NLRB ready to rule on Union's claim against NBA

[PistolP]

I'm pretty sure if the players win this the owners will realize maybe their case isn't as strong as they thought. My opinion from day one is that the players were waiting to hear from the NLRB since day one and they never really had much of a reason to negotiate past a certain level because of that. Unfortunately for the fans I think the owners were waiting for the same thing.

I don't think that's anywhere close to the reality after listening to the podcast linked in the post above yours. National labor relations expert Jay Krupin of EpsteinBeckerGreen spoke to the issues in front of the NLRB and what the process is. His take is that the owners probably aren't worried much at all about the NLRB ruling, nor even about the next step in the process should the NLRB rule in favor of the players

frankly, after listening to that podcast, my sense is if the union is gambling on the NLRB ruling to change the game in any significant fashion, they are fools

listen to the podcast:

http://eye-on-basketball.blogs.cbssports.com/mcc/blogs/entry/22748484/32918087

I agree with the facts from the podcast but I think the players have been waiting for the NLRB ruling all along. They are down big with the clock winding out, but they aren't going to take a knee when they they still have a hail mary play. As long as they have the sense that there is an alternative 82ish game schedule that can start Dec 1, they can wait this out until around Nov 1.

Seems highly unlikely the case would work its way up the legal chain even if the NLRB issues a complaint, but no doubt a complaint would change the risk profile to the owners of dragging this thing out, giving the players a little more leverage to negotiate a better deal now.

[DBoys]

"I agree with the facts from the podcast but I think the players have been waiting for the NLRB ruling all along. They are down big with the clock winding out, but they aren't going to take a knee when they they still have a hail mary play."

Why would the players be waiting for this? What "hail mary" does this provide? It gives them the chance to run through the courts with little-to-no chance of success, in a process that would take them a year or so before they got to anything that would make a difference in the current situation. NLRB ruling doesn't offer an end to the lockout or change the bargaining. It's step one in a long process that rarely goes anywhere.

[Hunter103]

and exactly where does it say that the NBA is legally obligated to produce everything the union has asked for?

I believe the NBA is claiming the union has asked for records they aren't required by law to produce

Well if the records are relevant, and the owners didn't provide them, then the union has a case. What we as a bunch of posters on the internet believe is ultimately irrelevant, but what is relevant will come out at the NLRB hearing, whichever way it goes. Until then it's useless to speculate.

That is a nice couple of ifs there.

That's my point, we are all speculating on "ifs" here. It's really no use claim anything definitive until it happens.

[BadMofoPimp]

I'm pretty sure if the players win this the owners will realize maybe their case isn't as strong as they thought. My opinion from day one is that the players were waiting to hear from the NLRB since day one and they never really had much of a reason to negotiate past a certain level because of that. Unfortunately for the fans I think the owners were waiting for the same thing.

This NLRB ruling has to be the players trump card, in fact, I'm positive it is. I'm pretty sure Fisher has even alluded to that being the case in the past and has used it as a reason behind not opting for decertification to the players themselves. Now, if they weren't "really" negotiating and simply waiting for this that would be a violation right there, once again as is the case with most law, hard to impossible to prove though. Whatever this ruling is it will establish how this entire thing proceeds from here. If the players lose, they will literally have no other options because if I remember correctly it is going to pretty much preclude them from being able to decertify all.

As I've said in the past, the players are simply gambling right now. There is a date where the potential concessions the owners are asking for them to commit to and the loss of games will cross over with the potential earnings they would recoup with the unions bottom offer. That's probably a few weeks out, maybe a month. They're just hoping that ruling comes down before that I'm sure.

Heck, it makes sense, but problem is, if they lose, and I think they will, they've just given up a months worth of salary and damaged the leagues image in the interim. Them thinking some promise of an 82 game schedule is also fuel for their fire because if true, that means they will make back that salary. Problem is, they're still playing with fire here and might end up burning themselves out of all that money while getting nothing in return except concessions AND a lost month or two. Sounds to me like they're relying on a lot of rumors and rumblings.

The players have already lost this, son. Players will be lucky to accept the 50% before more games are lost. The Majority of players have already lost money they will never make back. They will cave soon enough. The owners have enough money to wait this out til the end of time. Trust me, it is over for the players. They are grasping at straws for as much as they can salvage before accepting the Owners offer.

