Despite the risks, NBA's hard-line owners not backing down
If it weren't so serious, it'd be funny. For months, it seemed that a small but vocal group of hard-line owners were running the NBA's bargaining strategy with the players, but when it came time to make a deal, the moderates would take over.
As it turns out, the opposite is true.
It turns out, the proposal that's on the table for the National Basketball Players Association to accept by 5 p.m. ET
is the moderate one. The hard-liners take over at 5:01 if the players reject it.
The
New York Times has the details of a letter commissioner David Stern sent to union chief Billy Hunter on Sunday
outlining the terms of the league's ultimatum and shedding light on details of a so-called "reset" proposal that will be forwarded to the players if they don't capitulate. The most onerous of those details are a 47 percent share of BRI, a hard salary cap, a rollback of existing contracts and a reduction in maximum salaries -- not to mention a $3 million mid-level exception (down from last season's $5.8 million), and three- and four-year contracts for non-Bird and Bird free agents, respectively (down from five- and six-year deals in the previous agreement).
Pretty sure there's something in there about meteor showers, mass floods and flames from the seventh circle of Hell rising up and engulfing one continent at a time until the Earth is transformed into a charred, oozing marshmallow. Read the fine print.
The driving force behind this reset offer is a group of hard-line owners who needed a tireless and significant working over by Stern in recent weeks to get them to agree to offer the players a 50 percent share of BRI and a system that technically has no hard team salary cap. According to multiple people familiar with ownership dynamics, the effort Stern had to engage in to rein in the hard-liners and make the proposal that is on the table until 5 p.m. Wednesday should not be underestimated.
"They're all good with 50-50," one of the people briefed on the negotiations said of the owners. "David had to push and pull to get them all there, but they're there. So why not give it to all the players and let them say, 'Yay or nay?' "
In any event, the idea that the hard-liners would run the show for a while, and if they failed to get the deal they wanted, the moderates and big-market owners like Micky Arison, Jerry Buss and James Dolan would come in and restore sanity -- well, that's not going to happen. And the way Stern has framed this ultimatum has been at once "sickening," to use Kevin Durant's description, as well as ingenious. How do you make a bad offer seem good? You put it next to a worse offer and tell the players, in the immortal words of Gilbert Arenas, "Pick one."
In recent days, multiple people with direct knowledge of negotiations have identified the nine teams pushing the hardest for a draconian rollback of salaries and rules governing player contracts and team payrolls. According to those people, the teams holding the hardest line in negotiations have been Atlanta, Charlotte, Indiana, Memphis, Milwaukee, Minnesota, Philadelphia, Portland and Washington. These nine owners or ownership groups have been trying, with increasing success in recent weeks, to recruit more moderate owners to their cause. If the players reject the deal on the table, the NBA will be turned over to the Hard-Line Nine, and it won't be pretty. "Nuclear winter," as Kobe Bryant referred to it in an interview with Yahoo Sports, just about sums it up.
As the
New York Times reported Friday, Bobcats owner Michael Jordan has emerged as the ringleader of this group of owners -- referred to by one source briefed on the labor talks as the "original hard-liners." Though it may be surprising to some, Phoenix owner Robert Sarver and Cleveland owner Dan Gilbert have not been as hawkish in the negotiations as they have been portrayed, two of the sources told CBSSports.com. Nets owner Mikhail Prokhorov, it turns out, also is not in the hawkish camp, according to two people who disputed a CBSSports.com report Sunday to the contrary. I wouldn't wager my mortgage on who's right about Prokhorov, but I would love to have him at the news conference when this is over.
"The season, it is dead. Now your families, they will one day return."
Joking aside, the demographics of the true hard-liners are hardly surprising; all but the Hawks, 76ers and Wizards are in small or, at best, mid-sized markets. But something else significant rings true about the Hard-Line Nine: all but one -- Milwaukee -- received public financing for construction of their arenas, according to
data compiled by the Marquette National Sports Law Institute.
Five teams -- Atlanta, Charlotte, Memphis, Minnesota and Portland -- received public funding that accounted for more than 80 percent of their arena costs. The Timberwolves, one of the biggest economic drains on the league, received a perfect score in this dubious contest by receiving public funds covering 100 percent of their arena construction costs, according to the Marquette data. The Hawks, whose ownership transfer from the disastrous Atlanta Spirit LLC contingent that fell through last week, were a close second with their 91-percent publicly financed Philips Arena.
The least of the offenders are the Wizards (23 percent publicly financed arena), 76ers (11 percent) and Bucks (0 percent). Of course, when this is over and the owners get a far more favorable labor deal, brace yourselves for the continued push in Wisconsin to trick citizens into paying for an arena to replace the Bradley Center. To my knowledge, sports owners have never tried a cheese surtax to pay for their arenas, but there's a first for everything.
