Pointing two fingers
October, 12, 2011
By Henry Abbott
Neilson Barnard, Nathaniel S. Butler/NBAE/Getty ImagesThe best efforts of Billy Hunter and David Stern have not been enough.
Anything you hear about "the owners" being one way or "the players" being another is likely wrong. Both groups are all over the damned place.
Some bloody-minded owners want to get every last penny out of players now and forevermore. Some strident players would shutter the league for the long haul rather than give up a percentage or two.
But the people on the two committees -- and more importantly the key negotiators for both groups -- know the issues, define success as a completed deal, and wanted this done before now.
And they failed.
Why aren't these groups more unified? You could blame all kinds of people, but let's point the fingers at the people whose job it is to keep these groups together.
Blame David SternCredibility
The entire negotiation has been about the owners wanting two things: (1) more money and (2) significant new controls over the players’ portion of the money.
Making things better for players has not been on the owners' agenda at any point, because the league has long been saying that it is now, and long has been, losing money.
And it may well be so.
But as the league's list of loss-induced demands has grown distressingly long, a reasonable question has become: Just how bad is this financial pain, anyway? Under Stern, the league has not been careful about protecting the league's credibility. (Just a sampling.) They have smeared enemies as they have seen fit, even as it has meant stretching the truth.
Stern brags now and again about "knowing where the bodies are buried."
It appears to be entirely impossible, now, for this administration to convince players that this time there really is a wolf.
If the league has losses, whose fault is that?
The NBA agreed to give players 57 percent of basketball-related income starting in 1999. Since then, no one disputes revenues have more than doubled to last season's all-time high.
Late Monday night a union official laughed at Stern's talk of the state of the economy, noting "the NBA's economy doesn't stink."
Even after players are paid, the NBA now brings owners a billion or so dollars more, every year, than it did a decade ago.
If the league is financially strong, then this entire negotiation has been a sham at the expense of the players.
If the league is financially weak right now, however, is it even possible that it has been well-managed? What the hell happened to all that money?
Along these lines, back in February 2010, Stern said one reason the league needed help from the players in a new CBA was because it cost so much to open offices overseas, for instance in China and India. This makes no sense, though. The investments in those markets will either pay off long-term or not. If they will make their own financial sense, they're good investments that need not be helped along by players. If they won't pay off in the long-term ... why did Stern's office make those investments at all?
Stern's reputation as a labor negotiator has been nicked up a bit, too. As an ownership source describes it, Stern miscalculated by entering a conversation with the union about 50 percent of basketball-related income prematurely. Once the players rejected that, the conversation changed such that the players were at 53 and the league was now at 50, making the natural meeting point north of 51.
But sources say 50 is as high as the owners were willing to go, and Stern should have saved that final offer for the moment when players would have accepted it. The point of these years of talks is to know when it's deal time.
Meanwhile, Stern has been backpedaling in his public comments. Last week he was blustering that he could have talked his owners into 50. This week Stern said the players knocked on the door of the owners' closed-door meeting to reject the 50 split before he could complete the process of convincing his owners. The point of massaging this message was to pretend that the premature 50 offer never really happened, meaning the two sides are stuck at 47 and 53 -- numbers where the natural meeting point of 50 is in line with what Stern can actually offer.
Not all-powerful anymore
There are some downsides to life under a dictator. But the upside is that it's easy to get things done. Things don't get stuck in committee, you know?
But here's where the NBA has changed. Decades ago Stern managed a band of owners who could scarcely lose. They bought teams cheaply, spent moderately on players and could turn a profit any time they decided to sell. The whole industry benefited from decades of profit-inspiring innovations. Stern was always the smart guy who cared the most, and he had a lot of leeway to do what he wanted.
Now, however, the league is no longer an ATM for owners, and Stern is managing aggressive investors and dealmakers who demand major input over their expensive enterprises. Owners paid fortunes for their teams and have been paying big bills through the recession. They're also some of the most savvy business people in the world. That's why the owners started with an incredibly hard line. By the time Stern made the league's only halfway decent half-offer, of 50 percent of BRI, he was already beyond the comfort zone of many of his owners.
Even if Stern believed going to 51 or 52 percent of BRI would enable the system changes his owners want, it's not clear he could have brought his owners along with him.