[PistolP]

"I agree with the facts from the podcast but I think the players have been waiting for the NLRB ruling all along. They are down big with the clock winding out, but they aren't going to take a knee when they they still have a hail mary play."

Why would the players be waiting for this? What "hail mary" does this provide? It gives them the chance to run through the courts with little-to-no chance of success, in a process that would take them a year or so before they got to anything that would make a difference in the current situation. NLRB ruling doesn't offer an end to the lockout or change the bargaining. It's step one in a long process that rarely goes anywhere.

The doomsday scenario for owners would be having a federal judge lift the lockout, which would destroy the extreme leverage they have. There's maybe a 1% chance of that ever actually happening given what we know today. If the NLRB files a complaint, the players get 1 step closer to that and there's maybe a 5 to 10% chance of an injunction ever becoming a reality. If I'm an owner, I'd have to risk-adjust my stance and maybe give on an extra point of BRI OR loosen up on a couple system issues just to guarantee my win now (and the owners have already won). I think that's all the players are hoping for at this point.

[Paydro70]

FWIW, I don't think the owners can go two seasons. If the players can tough it out for one full season and stick to their guns, they can get 53%. I doubt we ever get to find out if I'm right on that, though.

If you are losing money while in operation, you are better off not operating, right?

Now, who knows if its true that 22 teams are losing money, but if it is true, why would they want to lose money?

No. When you shutter a business, you still have considerable expenses you have to pay. For the NBA, that means arena leases, financing, coaches' salaries (and anyone else on contract who is not a player), etc. It also means forgone income for the teams that are NOT losing money, and for most owners it also means a substantial bite out of their supporting businesses (i.e., TV networks, nearby real estate, etc.).

The owners have plenty to lose here, it's been a commonly repeated misconception on here that the players have "no leverage."

The reality is that the owners are going to be more able to weather these losses than the players are able to deal with lost income, which means they are likely to win this lockout. But they are taking a risk by attempting it.

[DBoys]

"The doomsday scenario for owners would be having a federal judge lift the lockout, which would destroy the extreme leverage they have."

But the insurmountable problem is, the point at which a judge would even consider an injunction is after the players have already lost a full season of pay. And that's the best case. That's way too late to make a difference, or to make it something worth waiting for. Right?

[mademan]

"The doomsday scenario for owners would be having a federal judge lift the lockout, which would destroy the extreme leverage they have."

But the insurmountable problem is, the point at which a judge would even consider an injunction is a year down the road. And that's the best case. That's way too late to make a difference, or to make it something worth waiting for. Right?

If, and that's a big if, the NLRB rules in favour of the union, I would assume the owners would appeal. I would also assume both sides would be a little more urgent to get a deal done while the owners appeal is being dealt with.

[HartfordWhalers]

and exactly where does it say that the NBA is legally obligated to produce everything the union has asked for?

I believe the NBA is claiming the union has asked for records they aren't required by law to produce

Well if the records are relevant, and the owners didn't provide them, then the union has a case. What we as a bunch of posters on the internet believe is ultimately irrelevant, but what is relevant will come out at the NLRB hearing, whichever way it goes. Until then it's useless to speculate.

That is a nice couple of ifs there. If the records are relevant, and if the owners did not provide them, but yet the owners are automatically guilty? Having thought about it for a little bit I seem to remember that the players also wanted the owners personal financials, here is a link I found from Berger.

The key to the NBPA's current strategy will be how the NLRB rules on the union's request for further financial information from the NBA to prove its stated $300 million in annual losses, said Jon Axelrod of Beins, Axelrod, P.C., in Washington, D.C., who has represented unions in labor disputes for 37 years. Larry Katz, the union's outside counsel, has requested additional financial documents from the owners, including those detailing third-party transactions -- where the money goes when a single entity owns the NBA team, the arena and an NHL team -- and franchise valuations.

"In my experience as a union lawyer, that stuff would be very valuable to the union in preparing its negotiating position," Axelrod said.

