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Time line of last NBA lockout. I'd forgotten a lot of the details to be honest:
http://www.hoopsworld.com/Story.asp?story_id=20580
http://www.hoopsworld.com/Story.asp?story_id=20580
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Commissioner Stern Admits Lockout Stalemate
By now you've likely at least heard about the Bill Simmons podcast with NBA commissioner David Stern, but not everybody had an hour to sit down and listen to the entire thing to see what Stern most recently had to say about the guts of this lockout.
I could sum it all up like this: Stern admits that the players and the league are miles and miles apart, and at this point it's not even about the stalemate of the discussions. Something's got to change in the way both sides approach this thing.
"We're all going to understand that when we lose [the exhibition season], that's when the NBA's offer is likely to change because there are going to be economic consequences that we're tiptoeing through right now," Stern admitted.
"I would say that I remain optimistic that we're going to make a deal," he added, "and I think that the urgency is set in a certain way by the rejection of our underlying premise. That is, this is the time to have a reset. This is the time to try to hold for the players most of what they have, and grow our way out of the situation we find ourselves in," he said.
"The players very strongly disagree and to this point don't even want to discuss it."
It's understood at this point that both sides are feeling hurt and offended by the other's inability to bend, and that's why a recent negotiation session was cancelled. According to Stern, the NBPA wanted to see a new proposal, which the league wasn't prepared to put out there, so the Players' Association just didn't show up.
In the meantime, the league's stance on numbers still hasn't changed. "We'd like to take out more expenses and then have a 50-50 split after the expenses," Stern said. "The big issue is, we have asked the players to take an eight-percent cut. From the $2.2 billion total, our total was $2 million, and hold it from where we try to grow out ourselves. If we do very well, and we grow more than four percent, they'll do better than $2 million under our projections and theirs, and we'll start to grow."
Cap guru and HOOPSWORLD contributor Larry Coon, however, says the numbers aren't that simple. "Players proposed [$100 million] cut, which translates to 54%. They say they'd 'be in trouble' at 50%," Coon said via Twitter. "League wants 50% after expenses. League says it needs to be in the black overall. With [$300 million] in losses, they'd break even at about 48%."
What all this means is that a 9% decrease in player salaries means the league could break even, but who do you know in this world that wants to make 9% less this year than they did last year, and know that they wouldn't see more than that for ten more years?
Even if the players did agree to a set number for salaries, like the suggested $2 billion, that would still equate to an 8% drop from last season. You can see why the players are so fired up.
But with so many teams losing money, you can see why the owners are so fired up, too.
"The NFL, the most profitable of all sports leagues, says it wants to be more profitable. Its players agree to a double-digit concession, and our players say, 'No, sorry, can't work.' There's something wrong with this picture, and that's why I think the picture will come into clearer focus as our players come to understand what our owners are actually offering and what they've done to open their books and why they want to make the changes they want to make," Stern said.
At the end of the day, both sides need to feel like the other is ready to start seriously bargaining in good faith. Right now, neither side is budging, and it's probably going to stay that way until there are games at stake. Of course, if they wait that long to get started negotiating, it may end up too late to save the season.
To avoid that, Stern said he'd like to see both sides keep their mouths shut throughout this part of the process so feelings don't get any more hurt than they already are.
"In this day and age, given the economic circumstances going on out there, with respect to the stock market, with respect to the European countries that look like they're falling with respect to economics and with respect to getting owners to buy teams and invest in them, lobbing grenades is not a good thing to do," Stern said.
"It's not good for business, it's not good for sponsors and it's not good for fans," he added. "So we're trying to keep ourselves aligned in the right way, and we think Billy [Hunter] is going to do the same thing."
Coon summed it up like this: "The players think the league is eventually going to stop bluffing. The league thinks the players are eventually going to come to their senses."
Right now, there's really no way to tell which will come first, but one or the other will have to happen for us to have NBA basketball before 2012 begins. Or ends.
Read more NBA news and insight: http://www.hoopsworld.com/Story.asp?...#ixzz1V3R1t9Je
9% is $90,000 for every $1,000,0000.
$910,000 versus $1,000,0000.
If players miss an entire year, it will take them 11 years to make up the difference of one lost season based on what the owners are offering.
The players are not done, out of touch with reality definitely in my opinion, but not dumb. Once these labour rulings come out that have been launched by both the NBA and the NBAPA serious negotiation should begin.
