Saturday, November 26, 2011
Updated: December 3, 9:02 PM ET
First look at the new deal
By Larry Coon
Special to ESPN.com
Black Friday, true to form, was a day for deals.
With the prospect of Christmas games as the carrot and the players' antitrust lawsuit as the stick, a tentative agreement has been reached in the NBA labor dispute. If all goes according to plan, teams will be able to sign players beginning Dec. 9, and opening day will be Dec. 25.
Much work remains to be completed in what NBA deputy commissioner Adam Silver described as an "incredibly tight schedule." The tentative agreement emerged as the result of a mammoth 15-hour negotiating session Friday, the first official face-to-face meeting since the players disbanded their union and filed an antitrust suit earlier this month.
"Despite some bumps in the road, even this evening, the greater good required us to knock ourselves out and come to this tentative understanding," commissioner David Stern said.
Those bumps in the road included a "take-it-or-leave-it" offer from the league on Nov. 10, with the threat of the league's proposal resetting to where it was last June should the players decline to accept. The players responded by dissolving their union on Nov. 14 -- a precursor to shifting the venue from labor law to antitrust law -- and filing two federal lawsuits, which were later consolidated into a single suit in Minnesota.
At the time Stern declared that the NBA was headed into a "nuclear winter."
"For us the litigation is something that just has to be dealt with," Stern said. "It was not the reason for the settlement. The reason for the settlement was we've got fans, we've got players who would like to play and we've got others who are dependent on us."
Technically what transpired in a Manhattan conference room Friday were lawsuit settlement talks, and not labor negotiations. With the union disbanded, the players' association was no longer the negotiating unit for NBA players. Billy Hunter officially was there as one of the litigators in the Minnesota lawsuit and not as the executive director of the union, but his role was the same: to bring home a deal. This was underscored by the presence of union president Derek Fisher, who was not one of the named plaintiffs in the lawsuit.
Conspicuously absent from the room was Jeffrey Kessler, the union's outside counsel and a participant in all negotiating sessions leading up to the dissolution of the union. The pugnacious Kessler had been a thorn in Stern's side throughout the process, with the commissioner calling Kessler "the single most divisive force in our negotiations" and referring to his conduct as "routinely despicable." However, Kessler did participate in Friday's negotiations via conference call at key junctures.
Friday's tentative agreement is merely the first in a series of events that now need to occur in order for the season to start according to plan. The next step is for the negotiators to brief their own constituents. "We have a conference call set up with the Labor Relations Committee tomorrow morning," Stern said.
Hunter had a similar plan: "I haven't had a chance yet to speak to the plaintiffs in the case. I think I owe it first to them to discuss the tentative settlement with them before we disclose it to the press and public."
Assuming there are no snags, players' attorney David Boies will ask the Minnesota court to dismiss the lawsuit early next week. The league will also request the dismissal of the federal lawsuit they filed in New York earlier this year. But before the sides can officially negotiate a new collective bargaining agreement, the players will need to re-certify their union. This will require a vote, but is expected to pass -- with the players likely following the recommendation of Hunter, Fisher and the union's executive committee.
According to Gabe Feldman, director of the sports law program at Tulane University, the league will also need to recognize the reconstructed union. "That will truly be a formality," he said, adding that the union does not also need to file a petition with the National Labor Relations Board.
But before an agreement can be voted on, the two sides also will need to resolve a litany of what have come to be known as "B-List" issues, including the age limit, the rookie salary scale, player discipline and drug testing. The players presented the league with a list of these unresolved issues, totaling six pages, during a negotiating session earlier this month. Stern was careful to note that these issues still need to be resolved before the league's Board of Governors can vote on the deal. "We'll call a board vote in due course, because we want to do that at such time that our understandings are adequately represented on pieces of paper," he said.
A quick resolution of these B-List items is not necessarily a foregone conclusion. A number of these issues -- including the age limit for league eligibility -- have been contentious. "It ain't over 'til it's over," cautioned one source connected to the players' side.
Once these issues are resolved, the two sides will each vote to ratify the agreement. A "yes" vote is needed from 15 of the 29 owners (the league owns the New Orleans Hornets) and from a simple majority of the approximately 450 NBA players. "We're confident once we present it, they will support it," Hunter said. Stern said it could take three days to a week for this vote to occur.
The new collective bargaining agreement will need to be written, proofread and signed. It is only when this happens that the lockout will officially be lifted and teams will be allowed to sign players and make trades. If everything proceeds according to plan the league will officially open its doors to the players on Dec. 9.
Training camps will open the same day, with camps and signings occurring in parallel. It is also possible (although not yet confirmed) that teams will be allowed to conduct informal workouts soon after the voting is complete.
"We're optimistic that will all come to pass, and that the NBA season will begin on Christmas Day with a tripleheader," Stern said.
A number of players signed to play overseas during the lockout, and now have to book their returns to the United States. Any player under an NBA contract had to have language in his overseas contract stipulating that the contract becomes null and void when the NBA labor dispute is settled. This is true for any NBA players playing in Europe. The Chinese basketball league would not allow contracts to be signed with these out clauses, and were limited to signing players who were NBA free agents. NBA players who signed in China, such as J.R. Smith and Wilson Chandler, are not expected to return for the start of the NBA season.
Details of the new agreement have yet to emerge, partly due to the unresolved B-List issues and partly due to the sides needing to present the details to their own constituents before commenting further. The new agreement is said to include a 50-50 split of revenues, which could climb as high as 51 percent or drop as low as 49 percent should revenues exceed or fall short of projections.
The agreement is also said to include a relaxation of many of the system issues from the league's Nov. 10 proposal -- issues that led to the union's disclaimer and subsequent lawsuit. The league sought to control spending and improve competitive balance through a highly punitive luxury tax and further spending restrictions to be imposed on taxpaying teams, which the union considered unacceptable. Friday's compromise included the elimination of the smaller mid-level exception for taxpayers, the restoration of sign-and-trade and extend-and-trade transactions, and the removal of the harsher tax penalties for teams that are taxpayers four times in a five-year span.
"It's not the system we sought out to get in terms of a harder cap," Silver said, "but the luxury tax is harsher than it was in the past deal, and we hope it's effective."
With the elimination of the harsher penalties for taxpaying teams, the union hopes it is able to preserve the freedom of movement that is the lifeblood of free agency. It is over this issue that the players rejected the owners' proposal even after agreeing to a 50-50 revenue split, and the players would not have dissolved their union and filed a federal lawsuit just to accept a proposal that closely resembled the deal that was already on the table.
The players also reportedly asked for their split of the revenues to be raised to 51 percent -- with the league rejecting this proposal and nearly ending the discussions. Instead, the two sides agreed to a 49-51 banded split, with a formula that made it easier for the players' share to exceed 50 percent.
Summarizing their agreement, Silver said, "We feel ultimately it will give fans in every community hope that their teams can compete for championships, and a basis for believing their team [success] will be a function of management of the team rather than how deep the owner's pockets are or how large their market is."
Perhaps the two sides got the best anyone can hope for in an extended and contentious negotiation: a deal neither side is happy with, but one that both sides can live with.
The rest of us got a new present to unwrap on Christmas morning.
Larry Coon is the author of the NBA Salary Cap FAQ. Follow him on Twitter.