Official CBA/Labour Talks Discussion Thread

[Fairview4Life]

Per Chris Bouchard: The League is now offering 49-51% BRI and the players want 51-53% BRI. They're talking an MLE starting at $5M.

It's so maddeningly close that it's aggravating for the games to be ticking off the schedule.

...that can't be right. Seems like it shouldn't have taken 16 hours to get to 51. Both numbers are right there.

[anj]

Per Chris Bouchard: The League is now offering 49-51% BRI and the players want 51-53% BRI. They're talking an MLE starting at $5M.

It's so maddeningly close that it's aggravating for the games to be ticking off the schedule.

Well, at the far ends, it's not that close, especially when you consider how huge a single percentage point of BRI is. Although it almost seems destined to be a 50-50 split - neither side wants to concede. Whatever the case, it'll be a sizable drop for the players.

[ATLTimekeeper]

One thing I don't think has being mentioned, but people assume that owners will be able to drive wedge between rich/low end players. Thinking goes that if the owners give benefits/money to the low end players, they will be able to restrict the high end player, and given the qty of low end players, they will be able to get the majority to vote on the deal.

However this would be overestimating the rationality of people. Studies have shown that people overestimate their place in society. For instance most poor people don't see themselves as poor, but rather middle class. I read study awhile back that 20% of people think they'll be millionaires. And I'm sure this is greater percentage among the low end players, as they probably don't see themselves earning the low end, but rather moving into the MLE/higher end salary range.

Alex Kennedy: Several veteran players wanted to attend this week's meetings in New York, but the NBPA only wanted the executive committee in attendance. Twitter

I think there are plenty of rational players.

[CPT]

Per Chris Bouchard: The League is now offering 49-51% BRI and the players want 51-53% BRI. They're talking an MLE starting at $5M.

It's so maddeningly close that it's aggravating for the games to be ticking off the schedule.

Something about the way that is written makes me chuckle.

I can picture KG arguing for a 51-53 split.

[baulderdash77]

I guess it's some kind of sliding % scale based on how much league revenues go up. That makes some sense as at the lower end the league can stabilize it's financials and players get a better participation of the revenue if the league is profitable. It appears from the proposal that the league and players are on the same page on this part since they're both proposing sliding scales.

They're only $1 million apart on the size of the MLE to start but I'm sure the years are the issue there. The league was looking for a 3 year MLE contract and the players wanted a 7 year. I really think the MLE is the largest way to go over the cap and it's also the biggest source of bad contracts. Assuming 10% annual raises through the deal the league is proposing a maximum MLE of 3 years/16.6 million and the players want 7 years/55 million. This is a pretty big gap.

Both players and league are talking a sliding tax scale every $5 million over the cap. The league want it to start at 1.75x and going up to 2.5x at $20 million over. The players want it to start at 1.25x and go up to 2x at $20 million over.

When you put the differing sides on paper like that we're not talking enormous gulfs between the sides. I'd be surprised if it goes for too much longer.

[BorisDK1]

Boris, you were wondering where intangible asset amortization and depreciation were listed on the Nets books, I took a few more minutes and read beyond the cash flow statements to see where the amortization and depreciation amounts were coming from:

http://www.scribd.com/doc/59074529/Nets-0506

Page 10 of the document, 12 of the PDF. The intangible part of the franchise value (about $161 million) isn't amortized but goes through goodwill impairment tests and something something something. I would not be surprised if the Nets declared impairments losses on that intangible franchise asset, but I have no idea if that's shown anywhere as part of their financial statements or if that's even a thing. It might not be. it is still listed in that section though.

We were talking about their operating position as reflected in their Statement of Operations. The amortization of asset value pertains to the Balance Sheet (NOT the Statement of Operations/Income Statement), which indicates net asset, liability and equity values of the organization. Unless you're invoking some argument I've forgotten, I've been pretty clear that when we've been discussing the Nets and their losses, I was referring only to cash losses (which have nothing to do with amortization at all).

