NBA players, owners take note: Reaching a deal is not this difficult
The NBA postponed camps, canceled preseason games because of labor dispute
The core issues: splitting league revenues, guaranteed contracts, teams' spending
A full 82-game season isn't out of reach, but it's certainly in jeopardy now
The announcement Friday that the NBA has postponed training camp and canceled preseason games through Oct. 15 is not much in the way of news. The moves were expected and will have little impact financially.
In a way this announcement is the equivalent of theatre management flashing the lights on and off as a warning to both sides that they must return to their seats at the bargaining table if they don't want to miss the opening curtain of the 2011-12 season. The surprise of the recent talks is that they have been more productive than anticipated. In other words, an 82-game season isn't out of the question.
Three core issues stand in the way of a deal, and they all appear to be manageable.
The first and most important issue is the split of revenues. The main reason for optimism is the players' acknowledgement that the league is losing money, which has led to movement by both sides in pursuit of a compromise financially. "It's on the road," NBA commissioner David Stern said last week, in what remains the most important statement to follow any of the negotiations. "And we know how to negotiate over dollars when the time comes."
If they are closing in on an agreement over the money, then aren't all of the other issues going to be simpler to negotiate? Once the split of revenues is sorted out, then the next two obstacles will involve guaranteed contracts and the competitive landscape.
By now each side can't claim to not fully understand each other's priorities. There is a lot of talk about how the players want no part of a hard cap, but it isn't the hard cap itself that worries them. The real concern is their belief that such a cap will result in non-guaranteed contracts for the majority of players.
If the owners are willing to be practical in pursuit of an agreement then they're going to have to view this issue from the players' point of view. The union has already shown a willingness to give back substantial money in order to maintain the contract guarantees that differentiate its players from those in the NFL. This is entirely understandable: These players -- led by union president and Lakers guard Derek Fisher -- believe, logically, that a ceiling on each team's payroll will ultimately result in nonguaranteed deals for all but the biggest stars, and they can't bear to go down as the generation that surrendered those guarantees. If the owners want to play basketball this season then they need to meet the union on this "blood issue," as characterized by union chief Billy Hunter, because the players are willing to hold out indefinitely over it.
The union insists its stance isn't merely self-serving. Force most players to play for new contracts year after year and you'll see more selfish play than ever, they predict, to the detriment of the league. "We're protecting what so many fought for and sacrificed a lot for prior to us," Fisher told SI in June. ``We can't just give up on that solely to keep everybody happy and keep [the season] going. ...It's going to be hard for me as president of the players' association to ever sign off on any agreement that would put us in that position."
But the players also need to understand that the owners cannot maintain the current luxury-tax system, despite the union's insistence that it should go unchanged. Of course big-market, owners like Jerry Buss of the Lakers and James Dolan of the Knicks wouldn't mind upholding the luxury tax, because they can afford to keep outspending the rest of the league. But even they have to understand that franchise values across the NBA won't grow if new owners in less-affluent markets believe they can't afford to contend for the championship; to that end the big-market owners have essentially agreed to share revenues at triple the current rate, according to Stern.
This is going to be Stern's final collective bargaining agreement, and of course he isn't going to accept some kind of temporary measure that separate the affluent Lakers and the spendthrift Kings. His owners need a unified vision that is good for all of them, and Stern and deputy commissioner Adam Silver are both on record as saying that some kind of uniform spending by the teams is crucial. "A GM that's given $100 million to spend as opposed to a GM or owner who's given $50 million to spend is at huge competitive advantage," said Silver last week. "And that's something we want to fix in this deal."
So, in order to agree on a deal, the players need to maintain guaranteed contracts and the owners need an equal playing field. The alternatives are gloomy: The owners could insist on cutting off the players' guarantees at the risk of losing the season, or the union could decertify at the risk of an extended legal fight that would jeopardize the season. To lose the season is to risk $4 billion in revenues in addition to angering millions of fans during hard economic times, which would create a greater deficit than the gains either side can hope to generate from these negotiations.
So they have to make a deal and they have to do it quickly, which means they have to respect the reasonability of each other's positions. Thanks to the progress that has been made already, there is a deal to be made somewhere in that vast negotiating landscape that exists between the borders of guaranteed contracts for players and competitive equality for owners. Much as the gridlocked politicians in Washington have been told by frustrated voters, so is this message delivered to the NBA union and owners today: Reaching an agreement should not be as difficult as you're making it appear to be.