The time for posturing, equivocation and half-hearted offers is over. When this week's bargaining sessions failed to result in a deal, NBA owners set a hard deadline: An agreement needs to be in place by Monday or the first two weeks of regular-season games will be canceled.
David Holmes, a corporate attorney based in Houston and who provides legal advice for some of my lockout-related work, has been in similar situation many times before. He believes the critical point in the settlement process doesn't come until the client -- and the opposing party -- are put at risk and forced to make a real choice.
"The risk is not the lawsuit itself," he said. "Instead, it is the point at which the client is faced with a settlement option that, if turned down, might be genuinely regretted later."
If Holmes is representing a client with a claim for $1 million, his opening settlement offer might be $950,000, with the defendant offering $25,000.
"No one is at risk yet," he says. "My client will nearly always be willing to roll the dice on going to court instead of taking $25,000. Conversely, unless my case is airtight and the slam dunk of all slam dunks, the defendant will be willing to risk going to court instead of paying $950,000."
Saying "no" at this point doesn't come with any risk. It's not a real choice -- nothing is at stake yet.
As time passes and the court date draws nearer, the settlement offers are going to change. One or both parties will be put at risk, because more is at stake. There is now a downside to making the wrong choice.
"The point at which this happens is going to depend on the relative strength of the case," Holmes said. "If I've got a 50/50 case, and the other side offers $250,000, I have to start seriously discussing the pros and cons of the offer with the client."
Holmes says there may be a litany of reasons to take the offer rather than roll the dice. "For one, the client gets paid real money he can use," he said. "The lawsuit is over, and being in a lawsuit is not fun. We don't have to go to court. We don't have to face a jury. We don't run the risk of a judge or a jury seeing things the other way. If we win, we don't have to endure a lengthy appeal. It's over today, and the client can move on to more productive pursuits. If I'm charging an hourly fee, the client doesn't have to pay me anymore."
So saying "no" now comes with potential consequences. That's a real choice.
"Until you get to that point," says Holmes, "you don't really know how you feel about the case. You don't really start asking the hard questions."
What does this have to do with the NBA labor negotiations? The players had to make their first real choice this week.
"The risk started when the owners put something on the table that the players might regret saying 'no' to," Holmes said. "When the owners were demanding a $45 million hard cap or offering the players 46 percent of revenues, it was easy to say 'no.' That's not a real choice. It's just a formality."
Once the owners' offer increased to 50 percent, it became a different ballgame. Holmes, experienced at negotiating in these situations, thinks NBA commissioner David Stern made a strategic error.
"At that point, the players needed to absorb the offer and think about what they really wanted to do," he said. "I fault Stern for taking so long to get to that point. When he finally got there, it was the end of the day and the players who were present were already locked into a 'no' answer. They didn't have time to truly come to grips with a real choice."
The risk started when the owners put something on the table that the players might regret saying 'no' to.
”-- Houston-based attorney David Holmes
It's now soul-searching time for the players. For now they have drawn a line in the sand at 53 percent. Players like Kobe Bryant and Kevin Garnett are leading the charge to hold firm and not give another inch. But Bryant and Garnett don't necessarily represent the interests of the rank-and-file players. Neither do the agents, who have already made it clear that they are against an agreement even at 53 percent.
According to Chris Mannix of SI.com, three rank-and-file players texted to say that, pending further details, a 50/50 split sounded fair. Three players is admittedly a small sample, but it could signal a shift in the players' tenor. Union chief Billy Hunter and president Derek Fisher need to find out where their constituents really stand, now that they're faced with a real choice.
Depending on what Hunter and Fisher discover, Holmes sees at least four possible scenarios:
• If Hunter and Fisher discover that the rank and file will settle for 50 percent, then the union and the players will need to save face. The union will make some sort of counter-proposal, and the parties will hammer out a deal. "Stern will understand this," Holmes said. "It will look like the union got a better deal, but that will mostly be window dressing to save face for the union and the players."
• If Hunter and Fisher discover that the rank and file will not accept 50 percent, but are willing to settle for something less than 53 percent, then the next logical step is a small group meeting with the owners. In that meeting Hunter could make clear that the players are willing to come down from 53 percent if the owners are willing to meet somewhere in the middle.
• If Hunter and Fisher discover that the rank and file are locked in at 53 percent, then the union will just stand its ground.
• Hunter and Fisher could also discover that the rank and file are deeply divided. "This is the hardest scenario for the union," Holmes said. "They will need to force players to come to meetings to talk it out. They will need to find a way to reach a consensus."
The two sides in the NBA labor dispute are now faced with real choices. Saying "no" now comes with significant risk. After two years of rhetoric, and through a flurry of recent activity, we are now reaching the endgame.