It also looks like there's a lot of fun stuff about their debt. I haven't spent much time looking through the numbers. I doubt you have the time, and despite my post count and obsessive refreshing, I neither have the time nor patience to go through everything. Other people have and there was a somewhat detailed discussion of those numbers:
http://wagesofwins.net/2011/07/07/better-angels/
viewtopic.php?f=15&p=28552631

And everyone would like to know what's in "other expenses". Asserting they are beyond a teams control without knowing what's actually an other expense seems a little strange. Anyway:
http://wagesofwins.net/2011/06/30/takin ... r-dispute/
http://www.sbnation.com/2011/7/7/226389 ... avid-stern
http://www.sbnation.com/nba/2011/7/5/22 ... r-expenses

A couple of things WOW missed in their first article (key assertions in "Better Angels" have already been thoroughly refuted):
1) While it's true that the NBA has capped player salaries at 57% in the past CBA, the players actually made more than that. The owners only held 8% of player incomes in escrow, and except for this past year, that 8% escrow margin failed to collect enough money to keep the player percentage at 57%. The owners were not empowered to retroactively collect the balance owing.
2) The WOW completely fails to provide any analysis of what portion(s) of the costs is spiraling out of control and any suggestions as to how to fix the problem. WOW assumes that this is some sort of ridiculous profligacy on the part of team management; that begs the question as to how people who are so good at accumulating wealth in other ways suddenly lose those skills once they become NBA team owners.

[baulderdash77]

The Wages of Wins analysis is pretty poor and simplistic. It's just numbers written by an engineer who is missing quite a bit of the business acumen that he needs to describe the circumstances. The CA in me can't get around that and he loses me.

He doesn't seem to get some basic things like revenue isn't what you have after you take BRI and remove expenses. He completely lost me after that because his terminology is so bad.

Then he ignores things like fixed costs, inflation, tax application and so on so I just can't get through reading his doc. It's just too messy.

[Ponchos]

1) While it's true that the NBA has capped player salaries at 57% in the past CBA, the players actually made more than that. The owners only held 8% of player incomes in escrow, and except for this past year, that 8% escrow margin failed to collect enough money to keep the player percentage at 57%. The owners were not empowered to retroactively collect the balance owing.

Boris this is flat out untrue.

I would direct you to Larry Coon's CBA Faq. 1st, if the NBA does not get sufficient money in the escrow then that overage amount is deducted from the escrow the following year. 2nd, the players had escrow money returned to them every year except for one (where the overage was made up for the following season). 05-06: 38 million back to the players, 06-07: 22 mil, 07-08: 21.5 mil, 08-09: 0 dollars, 09-10: 21.6 million. The players never exceeded 57% BRI aside from 08-09, and the difference was added to the amount in 09-10.

2) The WOW completely fails to provide any analysis of what portion(s) of the costs is spiraling out of control and any suggestions as to how to fix the problem. WOW assumes that this is some sort of ridiculous profligacy on the part of team management; that begs the question as to how people who are so good at accumulating wealth in other ways suddenly lose those skills once they become NBA team owners.

People who are so good at accumulating wealth? Many of them yes. Some are smart businessmen who happened to meet Bill Gates in college or were basically tech bubble lotto winners (Cuban). Many inherited their wealth.

Inherited wealth:

James Dolan
Wyc Grousbeck
Micky Arison
Stan Kroenke (married a Walton, wasn't incredibly wealthy before that)
Herb Kohl
The Maloofs
Clay Bennett

[Rhettmatic]

Looks like they're making progress on a new MLE:

The two sides are nearing a compromise on the annual midlevel exception starting at $5 million with annual raises over three years, sources told Y! Sports. Two weeks ago, the NBA was proposing a $3 million starting salary for the midlevel.

In previous days, the owners and players agreed on starting the midlevel exception at $4.8 million. Two sides had differed on the length of contracts teams could offer players with the exception, as well as the percentage of annual increase. The players were willing to reduce the maximum length of midlevel deals from five years to four, but the owners wanted the length dropped to three years.

Now, they’re close to compromising on a $5 million starting salary with a maximum length of three years.

There's a bunch of other promising stuff for people hoping that the lockout wraps soon at the link from Woj. More details:

http://sports.yahoo.com/nba/news?slug=a ... lks_101911

[Ponchos]

Looks like they're making progress on a new MLE:

The two sides are nearing a compromise on the annual midlevel exception starting at $5 million with annual raises over three years, sources told Y! Sports. Two weeks ago, the NBA was proposing a $3 million starting salary for the midlevel.

