Official CBA/Labour Talks Discussion Thread III

[Reignman]

Back in the early 80s my dad had to renew his mortgage and the rate was a ridiculous 17% or something like it. His previous mortgage was probably around 10%, maybe less. He couldn't just go to the bank and say 'that isn't fair' and say he was willing to go up to 14% but no farther - that the bank would have to give up some too.

Fast forward to 2008/2009 and millions of U.S. homeowners saw their gimmicky mortgage rates re-set to historically low rates. But they still couldn't make the payments as they bought too much house and never had the income to support it. They say 'hey, not fair. we could afford the original payments at 1000 per month. We can't go any higher than 1200.' Bank says, buddy that doesn't even cover your monthly interest so your mortgage would actually be going up while your house price plummets. Again, no protection for the little guy from normal market forces.

In both cases the last deal signed was irrelevant to the new deal being negotiated. Market forces were different.

But the NBA guys, most of whom are grossly overpaid millionaires, want protection from legitimate market forces impacting the economy and their contract offers. Something about that stinks. And this is why they will never get the support of most fans who have to deal with economic reality every day.

And basketball players have the option of going to play in other leagues. They won't make any where near what they make in the NBA but hey, market value and all.

You realize that the NBA is a legal cartel specifically because they can negotiate with a union, right? Without a collectively bargaining union protecting them from anti trust law, the league cannot protect itself from "legitimate market forces". They need to present an offer that the union feels is better than what they would get in an actual free market system, otherwise the union can disband and everyone can fend for themselves. Then the league just has to not do anything illegal (like collectively cap salaries, or setup other trade restrictions, etc.). Just like in every other business. The argument that the players can just go play elsewhere is disingenuous and misses the point. It isn't about going elsewhere to another league or continent. It's about going elsewhere to another team, since they are all supposedly competing with each other under antitrust law. The Pacers can say that as a team they are capping salary at 50,000,000/year. If the players don't like it, they can go to the Knicks, for example. The Pacers and Knicks can't just setup a rule between them that 50,000,000 is this years salary limit, without a union. They don't get to keep their exemption.

The players are now offering the league a choice. They are saying the league can pay them enough money as a group (or setup enough rules in the system to placate them) in order for them to remain a collective bargaining unit, or they can start negotiating as individual teams with individual players. There's going to be a negotiated settlement since no one wants to wait 3 years for the courts to handle things, but the owners as a group are not allowed to just unilaterally setup their own rules for the league. They need to give up enough to the players to get the cost certainty they're looking for, or they can run their businesses like every other non union shop in the country.

Listen, I know exactly what the players want, they want the same deal they had last time where the system allowed many players to get overpaid on long term guaranteed deals and gave them the ability to force their way to whichever preferred destination they have in mind. That's what the players want.

Unfortunately, that kind of arrangement isn't viable for the business model.

I'm all for the NBA dragging this through court until they get what they want. If the players win then the league shuts down anyway because treble damanages will sink them. The players still have the option to play basketball for a living, the nba never stopped them. they just don't want that because the NBA is what inflates their earnings. Like I keep saying, Kobe couldn't get $15 mil on the open market.

The NBA isn't holding the players back, they can go make money playing ball if they want to, they just won't be making inflated NBA salaries.

[Fairview4Life]

Listen, I know exactly what the players want, they want the same deal they had last time where the system allowed many players to get overpaid on long term guaranteed deals and gave them the ability to force their way to whichever preferred destination they have in mind. That's what the players want.

Unfortunately, that kind of arrangement isn't viable for the business model.

I'm all for the NBA dragging this through court until they get what they want. If the players win then the league shuts down anyway because treble damanages will sink them. The players still have the option to play basketball for a living, the nba never stopped them. they just don't want that because the NBA is what inflates their earnings. Like I keep saying, Kobe couldn't get $15 mil on the open market.

The NBA isn't holding the players back, they can go make money playing ball if they want to, they just won't be making inflated NBA salaries.

