Official CBA/Labour Talks Discussion Thread

[J-Roc]

The owners prepped for a 50-50 system and a hard cap (extreme lux tax) and shorter contracts. Everything else was posturing up until now. At some point, Silver put all his cards on the table and the players balked.

The owners do look bad now, but I never understood why it mattered who looked bad. Fans and media aren't deciding who wins. We just wait. Sure seems at the end of the lockout, the owners will get everything they want. It's up to the players if they want to give up a few paycheques to look better before they lose.

[BorisDK1]

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.

Oops - I did make a mistake of fact in this matter. I somehow got it in my head that this had happened on more than one occasion, probably because I conflated the excess of BRI going to the players with them not getting the full escrow refund. My apologies.

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

Just because these individuals may have inherited some wealth doesn't mean they're hapless halfwits who have no intellectual prowress of their own (Dolan might be the exception). It's not like they're the rich twits from Monty Python who back themselves over with their own car. And, even if they were, this represents only 7 teams. So does this speak against my point? Probably not much.

[ATLTimekeeper]

Sounds like the owners pulled the exact same stunt at the players did earlier with KG, Pierce and Kobe. Both sides have a band offer, but without the conditions it's hard to say what's fair or not.

I guess the owners feel like they have the leverage to get what they want, they'll either get it from the wealthier owners or the players.

[ATLTimekeeper]

I also find it hard to demonize Peter Holt. The guy did everything right under the bounds of the cap. Hired the best staff, found gems in late rounds, tried to win every year (after Duncan), and he got knocked out of the playoffs 6 times in the last decade by Cuban and Buss. The Spurs could have won close to 10 titles had spending capacity been equal. If I were him I'd play the hard line, especially if I felt I had the leverage to do so.

Gilbert, on the other hand, shouldn't be allowed near the negotiating table. The guy is just a troll.

[J-Roc]

^^
Yeah, people keep saying owners have to just spend what they can afford, etc. That would mean the Spurs should have given up on Parker and Ginobli.

[Fairview4Life]

I also find it hard to demonize Peter Holt. The guy did everything right under the bounds of the cap. Hired the best staff, found gems in late rounds, tried to win every year (after Duncan), and he got knocked out of the playoffs 6 times in the last decade by Cuban and Buss. The Spurs could have won close to 10 titles had spending capacity been equal. If I were him I'd play the hard line, especially if I felt I had the leverage to do so.

Gilbert, on the other hand, shouldn't be allowed near the negotiating table. The guy is just a troll.

Why do you think the Spurs deserved more titles than Shaq and Kobe, or Pau and Kobe? Jerry West orchestrated a trade to draft a teenage Kobe Bryant, and freed up enough capspace to sign Shaq away from Orlando (who didn't even offer him the max at first!). Then the Lakers traded Shaq for Lamar Odom (amongst others) and eventually traded for Pau Gasol. The players around Kobe and Shaq and Kobe and Pau weren't why LA beat San Antonio 3 or 4 times in the playoffs. The Spurs lost to the Lakers 4 times or something, right? The first loss was in 00/01 and there was a payroll difference of less than $2 million between them, and in the 07/08 season, the Spurs actually spent 2.6 million more than the Lakers, according to bball reference.

Both teams built long term contenders by drafting two of the greatest players in NBA history, and the Lakers also managed to sign one outright by using capspace, a fact that wouldn't have changed under a hard cap, especially since it's LA, and then trade for another fairly good player while still paying out less in salary than the Spurs that season. "Spending capacity" wasn't the reason the Spurs lost to the Lakers 4 times in the 00's. Kobe, Shaq and Odom/Gasol were.

[5DOM]

So essentially the players offered a band going from 50 to 52.5, which is a pretty big compromise. I sure haven't seen the same kind of movement on the owners' side.

Owners went from wanting 53% to 50% just a couple of weeks ago, so really, who makes what kind of compromise at one certain point shouldn't even matter. In fact, owners might be the ones who have given up the most during discussions for all we know.

[theonlyeastcoastrapsfan]

I'd been on the owners side, as I felt the current deal for the players was too much in favour of the players. Especially when I compared it to NFL, where players have shorter careers and face greater risk, to play a much more lucrative sport and popular sport, and they don't get the types of deal NBA players enjoy. Chris Johnson has struggled this year, but he was a a top player at his position in all of football, and he had to hold out and miss training camp to not even get Bargnani money, and only slightly over half is guaranteed. So, yeah I felt Players were phrasing everything in terms of what they were giving up from the previous deal, instead of looking at the shear value of what they were being offered. Also, I wanted to see some of those system changes too.