The public fleecing by sports teams is bad enough when economist after economist has found that the arenas and surrounding developments almost never provide enough economic impact to make up for the cost even when the teams are playing. But if the log-jammed negotiations stall by Wednesday, possibly resulting in a protracted legal fight that would imperil the entire 2011-12 season, citizens in the above cities will continue to be on the hook for debt payments to support arenas left dormant by the lockout.
With few, if any exceptions, NBA teams will continue to pay rent in their buildings during an extended lockout in accordance with whatever lease agreements are in place (the Pacers, for one, live rent-free in Conseco Fieldhouse). But the lockout doesn't absolve the city, county or state governments in those places from continuing to make debt payments while the teams that benefited from the public funding refuse to play.
To date, only one city has so much as threatened to take legal action against the NBA to recoup revenues lost from the lockout. Last month, the Memphis City Council passed a resolution authorizing city attorneys to explore legal options over the estimated $18 million in annual debt payments for a potentially vacant FedEx Forum. It's hard to blame the city for wondering where that money is going to come from, considering the arena was 83 percent publicly financed, including $207 million in bonds sold by the Shelby County Sports Authority. Grizzlies owner Michael Heisley admitted to the
Commercial Appeal last week that he doesn't even know what's going on in the negotiations that could shutter his free playpen for a season.
Apparently, the other cities whose NBA owners would be the most responsible parties if the season is canceled either don't know or don't care that they've been snookered. But I know, and somebody has to care, so I'll do that, too.
I'll take the words right out of the mouth of an agent who told me the other day, "The owners who are saying this [deal] isn't enough, stop hiding behind David Stern and stand in front of your communities and say why."
Here, here.
"If I hear one more person say they feel bad for parking lot attendants, I'm going to be sick," the agent said. "Do something. The parking lot attendant doesn't feel better when you say that. Stand up and take responsibility."
Of course, all of this could wind up being irrelevant if NBPA executives feel enough pressure from players to bring the league's take-it-or-leave-it proposal to a vote. Disaster similarly could be avoided if Stern has managed to keep one, final concession in his back pocket that he can drop into the players' laps at the last minute to compel union officials to shake hands and recommend the deal to the membership. Either approach would involve a rare dose of reason and common sense, two traits that have been badly overshadowed by ego and hubris in these negotiations.
If ego wins again, and if the union leaders reject the deal and find themselves getting slapped with the non-starter, 47-percent, reset-rollback-hellfire proposal, the players will hold them accountable by decertifying the union. You would be welcome to hold the players accountable for failing to realize they were never going to get a better deal, and thus should've taken this one. Many of you will call the players greedy and out of touch, which is another ingenious aspect of Stern's strategy: after being unreasonable for 2 1/2 years, the owners have now fitted the players for the bad-guy suit if this doesn't get done.
But if the owners don't get their way, who will hold them accountable for detonating a $4 billion industry and tainting the legacy of a sport in which they are mere guests -- many of them freeloading ones at that?
Who in Charlotte will dare to ask Jordan where the money is going to come from to make millions in debt payments that are supposed to be backed, in part, by city tourism revenues and seat taxes at the Time Warner Cable Arena? Who in Indiana will ask Pacers owner Herb Simon why the city agreed last July to pay $33.5 million toward operating expenses at taxpayer-funded Conseco Fieldhouse to get the team to agree to stay for three years -- two of which would include portions of a canceled season?
Who is going to tell Timberwolves owner Glen Taylor, the recently re-elected chairman of the NBA's Board of Governors, that his team has leeched off Minneapolis long enough when it comes time to find another politician to sucker the electorate into paying for $155 million in renovations to the Target Center? This, in a city still saddled with debt from its takeover of the building in 1995 and where $50 million is being diverted from the city budget over the next 10 years to fund capital improvements to the building -- for a team that hasn't had a winning season in six years.
Who in Portland is going to ask Paul Allen -- one of the richest men in the world and a silent assassin in the labor talks -- whether he personally is going to replace the event revenues that are supposed to fund the bond debt that partially funded the Rose Garden? And while Spurs owner Peter Holt wasn't mentioned on my sources' list of hard-liners, as the chairman of the owners' labor relation committee his fingerprints will be all over this death-knell proposal if it gets delivered to the players Wednesday night. Will anyone in the state of Texas, which has three NBA teams that would be idled by a season-long lockout, ask Holt to explain why the 84-percent taxpayer funded AT&T Center will be without its signature tenant and primary source of revenue?
Apparently, only the city of Memphis has noticed or decided to care. So I notice, and I care, and I regret to inform those cities that when they finally figure out what's going on, it could be too late.
Don't say I didn't tell you so.
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