I don't think you actually do understand. The players are going to fight for good things for the players. Owners will try and keep as much for themselves as they can. This is hardly breaking news. If you go by these negotiations, the players were willing to concede a significant amount of money. Much more than you seem willing to credit them for. Regardless, the league has not yet presented them with an offer they feel is better than what they would get as individuals in a free market. If the league wants anti trust protection, they can make such an offer. Or starve the players out. If they don't feel they can make an offer, and the players can last long enough, the league can learn how to obey the law without a union to deal with. What's going to happen is that they will negotiate through their attorneys as a "settlement" to the lawsuits, the owners will concede a little and take their massive gains and the season will start.

Your dream of terribly managed franchises getting to make a profit no matter how stupid they are can live on.


Edit: Kobe couldn't get $15 million on the open market? Are you nuts? Jerry Buss has openly said Kobe is worth about $70 million/year. The Lakers just signed a massive new local TV deal thanks to Kobe boosting their ratings. Your problem is that you seem to think the NBA deserves to exist, or it's the only basketball league that can exist. All things are thanks to "the NBA". That is nonsense. The NBA might have a massive initial advantage as the incumbent, but if they keep managing things incredibly poorly, there will be competition, and they will lose. They don't just have a right to exist without competition forever, just because. If the NBA **** this up for long enough, someone else will want a piece of the 4 billion in annual revenue.

[Courtside]

What does the world economy have to do with the NBA? NBA teams are generating record revenues, and their record ratings are driving huge local TV deals and soon to be anew record national TV deal. The NBA's economy is stronger than ever.

...and when the new record TV deal is signed, the total amount of BRI will take a big jump and player salaries will jump with it. The owners aren't trying to limit salaries by a dollar amount but by %.

The fact that multiple teams are losing money suggests that no, the NBA's economy is not stronger than ever. If they were a single entity, sure, but you've been arguing that's not the case up until now.

[floppymoose]

^^ Just in case you didn't follow the NFL CBA negotiations they agreed to a 53% owners 47% players. Previous CBA was close to 50/50.

Football is the least like NBA of the group. I think NHL is the strongest comparison, in terms of player lifetime and the value of an individual player to the team.

[roundhead0]

^^ Just in case you didn't follow the NFL CBA negotiations they agreed to a 53% owners 47% players. Previous CBA was close to 50/50.

Football is the least like NBA of the group. I think NHL is the strongest comparison, in terms of player lifetime and the value of an individual player to the team.

You need to take those numbers with a big grain of salt. Forbes has always (or at least used to) admit that they didn't have full access to numbers and so they had to make their best guesstimates. Things may also differ quite a bit depending on what is considered "revenues" to be counted against.

[dhackett1565]

Regardless, the league has not yet presented them with an offer they feel is better than what they would get as individuals in a free market

I keep hearing people say this as though the union disclaiming was an indication of that. It is not. The vast majority of players would suffer enormously under a free market system. You can bet every minimum salary player would be taking a 50% or more pay-cut. Most mid level players as well - teams will only have so much money after they blow the bank on the superstars. The total revenue split will probably be driven above 57% - you have been correct when you stated so before - but the amount of revenue going to the bottom 2/3rds of the players would shrink. Throw in the probable effect of the free market being that several teams close up shop, and suddenly there is a drop in the number of jobs available - especially since no owner is actually going to sign 13 players anymore. Probably 10 at most. If it were put up to a democratic vote, the majority of players would choose the owners last offer over free market every day (if they understood the ramifications of the free market system).

Of course, those aren't the choices. The players union never intended a free market to ever be an option. This is a negotiating strategy. As soon as the players filed suits, their lawyer was all over the news inviting the owners to negotiate, saying he thought it would end in negotiations, and saying he wanted it to end quickly (sound like court proceedings to you?). The union doesn't prefer a free market system - they just know the owners don't want it either, so they use it (and $6 billion in damages) as a threat to get the negotiations to go in their favour.