But, for this latest breakdown, I fail to see what it would have hurt to continue to discuss the system with the Players before settling BRI. BRI was already at the 20 yard line. From where it was reported to be, in between 50 and 52.5 - it was looking like win for the owners there either way. Why they couldn't move on to the system, and then address the gulf in BRI in a concession trade off to whatever impasse they encountered in the system talks, ie system more inline with owners wants - 52.5 bri, system more in line with Players 50 BRI - to me that's what people who want to negotiate a deal would do.

I can go into a dealership tell the salesmen what I want to pay, but if I don't actually want to buy a car, then I'm not really negotiating am i? It hard to say this after both sides had been meeting for so long, but I guess things changed after the BoG meeting. Well, suck on a banana and a pair of tangerines owners, I want my basketball. But if it's out of site out of mind, don't expect that to change at your whim.

[Fairview4Life]

^^
Yeah, people keep saying owners have to just spend what they can afford, etc. That would mean the Spurs should have given up on Parker and Ginobli.

The Spurs have done fine over the past 5 years under the current CBA.

viewtopic.php?f=15&t=1123753

https://docs.google.com/spreadsheet/ccc?key=0Aq--jXF1Xix4dHpwTXZNRE9FSHVIQkhDR0QzWVdWU0E&hl=en_US#gid=0

I put table together based on the Forbes team valuation data that has been provided to forbes by league office sources for several years. These numbers do not include the depreciation losses that make up the bulk of the league's $300MM loss claim.

This is each team's valuation at the start of the last CBA + annual cash flows over the course of the CBA and then the current valuation at the expiration of the CBA.

The 3rd row from the bottom "Cum Op inc" is the cumulative operating income (net cash flow) over the course of the CBA period.

9 teams showed annual operating losses over the course of the agreement. Two of those teams are Orlando and Dallas who have spendthrift owners/GM's who have the means and the will to voluntarily overpay to try and compete. Dallas bought a championship.

One of the teams is the New Jersey Nets, who were purchased most recently as a tax shelter for a Brooklyn real estate development consortium. They are intended to operate at no better than a break even position. (Because of a special depreciation tax break available to NBA owners, the Nets are spinning off somewhere on the order of $300MM in tax deductions over the next 15 years which can be used to offset OTHER income.) If the nets generate an annual profit, some of that depreciation allowance gets consumed by Nets income and can't be used on the books of the real estate project.

Philadelphia has a net loss of all of $2MM over the course of the agreement, and were just sold for a capital gain of $70MM over a 5 year holding period, illustrating the issue of Net Total Return of +$68MM vs. annual cash flow of -$0.4MM per year.

So excluding those 4 teams with unique circumstances, there are 5 teams remaining who had legitimate "non-voluntary" annual cash flow losses under this last CBA: Charlotte, Indianapolis, Minnesota, Memphis, and Denver and Portland.

Of the nine teams showing annual operating losses, only TWO are sitting at a total return loss position over the course of this CBA: New Jersey and Charlotte.

The league as a whole was cash flow positive by $1.25 Billion dollars over the last CBA period. The league saw franchise values grow by $3 Billion dollars over the same period. Owning an NBA team provided an AVERAGE annual return of +9% over a period where all other major asset classes (other than gold) earned historical lows. The Stock market averaged 3.5% over that same period.

If I could get my clients a piece of an NBA franchise I would do it in a heartbeat. The last CBA was a fantastic period to own part of an NBA team. And with TV and new media deals all being revised upwards right now, it's only about to get better.

[KG1585]

The owners and players union admitted making some progress on minor issues. Among them:

• 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. The 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.

• The owners also are proposing a “bonus pool” of money for high-achieving young players with performance-based incentives. Under the proposal, players would be rewarded for winning Rookie of the Year and making All-Star teams and other accomplishments. The union wants young stars such as the Chicago Bulls’ Derrick Rose(notes) and Los Angeles Clippers’ Blake Griffin(notes), who have out-earned their rookie-scale contracts, to have quicker access to more lucrative extensions. Currently, a rookie contract can be renegotiated between the third and fourth seasons, and goes into affect after the fourth and final year of the initial deal.

• As CBS Sports reported, the proposed amnesty clause that will allow teams to cut loose one problematic contract per team at the conclusion of the lockout will allow for teams to have 75 percent of the money taken off the salary cap over the length of the deal. The player will become a free agent, and the team will have only 25 percent of his annual salary on the books going forward. Players will still receive the full amount of money they’re owed under the contract.

The biggest hurdle left in discussions for the new amnesty clause, sources told Y! Sports, is how long teams will have to pay the player the money owed him. Will it be over two years, five years, seven years? The teams want the bought-out player to be paid over a longer period of time, while the union wants the money paid in shorter order. This is an area where a compromise will easily be found, sources said.

