Discussion in 'Pistons and NBA' started by G-man, Aug 5, 2009.
Manifesto! That guy's got some opinions.
Hey T. It's a thinking mans post eh.
Upside is he's bringing a fairly objective mindset, a variety of "media speak", comparisons of competing leagues and ownership self-interest all to the same table.
It's a Broadsword he's swinging....
Downside is if the reader has a short attention span he won't read line 1 due to the length of the post. People can't absorb the meaningful nuances of situations if they're incapable of even short term concentration.
That's why the Ringling Brothers created the "Three Ring Circus"......
I have an extremely long attention span, so I was just getting warmed up when the article finished. I feel like he could have expanded on Stan Kroenke a bit more though. It left me wanting.
(I too was left a little adrift when I realized Ms Davidson future impact on the Pistons spending habits wouldn't be menschened.....)
NBA Owners May Let CBA Lapse After 2010-2011 Season
Ken Berger - ProAthletsOnly.com
"The sky is not falling on the NBA, commissioner David Stern said yesterday while making reassuring comments about the league’s economic prospects during his annual preseason conference call with the media.
“If you are alive in this world and you have access to that ancient form of communication - the newspaper, which I do and I have - you can’t help reading the headlines with what’s going on,” Stern said. ” … So if you’re having a business discussion, you just have to understand what’s going on in the world around you, and we did that. That said, the owners were remarking upon the strength of the sports business and the value that it provides.”
Stern spoke after giving his annual preseason address to team owners at the Board of Governors meeting in Manhattan, which he described as “on balance, a very upbeat report.” He predicted flat attendance for this season and slightly better gate revenue, citing a plan to stem potential losses from lower season-ticket renewals with a league-wide program of 1,000 or more seats at NBA games selling for $10 or less. Sponsorship renewals for the 2008-09 season were strong, Stern said, adding: “We’re pretty optimistic that this will be a season that will be better in our industry than it will be in some other industries.”
But one team executive told Newsday yesterday that owners are worried about the economic downturn and might be inclined to let the current collective-bargaining agreement with the NBA Players Association lapse after the 2010-11 season rather than extend it one more year.
That executive said only “five to seven” NBA teams are profitable and raised the possibility of a lockout in 2011 if teams face more strain than Stern predicted. “You’re going to have owners pushing for a better deal,” said the executive, who spoke on condition of anonymity. “This is one of the years the NBA is worried that overall revenues may be a little bit down.”
A Forbes magazine analysis last December showed that 20 of the 30 NBA teams were making a profit. Stern estimated yesterday that a more accurate figure is about half, and said the league’s ongoing system for monitoring teams’ debt obligations has revealed nothing alarming.
“With respect to what my teams are going to do in three years to incite or not incite labor unrest, you have to give me a pass,” Stern said. ” … We know that when you go into collective bargaining, you’re going to look for ways to improve it to make our game more competitive, to make our teams more competitive, to keep our game growing. But I think it’s premature for me to speculate now.”
Referees now will be able to use replays not simply to determine if a quarter-ending shot should have counted, but also whether it was a two-pointer or three-pointer. Replay also can be used to determine if a shooting foul occurred on such a play.
Stern scoffed at the notion of European teams poaching more NBA talent after the offseason signing of several second-tier players, including the Hawks’ Josh Childress, who signed a three-year, $20-million deal with Greek power Olympiakos. Stern noted that with Euro teams often playing in arenas with fewer than 10,000 fans, “the economic model does not exist that would support such contracts. And we don’t mind the competition.”
NBA Owners May Let CBA Lapse After 2010-2011 Season : Pro Athletes Only
*Note, this article is from October 24, 2008.
The most relevant aspect of this piece is what Stern says at the end and how it tells us that the NBA players can't use the Euro League or FIBA as leverage for a walkout or strike in 2011, and that he knows it.
He said, "with Euro teams often playing in arenas with fewer than 10,000 fans, the economic model does not exist that would support such contracts. And we don't mind the competition"
There's some messages and strategy in those two sentences.
The first is to the "owners" as a strategy keep the salaries of the players high enough (hence - the players personal living standards expensive) that they can't afford to play anywhere else.
The second is that the NBA with their intertwined euro relationship, isn't going to be advocating greater growth in european arenas. The small arena keeps the profit model caged. So we can far more easily pilfer from them then they could ever pilfer from us.
