How will everything play out?
Larry Coon gives the answers to some frequently asked questions about the lockout
Saturday's breakdown of the NBA labor negotiations came with an ultimatum from the league: The players have until close of business on Wednesday to accept its latest proposal, or else it will reset its offer to where it was months ago -- including a 47 percent split of revenues and a "flex" cap system that the union already dismissed as a hard cap in disguise.
In the meantime, the players have been trying to find a way to fight back. A number of players, led by stars such as Paul Pierce, have explored decertifying the union as a means to gain leverage. According to ESPN.com's Marc Stein, the players hope to collect enough signatures by Tuesday to file their petition with the National Labor Relations Board and get the ball rolling.
A meeting of all 30 player representatives is scheduled for Tuesday, when union leaders will outline details of the league's proposal. On Monday, a number of players, including the Lakers' Steve Blake and the Rockets' Kevin Martin, became increasingly vocal in their desire for the union to accept the league's proposal so everyone could go back to work.
With so many parts moving at once and so many ways this could play out, it's a good idea to look at the questions one at a time, FAQ-style:
What is the offer that's now on the table?
David Stern said federal mediator George Cohen suggested six compromises during Saturday's session. The league accepted five of those six and is using them as the basis for its proposal. It includes a revenue split that would give the players from 49 to 51 percent with a larger share should revenues exceed projections.
It also includes changes intended to give the luxury tax more teeth. One is an additional penalty that teams would pay for being taxpayers more than three years out of five. Another is a limit on taxpayers' midlevel exceptions to $2.5 million with a two-year contract that is available every other year, and prohibiting taxpaying teams from participating in sign-and-trade transactions.
When asked whether the league's proposal would be accepted by the owners, including the hard-line faction that includes Bobcats owner Michael Jordan, Stern said "yes."
However, none of these deal points is acceptable to the players. The union's offer had come down to 51 percent, with 50 percent going to the current players and the remaining 1 percent used to provide benefits to retirees. Union attorney Jeffrey Kessler called the league's proposal a "fraud," saying it really amounted to only 50.2 percent for the players -- and then only under "the wildest, most unimaginable, favorable projections"
"They came here with a prearranged plan to strong-arm the players," Kessler said.
They seem closer than ever! Why are the two sides willing to blow up the season when the gap is so small?
They weren't as close as it might have appeared. It's easy to look at just the difference in the sides' positions on the revenue split and conclude that it should be easy to bridge the gap. But the revenue split and the cap system are intertwined. For the league to come up on the revenue split, it would require a significant tightening of the cap system. Likewise, for the players to come down on the split, they would need a system that's closer to the one they had in the previous agreement.
So although the two sides may be close on the revenue split -- 50 and 51 percent -- they are far apart on the system each would need to live with that split. This difference led to the breakdown of negotiations on Oct. 28, when the sides negotiated primarily on system issues. After a compromise was reached on a majority of these issues, the discussion then turned to the revenue split.
The players anticipated that the agreed-to system changes would enable them to go to 50 percent on the split. But then the league said it couldn't provide the system envisioned by the players with a 50 percent split, and it reset its offer down to 47 percent. In other words, the league was offering 50 percent but only when attached to a very restrictive system -- a system that was unacceptable to the players.
So it's a mistake to look only at the revenue split when determining how close the two sides are to an agreement. For the majority of players, the system issues have a greater impact than the split.
"Any illusion we're close," Kessler said, "is wrong."
If the owners roll back their offer Wednesday, are the players going to take it seriously?
For a long time the league has warned that if the lockout continues, the offers will get worse. They say this is necessary to make up for the damage being done by the continued work stoppage.
However, it would be equally valid for the players to tell the owners their offer will get worse because of the money they are losing through missed paychecks. There's no reason for the players to even acknowledge a proposal that represents a significant retreat from the league's current offer.
It's hard to unring a bell. The owners have made an offer at 50 percent and likely will need to do so again to reach an agreement with the players. The two sides have defined the range in which the eventual deal will lie -- backing out at this point amounts to little more than posturing.
However, one league source told ESPN's Chris Broussard, "If [the] players don't accept 50 [percent] by Wednesday, they'll never see it again -- at least not for a few years."
What happens Wednesday if the players don't accept the league's offer?
