The Oregonian, August 8, 2010, Sunday

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The Oregonian (Portland Oregon)

August 8, 2010, Sunday

Money hot topic as NBA, union talks turn serious

NBA owners say they are hemorrhaging money and need to change the formula under which players are paid. The players union doesn't agree.

That basic disagreement is at the heart of the league's looming labor unrest. The collective bargaining agreement under which the NBA operates, signed in 2005, expires July 1, 2011, raising the specter of a lockout.

The owners and union will meet Tuesday or Wednesday in New York, CBSSports.com reported last week. NBA spokesman Tim Frank confirmed a meeting will occur this week, but was unable to specify a day.

With less than two months left until training camps begin, this week's meeting might be the best opportunity for the sides to bridge the differences that, at the moment, seem so daunting that many are predicting the NBA's first lockout since the 1998-99 season was shortened by 32 games.

The meeting comes after a summer in which the same owners who claimed they lost millions seemingly spent freely on free agents, with LeBron James and other stars getting maximum or near-maximum deals, and other, less accomplished players getting hefty free agent deals, too.
In February, NBA commissioner David Stern projected that the league would lose $400 million for the 2009-10 season, then amended that figure to $370 million last month.

Billy Hunter, executive director of the National Basketball Players Association, has said in interviews with multiple media outlets that he disputes the NBA's figures.

"I'm preparing for a lockout right now and haven't seen anything to change that notion," Hunter told ESPN.com last month.

The union would be happy to have owners simply renew the current CBA, but it seems clear that will not happen. The Associated Press reported in February that an owners' proposal submitted to the union called for several drastic changes, including reducing the value and length of maximum contracts, and limiting guarantees on all contracts to half their value. Currently, most NBA contracts are fully guaranteed.

The proposal also called for cutting salaries for first-round draft picks by a third and reducing the minimum salary by as much as 20 percent.

The laundry list of cuts, however, could just be a negotiating point from which the owners could pull back to entice concessions from the union, said Lawrence Kahn, a professor of labor economics and collective bargaining at Cornell University who has studied sports labor negotiations.

"I think that's how most negotiations proceed," Kahn said. "I don't pretend to get inside the heads of the NBA, but back in 1982, they made all kinds of contract demands on the union, then dropped all of them except for the one they really cared about, which was the salary cap."

If there's a golden nugget the owners are reaching for this time, it could be the players' share of what's called basketball-related income. BRI is defined as any income received by teams and their ventures, including ticket sales, parking, sponsorships and even dance team and mascot appearances.

Under the current CBA, players are guaranteed 57 percent of league-wide BRI in salary.
To the owners, the problem with BRI is that it is calculated as simply the money coming in, with no accounting for the amount that teams spend to make that money.

"Part of the problem with the existing system is it's based largely on revenue, not net revenue," NBA deputy com-missioner Adam Silver, the league's point man in the negotiations, said at a news conference last month. "Our teams did a spectacular job in a down economy of increasing ticket sales, but that came at the cost of additional promotions, additional marketing, additional staff."

The union points out that the salary cap for 2010-11 --which also is based on BRI --came out at $58 million, much higher than the $50.4 million the league had projected.

And some critics point to the contracts players received during the current free agency period as proof that owners have money to spend. How can owners willing to give Drew Gooden a five-year, $32 million deal or Darko Milicic a four-year, $20 million contract cry poverty, some say.

Stern counters that owners need to keep their teams competitive to be successful at the box office.

"Our owners spend within the system," Stern said after an owners meeting in Las Vegas last month. "They're en-couraged, praised, and otherwise driven to improve their teams. Of course they have that capacity. It winds up driving them to unprofitability. They want to change that system so when they get driven to it, whatever they do, there won't be losses. That's all."
A lockout would be the first in the NBA since the start of the 1998-99 season, which was delayed until February. After the lockout, the league improvised a 50-game schedule by extending the regular season into May.
Mike Tokito: 503-294-7603;
miketokito@news.oregonian.com

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