You can almost see Stern smirking when he says, "And we don't mind the competition"......
Deal Or No Deal
Liz Mullen - Street & Smith Sports Business Journal
"Call it sports labor’s disharmonic convergence.
After suffering only one labor stoppage in the last 10 years, the major American sports leagues are headed into a time of unprecedented uncertainty. Each is dealing with its own complex set of issues between owners and players, including some points that have been controversial nearly from the day the previouscollective-bargaining agreements were signed.
And all of the leagues are dealing with an economy that has proved to be the worst in more than a generation and has affected nearly every corner of the business.
On top of that comes something no one at the four leagues or the four unions can remember happening before, the equivalent of a full solar eclipse on the sports labor calendar: All four major team sports have collective-bargaining agreements expiring in the same year, 2011.
It adds up to a lot of unknowns. A series of interviews by SportsBusiness Journal with top negotiators on both sides of the table in all four sports reveals hope from all sides that deals can get done, as well as frank acknowledgments that there could be a work stoppage in at least one of the sports.
The commissioners and some team owners in the NFL and NBA, both of which have begun formal bargaining, have made it clear that they are looking for changes in their salary cap systems, which regulate what they pay their most critical employees, their players. Those on the labor side of the table say major changes typically mean major concessions.
In the NHL, players are unhappy with the CBA they ratified in order to end the 2004-05 lockout. And despite numerous concessions from players, NHL owners are not entirely satisfied with it either.
In Major League Baseball, the MLB Players Association is investigating whether owners colluded to drive salaries down in the last free agent market. Both union and league officials say it is too early to say what will happen in 2011.
“We could have peace in all of them,” said Bob Batterman, who serves as outside labor counsel to the NFL and NHL as a partner at the powerful Proskauer Rose law firm. “We could have war in all of them, [although] I think that is very unlikely.”
But the heads of the two unions that have begun negotiations, NFLPA Executive Director DeMaurice Smith and National Basketball Players Association Executive Director Billy Hunter, both say they believe owners may be preparing to lock their members out.
“I have been through the lockout,” Hunter said. “I can see a fight coming into this one. I don’t want it. But you play the hand that is dealt to you.”
‘The world has changed’
For many of those coming to the bargaining table, everything starts with the recession.
“I think that our players understand completely that the world has changed,” said NBA Commissioner David Stern. “They look outside. They live in Detroit. They live in Phoenix. They live in California. They understand unemployment is at 11 percent, that office vacancies abound. The players understand those are our fans, the ones who aren’t working, who are in foreclosure, who don’t have jobs in offices.”
Revenue for professional sports leagues has increased regularly over the years, and that increase has made it easier for deals to be made between leagues and players unions. In the last 10 years, only the NHL has suffered a work stoppage, the lockout of 2004-05.
But in most leagues that revenue growth has run into a brick wall in the form of the recession, which could make new agreements much more difficult to reach, labor experts say.
Howard Ganz, Batterman’s partner at Proskauer Rose, who serves as outside counsel to the NBA and to Major League Baseball, said the current economy is the biggest issue for owners and leagues as they prepare for collective bargaining with players unions.
Ganz said the economy’s overall effect on sports leagues isn’t yet clear because many of the leagues’ biggest revenue-generating deals were made when times were better and stretch over multiple years.
“Those arrangements will be coming to a conclusion over the next year or two. And who knows whether sponsors are going to continue to spend lots of money on sports promotion,” he said. “At the same time costs have not declined.”
Batterman said the economy is affecting how sports team owners look at their costs of doing business, and players’ salaries make up the majority of costs in all of the leagues. “The feeling among all the owners and all the senior management teams in all the leagues is the business is changing,” he said.
Owners are questioning whether growth opportunities for revenue are going to continue “or do we need to revisit the revenues or shares [guaranteed to players] as a result?” Batterman said. “ I don’t know that there are any answers yet, but I think that question is being raised all over.”
At the same time, they say their expenses outside player salaries also continue to rise.
“You’ve got a lot of costs with sponsorship, with fulfillment, our fans are asking more. Our business partners are asking more,” said NFL chief legal officer Jeff Pash.