My opinions have always been based on the belief the NBA numbers are factual and they are indeed operating at a loss as an entire league.
A simple solution to me would be to:
1) cut the players 4.5-5% and have revenue sharing make up the difference for teams losing money,
2) cut out all exemptions except minimum contracts and Bird's Rights designated for one contract in any year (i.e. the most any team could pay in salary is cap plus 20% of it - around $80M),
3) implement a 'flex' cap around $65M with a max contracts of 25% of the cap,
4) cut guaranteed contracts to 3 years for free agency with team option for 4th and 4 years with team options for 5th when re-signing.
5) increase players portions equally if league revenues grow and decrease if revenues contract.
The above rewards prudent financial planning and drafting for teams. Players still get paid around the same they are currently getting anyways as most teams have a payroll over $64M as it is.
It does not solve teams currently in luxury tax though.
At a time when riots and wars are going on all over the world, bond markets are forcing governments hand to address irresponsible fiscal planning, mass layoffs are taking place world wide, economies are contracting, and governments are cutting back, I do not think the players are going to get much sympathy from the public for 'only' taking home $910K or $950K (if you want to use my napkin musings) versus $1M.
(Again, remember I am believing the majority of teams are losing money).Comment
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HoopsWorld Raps writer throws in his 2cents on lockout
Brother Steve makes some good points. He has an accounting background from what I recall and his view appears to have changed since the start of the lockout. I recall him being more supportive of the players - perhaps a 20% stock market drop in 3 weeks makes people start to realize things aren't really that great afterall.
Steve's luxury tax is interesting. Dallas won with around a $90M payroll. Under his rules, they would have a $92M tax bill in addition to that $90M for a total of $182M. Under current rules, the total bill for players would have been $110M ($90 plus $20M in luxury tax).NBA players need to take their collective heads out of the sand and start sending a quiet S.O.S. (Save Our Season) to union executive Billy Hunter.
NBA player association representatives ("NBAPA") seem to believe that they are in the posturing phase of negotiations and any real proposals they put forward will only be used against them once the real negotiating sessions start after league revenues are at risk. The NBAPA is wrong.
From the fans perspective, the worst thing that could have happened was the players getting their eight percent holdback money returned to them this year. Combining the return of holdback funds with the surprising financial planning of many NBA players to survive a lockout and the coming season looks lost long before training camps are even scheduled to open.
Why The Players Need To Save the Season
Most professional sports careers are short and a lost season's salary cannot be made up even if the players win everything they want in a contract. The players' representatives have publicly confirmed their belief that this season could be lost. They need to start acting like its true.
The NBA saw the financial success of the year-long NHL lockout and the NBA owners of NHL hockey teams have had little trouble convincing their brethren of just how profitable that strategy was. NBA owners are probably hoping, perhaps even planning, for a protracted work stoppage that will bring the players back to the negotiating table on the owners' terms.
The one thing NBA owners are not expecting is for the players to make a serious proposal that attempts to address their stated concerns. Therein lays the only real hope of saving our season.
The Owners' Real Demands
Cutting through all of the rhetoric and blather, the one idea that sums up the owners' real demands is every team should have a realistic chance of becoming an NBA champion and, if well run, be profitable.
Whether the players wish to acknowledge it or not, for most of the teams in the NBA, neither objective is realistic. The owners' concerns are genuine and need to be addressed for the long term health of the league.
What Should The Players Fight For?
The first step in any labor negotiation has to be holding onto as much of what you currently have as possible. Surprise, the NBA owners have already offered that with a $2 billion player salary guarantee, basically enough to protect every player's contract.
The players' representatives have seen the effects of the current NHL agreement and are concerned that the similar hard cap arrangement the owners' want will eliminate the ability of average NBA players to get the lucrative long term deals they currently enjoy. They're right. If the NBAPA wants to protect the average member and not merely represent a handful of stars, some aspects of the current collective agreement must be preserved.
The players need face the fact that this was never a partnership with the owners and for the most part ignore the financial information the owners put in front of them. They only need to look at attendance and ticket prices in some of the league's markets together with the inability of many teams to attract or hold onto star level talent to recognize the need for change.
Make An Offer that Owners Have To Look At
Take that $2 billion in player salaries the owners offered for next season, throw in a 2 percent per year increase and we can just ignore all that messy percentage of basketball related income stuff. It's a good offer.
