We were hoping to avoid getting back into labor/CBA talk until after the draft, but with discussions taking place in New York on Tuesday--a day commissioner David Stern called "a very important day in these negotiations"--it's tough to stick one's head in the sand any longer. The issues are deep, divisive and complex. To avoid veering too far off from our focus on this week's draft, let's revisit the big picture issues. We'll save the more complex analysis for next week.
Why is today so important? More than anything, it's a matter of timing. A week from Thursday, the current collective bargaining agreement between the players and owners expires, at which time management is expected to lock out labor. Till the dispute is resolved, that means no free agency, no trades, no team-directed workouts and no fun of any sort. The NBA's summer leagues, welcome annual touchstones for the hoops deprived, have already been canceled. If the two sides don't emerge from Tuesday's meeting with some good news that, frankly, no one expects to hear, a lockout becomes a near certainty.
Very little has been accomplished in the negotiations to date, at least in terms of tangible information that can be leaked to the public. Last week, the owners agreed to discard their proposal for protection against guaranteed contracts. From management's point of view, it was a major concession. From the players' standpoint, it was simply a case of the owners agreeing to not take something the players already had. That pretty much sums up the tenor of the process at the moment.
When Stern was in Chicago last month to present Derrick Rose with his MVP trophy, he told reporters that both the league and the union was hoping to avoid the acrimonious litigation that have marred similar talks between NFL teams and their players. Not long after that, the NBA player's union filed a grievance with the National Labor Relations Board, saying that management wasn't negotiating in good faith. That grievance is still pending, but it's not believed that the move will result in an injunction to prevent a lockout. It wouldn't be a long-term solution anyway.
According to the players, the owners have moved little from their original proposals calling for a hard salary cap, salary rollbacks and significant changes to the revenue split between owners and players. The players acknowledge a willingness to tweak the current formula for dividing up Basketball Related Income (BRI). If it were simply a matter of finding the dividing line acceptable to both sides, it would be easier to summon some optimism. The matter is not that simple.
When I wrote the chapter on the labor situation in last year's Pro Basketball Prospectus, I noted that for the talks to even begin in earnest, the sides had to agree on whether the owners are even losing the money they claim to be. Stern says the league didn't lose as much this season as it has the past few, but still is hemorrhaging money at an unsustainable clip. The players say baloney to that--there are a handful of mismanaged teams in the red, but to say the industry as a whole is unprofitable is merely a matter of accounting wizardry. I'm not certain this divide has ever been conquered to any degree of reasonable satisfaction--and that's the starting point for the entire negotiating process.
Perhaps I am overstating the importance of that, being so far removed from the actual talks. It may simply be typical of these types of talks. Management in a successful industry claims to be going broke because of labor costs. The labor, paid well for the services they provide, doesn't see the problem and doesn't want to change a thing. It's simply the nature of the beast. So if we can get by any perceived book-cooking, we've still got the problem of the hard cap. It's a hell of a problem.
I'm hoping that at the very least the owners will tip their hand on Tuesday in terms of just how adamant they are about absolute labor expense certainty in the form of a hard cap at a level in salary rolled back considerably from current levels. Everything else flows from this core issue. If the owners are insistent on the hard cap, I don't see any way we have a 2011-12 season.
What we don't know is how many owners are on board with going all-in for a hard cap, and just how much damage these owners are willing to sustain to their product. We still won't know for certain when the key figures in the talks emerge to talk to the press sometime this evening. However, we should be able to tell from the tone of the comments whether or not we're in for a long, hoopless void.
As I mentioned, there are a great many other issues to be hashed out and a million little details that are interesting to anybody that knows Larry Coon's work like the back of their hand. For most, they simply want to know whether or not we're going to have basketball this year. I don't think we'll know the answer to that question for sure today, one way or another. But I think we'll have a much clearer idea of where things are headed. Let's hope that logic, rationality and a spirit of cooperation emerges from Tuesday's talks. And let's hope that hoping isn't simply a matter of Jiminy Cricket wishing upon a star.
Bradford Doolittle is an author of Basketball Prospectus.
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