- Chad Ford, ESPN Senior Writer
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Are the NBA's owners and players out of their minds?
That's the question millions of fans are asking right now as labor negotiations head toward a disastrous course that could cost the league the entire 2011-12 season.
A week ago, in the midst of both players and owners insisting that their goal was to save the season, players walked out of talks with the owners, ultimately leading to commissioner David Stern canceling 2011-12's first two weeks.
Did the players walk out of negotiations in the last hour and Stern just kill part of the season to save it?
The two sides haven't spoken since. Instead, they've gone to the media to make their cases in the court of public opinion. On Monday, the two sides will separately sit with federal mediator George Cohen. If all goes well, both sides will meet together with Cohen on Tuesday ahead of crucial owner meetings in New York on Wednesday and Thursday.
Can a mediator save the season?
I have reason to be more hopeful than most. When I'm not writing about the NBA and NBA draft, I'm a conflict mediator who teaches conflict resolution at BYU-Hawaii. I was trained in grad school by former federal mediator Wallace Warfield.
Mediators can make a major impact on a conflict when the parties to a conflict become entrenched in their positions. While both sides have, from time to time, characterized a deal as "close" off the record, currently there seems to be a massive gulf between the two.
Can Cohen bridge it?
Perhaps. Mediators aren't miracle workers. Nor are they judges. The sort of mediation the league and players go through is voluntary and non-binding. Cohen won't be able to force them to agree to anything.
Cohen is also unlikely to present alternative solutions to the conflict. The parties need to come up with those. What Cohen will try to do is help them negotiate differently than they have been for the past few years and to do that, he's going to have to go deeper than either side has gone so far in the negotiations.
Up until this point, the NBA and its players' association have been primarily engaged in position-based bargaining, during which both parties swap specific proposals on various items. An example of this is the two sides' positions on Basketball Related Income (BRI): the players are looking for 53 percent of BRI, while the owners think the players should get 47 percent.
Bargaining like this, however, is rarely successful in these types of conflicts. Both sides focus on convincing the other that their position is correct. If they are willing to concede a position, they're likely to do it only in conjunction with the other side conceding a position, as well. While we tend to value compromise in American culture, we also tend to be dissatisfied with it. Study after study has shown that when people compromise, they tend to focus on what they're not getting from the deal instead of what they are getting.
Negotiations tend to get more constructive when parties move toward interest-based bargaining, during which the parties discuss the underlying reasons behind their positions and then try to come up with creative solutions that meet the needs of both sides.
There has been some interest-based bargaining in the past few months. The players' proposal to come down from 57 percent of the BRI to 53 percent was motivated, in part, by a willingness to address the owners' concerns that 18 of the 30 NBA teams were losing money. The owners did something similar when they moved off their demand for a hard cap (something the players abhorred) and instead proposed modifications to the rules governing the new CBA.
However, with a certain level of trust required between the sides, interest-based bargaining can get you only so far. When the league rejected the players' proposal of 53 percent BRI, the players were quick to note that they tried to address the owners' financial concerns and were still rebuffed. Thoughts of the owners being dishonest, or that they planned to lock the players out all along, began to bubble.
Hunter said as much after Stern announced that the first two weeks of the season were canceled.
"I think it goes back to a comment that David made to me several years ago when he said, 'Look, this is what my owners have to have,'" Hunter said. "And I said, 'The only way you're going to get that is if you're prepared to lock us out for a year or two,' and [this] indicated to me that they're willing to do it. So my belief, my contention, is that everything he's done has kind of demonstrated that he's following that script."
Without trust, it's virtually impossible to have successful positional- or interest-based bargaining. Instead, the parties continue to resort to contentious tactics in an attempt to force the other side to concede.
And we've seen the good that's done the past few weeks: The players walked out of talks. The NBA responded by canceling the first two weeks of the season. The players responded by refusing to meet with the owners. Late last week, Stern took it a step further, claiming that if a deal wasn't done by Tuesday, the league might not be playing on Christmas Day.
There is a high cost involved in using these types of contentious tactics. The harsher the methods, the more negative each side's perception of the other becomes, leading to more heels digging in. Currently, both the owners and the players' association are stuck in a classic conflict spiral of action and reaction that increasingly looks like it will end badly for both sides.
To most of us, both sides look like they've lost their minds. But from the perspective of the owners and players?
I think it goes back to a comment that David [Stern] made to me several years ago when he said, 'Look, this is what my owners have to have.' And I said, 'The only way you're going to get that is if you're prepared to lock us out for a year or two,' and [this] indicated to me that they're willing to do it.
”-- Players' association director Billy Hunter
Consider these troubling positions: If you asked David Stern who needs to step up and make concessions, he'd say the players' association. If you asked Billy Hunter, he'd say the owners. If Stern believes that the players have to change to get labor peace and if Hunter believes that the owners have to change to end the conflict, how will anything get done?
Even more troubling: If we asked the players what they really wanted the most, what would they say? To take the mantra from their recent Twitter campaign, LET US PLAY. If we asked the owners what they really wanted the most, what would they say? They want the NBA to be a healthy business. Is either side getting what they want? No. In fact, what they do and say takes them further and further away from getting what they want.