The owners believe they can grow this thing faster than two percent year don't they? This will give the owners the chance to grow out of the problems that they mostly created themselves. The players have never really believed the numbers the owners shown them anyways.
Set the salary cap to match overall player salaries and leave the current player salary exceptions in place. This protects the average player's opportunity to get a better contract and the owners' concerns about a level playing field and effective cost controls can still be addressed.
Set the player salary holdback at 15 percent and if player salaries exceed the agreed amount, increase the holdback next season to recoup the excess. The players should let the owners keep any shortfall in total salaries paid as an incentive to get the deal done instead of recouping it at the end of the season as they do now. (The owners almost never fail to pay out the minimum anyway.)
Change the luxury tax system to an escalating penalty that starts at one dollar per dollar over the cap and increases by one dollar per dollar over as team player salaries exceed the cap by each ten percent level passed.
For example:
At $2 billion, the proposed team salary cap would be $66,666,666.
Exceeding the cap by up to 10 percent or $1 to $6,666,666 costs luxury tax of $1 to $6,666,666
Exceeding the cap by 10 to 20 percent or $6,666,667 to 13,333,333 costs luxury tax of $13,333,334 to $26,666,666
Exceeding the cap by 20 to 30 percent or $13,333,334 to $20,000,000 costs luxury tax of $40,000,002 to $60,000,000
Exceeding the cap by 30 to 40 percent or $20,000,001 to 26,666,666 costs luxury tax of $80,000,004 to $106,666,664
While this is not a hard cap, teams like the Lakers would be more than 30 percent over the cap and facing a luxury tax bill approaching $100 million unless they make changes. The playing field between teams would be significantly leveled without eliminating the opportunity to add players and payroll to a team that believes they are just one player away or want to keep a roster together. It's only money and it will work to keep most teams close the salary cap level.
A few teams will need the opportunity to buyout existing contracts to fit under the new system, but as long as players get paid, the NBAPA shouldn't have any argument.
The Rest Of The Issues
If the players and the owners can agree on the money, every other issue pales in comparison.
The owners' season killing salary rollback proposal is not required as a team salary cap of $66,666,666 accommodates most of the league's franchises and their player obligations. The players should be willing to accept shorter guaranteed contracts which are the best way to reduce a team's risk in signing bad deals. One idea would be to include a one-year team option in every player contract to reduce the risk of losing star players for nothing to free agency. Most of the old CBA should still work and the two sides can hash out the details of any particular clauses they don't like.
The players can suggest a revenue sharing model between teams to complete the picture, but they need to remember they are not partners in this league and any team revenue sharing model should only be included in the CBA if it helps the league to get this done. (Which it probably would.)
Timing Is Everything
The NBAPA isn't acknowledging it yet but they should realize from the NHL experience that once team revenues start falling off the table with the loss of preseason games, it will get harder and harder to make a deal with the owners. Their best chance to get the best deal available will come while teams can still earn a full season's revenues. The owners' proposal of a guaranteed $2 billion in player salaries is the best offer the players can expect and it will not be there after they start canceling games.
The reason Hunter is being quoted saying the entire season is at risk is because he knows this is the situation the NBA and its players are in. Hunter should also know these are not the same owners he has faced in the past and this new group will hold out as long as it takes to get what they want, unless the NBAPA pre-empts this pending disaster with an offer that changes their minds.
Hunter needs to ask himself if it better for his members to play this season and earn the same lucrative salaries as last season and have 10 years of labor peace with guaranteed modest salary increases or is it better to risk sitting out an entire season and trying to negotiate with the owners from a position of weakness like the NHL players association did.
The proverbial ball is in the players' court, it is up to the NBAPA to save themselves and our NBA season.
Read more NBA news and insight: http://www.hoopsworld.com/Story.asp?...#ixzz1VnvO6cuc
If the luxury tax is still divided among all non-paying teams equally, that certainly helps the other teams. The question becomes is it enough of a deterrent to keep things equal?
The only addition I would make to this, and it might actually be beneficial to the players, is the luxury tax money received can be used in any manner by non-tax teams towards player payroll without any tax over the salary cap i.e. if each non-tax paying team receives $9M they can use that money towards their payroll in any way they wish over a set time period (say 2 years) without tax consequences. That helps the smaller market teams compete with the teams who may not have an issue paying $150M in payroll. Therefore each team pays up to $66.67M each year and the luxury tax payers could end up paying for additional salaries above the cap for non-tax paying or small market teams.