Before the recession, sponsors and advertisers increasingly were asking leagues and clubs what return on investment they would get in a deal. Now “it seems like you get those questions much more quickly and that there is a lot more rigor in the analysis that goes into it,” Pash said.
But NFLPA officials say the NFL has not provided them with any information about their costs. “The union thus remains in the dark as to what the owners consider to be the main items for the negotiations,” NFLPA outside counsel Jeffrey Kessler said after two formal bargaining sessions with the NFL.
And the NBPA’s Hunter noted that the NBA bought a full page ad in The Wall Street Journal touting the league’s third-highest attendance ever and increases in television viewership. “So you tell me what they mean,” Hunter said.
Although other issues often emerge in CBA negotiations, like age limits and marketing rights, negotiators on both sides of the table say that in this round of talks, the main issue is players’ share of league revenue. “It’s about dividing up the Benjamins,” Hunter said.
The economy, and whether it improves between now and 2011, is also a wild card. Labor experts say that a bad economy favors owners seeking concessions, but negotiators on both sides of the table said it is much easier to get a deal done in good times versus bad.
Update for salary cap?
The salary cap system that exists today in the NFL, NBA and NHL, in which team payrolls are capped at a percentage of league revenue, was invented by Stern in 1982, when he was executive vice president of the NBA.
But now, there is talk from Stern about a whole new system.
“As we begin [negotiations] there may be just a completely different way of doing it that doesn’t involve any percentage or salary cap,” Stern said. “I don’t know. We’ll have to see. There may be a system the players suggest to us that brings our teams to profitability that isn’t … a system we are familiar with.”
And in the NFL, the salary cap system that began in 1993 is not working for owners anymore, said Pash, who is leading negotiations for the owners. “It may have been perfectly sound in 1993 when it was entered into, but it has not evolved in a way that reflects the operations of the National Football League in 2009,” Pash said. Among other things, Pash said that system does not take into account owners increased costs, including more privately financed stadiums and debt service.
But on the players side, no one seems convinced that there is a need to throw out the salary cap system for a new system that they believe would further restrict players’ earnings.
Speaking before the Sports Lawyers Association in Chicago earlier this year, MLB Players Association Executive Director Donald Fehr — who has led the baseball players’ successful fight for 25 years against a salary cap — questioned why team owners, who sold the salary cap in the first place, were now saying the system was not working.
“One of the benefits of the salary cap system that has been in effect in the other sports has been the suggestion that it automatically adjusts for economic conditions,” Fehr said. “Players do better when the games do better… everyone sees a decline when revenues decline, and therefore, we don’t have to continually rebargain everything.”
“It doesn’t surprise me — although I think it is inconsistent with the basic philosophy as expressed for the cap — that when revenues go down, management wants to revisit the cap … because it doesn’t do what they said,” Fehr said.
Management side sources say the traditional cap is not working anymore because it was based on an old cost structure, and that cost structure has significantly changed in the last few years.
Stern, who recently revealed that fewer than half of the 30 NBA clubs are profitable, said the current cap in the NBA doesn’t take care of the problem of a decline in revenue, in part because the cap is set after the revenue has declined. Stern said. “I mean, if it takes care of it, presumably there wouldn’t be any losses.”
No ‘pattern bargaining’
Unless deals are cut before the leagues reach their deadlines, the CBAs will expire near the end of each quarter in 2011. The NFL’s deal is up in March, the NBA is next in June, the NHL is third in line in September, and Major League Baseball is last in December.
Though no one can predict what will happen in the labor talks between the four leagues and the unions, there is an oft-repeated sentiment that nothing ever gets done in labor negotiations until there is a deadline. The expiration of the CBAs is the major deadline, since players can not strike and owners can not lock out until the labor deals expire.
The timing is unprecedented, but all league and union officials interviewed for this story agreed that no one conspired to engineer the timetable. At the same time, sports management and labor leaders aren’t sure what it will mean, other than a greater emphasis by the mainstream sports media on sports business and labor issues.
“Obviously, all the sports look at what is going on in the other sports,” said Rob Manfred, MLB executive vice president, who leads labor negotiations for the clubs. But the sports industry does not engage in “pattern bargaining” like the auto industry, in which the first labor deal struck dictates successive labor deals, he said. Kessler, who serves as outside counsel to both the NFLPA and NBPA, said one negotiation may have little or no effect on another negotiation in another sport because the CBAs and the issues associated with them are so different.
