DGCollectables
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Who knows, however New Orleans is not going to win a championship with David West as the second option. He's more of a complementary third option, a poor man's Chris Bosh or Boozer.
Your take on David West opting out of his contract and testing the free agency.
Coming from a torn-ACL injury, not sure if its the right decision.
But he could be a great addition (if healthy) to those teams chasing a ring.
NLRB filing
On May 24, the NBPA filed an unfair labor practice complaint with the National Labor Relations Board as an opening salvo from the union, accusing the NBA of "surface bargaining": going through the motions of negotiating while planning on locking out the players regardless.
Interestingly, prior to the NFL lockout/decertification, it was the owners, not the union, who filed an unfair labor practice complaint, accusing the NFL Players Association of going through the motions of negotiation prior to their plan to decertify and file an antitrust lawsuit. On a track a few months behind the NFL, the NBA is dealing with the same arguments by different parties in a similar dispute.
Eyes on the 8th Circuit
The NBA and NBPA are obviously watching the legal and judicial proceedings of Brady v. NFL with great interest. So far, the 8th Circuit has ruled that the NFL lockout may remain in effect through the appeals process, and we are waiting for a ruling whether it would remain in place indefinitely. My sense is the 8th Circuit will continue to rule for the owners -- giving NBA owners a valuable precedent should they lock out -- but the court is standing down on its decision, as there is some momentum in negotiations between the NFL owners and players.
Although the NBPA could file in a different circuit than the 8th Circuit and have a much different result, a win for NFL owners would resonate with NBA owners.
NFL vs. NBA situations
In both disputes, the players are "playing goalie," trying to protect what they already had in their latest agreements and fighting off clawbacks from the owners. Both ownerships question the "bad deals" they made with the players several years ago, which is where these disputes are similar.
However, there are differences. The NFL has not said its teams are losing money, but that its teams are not as profitable as they once were. The NBA is saying its teams are losing money -- the league claims it is 22 of the 30 teams; the players claim that number to be less than 10 -- and has subsidized one of its franchises, the Hornets. And although the NFL salary cap is not a true "hard cap," as proration of signing bonuses creates extra cap room, the NBA salary cap is replete with "exceptions" that make it a very soft cap -- a yarmulke, if you will -- that the league is desperately trying to "harden."
There also are some differences in leadership. In football, Roger Goodell and DeMaurice Smith are negotiating their first CBA. David Stern and Billy Hunter have history and have been through this before. That doesn't necessarily make it easier, but there is a different dynamic.
Finally, although the NFLPA took the decertification route -- dissolving as a union to pursue an antitrust lawsuit (Brady v. NFL) as individual litigants -- it is unclear whether the NBPA will go that route, even though outside counsel Jeffrey Kessler is guiding both unions.
With that, here are summaries of the recent proposals and issues for each side in this negotiation that appears to be going nowhere.
Owners' proposal:
• "Flex cap" of $62 million: This would raise the cap from the current $58 million, thus allowing teams to exceed the cap subject to certain (undefined) restrictions. The exact levels of the salary floor and ceiling, as well as which exceptions would be part of the new system, have not been detailed. However, the basic idea is that the flex cap is similar to the current system but incorporates a firm upper limit (and thereby eliminates the luxury tax).
• $2 billion-a-year guarantee: Owners are proposing to guarantee players $2 billion a year in salary and benefits for the duration of a proposed 10-year CBA. This represents a modest decline from the current $2.17 billion but allows owners to capture most of the gains from a growth in income expected over the course of the next 10 years, especially when new television rights deals are signed in the next five years. This would net the players a declining share of basketball-related income (BRI), estimated (by the players) to go from the current level of 57 percent to about 40 percent in 10 years.
• Keep escrow money: Owners want to keep 8 percent of 2010-11 salaries that has been escrowed in case the players' BRI share went over the 57 percent limit. Players view this as unreasonable, since they consider it money already earned.
• Reduced contract length: Owners are proposing a maximum contract length of three years for players signing with new teams (reduced from five today) and four years for players remaining with their current teams (down from six today). This might be more palatable to the players now that the owners have backed off their demand for unguaranteed deals; the deals will be less crippling with fewer years.
• Removal of sign-and-trades: This is another measure aimed at keeping players on their current teams. Presently, players can take advantage of "Bird rights" by signing with their current team and leveraging a trade, allowing them to receive the six-year deal with 10.5 percent increase from their current team.
Furthermore, the team losing the player usually receives some sort of compensation. For example, both Toronto and Cleveland received late first-round picks and large trade exceptions from Miami for Chris Bosh and LeBron James, respectively. And New York received three players, a second-round pick and a trade exception from Golden State in David Lee's sign-and-trade. With a hard cap, there is no use for this.
• Reducing rookie contracts: This is a lower priority for the owners and certainly not the issue that it has become in the NFL. Owners will seek lower rookie contracts, most notably for first-round picks, but probably not push this too hard.