I have not thought this out totally so I might be missing something there.Last edited by mcHAPPY; Mon Aug 22, 2011, 08:10 PM.Comment
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SI Memo to NBA players: It's time to wave the white flag.
The bit in there on Lamar Odom was interesting. That seems a little extreme - that is around a 70% pay cut next year. When owners have been looking for an 8% roll back of salaries that does not seem realistic.Memo to NBA players: It's time to wave the white flag.
Or at least put the menacing stares and looks of exasperation away for a while and insert a few (dozen) more concessions into the next proposal to force those draconian owners back to the negotiating table before things get even worse.
As the lockout approaches its two-month mark and with just one full-blown meeting having taken place since it began, the harsh reality is that the leverage players wanted so badly doesn't seem to exist.
The international job options that were limited to begin with are shrinking by the day. Euroleague officials are claiming disinterest in the idea of signing NBA players who are under contract, and the Chinese Basketball Association recently announced that it won't allow opt-out clauses in contracts, even if doing so means it can't have Kobe Bryant.
Decertification remains an option for the players, although dissolving the union would do immense damage to both sides, and it would only extend this sluggish situation considering the league filed a litany of preemptive lawsuits in early August. The NBA's message to its players: Go ahead and decertify, but run the risk of voiding all current contracts while continuing to avoid our inevitable victory.
The self-employment route is also a non-starter as a business strategy. Players are learning the hard way how vital the league's marketing machine is with sponsorship and television money. Exhibit A was there for all to see on Saturday night -- as long as you paid the $4.99 user fee charged by a startup basketball website that streamed the Drew League vs. Goodman League game.
It didn't matter how many stars played in the East vs. West battle of pro-am leagues at Trinity University in Washington, D.C., as numerous major television networks (including ESPN and Fox Sports) passed on the chance to air the game because -- as one involved person surmised -- one night of good business with the millionaire talent wasn't worth ticking off the billionaire bosses. Which says nothing of the endless problems the event had with the online streaming, paying customers getting stuck outside the venue and players griping about the not-so-small officiating snafu, in which Drew players weren't told until the final minutes that they could not foul out.
Some exhibition games overseas have proved to be plenty profitable for the players. But there's a limited shelf life for such opportunities and the All-Star style of competition is hardly enough to fuel their competitive fire.
There is one reason, and one reason alone, why the players aren't rolling over in this labor standoff: the expectation/belief/hope that the owners will be divided at some point in time. It is their slightest sliver of hope, the reason they continue to scoff at the league's attempt at a collective bargaining overhaul intended to shore up the $300 million in losses it cites from last season, when 22 teams were said to be in the red. That offer from the owners features a $62 million "flex" salary cap, which the players say is a hard cap in disguise (compared to the current $58 million soft cap). The plan also includes a drastically reduced split on basketball-related income that would start out as a 50-50 split and eventually could result in less than 40 percent for the players in 2016-17 (compared to the current 57-43 split that favors the players or the 54 percent players' portion already offered in the union's latest proposal).
The hoped-for fracture might start with Jerry Buss or Donald Sterling in Los Angeles, or Jerry Reinsdorf in Chicago, or James Dolan in New York. In the eyes of so many players and the folks who represent them, someone from a large market will eventually raise his hand and ask out of this lockout game. This owner would explain how the old system worked just fine for his team and how it's no longer in his best interest to support this cause.
He would be followed by a few more of the fattest cats whose finances are just fine, and then there would be weeping from small- and mid-market owners who have dreamed of a system makeover. The players, who would have missed many months of paychecks by this hypothetical point, would rejoice in that seemingly plausible scenario.
But here's the thing about this premise that has so much to do with the current state of affairs: I'm pretty sure it's wrong.
There's nary a sign of the owners backing down. Not now. Not ever. Their lack of urgency is rooted in the unofficial and universal agreement that it's worth losing an entire season if there isn't serious progress forged by the players. And while the players' desire to fight back is certainly understandable, the truth is that this slope will only get more slippery if there isn't resolution in the next month.
The owners' offers will get worse because they will begin to account for the losses that come with losing games, all while players -- whose average career length was reported as 4.82 seasons during the last lockout, in 1999 -- will see an entire season's pay go to waste. As one agent said for the umpteenth time last week, "Billionaires beat millionaires every time."