In previous days, the owners and players agreed on starting the midlevel exception at $4.8 million. Two sides had differed on the length of contracts teams could offer players with the exception, as well as the percentage of annual increase. The players were willing to reduce the maximum length of midlevel deals from five years to four, but the owners wanted the length dropped to three years.

Now, they’re close to compromising on a $5 million starting salary with a maximum length of three years.

There's a bunch of other promising stuff for people hoping that the lockout wraps soon at the link from Woj. More details:

http://sports.yahoo.com/nba/news?slug=a ... lks_101911

Well I guess Colangelo can now be credited with at least one positive thing.

[dacrusha]

What I don't understand is that Stern talks about mechanisms to increase parity in the league, but then wants to restrict usage of the Larry Bird exception, which is an important way for small market teams to hang-on to their own free agents.

[baulderdash77]

The Larry Bird exception promotes so much sign and trade activity and tanking that it compromises the game. When expiring contracts are more valuable than the players that are earning them, you have a major system problem.

Also the NBA would like virtually every non-star to be a free agent every year in a perfect world. The Larry Bird exception gets over used and you have non-stars using it these days.

Reducing the MLE will go a long way to improving competitive balance. It has become such a huge tool for the big teams to replenish their rosters with 5-7 year contracts. Also it is the primary mechanism for going into luxury tax territory.

With the new MLE it will be difficult to get more than $17 million above the salary cap. NBA will make capspace much more valuable and makes building super teams so much harder. That will impact competitive balance in a good way.

[I_Like_Dirt]

The Larry Bird exception doesn't promote sign and trade activity. Allowing sign and trade activity promotes sign and trade activity. Keep the Larry Bird exception and just make a rule that a player cannot be traded until a year, or even 6 months after he signs a contract based on the Larry Bird Exception or something like that and sign and trade deals are totally gone.


The idea that non-stars should get a bunch of perks that stars don't get just seems like a stupid idea to me. I mean, I still think that stars should have a chance to escape teams that continually mismanage their franchise if they so choose to do so. I'm not a huge fan of protecting teams from their own stupidity excessively.

[S.W.A.N]

The Larry Bird exception doesn't promote sign and trade activity. Allowing sign and trade activity promotes sign and trade activity. Keep the Larry Bird exception and just make a rule that a player cannot be traded until a year, or even 6 months after he signs a contract based on the Larry Bird Exception or something like that and sign and trade deals are totally gone.


The idea that non-stars should get a bunch of perks that stars don't get just seems like a stupid idea to me. I mean, I still think that stars should have a chance to escape teams that continually mismanage their franchise if they so choose to do so. I'm not a huge fan of protecting teams from their own stupidity excessively.

The role (going forward) of these exemptions that remain are to give advantages to teams keeping players they want. If you did not have the ability to earn more money staying with the [ Raps, Bucks,Pistons, Bobcats, Cavs, etc etc.] you would go to the teams based on factors beyond paycheck. Such as Market size (secondary income) Taxes Weather.

Certain franchises are always going to have an inherent advantage when it come to being a desirable destination and if wages are equal are going to get to pick the cream of the crop. Exemptions allow a monetary advantage that in a lot of cases overrides the other advantages these premier destinations have.

[C_Money]

Talks just broke down and they're probably going to cancel more games here.

[J-Roc]

Certain franchises are always going to have an inherent advantage when it come to being a desirable destination and if wages are equal are going to get to pick the cream of the crop.

The NFL doesn't have that problem, at all.

[mintsa]

Adrian Woj's twitter:

Talks on a 50-50 BRI split broke down, and labor talks have ended, source tells Y! No new meetings scheduled. Huge setback in this lockout.

[Nially]

Question about the 82 game thing...

Do they need to "compress" the schedule? What is so wrong with just extending the season an extra couple months into the summer?

[YogiStewart]

yep.
but the players will miss another paycheque or 2.

of course, they're at the point where they have more to lose than to gain by striking. their lost salaries will soon be equal to (and then greater than) the difference in BRI.

[C_Money]

yep.
but the players will miss another paycheque or 2.

of course, they're at the point where they have more to lose than to gain by striking. their lost salaries will soon be equal to (and then greater than) the difference in BRI.

Its not about that though. Its about who has the biggest d*ck in the room.