The NBA has furnished voluminous financial data to the union, including audited financial statements and tax returns. But Katz said the owners have not turned over accounting of third-party transactions or franchise valuations, for which the NLRB could cite the league for bad-faith bargaining.

http://www.cbssports.com/nba/story/1537 ... -legal-war

So the union wants to check the owners personal books, what they do outside of the league, the revenues and where they go from the NHL teams and arenas, and a valuation on what the team may be worth if it were sold. In other words they want a cut of what someone guesses the teams are worth, they want a cut of the money the arenas make outside of the NBA, they want a cut of the owners personal businesses, and they want a cut off of an appraised value of a team. That must be where Hunter is getting his 600-700 million from.

I know the players are acting as entitled brats, but really they think they get the right to get a cut off of everything the owner does, even outside of the league and business of basketball? I would tell them to pound sand as well.

I don't know if you are intentionally misunderstanding or if it is just unintentional and based on your clear bias in the issue, but you are really missing the boat drastically with your leaps against the players. Nothing you said that I bolded is at all what is in that request.

The third party deals are between the team and the related also owner owned entity. This isn't about getting the books on some unrelated business as you try to portray it. This is only about basketball related business.

As an example, this is looking into if the Wizards paid 10 million to the Capitals for "marketing", to figure out if the Capitals really did 10 million in marketing for the wizards or if Leonsis is just spreading the Wizards profits over to the Capitals to lower taxes, or improve bargaining against the union. (And similarly to the stadium also owned by him). It is pretty easy when you own the Arena, the hockey team, and the basketball team, to pick contracts that enable you to move profits between the 3 to which ever you want. Same with owners that own TV stations, and essentially negotiate with themselves over TV fees.

For the owner of both there is zero (assuming away taxes) difference between paying 20 million in rights or 50 million. Which means there is zero reason to assume that the 20 or 50 that is picked was a true fair market price and not picked to minimize taxes (obviously very egregious examples might get you in trouble if audited). In contrast, when a team is negotiating with a TV station they don't own it is always in their interest to get the most money.

This isn't asking for Leonsis sets of personal financials, unless the team is giving him a loan. This isn't asking for revenue from the latest boy band concert at the arena. This isn't about attendance at the hockey team. This would only be asking for the details that the team paid to the owner (via his other holdings) as a cost, and trying to see if those numbers are fair market values. {And for what it is worth, I have no reason to believe that they aren't.}

[turk3d]

+ 100 ^^^

[turk3d]

"The doomsday scenario for owners would be having a federal judge lift the lockout, which would destroy the extreme leverage they have."

But the insurmountable problem is, the point at which a judge would even consider an injunction is a year down the road. And that's the best case. That's way too late to make a difference, or to make it something worth waiting for. Right?

If, and that's a big if, the NLRB rules in favour of the union, I would assume the owners would appeal. I would also assume both sides would be a little more urgent to get a deal done while the owners appeal is being dealt with.

If they rule for the players and against the owners, that could eventually be recoverable in damages. It would take time (similar to when the players sued Major League Baseball for collusion and eventually won) but it could be a nice windfall as I'm sure they'd have to receive at least all their back pay from any lost time.

[DBoys]

If they rule for the players and against the owners, that could eventually be recoverable in damages. It would take time (similar to when the players sued Major League Baseball for collusion and eventually won) but it could be a nice windfall as I'm sure they'd have to receive at least all their back pay from any lost time.

If the players are relying on the possibility of damages in such a case, as their motivation, they're nuts. For the NBA to lose on this, it would have to be determined that they really weren't (and aren't) trying to get a deal. And that's absurd, everyone (even the most strident of the players) know that. The league may not be offering a deal the players wanted, but they've been chasing a deal all along.

[DBoys]

Lots of things the union has done and said before, and are saying and doing now, has seemed more to be aimed at the players, rather than the league or getting a deal. The union claiming that the lockout was illegal? That's a feel-good point for the players, but absurdly wrong and going nowhere ....and someone like Hunter knows (or should know) that. So when he says something like that, who's he trying to persuade? Sounds like its a rallying point to his followers. It's certainly not striking fear in Stern.

[BadMofoPimp]

Lots of things the union has done and said before, and are saying and doing now, has seemed more to be aimed at the players, rather than the league or getting a deal. The union claiming that the lockout was illegal? That's a feel-good point for the players, but absurdly wrong and going nowhere ....and someone like Hunter knows (or should know) that. So when he says something like that, who's he trying to persuade? Sounds like its a rallying point to his followers. It's certainly not striking fear in Stern.