While owners rake in local television revenues that continue during a lockout and offer the sort of financial bloodline union members could surely use right now, most of the players will start missing paychecks in mid-November. And maybe that's when the end game will finally become clear.
That view has been reinforced in discussions with owners who sound just as militant now as they did a year ago. I've seen the gleeful look in a large-market owner's eye when he discusses the league's dream scenario, a system in which cost certainty aids the business side and the basketball landscape is more competitive because super teams like the one in Miami simply aren't possible anymore. I've inquired recently about the owners' level of unity, and heard the chuckle on the other end of the phone after asking if any of the big-city boys have expressed concern about the possibility of sacrificing an entire season to make these changes.
Despite the league's threats of seven-figure fines for discussing the lockout or the ones being locked out, Bobcats owner Michael Jordan -- the boyhood idol to many in the league -- recently made clear his view that the players need to give in here.
"The model we've been operating under is broken," he told the Sydney Herald Sun, while also discussing Australian native and Milwaukee center Andrew Bogut. "We have 22 or 23 teams losing money, [so] I think we have gotta come to some kind of understanding in this partnership that we have to realign."
Yet even the words of His Airness aren't likely to spark a resolution anytime soon. The new system would create an earnings divide between the league's superstars and their less-talented colleagues almost as wide as the current negotiating gap, meaning the player masses (and their agents, of course) are left scrambling for ways to turn this labor tide.
As described by one such agent who was briefed about the owners' proposal and what it would mean, a player such as Lakers forward Lamar Odom would see his salary plummet from $8.9 million to $2.6 million next season, according to the union officials putting on the presentation. Such stark propositions have created a climate that another agent recently deemed "odorous," with the bad blood and bitterness continuing to rise while the emotions do nothing to help with a solution.
As commissioner David Stern asserted in a recent podcast with ESPN's Bill Simmons when asked about the absurd lack of urgency from all involved, a recent meeting that was scheduled between the two sides never took place because of the owners' refusal to heed the union's request for another proposal. And while the NBPA has been updating players and agents on the labor situation in a series of regional talks that will continue this week, it's the meetings that include both sides that are needed at the moment. Stern estimated the two would meet in the coming weeks, but it's not known whether those sessions have been scheduled yet.
"[The owners] worrying who has the leverage today or momentum or how we can break the union, to me, misses the point," said New York-based agent Marc Cornstein, who is closer to the talks than most of his peers. "You have a sport that's in the healthiest place it's been in, some people would argue, ever. You have an economy and a world where there's complete turmoil and uncertainty. I think we need to start finding solutions, not leverage.
"If we miss games, it would be detrimental to the sport. ... And that doesn't mean the players should accept a horrible deal, or the owners should accept one that's prohibitive for them, but no one is going to convince me we can't find a solution and I think it's time to start doing it."
One league source said the next Board of Governors meeting has been scheduled for Sept. 15 in Dallas, where the owners will have their own gathering and -- just my prediction here -- no one will be asked to bring a white flag. Here's to hoping the players stop by to wave one of their own.
http://sportsillustrated.cnn.com/201...#ixzz1VrBZ0BxmComment
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One of the fundamental issues in the lockout and the splitting of revenue is determining what counts as an expense.
You can't operate if you don't own and most, especially new owners, can't own unless they borrow.Random in Any town, Anywhere:
Were all of the teams audited by the same firm? If so do you know which one? If not that may explain some of the player's union complaints about how the teams define profit and revenue.
Larry Coon:
No, because the teams (and league) operate under Generally Accepted Accounting Principles, or GAAP.
Everything the league is doing is kosher per GAAP. The real problem is that what is correct under GAAP doesn't necessarily make sense when trying to persuade the players that they should take less.
A case in point is interest paid on debt used to finance part of the cost of purchasing the team. GAAP allows them to count this interest as an operating expense -- it is, after all, money that's going out the door. The league says that as long as franchises aren't overly leveraged (and they're not), then this expense is a legitimate part of operating the league. And as I said, it IS money that's going out the door.
The players are saying that even though GAAP says it's an operating expense, it's still related to the cost of purchasing the team, not of operating the team. And since they don't share in the profits when a team is sold, nether should they help finance the cost of purchasing the team in the first place.
So it's really a philosopical issue that runs deeper than one of who's doing the auditing.