“It is unfortunate that after 30 hours of negotiations in front of a federal mediator that we were unable to have any major progress,” Minnesota Timberwolves forward Kevin Love said in an email to Y! Sports. “Hopefully we can get back to the negotiations and come to a fair agreement on the significant issues separating the two parties. Potentially, more games could be canceled as a result of today and it is disheartening to have no clear end in sight.

“Heading forward we will continue to remain united and wait for a fair deal.”

http://sports.yahoo.com/nba/news;_ylt=ArbzHUAodHbrGEcrO84vW7K8vLYF?slug=aw-wojnarowski_nba_labor_talks_breakdown_102011

Really good article by Woj...

[whoknows]

One particularly interesting aspect of Simmons' piece was his assessment of the players' intelligence.

"I don't trust the players' side to make the right choices, because they are saddled with limited intellectual capital. (Sorry, it's true.)," wrote Simmons.

...On Friday, he pointed out that Paul Pierce, Kobe Bryant and Kevin Garnett, who did some negotiating for the union, had a combined three years of college....

Read more: http://basketball.realgm.com/wiretap/21 ... z1bQMXr03V

just to stir it up shite...

[lucky777s]

A lot of interesting stuff came out of this latest meeting.

The owners made a bold move. They were winning the PR war pretty convincingly and had far more public support than the players, even in an environment where Occupy Wallstreet is a huge movement.

But they removed Stern from the negotiations Thurs and came at the Union with a hardball take it or leave it offer for 50%. This could all be a strategy to put the fear of god into 80% of the players who would take that deal today to get paycheques back soon. Then they bring Stern back in to be the good cop and say he convinced the owners to move up to 51 or 52 and finalize the deal.

But I think that Spur's owner Holt being one of the hardliners says a lot. That franchise did almost everything right and if he truly believes such a big change in the CBA is necessary for his team and the league that means something.

The players have finally done some PR planning themselves and seem to be capitalizing on the take it or leave it quote from Holt which comes off very harsh and difficult to support to the public.

The owners don't want to be seen as bullies. They want the public seeing all the champagne bottles players party with and the Bentley's they drive and the ridiculous jewelry they wear. The public is not in the mood to support wasteful spending by spoiled young kids. The players personal spending is far more visible to the public than the owners who are generally not 'celebrities'.

Its pretty clear the deal should be done in the 50-52% range for the players, with 51 being a deal both sides should jump at. Let the owners do what they want with the tax. The players take home 51% no matter what the tax anyway. Its a false issue.

I predicted in the summer that the league would be happy with a 5% reduction to BRI and 1 year off guaranteed deals. The owners seem to be a little firmer than that, but not much. That still may be the deal. The players just need to get the tax issue out of their heads entirely and let the owners handle their own business in that area.

If this deal isn't done this week or next it is just stubbornness and personal pride getting in the way of good business. On both sides. Its like a real estate transaction for a half million dollar house not getting done because of a $1500 difference neither side will budge on. Stupid.

[J-Roc]

^^
Yep, I could see Stern ride in on his horse like that.

Also, another hardliner...or at least playing the role of hardliner....is Paul Allen, the richest of the owners. Definitely looks like srtategy on the owners' part.

[ATLTimekeeper]

Stern was removed to take away an excuse. Want to call him a plantation overseer or whatever, he'll step back and let everyone know who's really running the show here. The majority of the owners think they have an advantage over the players in these negotiations, so they're willing to play it out.

EDIT: Also, the public perception doesn't matter. Maybe on a message board it does. But the only way the public could influence the two sides is if they threatened to stop watching.

[MEDIC]

The NFL & NHL systems are the new models for professional sports. The NBA should be shooting for a hybrid of the two.

The NBA owners should hold out until they get something similar.

If we lose the season, it's a win for the Raptors anyhow (from an on the floor product standpoint). We get a high draft pick still. Veteran winning teams get older (& less capable). The Raptors start fresh with their new young lineup in 2012 with JV & whoever we draft next season.

I could care less about BRI, but I hope they hold out for a hard cap (or heavy, heavy luxury tax) & a franchise player tag system.

[Reignman]

Glad to hear talks have broken down, I don't want the new CBA to look anything like the last one and it seemed to be headed in that direction.

Like I've said before, the longer this goes on the closer we get back to 50/50, hard cap, shorter contracts with some variation of the franchise tag. Also, we'll get back closer to a short-term MLE starting at around $3 mil.

[BorisDK1]

https://docs.google.com/spreadsheet/ccc?key=0Aq--jXF1Xix4dHpwTXZNRE9FSHVIQkhDR0QzWVdWU0E&hl=en_US#gid=0

There are some real problems with statements here. Let's examine a few.

I put table together based on the Forbes team valuation data that has been provided to forbes by league office sources for several years. These numbers do not include the depreciation losses that make up the bulk of the league's $300MM loss claim.