“The amount of revenue sharing in the four sports is vastly different, the amount each sport depends on national revenues; the average career length in the four sports is different; the overall financial health in the four sports is different,” Kessler said.
There is, however, what Kessler calls a “psychological intersect” in which owners in one sport will be mindful of how negotiations are going or labor tactics are being used in another sport. “If one strategy is successful in one sport, people might think it could be successful in another sport,” he said.
Other industry experts noted that because there is cross-ownership among the sports, owners who win a labor victory in one sport could push harder for gains in another sport.
The sports unions, too, have historically supported each other, at least verbally, in times of labor unrest.
Hunter said the expiration of all four deals in the same year was something he discussed at length with Gene Upshaw, his good friend and the former NFLPA executive director, before Upshaw died unexpectedly last year.
“If it resulted in any one group being locked out, I think he sort of saw himself at the front because the NFLPA agreement is the first to expire.” Hunter said. He has not yet addressed this issue with Upshaw’s successor, Smith.
Upshaw, Hunter said, “thought it provided an opportunity that I guess we could all … unify if we all kind of took a universal position about the concerns of our players.”
Deal or no deal?
Cohen remains skeptical of restrictions
Tennessee congressman seeks answers from NBA on age rule
BASN Wire Services
"WASHINGTON -- The NBA defended its minimum age requirement to Congress, but a critical lawmaker was unmoved and is asking to meet with top league officials to discuss it, according to letters obtained Monday by the Associated Press.
The rule, which is part of the league's collective bargaining agreement with the players union, requires that players be at least 19 years old and a year out of high school before entering the league. Last month, Rep. Steve Cohen, D-Tenn., urged the league and union to scrap the requirement in the next collective bargaining agreement, calling it unfair.
NBA president Joel Litvin told Cohen in a recent letter the purpose of the requirement is to promote the league's business interests by "increasing the chances that incoming players will have the requisite ability, experience, maturity and life skills" to perform at a high level. The policy also helps teams make informed hiring decisions, he wrote. In addition, he said, players get an extra year to mature and develop, making it more likely they can handle the challenges of being an NBA player.
Litvin said the policy is motivated by "business considerations," not a desire to force players to attend college against their wishes. He wrote that many employers require job candidates to have post-high school experience, and that the U.S. Constitution sets minimum ages for House members, senators and the president. Given that, "we do not understand your objection" to the rule, Litvin wrote.
In a letter sent to Litvin on Monday, Cohen maintained that players should have the "economic freedom" to make their own decisions. He said he understood that the policy might help the league in its scouting and hiring decisions.
"However, my concern is that the players who must abide by this rule are harmed by the league's pursuit of these business interests," the congressman wrote, adding that the "age discrimination" prevents players from supporting their families.
The policy increases the chance that such players will be injured before getting the chance to play in the NBA, he added.
"I am concerned that the careers of young men who possess all the skills necessary to succeed in the NBA," Cohen wrote, "may be sacrificed in favor of the bottom lines of the teams on which they hope to play."
Cohen, a member of the House Judiciary Committee, asked for a meeting with Litvin and Commissioner David Stern. Cohen has said that that he would consider both hearings and legislation if the requirement remains."
Cohen remains skeptical of restrictions
not quite sure why the government should be sticking its nose into a contract between two sides.... about age restrictions.. unless they want to admit that there shouldn't be an age restriction on drinking.... driving.... and anything else. I can make the same arguments that those should be done away with too...
Well, there actually are existing laws about age discrimination. Can't deny someone employment based on age, gender, race, etc. Seems like kind of a good thing to me.
But you CAN deny someone employment based on age.
Why we might not see Rubio until 2012
Chris Sheridan ESPN
"Here's the main thing: money.
It's always about the money, and the monetary benefits of Rubio's playing three more years in Spain instead of two are astronomical.
If Rubio exercises his 1 million euro buyout in the summer of 2011 after two seasons with FC Barcelona, he then would be able to sign with the Timberwolves (or any other NBA team if Minnesota were to trade his rights) under terms of the 2011-12 rookie-salary scale.
Assuming collective bargaining agreement rules don't change, that would guarantee him $7.22 million in his first two NBA seasons, with his team holding options for a $4 million salary in his third season and $5.07 million in '14-15. He would make a total of $16.29 million in his first four seasons, and he would not be eligible to become an unrestricted free agent until the summer of 2016, when he would be 25.