[Twinkie defense]

Today, Doug Smith commented on the new MLB CBA here, with references to the NBA situation:

Well they do share revenues and don’t have a salary cap of any form.

They do maximize profits from internet media, which is huge for them and not something the other sports do particularly well.

There is a level of competitive balance – look at the teams that are in the playoffs each year and, please, for the love of all that’s good in the world, get past the myopic American League East parochial view and put the blame where it should have been all those years – on Blue Jays ownership and management.

But what’s most important, in light of what’s going on in that sport I used to cover, is that the talks on this new deal began quietly, without any fanfare and quite a while ago.

They did not leave things until the last minute, they appear to have puttered around on their version of “system” issues for months, if not years, behind the scenes and in the true method of collective bargaining.

They didn’t not hold public bargaining session or give month-by-month updates; they did not call each other names, suggest that what one side wanted was never going to happen. They did it professionally and on their own and everyone came away happy.

There are those of us who used to think baseball was the most screwed up of all the sports when it came to relations between the union and the owners. The players were militant to a huge degree, the owners were unwavering in what they wanted. They got to the brink and beyond on almost every occasion.

Now? Not so much.

They’ve got it right. Everyone else has it wrong.

Odd, isn’t it? Good, but odd.

Give NBA owners an anti-trust exemption like MLB has and you might see more labor peace in basketball too

[I_Like_Dirt]

...and when the new record TV deal is signed, the total amount of BRI will take a big jump and player salaries will jump with it. The owners aren't trying to limit salaries by a dollar amount but by %.

So if overall revenues are going to take a big jump, that means that the owners are going to see a jump in their profits along with the current players salaries even if nothing changes. So yes, the owners are after more. In fact, they're risking that jump in tv revenues in order for the %-based drop.

The funny thing about all of this is that some of the smallest market teams (the ones from the previous ABA - I think 4 of them) actually have to pay some of their national tv revenues (something like 1/7th if memory serves) to their previous ABA owners. This means that not only does local tv revenues cause a reason for disparity in revenues, but so does national tv revenues since those former ABA franchises get 1/7 less than every other team.

[floppymoose]

You need to take those numbers with a big grain of salt.

I do. If you have a better source please share.

[Twinkie defense]

But the NBA guys, most of whom are grossly overpaid millionaires, want protection from legitimate market forces impacting the economy and their contract offers. Something about that stinks. And this is why they will never get the support of most fans who have to deal with economic reality every day.

The players don't seem to grasp this, but when the fan looks out at those players - and it doesn't even have to be a ton of players - who are making big salaries, but seemingly not putting a lot of heart or effort into their play for their teams, that is going to reflect really poorly on the players. Players say "hey no one forced the Hawks to pay Jamal Crawford $15 mil!?" But how does that make the ultimate source of players' salaries - fan interest - feel sympathy for the players' plight in CBA negotiations? If they were smart they would agree to redirect some of that dirty money to more deserving players, and everyone would be happy - except the Eddy Currys of the world... and who cares about them except Eddy Curry?

[Twinkie defense]

Here is a different take on what's going on. The two sides are much further apart than you think. And the players did not make nearly as much of a concession as advertised. They never really agreed to a 50:50 split - although they would like you to think that they did. I base this on the fact that they are fighting tooth and nail against any method that would enforce the 50:50 split. No to salary rollbacks. No to a proportionate reduction in max contracts. No to a reduction in the rookie scale. And especially no to any higher escrow than 8% and no to any mechanism that would allow the teams to recoup if the escrow was not sufficient to reduce the actual salaries to 50%. This is the same game they played before. Let me explain. If total salaries are 57% like they have been all but the past year when some teams stripped down for the big free agent frenzy, the 8% escrow would only reduce the players' take to about 52.5%. if they reach salaries totaling 60%, an 8% escrow would only reduce it to about 55%.

The owners know this and that is why they don't give on "system". I am sure that if the players offered a 15% escrow they could have all the system changes they wanted.

This is a really important point that I don't think people are grasping - what does it matter what the BRI split is if there is no mechanism (read: system) to enforce it?