The league's claim was that there was a $300 million cash loss, not paper loss. That's been discussed numerous times by now. Cash losses do not include depreciation or amortization. Secondly, Forbes' numbers are only a rough estimate: we've seen from New Orleans' documents that Forbes was nowhere close on their estimates for them. Forbes shows them with a $3 million profit in FY 2008, NOH's own documents shows a $16 million loss; likewise, in FY 2009, Forbes shows them breaking even, when they actually had a $1.8 million operating profit.

The 3rd row from the bottom "Cum Op inc" is the cumulative operating income (net cash flow) over the course of the CBA period.

"Operating income" is not synonymous with "net cash flow". The Statement of Cash Flows consists of an entire document which does summarize cash flows. For example, with the FY 2008 and FY 2009 NOH, they had net cash losses of $7,437,863 and $1,541,767 respectively. Obviously whoever wrote this does not have much of a history of reading financial statements.

One of the teams is the New Jersey Nets, who were purchased most recently as a tax shelter for a Brooklyn real estate development consortium. They are intended to operate at no better than a break even position. (Because of a special depreciation tax break available to NBA owners, the Nets are spinning off somewhere on the order of $300MM in tax deductions over the next 15 years which can be used to offset OTHER income.) If the nets generate an annual profit, some of that depreciation allowance gets consumed by Nets income and can't be used on the books of the real estate project.

Does the author realize the difference between "tax deducation" and "operating expense"? Evidently not.

This comes back to the same argument that has been rehashed before: it's a fallacious appeal to history. "Since NBA franchises have been selling for $x million, they are intrinsically worth that much and that will not change, no matter how much the franchises lose on a yearly basis." At some point, markets find equilibrium. Generally, people don't invest money in businesses that pull heavy annual losses - except maybe speculation. Eventually, those bubbles burst - just like some of the ridiculous real estate valuations have come back to earth in the past couple of years. What people assumed was as safe an investment as could be imagined became a massive loser.

[bboyskinnylegs]

The NFL & NHL systems are the new models for professional sports. The NBA should be shooting for a hybrid of the two.

The NBA owners should hold out until they get something similar.

If we lose the season, it's a win for the Raptors anyhow (from an on the floor product standpoint). We get a high draft pick still. Veteran winning teams get older (& less capable). The Raptors start fresh with their new young lineup in 2012 with JV & whoever we draft next season.

I could care less about BRI, but I hope they hold out for a hard cap (or heavy, heavy luxury tax) & a franchise player tag system.

Will we really get a high draft pick though? In the past three seasons, we finished 9th, tied for 12th, and 3rd in the lotto standings. We've only really been in high lotto territory this last year.
Here's a list of some of the lotto standings of some teams in the last 3 years (I also added the average of those standings over that time period):
SAC (1st/3rd/tied 5th) = 3
MIN (5th/2nd/1st) = 2.7
LAC (2nd/tied 8th/8th) = 6
NJ (tied 10th/1st/tied 5th) = 5.3
GSW (7th/4th/11th) = 7.3
WAS (tied 2nd/tied 4th/4th) = 3.3

Our 'average' over the last three seasons is 8, so every one of those teams would be ahead of us if they use a straight average to determine lotto order. Unless if they do something that heavily favours this last season, and/or eliminate teams that have won the lottery recently, we're not really in the best position as far as the lotto standings go. A team like Cleveland would really get screwed having had the best record in the league the previous two seasons before ending up with the 2nd pick last year. The way they determine how a lotto would work after a cancelled season will greatly affect how things play out, and unless they do something like repeat the lotto from last year, things don't look all that great for us. At least if we were to play games there's a very good chance (given our current roster makeup and the fact that we don't have our rookie playing for us) that we could earn a high pick.

[J-Roc]

The NFL & NHL systems are the new models for professional sports. The NBA should be shooting for a hybrid of the two.

The NBA owners should hold out until they get something similar.

If we lose the season, it's a win for the Raptors anyhow (from an on the floor product standpoint). We get a high draft pick still. Veteran winning teams get older (& less capable). The Raptors start fresh with their new young lineup in 2012 with JV & whoever we draft next season.

I could care less about BRI, but I hope they hold out for a hard cap (or heavy, heavy luxury tax) & a franchise player tag system.

One major flaw in the NHL are the long term contracts. As long as that loophole is covered, the NHL model could be fine.

But let's be honest....the real model for owners AND players is the NFL. It works.

[Laowai]

That's all she wrote folks..............How stupid can the union be saying LAL, Miami,Dallas & NYKs ready to do a deal all are directly responsible for the financial mess the league is in today.

Was surprised Paul Allan was a hardliner had him on the big spender lineup! Boston has stated they want drastic changes so the who gives a damn we are OK would be no more than 5 or 6 teams the balance wants real reform.The line will harden considerably now because I was surprised how much Stern was willing to give.

Guess no NBA this year.