If Rubio plays three seasons for FC Barcelona, by the summer of 2012 he no longer would be bound by the terms of the NBA rookie scale, which apply to first-round picks only for the first three years after which they are drafted.
Rubio then could exercise his buyout (which remains the same in 2012 as it is in 2011: 1 million euros), come to America at age 21 and not be bound by the rookie scale. (Yes, there is a specific rule covering these situations. We've checked the details with the highest authorities and discovered a few caveats: Rubio's contract would have to be for a minimum of three years and a maximum of five, and the money that would be made available to him could be only from a team with salary-cap space, the mid-level exception, or a disabled player exception.)
So let's say the Wolves are $8 million under the cap in the summer of 2012, they still hold Rubio's rights and Rubio has blossomed into an All-Star-caliber player.
Minnesota then could offer Rubio a five-year deal starting at $8 million with 8 percent annual raises (assuming CBA rules don't change), which would total out at $46.4 million and make him an unrestricted free agent at age 26. (Moreover, if Rubio had an opt out, he could become unrestricted at 25.)
In short, if Rubio comes in 2011, the rules say he can earn a maximum of $16.3 million in his first four seasons. If he comes in 2012, he won't be boxed into that rookie-scale deal.
Let's take it even further: If Rubio's stock rises to the point where he is considered talented enough to be a "max" player (a player eligible to receive a maximum salary, which in Rubio's case would be 25 percent of the salary cap if the rule stays the same under the new CBA), and his agent can get Rubio's rights traded to a team with "max" space, he could make $16.3 million in his rookie season alone.
Yes, there are a lot of ifs there, and another big if is whether those same rules would be grandfathered into the new collective bargaining agreement that will replace the one likely to expire in June 2011."
Ricky Rubio might not make his NBA debut until 2012 - ESPN
The salary cap recession
Doug Thonus Chicagonow.com
"The decreasing salary cap changes everything though. Let's look at Luol Deng's recent extension. He signed a contract worth approximately 16% of the salary cap which is quite far away from the non-veteran max of 25% of the cap. This season, his salary has bumped up to 18% of the team salary cap, still not so terrible, but quite a rise. If the worst case scenario happens next year and the salary cap drops to the 50.4 million level at the low end of the league's estimate, then Deng's contract will advance up to 22.5% of the cap, just slightly under the veteran max. If the salary cap continues to fall, then he could easily end up at higher than max contract rate in his final three years.
Luol's hardly alone in this group. Many contracts signed this off-season and last off-season with five or six years left have players who can't hope to justify their contracts due to the shift in NBA economics. The question becomes, how long will the league continue to sign these monster deals with huge raises in an era with a receding salary cap?
What does this mean for NBA decision makers? The logical outcome seems to be lower offers for players. For some players, that definitely was the case. However, a team like Toronto spent money like a drunk sailor throwing out huge backloaded deals to Hedo Turkoglu and Andrea Bargnani. They hope to keep Chris Bosh, however, if Bosh signs a max deal with them next off-season then they'll never add anything else around him as that team capped might fill 80%-90 of the room under the luxury tax with Bargnani, Calderon, Turkoglu, and a resigned Bosh in a couple years.
You know I love Ben Gordon, however, if the salary cap continues to fall, then his deal won't look so hot for the Pistons going forward either.
This is one reason why 2010 is the Bulls greatest hope and potential worst enemy. The league is going to destroy the players union after the 2010/11 off-season when the next CBA is introduced. Players signed in 2010 likely sign under far more player friendly contract conditions than the players a year later. Chris Bosh will sign 6/120 million dollar contract with someone, and if he doesn't play like a top 10 player that team's in a world of hurt. Do you trust Chris Bosh to do that? Same deal with Amare Stoudemire. Carlos Boozer won't get quite that much, but the same argument applies."
The salary cap recession - Chicago Bulls Confidential
I'm assuming that salaries that end up over the 25% threshold don't get lowered, but are grandfathered in. At a cap of $50.4 million, the max salary would be 12.6. Last year there were 36 players who made more than that.
Report: CBA would cut all player costs
ESPN February 11, 2010, 10:50 PM ET
"DALLAS -- The proposal the NBA sent to the players' association for a new collective bargaining agreement seeks cuts from the biggest superstars down to guys not even in the league yet.