[floppymoose]

That seems like a bit of a red herring. The prior agreements did fine with 8% escrow. Even in the event that the escrow couldn't make up for an owner shortfall, the cap system (based on prior years revenues) would fix that the very next season.

[YogiStewart]

^^ Just in case you didn't follow the NFL CBA negotiations they agreed to a 53% owners 47% players. Previous CBA was close to 50/50.

Football is the least like NBA of the group. I think NHL is the strongest comparison, in terms of player lifetime and the value of an individual player to the team.

except for its lack of a major TV deal in the US.
and lower merch sales in the US.
and the NHL making most of their money from gate revenues.
and the NHL having around 6 teams that are bleeding the league, with 1 league relocating last season and giant red flags in Phoenix, Florida, Columbus, etc etc.
otherwise, the NHL is exactly like the NBA.

[Twinkie defense]

The Pacers can say that as a team they are capping salary at 50,000,000/year. If the players don't like it, they can go to the Knicks, for example. The Pacers and Knicks can't just setup a rule between them that 50,000,000 is this years salary limit, without a union. They don't get to keep their exemption.

That is true only insofar as the NBA controls the market for American professional basketball players. But when you have so many foreign basketball players working in the US, so many American ballers playing overseas, and so many foreign leagues - many of them offering competitive salaries to many American players - that is not a slam dunk case, it is a case that the *NBPA would have to prove in court. And while it is possible they could do that, it is no sure bet - in fact there have already been two US courts who have establish precedent that the *NBPA would have to overcome in making this determination.

But let's not kid ourselves! The players have no desire to test these theories in court, and no desire for a "free market" for their services. They want protection from the free market. They want the same system they had before, which put a lot of restraints on player movement and salary, while guaranteeing them cushy lives with untold millions they don't have to really work for.

[Twinkie defense]

That seems like a bit of a red herring. The prior agreements did fine with 8% escrow. Even in the event that the escrow couldn't make up for an owner shortfall, the cap system (based on prior years revenues) would fix that the very next season.

An 8% escrow may have worked fine when everyone's contracts were given out with that BRI split in mind. But now we have billions of dollars in future years contracts sitting out there - contracts with a 57% BRI split in mind - with significantly less money to cover those contracts. How do you propose 50% gets enforced? If next season there is a lower cap, Andris Biedrins is still making $9 mil.

[floppymoose]

Well Yogi, I never said they were identical. And yet it's funny how all the leagues are still here after a decade of averaging at 54% to the players.

NBA is just an aberration, right? They're special, they will surely fail at 54%.

[floppymoose]

Twinkie, the cap/tax squeezes those dollars out of players who negotiate their next contract. I don't think it's a significant issue past the first year.

[YogiStewart]

Well Yogi, I never said they were identical. And yet it's funny how all the leagues are still here after a decade of averaging at 54% to the players.

NBA is just an aberration, right? They're special, they will surely fail at 54%.

when you're talking about up to 6 teams in financial trouble with only 2-3 markets to move them to, then yes, they're likely to fail.
we'll see what happens next year. my guess is that owners ask for a greater % to bring them closer to 50%. but its great that you're referencing a CBA that was ratified 5+ years ago. different economic times, which is the point that other posters are making repeatedly (and which you're not listen to)

[floppymoose]

when you're talking about up to 6 teams in financial trouble with only 2-3 markets to move them to, then yes, they're likely to fail.

Which brings us to the next question... if that's true, is the right solution to shift money from the players to the owners? Or is it better revenue sharing? Or is it contraction?

[floppymoose]

but its great that you're referencing a CBA that was ratified 5+ years ago. different economic times, which is the point that other posters are making repeatedly (and which you're not listen to)

I have listened, repeatedly. No one has ever explained how the economic climate has affected the league in a way that implies the owners need a bigger share of the pie. Revenues are all time high. Inflation is low. Interest rates are low. Gate receipts have been steady for several years, not down. We've been through all this multiple times.