would have being forced to really negotiate by now...

[ATLTimekeeper]

That being said I am all for decertification of players. I think this league needs a big shake as it became so uncompetitive.

I think part of the reason some people are on owners side is they think out of this deal the league will become more competitive, and Raptors will have better chance. Sorry to break the news to you but this league has never being competitive. In the last 30 years few teams have dominated this league. It was never competitive nor will it be as competitive as other leagues. The primarily reason being that 1 player has so much effect on the success of that team. Thus whoever has the best player in the league will usually win. Look at the past 30 years. With the rare exception the winning team had the leagues best player that year.

This can change, though. It's not a unique part of basketball, it's a unique part of the NBA. In Europe and college, FIBA, whatever, it's not critical to one dominant player that you can build your offense around. I agree that the league isn't interested in competitiveness, and neither are the players. They want people in every city to see someone take their man off the dribble and cram it down on some oversized utility big. They feel this is the best way to make money for all, but as they've learned, people tire of personalities faster than they tire of loyalty to the team. You can admire talent, but you love a team. The NBA has forsaken bigger picture money for making a quick buck hawking posters.

[AB_21]

[Indeed]

For the rest: If you managed a business or a part of it, you would know that the more you pay an employee: a. the lesser your profits are (duh!) (or in today market your business sustainability, which may apply to a number of NBA owners) and b. the more they, the empoyees, think they are entitled to so you set up future expectations which again may be usustainable.

I think you mis-understand a lot of things. NBA is providing a service, which means your assets are the players itself. Think of a car as a product, would you buy a good quality of expensive car, or you buy a poor quality of a cheap car in the high end market (since NBA is a high end market, it is not NBAD league).

From that direction, most companies (in factories producing goods or products), they have a labour cost of 50%, and the material cost are 10 - 20 %. If players themselves are part of the materials in terms of service, I believe they deserve more than 50%.

[J-Roc]

For the rest: If you managed a business or a part of it, you would know that the more you pay an employee: a. the lesser your profits are (duh!) (or in today market your business sustainability, which may apply to a number of NBA owners) and b. the more they, the empoyees, think they are entitled to so you set up future expectations which again may be usustainable.

I think you mis-understand a lot of things. NBA is providing a service, which means your assets are the players itself. Think of a car as a product, would you buy a good quality of expensive car, or you buy a poor quality of a cheap car in the high end market (since NBA is a high end market, it is not NBAD league).

From that direction, most companies (in factories producing goods or products), they have a labour cost of 50%, and the material cost are 10 - 20 %. If players themselves are part of the materials in terms of service, I believe they deserve more than 50%.

you can't randomly say the players deserve or don't deserve 50%. That number is pulled out of thin air as far as we're concerned. It's just the latest clawback Stern et al are looking for.

likewise as long as both sides are doing what's in their right, they are both “right” in their stance.

[Dr Positivity]

Coon's article proves why it'd be dumb for the players to give up 2 weeks, but I think it's important to note the owners missing games hurts more than the diff between 50% and say 51 or 52%. That's only 40-60 mil total or 1-2 mil per owner next year. They could reschedule those 2 weeks of games at the end of the season and still lose that 1 to 2 million by having less ideal scheduling and tv setups

1-2 million is not worth missing games for the owners. They should really just take 51-49

[Schad]

Good luck to your family's business, he who takes pleasure in others' mishap. Are you and your family paying your employees millions to throw a ball through a ring? Are you paying each of your employees millions of dollars? When you do, your comparison may hold.

If the business made billions with a relatively small workforce, they'd probably make millions, yes.

As it stands, the employees make a fair bit more than at most competitors, the company charges customers a bit less, and the business makes a rather small profit. Why are they paid more, with lower prices? Because those happen to be the only two major points of competition in this particular market...the quality of the instructors, and the price of the service, and reputation is of the utmost value. The balance could be altered to generate more profit in the here and now, but it would be to the long-term detriment of the company: greater market share and customer loyalty >>> a little extra coin now.

It's why, beyond its fairness and my feelings as a fan, I don't particularly like the business side of this, either. The current owners will get their desire...short-term profits, and a jump in franchise values. The former part of the equation carries with it quite a bit of moral hazard; the owners have no reason to rein in non-basketball spending or to make sensible decisions on player contracts because they can simply rewrite the CBA if all goes wrong. The former part is even worse in many respects, because driving up franchise prices means that most new owners will need to purchase on debt (as there are relatively few who can shell out $500m+ in cash), which means that they'll need even greater profits to achieve a return.

