NBA Labour Issues Point to Lockout
Ever calm, David Stern stared onwards at the crowd of reporters and didn’t look annoyed even once during the press briefing Monday on the current state of the NBA. There were no theatrics. His message couldn’t have come off as clearer: concessions must be made, because the state of affairs in the NBA simply has to change.
Amidst discussion on slapping a fine on Cavaliers owner Dan Gilbert for a letter he made public on the eve of LeBron James’s decision to join Miami, Stern took up the looming labour issues that routinely threaten to erase part or even all of the 2011-2012 NBA season. Indeed, calling them ‘issues’ would evidently be putting it lightly, since the two sides' proposals have already been swapped, and according to one source, are “miles apart.”
Stern addressed the problem clearly and pragmatically, citing that “basically where we are at is that we would like fundamental changes. And the players would very much like the present system to continue."
But the present system can’t continue, says Stern. At least not with teams losing roughly $370 million last season and the American economy still picking itself up from a blistering recession. According to Stern, countering the NBA’s debts will require an executive overhaul. Stern proposes to have first-round picks’ salaries cut by a third, to reduce minimum salary in the NBA as much as 20 per cent, and to reduce contracts to half their value. Maximum salary would likewise drop, and along with it, the amount of time (years) players would be signing for. Finally players should expect a reduction in their take of ‘basketball related income,’ of which they presently receive around 57 per cent.
From the perspective of the players, it’s easy to see why all of this is contestable. We’re not talking about trimming the hedges here; we’re talking about demolishing parks and trees.
"Part of the problem with the existing system is it's based largely on revenue, not net revenue," deputy commissioner Adam Silver suggested. "Although our actual revenue numbers were better than what we projected, it came at a large cost. 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. They largely made up for a reduction in season ticket sales by selling more individual tickets."
As is to be expected, the players’ union will have none of the proposal. It was rejected over the All-Star break, with union chief Billy Hunter stating Stern’s projected losses ‘baloney.’
At the conference, Stern tried to empathize: "I think, as I understand their answer […] is that, ‘we agree with your numbers, we just would eliminate some of them from the final calculation.'"
Recently the Washington Post announced that in line with the union’s defence was the fact that the total salaries of players has risen only about 10 per cent over the last four years, which is 2.5 per cent a year, from $1.85 billion to $2.04 billion (total). In defending their right to earn more, players will likely point to a salary cap that ended up being $2 million higher than last year, and $8 million higher than apocalyptic scenarios suggested by the NBA last summer.
It’s most likely that Stern will play the cool cat, but won’t bend. His main concern is getting the NBA out of debt with teams circled in red ink, and naturally he’ll do everything he can to change that.
"Our owners spend within the system," Stern reasoned. "They're encouraged, praised, and otherwise driven to improve their teams.Of course, they have the 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."
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