Burning questions as NBA players, league resume labor talks
The NBA, players' union plan to continue CBA discussions All-Star Weekend
League execs believe players will require coaches to take salary cuts as well
Among the contentious points: salary cuts, revenue-sharing, coaches' pay
Will there be a lockout that disrupts next season? Will NBA commissioner David Stern and players' union chief Billy Hunter move toward an agreement when they meet before the All-Star Game this weekend in Los Angeles? Here is a brief look at five questions that threaten the NBA's prosperity.
1. What about the coaches? The players aren't alone in worrying about the values of their future paychecks. Several coaches and team executives have told me that they believe they'll be threatened with a major cut in salary next season as part of a new cost-savings approach that will affect all areas of NBA business.
"The players are going to require it," said a team executive with knowledge of the owners' agenda. "The players aren't going to accept a rollback of 35 percent, and then allow some team to pay Phil Jackson $15 million."
Two team executives predict that each team will be given a standardized budget (not yet determined, but let's say it's $4 million per team) from which to pay the entire coaching staff, and another budget to cover the salaries of the entire front office. Because there is no collective bargaining agreement between owners and coaches or front-office employees, the owners won't be able to cap their salaries. However, the league could attempt to punish teams that "overpay" coaches by refusing to share certain revenues with them, in much the same way that high spenders are prohibited from receiving their share of revenues from the luxury-tax pool.
One head coach told me that he believes the league will indeed attempt to limit the total amount to be paid to a coaching staff. "The other thing they'll do is to change our pension," the coach predicted. "They're going to go into our pension and cut back on the money we get, or maybe do away with it entirely.''
How would the coaches react?
"I think then you'll see a walkout by the coaches," the coach said.
NBA Coaches Association executive director Michael Goldberg, who also heads the NHL coaches association, downplayed fears of an overhaul of the salary structure.
"These are individually negotiated contracts," he said. "From the legal standpoint, I don't believe that teams can combine to have a situation that would uniformly have a scale. That would not be permitted by antitrust laws.
"The short answer is I have not been informed of any effort [by the league to cut back coaches' income]. I don't think it's legal for a combined effort to dictate salaries. We don't have a salary cap with respect to coaches, and no one has discussed it with me.''
Goldberg suggested that some NBA coaches can expect to be paid less in the future, but not as part of an across-the-board mandate.
"I think it's a nonissue," he said. "The league has made it clear there have to be changes. This is a beautiful enterprise -- the NBA employs tens of thousands of people, and if it turns out that they're asking for help and an overall effort to preserve what is a wonderful thing that is growing globally, then everybody has to pull the belt in. The NFL, which is making money, is taking similar steps."
But one team executive said the league office in New York has recently shown more interest in coaching salaries.
"Within the last two to three years, the NBA has wanted to have all of the coaches' contracts sent to them, and that wasn't the case before," the executive said. "They always had access to that information, but now I think the owners want all of that information at their fingertips."
Here are three more considerations:
Will experienced coaches such as Jackson, Larry Brown, Mike D'Antoni, Gregg Popovich and Doc Rivers -- each of whom was paid at least $5.5 million last season, according to a Forbes survey, which is more than any baseball manager earned over the course of 162 games last year -- be willing to continue coaching in the league for half as much as they've grown used to earning?
One way to mitigate the impact of a sudden decline in pay would be to give the coach total control of a franchise, similar to Popovich's role in San Antonio, which would enable him to be compensated as both coach and executive.
Coaching in the NBA is the most difficult job in American pro sports. The rules of baseball and football define the role of each player: While Albert Pujols is limited to five at-bats per game, the fluidity of basketball provides everyone from LeBron James to Monta Ellis with the freedom to shoot the ball as often as he chooses. Though NBA coaches are expected to define each player's role, most of them fail to maintain control because players know that their guaranteed-contract status, combined with the inherent freedom of basketball, affords them more financial muscle than the coach.
So owners need to consider this: Will a limitation on salaries weaken the power of each head coach and further damage his influence over the team?
One team executive doubts the owners will succeed in enforcing major limits on coaches' salaries. While GMs typically decide which players to acquire, owners tend to play a larger role in the hiring of a coach.
"I don't see them capping that particular area," the executive said. "If an owner wants to hire somebody to coach the team, he's going to hire him."
2. Will the sides move this weekend toward a long-term agreement? It's highly unlikely. Hunter has already predicted a 99 percent chance of a lockout this summer, and each side knows that a willingness to compromise now will be viewed as weakness by the opposition with months to go before the current agreement expires. Look for Stern to spend the weekend articulating his position that the game needs an overhaul, while Hunter insists that no major adjustment is necessary amid a 25 percent hike in TV ratings this season. The climate for negotiations may improve in late June should both sides be interested in averting a July lockout; a more likely scenario is that the sides will begin to seek solutions in the fall when players and owners realize the consequences of losing games to an extended work stoppage.
3. Do the players really need to surrender $800 million? The initial proposal by the NBA last year demanded cutbacks totaling $800 million in player salaries, but this should be viewed as an opening stance. If the owners really expected to slash salaries by $800 million, wouldn't they have opened with a demand for $1 billion or more in givebacks? A more likely figure is $400 million, which amounts to the losses incurred by the NBA last year, according to Stern. By initially demanding $800 million in cutbacks from the players, the league has created room to come closer to $400 million, which is the break-even point.
There are going to be other issues involving a potential franchise tag for players (to make it harder for the next LeBron James to leave as a free agent) and a new minimum-age rule for rookies, but these are back-burner concerns to be addressed after both sides have reached a big-picture agreement on how to split the money.
4. Would revenue sharing among teams help the poorer franchises? The bargaining is especially complicated because there are two sets of negotiations: Not only are the owners arguing with the players, but they're also arguing among themselves over revenue sharing. The players insist that many of the league's financial problems would be resolved if rich franchises like the Lakers and Knicks were willing to share some of their gaudy TV and sponsorship revenues with the smaller-market Grizzlies and Hornets.
Stern needs revenue sharing in order to placate owners of cash-poor franchises. He needs to restore the myth that any team regardless of market size can win the championship. Only three teams have reached the NBA Finals over the last three years -- the Lakers, Celtics and Magic -- and each of their payrolls ranked among the most expensive in the league. If it's a fact that more than half of the NBA's 30 teams are losing money annually -- a claim disputed vehemently by the players -- then Stern must invoke a coherent plan to share revenues in order to prevent the values of small-market franchises from plummeting. Who would want to pay $300 million or more for a team that can't turn a profit and can't contend for the championship?
5. How can the owners persuade the players to accept major salary cuts? One possible way would be to follow the presidential election strategy of Barack Obama, who proposed higher taxes for the richest Americans. What if Stern were to tell the majority of NBA players that they will suffer a relatively small cutback in their salary, because most of the slashing will be limited to the richest contracts? The initial reaction of players will surely be to reject such a plan as a cynical attempt to divide their union, but attitudes on both sides of the table are sure to change once a lockout has extended into next season, when buildings are dark and player paychecks have not been received.
Owners can talk all they want about breaking the union and forcing the players to surrender, but they would be wise to focus on a solution they can sell to the players in order to minimize the negative impact on league business. Since every player has an equal vote, regardless of salary, then why not come up with a plan that harms the least number of voters with the aim of ending a lockout sooner than later?
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