Maybe very little. The league said its offer will get worse -- including a 47 percent revenue split and a "flex" cap -- but Wednesday is an artificial deadline. The season won't be canceled and the union won't be decertified if the players fail to respond by Wednesday.
There are two real deadlines in this process -- the day the players vote to decertify the union and the day the league announces the cancellation of the season. Anything else likely is just drama.
What are the players likely to do?
It's unlikely that the players will accept the league's take-it-or-leave-it offer, although there is an increasing groundswell of players who favor accepting the offer so everybody can get back to work. According to Broussard, the executive committee is staunchly against voting to approve the deal, while the player representatives may be divided.
The likeliest outcome is that the union will politely say no or simply ignore the ultimatum until Wednesday's deadline passes, then continue negotiating as though nothing happened.
In the meantime, the players likely will collect enough signatures to file a decertification petition with the NLRB. This filing will set the wheels in motion on a decertification vote, which would occur approximately 45 days later. The players would hope that the league would be more inclined to negotiate a fair deal with a decertification vote pending.
It seems like the league doesn't even want a deal. Is it pushing the players too hard?
Many people have assumed the league has wanted all along to drag this out as long as possible -- knowing that the longer this goes, the greater its advantage. When it appeared the sides were nearing a deal late last month, the league's hard-line owners got louder, letting Stern know they would not accept a deal above 50 percent, preferring the players' share to be limited to 47 percent.
"We anticipated that we would be here, that the NBA and teams would lock us out as long as they needed to get what they want," Derek Fisher said Saturday.
But the harder the league pushes, the likelier the players will be driven to take drastic measures, including decertification. As one agent told CBSSports.com, "There has to come a point where I feel like I'm better off in front of a judge than I am in front of the mediator."
In any event, the players feel they're not getting a fair deal from the league right now, and may be willing to continue to fight this on principle alone.
The players' negotiating committee doesn't even want to take the league's latest offer to the players for a vote. Is that reasonable?
It's the job of the union's executive committee to vet all offers and to bargain for the best deal possible before presenting an offer to the players for a vote. "We have a responsibility to be gatekeepers and be leaders," Fisher said. "Our job is to take a deal to our players that we're comfortable presenting and that we feel will get passed, and will receive the votes to get basketball back up and running."
Fisher and the executive committee will not want to present an offer for a vote unless they believe that the benefits of accepting the offer outweigh the downsides of declining it. They will meet with the player representatives this week to determine where they stand and use that information to inform their decision.
"But right now we've been given an ultimatum," Fisher said. "And our answer is, 'That's not acceptable to us.'"
What if a majority of players are ready to accept the league's offer? Can the players insist that they be allowed to vote on the current proposal?
The union stays in consistent contact with the players, and information flows both ways -- in addition to determining where the players stand, the union lets them know what's going on in the negotiations and why the current offers are unacceptable. A meeting of union representatives is scheduled for Tuesday, during which union leaders will review the league's proposal and discuss their next steps.
It is possible that union leadership will convince the player representatives that the league's take-it-or-leave-it offer is a bad deal and that they should continue to stand firm. It is also possible that the player representatives will convince the union leadership that the majority of players are ready to accept the offer and get back to work.
Most likely there will not be a consensus among the players, with some ready to accept the league's offer and others favoring rejecting it, with many ready to decertify the union and take the battle to antitrust court. Lacking a clear consensus from its constituents, the union leadership would not alter its recommendation to reject the league's proposal.
The players are making a big deal over what looks like minor issues, such as allowing taxpaying teams to use the sign-and-trade provision. Why is this so important?
These system issues affect the rank-and-file players to a greater extent than the revenue split. The league originally wanted a hard cap -- which would virtually eliminate the middle class and endanger guaranteed contracts. The league backed off from this demand when the players made it a "blood issue" and asked instead for a more punitive luxury tax. However, the players considered this to be a hard cap in disguise, as a tax that is so punitive that few teams will exceed it is effectively a hard cap.
The league has consistently sought ways to "harden" the cap in a manner the players would find palatable. Giving the luxury tax more teeth by imposing additional restrictions on taxpaying teams is their latest idea. Limiting access to mechanisms such as the midlevel exception and the sign-and-trade provision would effectively increase the penalty for exceeding the tax threshold -- making the system behave more like a hard cap.
