Posted: Friday July 29, 2011 1:36PM ; Updated: Friday July 29, 2011 5:16PM
Ian Thomsen
Ian Thomsen>INSIDE THE NBA

Distrust of league, overseas market to weigh heavily in labor talks

Story Highlights

Neither side is likely to budge during Monday's NBA labor negotiations in New York

Players understand the league is losing money, but don't believe it's that bad

Teams overseas are leery of locked-out talent that may only play a few months

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The union's offer to reduce player salaries by $530 million over five years did little to make an impression on David Stern.
The union's offer to reduce player salaries by $530 million over five years did little to make an impression on David Stern.
Mary Altaffer/AP

What are the owners and players going to say to one another when labor negotiations resume Monday in New York?

Neither side is likely to be in the mood to compromise. If action is to take place to save 2011-12, it probably won't happen until late September when there's no time left for posturing and their hands are forced to make a deal or face a truncated or canceled season.

It's fair to guess that each side will be waiting for the other to make the next move on Monday, adding frustration to an already tense situation. The owners insist the league is underwater financially, while the players believe it's not nearly as bad -- especially if the owners work out a revenue-sharing plan among themselves. Those are the two positions, and don't be surprised if the accusations of stubbornness and ignorance boil over into name-calling. They've had a full month to privately blame each other for the current predicament and now, unless they're distracted by some new, promising proposal, the back-and-forth may very well drift into bad feelings.

One fact should be made clear: The union has acknowledged that the NBA is losing money. That's why the players have offered to reduce their salaries by $530 million over the next five years. NBA commissioner David Stern dismissed that proposal as "modest," but it is the start of an eventual settlement.

The owners have projected $300 million in losses for the current year, including approximately $130 million in interest payments. The players don't believe they should be held accountable for loans taken on by owners who couldn't otherwise afford to buy their teams. The players also don't want an unprecedented 10-year deal, and they don't want a hard ceiling on each team's payroll because they believe it will lead to non-guaranteed contracts for a majority of players. But if the players can negotiate an agreement they believe will enable them to share in future profits, then surely a 10-year deal would become more palatable.

To understand the divide that separates owners and the union, take a good look at the conjecture of NBA players moving overseas to play in Europe next season. From the owners' point of view, this is incomprehensible: The players aren't willing to accept an 8 percent wage cut next season, but they're willing to pursue contracts in Europe that would pay millions of dollars less than they would earn in the NBA? From Stern's side of the table, this makes no sense.

But look at it from the players' side. First, players say they'll lose much more than 8 percent, insisting they could surrender billions of dollars over the course of the owners' current 10-year proposal, depending on the future growth of the NBA.

Even more to the point, the players have yet to accept that the owners deserve so much additional money, or that it is needed for the future health of the league. This is the hardest fact of them all: The players don't believe the story that the owners are selling.

This is how the players see it: They've been locked out and they want no part of the future NBA as envisioned by owners. In addition, the players believe they have no control over the NBA's decision to lock them out. But they can, in the meantime, seek work elsewhere. And even if playing in Europe means making much less than they're used to earning, it's still better than surrendering to the lockout and not being paid at all.

The problem for the players is that European basketball isn't as lucrative or accommodating as it used to be. One reason that renowned Italian coach Ettore Messina has agreed to join the Lakers as an assistant is because the European market has been reduced, leaving fewer powerhouse clubs that are able to operate at the high level to which Messina was accustomed.

The Greek championship club Olympiakos has stopped paying out the big salaries that made headlines in 2008, when it was rumored to be considering an offer of $40 million or more for LeBron James. Olympiakos isn't even in the market to make an offer approaching the three-year, $20 million deal it gave to Josh Childress in '08.

Its crosstown rival, Panathinaikos of Athens, has been another big payer, but the trauma of the Greek recession has gone hand-in-hand with reports that the Panathinaikos owners are seeking to sell the club. Another big spender was CSKA Moscow, which maintained an overall budget approaching $40 million when it was bankrolled by Mikhail Prokhorov (who now owns the Nets), but those days have come and gone.

There may be 10 to 12 teams in Europe that can afford to pay 1 million euros -- currently $1.4 million -- or more for a great European player. Giorgio Armani has spoken of pumping money into his basketball club in Milan, but otherwise there is little money to be found in Italian or French basketball.

There are two reasons why the major clubs will be skeptical of renting out an NBA star during the lockout: (1) Those clubs can't afford to artificially inflate the market for players during this unusual time, and then face demands for higher salaries from European players after the NBA stars have returned to North America; and (2) These are sophisticated clubs that are more interested in winning a European championship than in signing a big-name star for the short-term buzz. If the star were to return to the NBA after two or three months, his absence would ruin the season of the European team he abandoned.

It will be especially interesting to see what becomes of Turkish club Besiktas, which reportedly has had its accounts frozen because of the involvement of its soccer team in a match-fixing scandal. There is a belief in Europe that Besiktas agreed to a contract with Nets All-Star Deron Williams this summer primarily for the publicity. Besiktas is not a major club: It is not competing in the Euroleague this season, and its Istanbul arena seats 3,200. Besiktas earned enormous publicity when Allen Iverson joined the club for a short time last season, and the headlines have continued with the signing of Williams and the recent pursuit of Kobe Bryant.

Even if Williams never plays for Besiktas, his fellow NBA players should laud him for the attempt. Williams played an enormous leadership role in the union by showing fellow players that they could seek alternative employment during the lockout.

It is more likely that NBA role players -- rather than All-Stars -- will move to Europe in the months ahead, because complementary players will be more affordable, in terms of their salary as well as their insurance. In the meantime, many clubs overseas are likely to be patient about signing locked-out NBA players. They will want assurances that these players will remain in Europe for the entire season, and they'll wait in hopes that the price for NBA players will drop as more of them work seek work abroad.

Meanwhile, I question whether speculation of NBA stars moving to Europe has put pressure on the owners to reach a settlement. The truth is that Stern happens to be America's No. 1 expert on world basketball, and he understands better than anyone that there is little money in Europe to pay for NBA talent these days, as well as little patience among European owners to expose their major clubs to the uncertainties of the lockout.

 
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