A source has told me that the Union is not telling the full truth to all the players, only enough to justify the unions agenda.

[Nate505]

So if they're "ready" are they actually ever going to rule on the damn thing?

[The Rebel]

I don't know if you are intentionally misunderstanding or if it is just unintentional and based on your clear bias in the issue, but you are really missing the boat drastically with your leaps against the players. Nothing you said that I bolded is at all what is in that request.

The third party deals are between the team and the related also owner owned entity. This isn't about getting the books on some unrelated business as you try to portray it. This is only about basketball related business.

As an example, this is looking into if the Wizards paid 10 million to the Capitals for "marketing", to figure out if the Capitals really did 10 million in marketing for the wizards or if Leonsis is just spreading the Wizards profits over to the Capitals to lower taxes, or improve bargaining against the union. (And similarly to the stadium also owned by him). It is pretty easy when you own the Arena, the hockey team, and the basketball team, to pick contracts that enable you to move profits between the 3 to which ever you want. Same with owners that own TV stations, and essentially negotiate with themselves over TV fees.

For the owner of both there is zero (assuming away taxes) difference between paying 20 million in rights or 50 million. Which means there is zero reason to assume that the 20 or 50 that is picked was a true fair market price and not picked to minimize taxes (obviously very egregious examples might get you in trouble if audited). In contrast, when a team is negotiating with a TV station they don't own it is always in their interest to get the most money.

This isn't asking for Leonsis sets of personal financials, unless the team is giving him a loan. This isn't asking for revenue from the latest boy band concert at the arena. This isn't about attendance at the hockey team. This would only be asking for the details that the team paid to the owner (via his other holdings) as a cost, and trying to see if those numbers are fair market values. {And for what it is worth, I have no reason to believe that they aren't.}

your right I read it wrong, I should have been sleeping and not posting on here. either way, the union only has the right to ask for the proof that the companies provided services, and that it is for market rates. Which should not be hard for the players to figure out. There are plenty of ways to do it, and honestly it does not take anything egregious for a fine in a audit, if the owners are caught moving money between 2 companies they own for less or more then market rates on the day of the contract then both companies and the owners have to pay fines and penalties to the IRS.

the Nuggets specifically opened the tv right up for bids before they started Altitude, and then proceeded to beat the next highest bids in order to have the rights to the Avalanche and Nuggets games.

As for franchise valuations, you and I both know that is crap, there is no real way to value franchises until the team is sold. Plus why should the union and their employees take part in that?

[HartfordWhalers]

I don't know if you are intentionally misunderstanding or if it is just unintentional and based on your clear bias in the issue, but you are really missing the boat drastically with your leaps against the players. Nothing you said that I bolded is at all what is in that request.

The third party deals are between the team and the related also owner owned entity. This isn't about getting the books on some unrelated business as you try to portray it. This is only about basketball related business.

As an example, this is looking into if the Wizards paid 10 million to the Capitals for "marketing", to figure out if the Capitals really did 10 million in marketing for the wizards or if Leonsis is just spreading the Wizards profits over to the Capitals to lower taxes, or improve bargaining against the union. (And similarly to the stadium also owned by him). It is pretty easy when you own the Arena, the hockey team, and the basketball team, to pick contracts that enable you to move profits between the 3 to which ever you want. Same with owners that own TV stations, and essentially negotiate with themselves over TV fees.

For the owner of both there is zero (assuming away taxes) difference between paying 20 million in rights or 50 million. Which means there is zero reason to assume that the 20 or 50 that is picked was a true fair market price and not picked to minimize taxes (obviously very egregious examples might get you in trouble if audited). In contrast, when a team is negotiating with a TV station they don't own it is always in their interest to get the most money.