Read more NBA news and insight: http://www.hoopsworld.com/Chat.asp?C...#ixzz1VzIQL2x1Comment
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Good thing for negotiations that America hasn't switched to IFRS yet. Talk about confusion then...Comment
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This is still pretty much the same as the amortization debate though. Should the costs of owning a team be considered in with the cost of operating a team? Especially when a portion of the profits/returns from selling the team will not be distributed with the players?Matt52 wrote: View Post
An owner is not forced or required to borrow money. They choose to because they want something without having the current liquidity to purchase it.Comment
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I'm neither a pro management or pro union guy. Not just in this case, but in general. However, I hate the concept of telling a Union to 'just give in because you can't win, management holds all the power'. It isn't true and that has been shown through history. This is what they told strikers (pre-union) until the Winnipeg General Strike was held. And while it took the government killing protesters in the street to force them back to work in the end they succeed (mind you it took time). This is what they told GM workers in the mid 30s and they ended up forcing management (and government again) to recognize their legitimacy.Matt52 wrote: View Post
IF the players can stay unified and hold out, they will win. Management has too much money at stake to risk losing their investment (which would be the ultimate doomsday ending). Yes the players may be out of jobs, but management will be in the hole for 100s of millions of dollars and very few of these guys can afford that.
Now ofcourse the question is can these players (who make millions as opposed to said workers above who had very little to lose) be able to do that? I'm not sure they can. But IF they do, they will win. Unions who are able to reconcile their base almost always come out on top.... now whether that ends up leading to a better business is ofcourse a significantly different question.Comment
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Sam Amick talked to Maurice Evans who is the NBPA VP and man this lockout doesn't look like it's going to end soon
http://sportsillustrated.cnn.com/201...maurice.evans/The owners' proposal, Evans made clear, will simply never be accepted even if its means losing "this season and more."
SI.com: So no white flag is coming, huh?
Evans: The deal we've been offered would so drastically alter the game as we know it today. The offers have been so pathetic that it's hard to even talk about it when we're informing the guys. We're $7.6 billion apart [over the life of the proposed deal]. Again, when you realize all the components that they're trying to take away, and trying to take out of the [collective bargaining agreement] that's already in effect -- the guaranteed contracts, grandfathering in [contracts], the [salary-cap] exceptions, Larry Bird [rights]. You and I have already talked about this many times, but [players] are really starting to get it and they're willing to sit out for as long as necessary to get us a fair deal.
SI.com: My thing is simply about the owners and the fact that I honestly believe they're not going to crack, that they're just fine missing the season, no matter if they're a large-market team or small-market owners.
Evans: They're unified, and as unified [as the players], and that's great for them. It's not about who's more unified and having a battle of wills. It's about knowing what's right. We've earned the right to compete. We're the ones playing. You can't tell me their sponsorships and the package that they're selling is what has allowed the game to grow to what it is. That's not what increased basketball-related revenue 4.8 percent. We can go down the list about record television ratings and all kinds of different things. And for those guys to jeopardize that, you can't tell me that the owners aren't going to be hurting as well. They've made commitments to sponsorships and things that are contingent on us having a season. We're not holding that over their heads. We've never walked into negotiations and told them about all the things they're going to be losing. We've only walked into negotiations and tried to get deals.
The last [players'] offer was [a giveback of] $630 million over a six-year period. That's over a $100 million a year and they told us that it was pathetic. ...If they think that's what this negotiation is about, then they're miscalculating. Again, even with the 57 percent of BRI -- when you total out the total revenue, we receive 50 percent [in the old system]. We allow them to deduct expenses and deduct things, so when they overpay coaches and fire them and then they have three coaches on payroll that, in effect, goes into BRI. We've never told them that they could take that out, even though it's one of the highest expenses.
We don't want anyone to take a loss, not even the owners. But they seem to be hellbent on contracting [teams] and, as David Stern said, have a huge reset [of the entire system]. If we're going to reset ... then they're going to have to reset the entire league. And even they're going to have to take a reset. We're unified with the agents. We're getting them back on track, getting the players back on track, so now we just need to get the owners back on track.Comment
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I'm not sure about that. THe biggest expense - player salaries - is no longer being paid, same with medical insurance and other player benefits, no travel costs, no arena staff, and many front office staff have been laid off or contracts not picked up until this concludes yet they still get TV contract money and merchandise money.GarbageTime wrote: View Post
If the owners loses are accurate and you've got many teams losing up to $20M a year operating losing $10M a year not operating just saved them $10M (all numbers made up). The point is if the current system was better than not playing the games, they'd continue on business as usual trying to come to a new agreement. The fact they are willing to throw away the season (and I truly believe they mean it) speaks volumes - again only my opinion.