• The expensing of franchise acquisition costs in teams' operating budgets: The dispute over the fundamental state of the league is principally over how much of the league's claimed $380 million loss is a result of acquisition costs, debt service, etc.
• Length of the agreement: The owners want a 10-year deal, while the players want only five -- which would coincide with the league's new TV deals.
Players' proposal:
• $500 million pay cut: Players are proposing a reduction of their income by $100 million a year for the next five years. They have made this concession to reduce the percentage of BRI that is guaranteed to them. However, they do not want change to the fundamental features of the current system: a soft cap, long contracts and fully guaranteed deals.
• Enhanced revenue sharing: The players believe the owners' concerns about competitive balance can be addressed by reforming the revenue-sharing system. This is the age-old issue in labor disputes: Players believe that looking within, not at themselves, can solve a lot of the owners' issues.
Currently, big-market teams (such as the Knicks, Lakers, etc.) keep all the revenue from their ticket sales and local broadcast deals. The gap between the big and small markets is so large that players believe it undermines the stability of the league and the competitiveness of many of the teams.
• Enhance sign-trade flexibility: Currently, teams over the cap can trade players only when their salaries are within 125 percent and $100,000 of each other. Players want this amended to a range of 250 percent to make player movement easier. To ease this transition, the players are proposing a change to base-year compensation (BYC), a designation awarded to players who receive large raises after their rookie deals. BYC players' value in trades is halved, which makes trading them more difficult. As with the 125 percent rule, players are pushing to eliminate this rule because it impedes trades.
• Reduce the age limit to 18: Players want to revert back to the pre-2005 rules, where players only had to be 18 years old to declare for the draft. As of now, they must be 19 years old and one year removed from high school graduation.
• Restructure restricted free agency (RFA): Teams currently have one week to decide whether to match RFA offer sheets. Players believe this length paralyzes bidders during a frenzied free-agency period and provides disincentives to pursuing RFAs.
• Change/create exceptions: Players will not support a hard cap, but they are willing to make changes to various exceptions. They will shorten the length of the mid-level exception (MLE), the source of many misguided deals, from five years to four, in exchange for adding a second MLE for each team.
• Deduct arena/construction expenses from BRI pool: This is another concession by the players, who agree that they should take some part in the expenses of building and maintaining state-of-the-art arenas. This is also a key issue in the NFL labor negotiations.
• Provide a neutral arbitrator for all on-court discipline matters: Currently, players can appeal to a neutral arbitrator only when they have received suspensions longer than 12 games.
Notable topics not being discussed by either side: length of season/training camp/playoffs; retired player benefits; draft order; playing rules.
For reasons Kevin Arnovitz explained a few days ago, some poor sucker at every team has to maintain a website without any player content. No images, no Twitter feeds, no videos, no nothing. So, what's the next logical step? Why, take the dancers to the local zoo, of course, to help clean up after various animals, and video the whole thing. Pitchforks in hand, a zookeeper informs some Utah dancers that one of the zoo's elephants can leave a 125-pound deposit. "That's like pooping me!" exclaims one of the dancers. Could be a long summer.
Dear Owners ...
Stop whining about how you have to have a system that guarantees profitability. You are the winners.
Income disparity has increased dramatically in the United States in the last 30 years, and you all were the beneficiaries. You got corporate tax breaks and personal tax writeoffs, and are doing better economically, even after this killer recession, than 99.9 percent of all people. Most people in this country make a lot less than they did 30 years ago, adjusted for inflation, while costs have gone up. You haven't made quite as much in the last few years, but you're still taking home a huge check.
Yes, you've taken great financial risks in your businesses, and you've probably taken a big hit in them over the years, just as you have in the NBA. But you weren't guaranteed profits in any of those endeavors. Nothing is guaranteed -- even the Maloof Family, whom I love, couldn't assume the money would keep rolling in owning the Palms Casino in Vegas.
Nobody guaranteed you a profit when you got in the movie business (2020 Films), Mavs owner Mark Cuban. Nobody guaranteed you a profit investing in airlines (Mesa Airlines), Suns owner Robert Sarver. Nobody guaranteed you a profit in the home loan business (Quicken Loans), Cavs owner Dan Gilbert. You pays your money, you takes your chances.
When MCI (now Verizon) Center opened in D.C. in 1996, I had a little money saved up and I thought about trying to open up a bar nearby. It seemed like a logical extension of my job -- go to the games there, walk across the street, have a few drinks with my buddies, have players and fans come by. (I even had a name thought out -- The Fifth Quarter. Get it?) I started checking out potential locations and who owned them, and I asked people who'd invested in bars whether I should go forward. They all told me the same thing: don't do it. The bartenders gave away free drinks; the waitresses always called in sick; you could always count on local inspectors to have their hands out for bribes. Do. Not. Do. It.
At that point, I had two choices. I could stay away and keep my money safe, or I could ignore the advice of people who'd gone before and found the bar business a terrible investment. In the end I bagged the idea and kept my money. But if I had taken the leap and failed, the fault would have been no one's but my own.