Would a decertification vote actually pass?
It depends on when the vote is held. Decertification is a risky strategy, and it essentially would eliminate any hope of salvaging the 2010-11 season. If there is still time left in which a deal can be reached, some players would rather give them that chance than face the great unknown. It is questionable whether the players would be able to muster enough votes to decertify if there is still an opportunity to make a deal.
However, if the league does cancel the season, the players have much less to lose. Decertification will be much likelier at that point. So the outcome of the decertification process is dependent to a large extent by the timing of the vote.
In 1999 the league set a drop-dead date in early January for canceling the season. If the union files a decertification petition with the NLRB this week, it will lead to a vote in mid-to-late December -- well ahead of the anticipated drop-dead date for cancellation.
If the players decertify the union, what happens next? Would the season be canceled at that point?
If the players decertify the union, there will be no organizing body left with which to negotiate. The next step would be for a group of players to file an antitrust suit against the league, attacking many of the salary cap rules as illegal price fixing, and attacking the lockout as an illegal group boycott.
The league would have a number of options at that point, but none of them would be likely to expedite a season-saving resolution. So while the season is not officially canceled when the union is dissolved, it is a very likely result.
If the players decertify the union, will this go all the way to trial? How long would that take? What would happen?
An antitrust suit could take years to litigate and would be a disaster for both sides. Although the prospect of treble damages sounds great for the players, they would be able to collect only after years of nonstop litigation and appeals and only if they prevail in court -- which is by no means certain. To reach that point, they likely would have to hold out for years without income.
The players would look for a way to score a quick victory -- the key battle will be over the continued existence of the antitrust exemption. A likely scenario is that the players would file an early motion for summary judgment with respect to the exemption. The league would argue that the exemption survives the decertification.
The court could rule that the exemption still exists, in which case the players would lose. It could rule that the exemption is gone, in which case the owners would lose. Or it could find some reason not to rule on the issue until later -- which would hurt the owners because their remaining defenses aren't very good.
So whichever side wins the first battle in the antitrust arena is likely to win the war.
If the players file a petition with the NLRB, can they ask for a court injunction lifting the lockout during the 45-day waiting period before a vote?
They can ask for anything, but the only plausible way the players could have a valid claim for an injunction before the union is actually decertified is if they declare an impasse. The idea would be to cause an end to the labor relationship that protects the bargaining process from antitrust laws before the union actually ceases to exist.
More likely they would wait for the vote to decertify the union, and once the NLRB certifies the voting results and the union is dissolved they would file an antitrust suit.
If the players decertify the union, what would happen to the league's federal lawsuit?
When they filed their federal lawsuit, the owners were anticipating a "disclaimer decertification," with the union disclaiming interest from representing the players (like the NFL). Instead, the players are considering the lengthier process of an "involuntary decertification," in which they vote the union out of existence.
A successful decertification vote likely would make the federal lawsuit inconsequential, because its targets -- the players' association and its executive committee -- would no longer be the parties driving the antitrust litigation against the league.
So how does this all play out? A canceled season? Scab players? A rival league? The end of basketball as we know it?
The union may see the league's Wednesday deadline as little more than posturing, and the two sides will continue to negotiate after this artificial deadline has passed. The players likely will file a decertification petition with the NLRB because they want to have this tool at their disposal should they need it later.
The first real deadline will come some time later, either when the union votes for decertification or at the league's drop-dead date for canceling the season, whichever comes first.
When a real deadline is imminent, both sides will be likelier to compromise. It is one thing to say no when the risk is the incremental loss of another chunk of the season. It is quite a different matter to say no when the consequences are a lost season or a certain trip to antitrust litigation. Both sides likely will be more amenable to dealing with a hard deadline fast approaching.
But negotiating while facing a hard deadline also increases the risk of a spectacular failure. If they're still negotiating right up to the deadline, a canceled season would become a distinct possibility. Drastic solutions like the league reopening its doors with replacement players, or the players starting their own league, likely would be considered only after the season was canceled.
In the end, it will be in everyone's best interest to seek a reasonable compromise rather than allowing unspeakable damage to be inflicted on the league. And in what may be the best news of all, when this long, arduous, uncertain process is over, basketball as we know it will continue to exist.Houston attorney David Holmes contributed to this report.
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