As for unions coming out on top with a strong support within I'd think may public employees or profitable businesses. When it comes to the NBA (or any business losing money operating) they save money by not operating and when that happens, and if the owners or management are unified, the bosses come out on top (in my opinion, again!).Comment
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It is a good debate and I take the owner's side (surprise! lol).GarbageTime wrote: View Post
As for the profits on selling - that assumes there is a profit. Historically there has been a profit - very large in some instances. However how long will franchise values appreciate? How long did stock/commodity/housing bubbles last? The point is the values keep going up until they don't. Are the players willing to take a share of the losses in the future - both operating and on a potential sale - should they occur? I doubt it. I've said this before but for all the hundreds of players/coaches/scouts and the thousands of employees for every team combined, the only people who lost money associated with the NBA last year were 22 owners.
No matter what business, at the end of the day, the owners are the ones who take on the risk and therefore should take on whatever profits (or LOSSES) that come their way - at least that use to be how capitalism worked until Bailout Nations took over.
The liquidity is a good topic as well. GAAP certainly considers the expense valid. In the US private homeowner are permitted to deduct interest on their personal mortgage as well. Unfortunately, this is not permitted in Canada.
As for them wanting something without ability to purchase it, many businesses (and that is what a professional NBA team is) are unable to start up without a loan. Look at the franchise fees for any chain of restaurant or a business such as Canadian Tire. Most owners have a good chunk of change but not enough to handle franchise fees and all start up costs - so they borrow - and that interest becomes a cost of doing business.Comment
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Bill Ingram, HW: CBA Conspiracy Theory?
Sadly, I'm not sure there is much to disagree with here.
We all saw this coming; at least, all of us who follow the inner workings of the NBA saw this coming.
The real concerns about possibly missing the entire 2011-12 NBA season went into full force in February, when we were all gathered in Los Angeles for the 2011 All-Star Game. To outsiders it all seemed like business as usual, but insiders were talking about what wasn’t being said. Namely, the massive marketing effort surrounding the next All-Star game was completely missing. Not one sign, not a logo to be found, and never a mention of Orlando, where the 2012 game is scheduled to be held.
To understand the significance of this you have to understand that the NBA goes out of its way to kick off the hype machine for the next All-Star game at the same time that it’s holding the current one. Yes, a full year in advance. You see, the All-Star festivities include a number of housekeeping events for the NBA, and is far more than just a chance to show off the game’s biggest stars. Commissioner David Stern delivers his State Of the Game address at All-Star Weekend, announcements are made regarding NBA Cares, Green Week, and the many other social initiatives that will take place over the next year.
This time . . .bupkiss!
That was when we started to fully understand just how far the NBA owners were willing to go to bring about a complete revamping of the league’s economic structure.
Since then, there have been many other signs that the 2011-12 season was in serious jeopardy. Summer league was canceled months before the collective bargaining agreement expired on July 1st, and while the NBA did announce a preseason and regular season schedule for 2011-12, that schedule didn’t start regular season play until November 1st. In recent years the start of the NBA season has been inching earlier and earlier into October, and last season began on October 24th.
Could it be a coincidence that the start of the new season was pushed back a full week, thus allowing more time for pretend negotiations and a nice, clean deadline for CBA talks? Perhaps, but unlikely.
In his column for HoopsHype today, Mark Heisler suggests that this entire “phony war” was programmed from the start, that the NBA never had any intention of bargaining in good faith with the players. The plan all along was to take a hard line stance and simply wait out the players, who can ill afford to hold out for a prolonged period of time. After all, some 22 owners are said to be better off if the season doesn’t happen at all due to the current imbalance of the NBA economy.
As Heisler aptly points out, all of the so-called negotiations between the owners and players to this point have been completely useless, little more than photo ops for each side to posture and dig their heels in even further than before. Both sides walk out of the meetings calling the demands from the their opponents unreasonable, saying they can’t possibly bargain with such unreasonable people.