NBA owners know the risks before they buy in. They know that players expect to keep making more and more, that the players' agents will always be agitating for max contracts, that great coaches like Phil Jackson and Gregg Popovich don't come cheap, that you have to go into massive debt to build new arenas today even with some public financing. They know this because they're not stupid. They got rich because they were smart, asked the right questions, and in the end, made more right choices than wrong ones. Nobody dragged them kicking and screaming into this particular business.
And in the last 15 years, almost all of the concessions have come your way. There are maximum contracts for superstars where there weren't before. (What do you think Miami's SuperFriends would have gotten in a true open market without any limitations? About $125 million each? Or maybe $150 million? Maybe even $175 million?). There's a rookie scale that ended the kind of contracts the Bucks had to give Glenn Robinson ($68 million in 1994). Contract lengths are shorter. Players can't come straight out of high school anymore, and it takes them five years of their career before they get their first crack at unrestricted free agency. You have gotten more than a billion dollars back in rebates from players in the form of escrow payments in the last decade.
And, yes, while the Bobcats sold to Michael Jordan for less than what Bob Johnson paid for them, the overwhelming majority of franchises have increased significantly in value. Don Gaston's group bought the Celtics in 1983 from Harry Mangurian for $17 million. Gaston's son, Paul, sold it to the Wyc Grousbeck-Steve Pagliuca led group in 2003 for $360 million. Even adjusting for inflation, the Gastons made a killing (there are a lot of inflation adjustment sites out there; I used this one to calculate the 2003 cost of buying the Cs). And when the current group sells, it will make a killing.
And do you think you're the only group of owners who've had it rough at times? Do you know what Walter Brown had to do in the 1950s and '60s just to keep the Celtics afloat?
No, I do not say 'if you can't afford it, sell it.' That's ridiculous. I do say, 'you knew what you were getting into.'
Dear Players ...
Stop whining about how you can't possibly agree to a 50-50 split of revenues.
No group of professional athletes has ever, collectively, made as much money as you're making today. You made the last of this money in the midst of the worst economic downturn in eight decades. Nobody wants to take a pay cut. But you have jobs, and tens of millions of Americans do not. They would kill to be able to take a pay cut to keep what they once had. Yes, owners have to be responsible for the decisions they make. But if they chose not to make them, to save their money and go the cheap route, you would be on the first microphone available screaming collusion.
You are the game, no question. People pay money to see you play. But the owners are the ones that take the financial risk. They pay not only your salaries, but the salaries of the coaches, the trainers, the scouts, the front office, the vendors, the janitors and the pilots of the charters you fly so you don't have to be cramped going commercial. They pay for the gas that flies those planes and for the s**** hotels you stay in. (Very few Marriotts and Sheratons anymore on team itineraries.) They pay for the health insurance you and your family receive and build the arenas in which you play. And all of those costs go up, year after year.
You know better than anyone who's stealing money, and you know some of your teammates and opponents are stealing. You know that many -- not all -- of those who've gotten the mid-level exception over the years haven't played up to those contracts, and while it's noble to fight for the "middle class" in your ranks, and that no team can win without a deep roster and good bench players, the reality is people come to see the stars. The stars will be paid in any system. It is the middle class that will have to adjust and sacrifice, to accept the fact that taking a few million less on a contract is still better than, as my friend Tony Kornheiser says, slicing meat at a deli.
In 1995-96, after 11 years in the league -- during which time he'd won three championships, redefined the game on and off the court, taken the mantle from Larry Bird, Magic Johnson and Isiah Thomas and been the catalyst for an explosion of interest in the NBA, sold a billion or so pairs of sneakers, been on the Dream Team, retired from the game and returned with a simple, declarative, two-word sentence: "I'm back" -- Michael Jordan made $3.8 million playing for the Bulls.
A lot of money, to be sure. But not close to the $5.7 million average salary today's NBA player makes. And ain't none of y'all Michael Jordan. But many of you are getting paid more money than he was until his last two seasons in Chicago, when Jerry Reinsdorf agreed to two "balloon payments" of $30 and $33 million.
The union has already proposed a reduction from its current 57 percent of Basketball Related Income to 54.3 percent. If the players accepted a 50-50 split of future revenues, as I've written before, it would not only prove their seriousness of purpose in doing their part to restore fiscal balance to the league -- based on $4 billion in yearly revenues, the union going from its current 57 percent down to 50 percent would be a $280 million annual giveback by the players, covering almost all of the $300 million the owners say they lost last year -- it would give players a moral high ground. They would no longer lose the public relations battle that they lose time after time. No one could seriously argue that the players aren't doing their part to save and grow the game.
And, as I've written before, that 50-50 split could be revisited in three years; if revenues increase above $4 billion after year three, the players could and should receive a larger split in the remaining years of the new CBA to help recoup some of their financial sacrifice. They would, literally, be partners with the owners.
And even after taking such draconian salary cuts, you'd still be doing better financially than 99.5 percent of all people in the history of the earth. (That remaining five-tenths being the owners, of course.)
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