Both sides have a problem, but don't think they have a problem. Furthermore, they resist any suggestion they have a problem. In the process, trust has been eroded and both sides feel like they can't do anything to fix the problem until the other side moves.
When the players don't move off their positions, for example, it gives owners more justification that the players aren't bargaining in "good faith" and that they are correct in not making additional concessions. The same is true for the players when the owners don't move. After a while, both the players and owners have a need for the other side to continue to be difficult. They want each other to hold out because it helps each side feel right about its lack of trust. No one would ever admit to such an absurd thing, but we do it on a day-to-day basis. So while the owners and players publicly moan about the intransigence of the other side, in a certain sense, it's secretly delicious to them.
Enter the mediator.
After speaking with sources from both sides, it seems clear what Cohen's mandate is: get to the underlying needs of the parties to end the conflict spiral. To do that, he's got to start building trust and creating a stronger sense of interdependence between the two sides.
Currently, the owners are hyper-focused on the value proposition they bring to the table. They finance the league. They take enormous financial risks. The Lakers, Knicks and Bulls don't exist without owners willing to risk tens of millions each year.
The players are equally focused on their value. The fans come to see the players. The league has been, and likely will always be, primarily marketed around individual players. They drive ticket sales and fan interest. Without them, the league is nothing.
Both sides are right. And both sides are wrong. But they need each other, and to come to that realization, they'll first need to trust each other.
To do so, Cohen needs to accomplish two big things in the short amount of time he has.
First, he needs to help bridge the trust gap on the league's finances. The crux of the league's argument is that it's no longer that profitable to own an NBA team outside of a major market like L.A., New York or Chicago. If what the owners claim is true -- that 18 of the 30 teams in the league are losing money (and that number could jump to 22 or 23 franchises in another year or two under the current system) -- then the league is truly unhealthy. That's not good for the owners, nor is it good, in the long-term, for the players. Whether that's the fault of GMs who give out ridiculous deals or players like Eddy Curry who take them and then check out for the next five years is irrelevant. If the owners aren't making money, it will eventually catch up to the players.
However, it's clear that the players don't believe Stern. They believe the league is hiding money, cooking the books, whatever. Stern has said publicly that he's offered the players' association more information but the players' association hasn't wanted it. Why wouldn't the players want to know if the league was actually losing money?
If the league can prove it to them, then the system is unworkable and the players are going to have to concede more. On this issue, the players would be wrong. And in conflict, we prefer to maintain the illusion of being right over the reality of being wrong.
Cohen needs to help the players get the information they need to trust that a majority of owners are losing money and that it's in their best interest to help the owners make a profit. The owners aren't going to agree to a new deal that still has the majority of small- and mid-market teams losing money. If the players can find numbers they actually trust, they should be able to move a few points on the BRI system.
Second, he's got to have a heart to heart with the owners. During the previous round of failed negotiations, the owners were adamant that financial problems were just part of the issue. They were also deeply concerned with the competitive balance of the league and wanted to address it with a number of changes to the system in the way of luxury taxes and trade and free-agent restrictions.
The players were rightly suspicious.
If the owners cared so much about making the league more competitive, why haven't they come up with a robust revenue-sharing plan that helps their own small- and mid-market teams and share that with the players?
If the owners share the plan, it will become immediately clear that the players aren't the only reason that teams are losing money. The owners are at fault, too. Right now, it's easier to blame the players for the league's financial woes than to look into the mirror.
But the owners really need to work this out. The Lakers' and Knicks' ability to sell tickets at premium prices and to score huge local TV deals is great for them, but those big profits actually hurt small-market teams because those profits inflate the BRI the league reports on every year. The Lakers, even with a high payroll, may actually spend only 45 or 50 percent of the revenue they generate on player salaries. Meanwhile, a small-market team may be spending closer to 65 to 70 percent of its revenue on player salaries.
If the owners care so much about competitiveness, why aren't they putting some skin in the game? Why do the players have to fix a problem that, for the most part, is an owner problem? The players won't cave on system issues until the owners get on the same page with revenue sharing.
By doing these two things, Cohen can help restore a level of trust and put the parties in a position to make a deal. Whether Cohen can get there in such a short time is debatable.
In two days, the federal mediator will attempt to resolve a conflict that has been raging for the better part of two years, and it's unclear if all the parties that need to be in the room will be there.
By now, we know that players like Dwyane Wade, Kobe Bryant and Kevin Garnett have been as influential as Derek Fisher and Hunter in the negotiations. Ditto for a few big agents and a number of small-market owners not on the negotiating committee. So even if Cohen can get the representatives in the room to trust each other, it doesn't mean that the larger constituencies on both sides will feel the same way.
When parties come to mediation, they usually come in with a game plan that includes using the mediator to help convince the other side that they're wrong and need to change. But if a mediator can help each side see that it must change, then the whole negotiating game will change.
Cohen's got his work cut out for him on Monday and Tuesday. The owners and players are currently more interested in being right than having labor peace. The question is whether they love the game even more than being right.
The entire NBA season may hinge on it.
8hSteve Ilardi and Jeremias Engelmann