Perceived insulation from risk breeds hubris, and borrowing against future revenues often leads to a game of catch-up that cannot be won (see: roughly half of the major association football clubs in Europe). Neither leads to sound business practices.

[mihaic]

whoa my post was ripped apart:
- I only responded to a schattzi freund post, leave me alone
- I don't claim to be expert in an NBA business. While I am managing a part of a business, this is why I thought schadenfreude was not right about his extrapolation. In many /most cases it does not translate to other businesses
- For the guy who broke the news to me that NBA is not competitive: this was news to me like 15 years ago. However it REALLY becomes less competiitive as the years go by. Do your homework man
- And finally to whoever says this (parastax or something):
"There is no direct co-relation between employee pay, and profitability. "
That is plain wrong (with notable exceptions).
Example: Pay Kapono more does he do better? Or will Lebron? Or Bosh? Or Kobe?

Food for thought:
In a number of years managing and working with several teams in my business I collected some stats. According to that unless people are really into it for some reason (they're stars, their career is a bigtime match (i.e. they will be stars), workaholics or geniuses) they will just demand more for less production. Unfortunately i works like that, if you have a business you better write that down and use it (IN MY OPINION!!!).

PS
Fairview and schatzi guys I appreciate your contributions to this forums but this time up I just disagree with your views. We seem to be wired differently financiall wise. I suppose this is why you have PC, Liberals, NDP, no? You can't have a unique solution

[mihaic]

Good luck to your family's business, he who takes pleasure in others' mishap. Are you and your family paying your employees millions to throw a ball through a ring? Are you paying each of your employees millions of dollars? When you do, your comparison may hold.

If the business made billions with a relatively small workforce, they'd probably make millions, yes.

As it stands, the employees make a fair bit more than at most competitors, the company charges customers a bit less, and the business makes a rather small profit. Why are they paid more, with lower prices? Because those happen to be the only two major points of competition in this particular market...the quality of the instructors, and the price of the service, and reputation is of the utmost value. The balance could be altered to generate more profit in the here and now, but it would be to the long-term detriment of the company: greater market share and customer loyalty >>> a little extra coin now.

It's why, beyond its fairness and my feelings as a fan, I don't particularly like the business side of this, either. The current owners will get their desire...short-term profits, and a jump in franchise values. The former part of the equation carries with it quite a bit of moral hazard; the owners have no reason to rein in non-basketball spending or to make sensible decisions on player contracts because they can simply rewrite the CBA if all goes wrong. The former part is even worse in many respects, because driving up franchise prices means that most new owners will need to purchase on debt (as there are relatively few who can shell out $500m+ in cash), which means that they'll need even greater profits to achieve a return.

Perceived insulation from risk breeds hubris, and borrowing against future revenues often leads to a game of catch-up that cannot be won (see: roughly half of the major association football clubs in Europe). Neither leads to sound business practices.

I see what you are saying. I am also paying top salary to who really deserves. But I don't generalize with that, I only pay who really deserves, and I impose standards on return of investment (yes I see it an investment).

It i s strange but often people peak out and lose interest. It is sometimes hard to motivate a top "dog"

I think I agree to most of your analysis hereby (in the second half of your post), and I think this is why the major owners want a clause to ensure they do not become the next Real Madrid or Barca

[knickerbocker2k2]

Players should have initiated the decertification option early in the summer. Why? Because it would have scared the owners (especially the cheap ones) into negotiating in good faith. You have to remember the current system in place is put in to mainly stop the owners crazy spending. Unions, especially in pro leagues, were initially set-up to help the players vis vie the owners. Right now it is becoming more evident the union is being used by owners to stop the players from getting large share of the pie.

Imagine what would happen if there were no restrictions on players salaries. You don't think some of the billionaire owners would go crazy with dream team spending? Look at football in Europe. Crazy spending by billionaires is distorting the market there. All it would take is one or two owners. You don't think the Nets owner would spend like $100M in salary per year getting the likes of Lebron/Howard/Paul in one team? How about Paul Allen? The guy is facing health issues and may not care about spending $200M in bringing championship to the Blazers.

If owners are crying about that the current system which does good job of keeping the market in check, they should take a hard look at the alternative which is not pretty and would hurt the value of owners in small markets. Players should make it clear that losing a year doesn't mean coming back to the same system. That should be their threat. Looking at the leagues without any caps (baseball/european soccer) there is still healthy middle class players and the money is not only going to few player.

[HSOB SIRHC]

With the NBPA scheduling a meeting on Monday in LA, is it safe to assume that it's pretty much official that regular season games will be canceled?