A person who has seen the document told The Associated Press on Thursday that first-round picks would have their salaries cut by about one-third and the minimum salary would be reduced by as much as 20 percent. The person spoke on condition of anonymity because he was not authorized to comment publicly about the negotiations.
The total value of a maximum contract for a veteran also would drop below $60 million, as previously reported by ESPN.com. That's less than half of what LeBron James can sign for this summer if he opts out of his contract and re-signs with Cleveland.
The person said owners "have made it clear they intend to rein in player costs across the board from every segment of the player population."
The league sent the proposal to the union last week and negotiators from both sides will meet Friday to discuss a new deal to replace the one that will expire July 1, 2011. They already had some preliminary sessions and exchanged financial documents last summer, getting an early jump on the process with many teams hit hard by the economic downturn.
Neither the NBA nor the players' association have commented on the proposal."
Report: NBA owners proposing cuts to player salaries - ESPN
Union: NBA tears up proposal after heated meeting
Brian MaHoney AP Basketball Writer - yahoo Sports
"DALLAS (AP)—The executive director of the NBA players’ association says the league has torn up its proposal for a new collective bargaining agreement after a “contentious” 90-minute session.
But Billy Hunter says that doesn’t mean the league is closer to a lockout after the 2010-11 season. He says the union will submit its own proposal, but offered no timetable for when that would happen. He says the players won’t rush because they believe the current system is working for both sides, and it doesn’t expire for another 16 months."
Union: NBA tears up proposal after heated meeting - NBA - Yahoo! Sports
Stern: NBA projects $400 million in losses
Brian MaHoney AP - Yahoo Sports
DALLAS (AP)—David Stern said Saturday the NBA is projecting league-wide losses of about $400 million this season and has lost hundreds of millions in each previous year of the current collective bargaining agreement.
The commissioner said it has shown the players’ association those numbers in hopes of demonstrating why the league feels it needs “significant changes” in the next deal.
The NBA’s first proposal for a deal to replace the one that expires on July 1, 2011, was thrown out Friday after what players association director Billy Hunter called a “contentious” 90-minute meeting. Hunter said the proposal called for harsh changes that would affect every NBA player.
“The right adjectives were thrown around, and our proposal appropriately denounced. Our response is, ‘You can denounce it, tear it up, you can burn it, you can jump up and down on it, as long as you understand that it reflects the financial realities of where we are,”’ Stern said during his annual All-Star press conference.
“And if you would like to have your own proposal, as long as it comes back and deals with our financial realities, that’s OK with us. That’s fine with us. In fact, that’s what we would like to do.”
Stern criticized the union’s behavior at the session, saying it earned “high marks on the list of theatrical negotiations.” He revealed that the players’ side brought in a lawyer who threatened that the union would be decertified, making negotiating more difficult.
He also had sharp words for his own side, denouncing anonymous comments made by team executives that served to inflame the bargaining process.
Stern refused to details specifics of the league’s proposal. A person who had seen it told The Associated Press on Thursday that it called for first-round picks to have their salaries cut by about one-third, would reduce the minimum salary by as much as 20 percent, and would guarantee contracts for only half their value.
Also, the total value of a maximum salary would drop sharply, as would the total years players could sign for, and the players would see a reduction in their share of the basketball-related income, of which they currently receive 57 percent.
Stern defended sending the proposal shortly before the All-Star break, saying the plan all along was to start the process early. Hunter said the league would like to get a deal done before this July, but the union won’t be in any rush to send its own.
Stern: NBA projects $400 million in losses - NBA - Yahoo! Sports
I'm not business guru, but I do know that you want to try and keep your labor costs no higher than say 30%...
Well, in the case of the NBA, labour is the actual product.
People would watch LBJ play in sweatpants on the blacktop. The theatrics are part of the NBA's overreach into sectors it is simply not competitive within (general entertainment).
It's interesting someone on the player's union side would mention de-certification, that's the nuclear option. It is very early for people to be making threats like that.
This is probably going to be very ugly.
I got cha Scoe. So actually, you can flirt with the 60% mark as you want to combine your overhead and labor costs, both of which you would like to keep below the 33% mark at the very highest.
Separate names with a comma.