There are more meetings scheduled, of course, but rest assured that nothing will come of any meetings that happen before November 1st. Neither the players nor the owners are particularly concerned about preseason; in fact, most players would just as soon skip the entire exercise. Why play games that don’t count in arenas where fans aren’t paying to see players who won’t play during the regular season? What’s more, players who have their salary split up into 12 equal checks are still getting paid in October.
November 1st is the first meeting that will hold any real repercussions for the players. If a resolution is reached on November 1st the majority of the 2011-12 season can still be salvaged, with just a month of games missed. Truth be told, that’s exactly what the vast majority of NBA players would like to do. They’d like to take a deal that doesn’t cut them too deeply, but one that gets the money flowing again without delay. Unfortunately, the richest 20% of the league’s players will never go for such a resolution, as it will involve taking a great deal of money from them to make the NBA’s economy sustainable.
There will be a lot of talk on November 1st, both sides will say some progress was made, but at the end both sides will agree that there is still far too much distance between the sides to actually come to terms on a new CBA. The lockout will continue.
When the lockout might actually end is, of course, anyone’s guess. Every analyst in the field has their own date in mind with reasoning to support their conclusion. This analyst’s firm belief is that the players will cave right around the first of December, when the entire 2011-12 season is really at stake for the first time.
The vast majority of players live paycheck to paycheck, as ridiculous as that sounds, and by December 1st those players will be getting antsy for that next check. The pressure on Billy Hunter to get a deal done will increase exponentially, which is exactly what the owners are counting on. It’s not the owners who make their living playing basketball . . .and the owners have plenty of other revenue streams to milk while waiting for the outcome of the lockout. It’s possible that the players could hold out until the first week of January, when a failure to reach agreement would mean the cancellation of the entire season, but my gut tells me that last-ditch meeting won’t be necessary.
It will be ugly . . .really ugly. There will be bitter, hurt feelings between the players and owners for years to come. But business is business, and most players would be in a world of financial hurt if the entire season was lost. They will step to the plate and deliver the owners the vast majority of what they’re currently asking for, all in the name of resuming the billion-dollar revenue flow.
This is what the owners have counted on all along, what they knew would be the inevitable conclusion. It’s why they knew in February that there would be no need to plan for All-Star 2012 in Orlando, why they knew it was fine to delay plans for a lost summer league. It’s why the league pushed back the schedule for a week, and it’s why all of the negotiations to date have been fruitless.
Call is a phony war or a conspiracy theory . . .either way, the NBA and its owners have been planning for a long, cold autumn, one that features absolutely no NBA basketball.
http://www.hoopsworld.com/nba-pm-cba-conspiracy-theory/Comment
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It's not a conspiracy...
A conspiracy is something done behind closed doors. The owners have been pretty vocal for the past two years about their extreme distaste in the just expired CBA and that drastic change was needed. This isn't a conspiracy, it's out there right in front of all of us. This is hardline labor negotiations 101. They don't like the current arrangement and they have the leverage and resources to win the fight. To win this one they're going to simply use the most important resource they have, time. Based on what I've seen in terms of offers from the league in publications, it's not bad at all. It's no where near where the players were but let's face it, the party is over. This isn't 2005. Unemployment is at 20%, social aids are being cut and taxes are being hiked on the middle class. The NBA makes their money off the middle class and the middle class is under siege by the economy and government doings. The middle class is shrinking and the dollar is inflating. They're smart men, they're looking to the future, not the past. I think if the players fail to cave all through the winter and then finally come to the table later in desperation you're going to see what happened to the NHLPA happen to the NBAPA. The NHLPA ended up settling on an offer that was way worse than the Owner's initial offer but not only that, they also lost an entire year of work and no doubt killed a lot of their endorsement money because hockey interest in the states got so bad that only OLN would pick up games.Comment
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Apollo wrote: View Post
I don't doubt that for a second. But what if they are able to hold out longer? What if they can hold out for two or three seasons? What if they can hold out until some of these owners are on the brink of losing previously fixed incomes? What if they can hold out until some of these owners are paying out costs with no sight of income in the near future? Until they are on the verge of having to declare bankruptcy on their asset?
Its not something I endorse or want to see... but I think if the players are willing to hold out for a full season, leading into the following season they will win. Just like management unity is crucial to success so if player unity. The real question is who can stick together the longest... they both have alot to lose.Comment
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I think that's an impossibility, hence the Owners willing to play the waiting game and the players crying foul.GarbageTime wrote: View PostComment
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