Print and Go Back TrueHoop [Print without images]

Thursday, May 19, 2011
CBA talks marching to an NFL schedule

By Henry Abbott

The heads of the NBA and the Players Association:
Everyone is on their best behavior, in other words.

What's driving that? Is it simply that the NBA is going strong, and the current deal is set to end soon, on June 30?

Or is there something more?

There is one more thing, it turns out, and that thing is football, and the hundreds of millions it could cost one or both sides in the NBA talks. In short, the NFL's messy legal dispute holds not only the potential to give NBA or its players tremendous leverage, but also the potential to destabilize, and randomize, the talks in ways that could get very expensive and messy for both parties.

And the only way the NBA and its players can minimize the influence of the NFL labor fight is to make a deal quickly.

To understand that better, some thoughts about how the NFL is affecting the NBA right now:

Testing the players' "nuclear option"

The NFL and its players are using the courts to discover the real current value of the "nuclear option" for players in both leagues: Attacking the league's exemption from labor law in the courts, through decertification of the union. The next opinion will come in a matter of weeks, but if both sides dig in, a final ruling could be at the end of a long, expensive battle, potentially before the Supreme Court.

At the end of all that, if the courts take away the players' "nuclear option" that will stiffen NBA owners' spines in dealing with players. On the other hand, should the legal battle take a turn to damage the NFL owners -- and there are variosu ways that might happen -- players in both leagues might find themselves in the power seats.

One insider says a resolution of this legal issue would swing NBA negotiations to the tune of $200 million in annual revenues. In other words, a win for NFL owners would strengthen NBA owners' position such that they could demand, hypothetically, $400 million in annual concessions from players instead of $200 million.

Whether that number is high or low, the reality is that there's a ton of money at stake which is, awkwardly for all parties, out of the hands of everybody in basketball.

Legal fees and lost revenue become factors

There will be a hearing before the three-judge panel of the 8th U.S. Circuit Court of Appeals on June 3. Some number of weeks after that -- the court has promised something "well before the scheduled [September] beginning of the 2011 [NFL] season" -- the court will hand down an opinion.

After that, all kinds of hell could potentially break loose. Experts agree the 8th Circuit has sent strong signals it will take an owner-friendly position. But then what? The players could mount an effort to take the case to the Supreme Court. The anti-trust battle could carry on for years at tremendous cost to both sides.

A true court showdown over either league's anti-trust exemption would likely take years. Legal fees alone, one source estimates, could approach nine-figures. In the NBA, that's a big percentage of what the union and league are fighting over anyway.

The costs of missing games are almost impossible to estimate. The NBA says it is losing money by operating as is -- so closing could in theory come with savings.

However, the NBA does have more than $4 billion in revenue, much of which would go away without games. People who own and operate stadiums can't stand empty seats, and don't forget that the NBA makes a ton of money from corporate sponsorships of everything from stadiums to stanchions -- that pipeline slows considerably without games.

The wheel of fortune

David Stern and Billy Hunter enjoy the respect of their constituents. They both have some ability to control the negotiation process, and to chart a course to a place from which they can declare victory and solidify their own leadership positions.

It's not easy, but they have done it together before, by hammering out all these little issues, painstakingly, in conference rooms, over endless long meetings.

That's what's underway right now.

The whole darned thing, however, is turned on its ear by having these NFL proceedings roll on in the background. As Stern and Hunter talk, the ground tips and shifts under their very feet, beyond their control. A loser today becomes a winner tomorrow, based on insight from a judges and lawyers in far-off rooms, sorting through the particulars of another league entirely.

Imagine if Stern or Hunter scoffs at a deal on a Thursday, only to have something happen in the NFL on Friday that guarantees his side won't get an offer that good again. Whoops.

If you crave control (and what leader doesn't!) this is no way to negotiate. At any moment, either leader could be made to look exceedingly foolish.

One easy way out

The twists and turns of the NFL legalities will affect the NBA talks, and there's nothing anybody can do about it, except ... sprint.

The one way the NBA and its players can determine their own destiny is to get a deal done before anything else happens in the NFL case. That's how Hunter and Stern avoid the randomizing effects of future NFL rulings.

The end of June marks both the end of the NBA's current collective bargaining agreement, and about the time the next ruling is expected in the NFL case.

"Clearly the most recent ruling in the Eighth Circuit favors NFL ownership," says  NBA deputy commissioner and CBA point man Adam Silver. "Both sides are very aware of what's happened in the NFL and the disruption to their business caused by the work stoppage, and I think I can speak for both the owners and the union in that we want to avoid at all costs entering into any type of work stoppage or certainly a lockout.  And so we're determined to try to make progress between now and the end of June."

"Let's focus all our attentions on a negotiated resolution," Silver adds, "and that's what we're doing right now."

By racing to the finish line, the league would seem to be passing up a chance to really stick it to the players. Imagine NFL owners do win a stunning court victory. Wouldn't it make sense for the NBA to wait and see if that happens? It's less appealing when you consider that the NFL owners could lose. Less appealing still when you consider that following suit would introduce delays that cost games and money, legal fees galore and the chance that a judge would do things differently in an NBA case.

And even after all that, the league would still have to hammer out a new CBA in talks with the union, the likes of which they are already having. It's unappealing and risky, even if does contain the chance, for both sides, of ending in a big win.

"We're determined to avoid the course that the NFL and its union has taken," says Silver, "and we've said from the beginning that regardless of who wins or loses a particular motion, whether at the district court or appellate court level, ultimately the resolution will come through negotiations."

"I'd like to think," says Silver, "it would be irrational on both sides not to achieve a negotiated solution."

Notably, Commissioner David Stern did not support Silver on that last point, saying things do sometimes require the involvement of courts. But nevertheless, the commissioner bangs the drum of diplomacy.

"In negotiations like this, whether you ultimately can or cannot bridge the gap, you know in the shortterm, you know eventually you're going to bridge the gap because there will be a settlement eventually and an agreement," explains Stern.

In other words, no matter what courts anywhere do, with the NFL or the NBA, ultimately the players and the league will have to sit down and negotiate agreement on every point. The only alternative to that is that the league does shuts down.

So long as negotiating is the preferred approach, doing so quickly has a lot to recommend it to both sides.