Blame Billy HunterLeading from behind
The key public moment of these talks remains last Tuesday's press conference, when Stern announced how aghast he was that his side's best offer had been rebuffed.
Why was he so surprised?
Because Stern had been listening to Hunter and his negotiating committee (the Mo Evanses and Roger Masons) through years of talks, and they had signaled openness to that kind of deal.
But suddenly all those people were sidelined. Lo and behold the dominant voices belonged to macho men like Kevin Garnett, Arn Tellem, Steve Nash, Ray Allen, Dwyane Wade, Dan Fegan, Kobe Bryant, Paul Pierce and others who had either dropped in on a session or two or, in the case of the agents, weren't even in the negotiating room.
The player storyline had been that they simply wanted to play. Now they just want to play ... for 53 percent of old BRI and a very soft cap.
That may be a fair position, but it did not come from Hunter. Until last week. Where Stern was at least willing to whip his owners into line enough to make a move to the edge of their comfort zones, Hunter appeared to be determined to move only as far as his most vocal constituents.
There will have to come a time when the union sells players hard on compromise. But it has not come yet, and the evidence is mounting that when it does come it will have to come from president Derek Fisher, and not Hunter, who has yet to show much tough love in his own camp.
There are good arguments against decertification. NFL players came out of the process with the kinds of paycuts NBA players have already been offered. And no one disputes doing so costs a fortune in legal fees, mires the process in the courts while doing almost nothing constructive to build consensus between players and owners, which is the only way this can end.
However, there's no denying that decertification would be beyond a hassle for the owners. They'd have to gear up for one of the most costly legal battles in sports history, with the threat of triple damages if they were to ultimately lose an antitrust case. This is one way a fight could cost owners way more than players.
Hunter failed, however, to ever make a meaningful threat of decertification. He almost never brings it up, and when asked about it the best he can muster are comments along the lines of "it's something we might have to think about."
This matters in no small part because if Hunter had kept his meanest threat around, those powerful agents would have been unlikely to have turned their flamethrowers on the collective bargaining process. By refusing to play that brand of hardball, Hunter inspired a whisper campaign by those who point out that Hunter is one of the only people in these talks who won't miss a penny of salary no matter happens -- so long as the union that employs him does not disband.
The lockout comes down to whether or not you believe the owners are fat cats. The NBA says 22 teams lost a combined $450 million last season.
Hunter says it wasn't that bad.
How bad was it? Hunter, disappointingly, can't really say.
What do the union's forensic accountants report? What about the tax returns and certified financial statements the league proudly made available for the first time in history? What are the off-book profit streams the owners have in place? How much is it that the owners really make, even when you roll in all the other benefits of ownership?
Specific theories about all of that have come from just about everywhere but the union, which as far as I can tell has not been particularly aggressive in trying to pin down the NBA's real-world bottom line. It's not clear they even have forensic accountants.
This is a small stylistic detail with huge practical implications.
The stylistic part is much like sports' Moneyball debate. Are you or are you not going to employ and trust aggressive Ivy Leaguers with spreadsheets and a knack for sniffing out value?
Hunter is not that kind of guy, just like a lot of NBA GMs don't trust advanced stats. Even though it's 2011, and even though these methods are commonplace in most industries, many people just can't bring themselves to believe that numbers can express the kinds of things numbers claim to express these days. Fair enough. Not everybody is into the geeky thing.
However, it's a big, real problem now as far as saving the season goes. Because the truth is that Hunter and the players are bargaining on the assumption that the losses, if real at all, are small, and that the owners will cave to reignite a promising enterprise.
Which might be right, or might be wrong.
The IRS knows precisely how much money I make every year, which makes it easy for them to decide a fair amount for me to pay them. Their knowledge makes the process of figuring out what's fair pretty simple.
But imagine if they had no idea how much I made. You know what'd happen? We'd fight. Every year. Even if I told the gospel truth they'd be suspicious. And they might, once in a while, get it in their heads to just treat me like a liar just to keep me honest.
I'm a little worried that might be what's driving this lockout now. Without a real answer to the question of whether or not the teams need more help from players, Hunter can't say for certain what kind of a deal is fair. Instead, he has to make owners, essentially, give 'til it hurts. That could be painful for owners ... and players and fans, too.