This isn't asking for Leonsis sets of personal financials, unless the team is giving him a loan. This isn't asking for revenue from the latest boy band concert at the arena. This isn't about attendance at the hockey team. This would only be asking for the details that the team paid to the owner (via his other holdings) as a cost, and trying to see if those numbers are fair market values. {And for what it is worth, I have no reason to believe that they aren't.}

your right I read it wrong, I should have been sleeping and not posting on here. either way, the union only has the right to ask for the proof that the companies provided services, and that it is for market rates. Which should not be hard for the players to figure out. There are plenty of ways to do it, and honestly it does not take anything egregious for a fine in a audit, if the owners are caught moving money between 2 companies they own for less or more then market rates on the day of the contract then both companies and the owners have to pay fines and penalties to the IRS.

the Nuggets specifically opened the tv right up for bids before they started Altitude, and then proceeded to beat the next highest bids in order to have the rights to the Avalanche and Nuggets games.

As for franchise valuations, you and I both know that is crap, there is no real way to value franchises until the team is sold. Plus why should the union and their employees take part in that?

Absolutely. There is zero reason for the players to get any share of franchise appreciation. Not a single one I can think of.

My guess is it is a feeble response to including franchise purchasing debt as a real reducer of team profitability. I.e. if you buy a team for 200 million more then the last owner, finance that additional 200 million in debt and then say profits are down by the interest you pay on that 200, players are looking to equalize things as the underlying franchise isn't worse it just changed its capital structure. {Which is saying that pretending teams are wprse because they were bought expensively with tons of debt is silly. Similarly pretending teams don't have debt from operations is silly.}

At the end of the day this is a negotiation, so neither side really cares about what is right versus what they can get. It sounds according to that original link like the union cannot even get the price of the services provided to determine if they were near the market rate. Interesting about Altitude. I have to assume that things like arena maintenance and custodial have a couple of million in wiggle room that isn't going to get you caught by the IRS if they are looking (hard to say what really is fair value), and it isn't like audits are that frequent.

On topic, I really don't see how the NLRB could swing the balance of power. Even if they side with the players, the owners can start a lengthy appeal and the upper level courts are more owner friendly as evidenced by the NFL (and the supreme court in general). And while I don't see the owners as having been flexible, the deal they have put on the table is only a 15% reduction in player salaries so it hasn't been that draconian to rule they haven't tried to make an agreement.

I just don't see anything short of some bizarre congressional/presidential crusade in which the politicians (sick of dealing with the economy and housing) decide that the lockout is hurting their sports fan constituents and start threatening them with putting punitive taxes on nba franchises and sporting events like they were oil drillers and local hotels.

Like it or not, the players need to try and squeeze a last half percent from the owners and then just take their beating. And prepare for 46% in 2017.

Oh, and nice response.

[DBoys]

"My guess is it is a feeble response to including franchise purchasing debt as a real reducer of team profitability."

Except, everything franchise-purchase-related has been excluded from the profit/loss numbers on the table in the negotiations. The idea that franchise purchase costs have anything to do with the losses has been thoroughly debunked months ago.

[HartfordWhalers]

"My guess is it is a feeble response to including franchise purchasing debt as a real reducer of team profitability."

Except, everything franchise-purchase-related has been excluded from the profit/loss numbers on the table in the negotiations. The idea that franchise purchase costs have anything to do with the losses has been thoroughly debunked months ago.

I don't think Hunter or the owners got that memo. Team debt servicing is definitely in every set of books I have heard the owners presenting (RDA isn't always, which is a different thing entirely). Feel free to link otherwise. As an example, find a set of books that subtracts the debt servicing on the 150 million in new debt that the Warriors have after their purchase.

[DBoys]

You've misread.

Regarding the GS books, they would (a) not be available to the public, and (b) would not be relevant to your question. Notice that what is under discussion is specific numbers, not all the numbers - we really are only concerned with the numbers that are on the table in these negotiations, substantiating the >$300 million in losses.

There is indeed "interest" (aka debt servicing) in those financials.

But, it is not interest related to team purchases. That was a mistaken connection (of why a team would be paying interest) made by media - perhaps a misconception slyly contrived by Hunter - that was completely refuted by the NBA in writing. They said that the numbers presented to the players had been completely scrubbed (ie adjusted) to removed what would be purchase-related. The NBA's response was very outspoken, and not disputed by the union, who certainly would have made a big case if the NBA had been telling a lie. Both Coon (ESPN) and Silver (NYT), who had written articles assuming the losses included things purchase-related, issued retractions for the mistaken assertions.