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Old 08-03-09, 09:30 PM
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Many Are Predicting Lockout In 2011

As labor challenges grow, NBA adds Cavs owner Gilbert to labor committee and ponders future

by Brian Windhorst/Plain Dealer Reporter
Saturday August 01, 2009, 7:24 PM

Tracy Boulian/The Plain Dealer
Dan Gilbert will join two more of the NBA's newer owners on the league's labor committee as talks begin on a labor agreement set to expire after the 2011 season. The troubled economy could be raising the stakes for reaching an agreement between owners and players while avoiding a shutdown of the sport.CLEVELAND, Ohio -- This week Dan Gilbert will be putting on yet another hat.
The Cavaliers owner has been given an important responsibility by NBA Commissioner David Stern, who has named Gilbert as a member of the Board of Governors' Labor Relations Committee. The group is scheduled to begin talks with the National Basketball Players Association on Tuesday about a new collective bargaining agreement.

That's a lot of verbiage and capitalized words. Basically, Gilbert is one of the five new members on the committee representing the 30 owners against the players. And it isn't going to be easy.

The CBA doesn't expire until 2011 and owners possess a rollover clause to 2012. Normally new talks wouldn't begin until a year from now and maybe later if the owners picked up their option, as they did the last time it was an option in 2003. But expecting some sticky issues, both sides have decided to begin now.


Stern put Gilbert and several other young owners on the committee -- including Phoenix's owner Robert Sarver and Oklahoma City's Clay Bennett -- in part because they represent new blood and a new attitude that have come into the ownership circle over the last decade. Gilbert, Sarver and Bennett have more than a combined $1 billion invested in their teams, unlike some of the veteran owners who bought cheaper many years ago.

Some believe the NBA's current system of sharing the multi-billion dollar pie is broken and they are predicting a lockout come 2011 -- just as when owners wanted to make significant changes to the system in 1997. Some, like the person writing this column, don't believe it is broken and only needs some tweaks.

But no one disagrees with this: Finding middle ground is going to be difficult.

Before we get into that, let's examine the NBA salary-cap system for a moment. It is an appropriate time to do so, on the 25th anniversary of its creation.


Eric Gay/Associated Press
While the current collective bargaining agreement has assured mid-sized franchises the ability to retain stars such as the Spurs' Tim Duncan, some complaints about how to spread revenues could make reaching another agreement difficult.In general, it has been a smashing success story. It certainly saved basketball in Cleveland. When it came into place, Gordon Gund felt safe enough to buy the Cavs when it appeared as if the team might relocate or simply fold.
In those 25 years, the cap has enabled dynasties not just in places like Chicago but also San Antonio. Great players have thrived in not just Los Angeles but also Sacramento. It is a triumph that the Utah Jazz made the playoffs more than 20 consecutive years at one point. Yes, the Celtics just won another title in 2008, but mid-size market teams in Cleveland and Orlando won conference titles around them.

The "soft" cap has allowed the New York entry to spend wildly, but because of the limits and the protections put on the best players, the Knicks can never become the Yankees and the whole league is better off for it. Players in Oklahoma City can make as much as players in Philadelphia. Plus the average player salary is nearly $6 million per season. Nearly every player in the league is filthy rich, at least during their playing days.

Plus, the cap has mechanisms to protect against bad economic times. This past season, every player in the NBA took a pay cut and each team got more than $6 million in salary rebates because revenues didn't keep pace with salary inflation. That was a story that got no play, but it should have.

There is a system that holds about 10 percent of the players' salaries in escrow to make sure the split fits the deal. The owners are promised at least 43 percent of basketball-related income and most years they get it. But for just the second time in history, they didn't last year. The collective bargaining agreement balanced it.

But while the salary cap system is more of a success than the free for all in baseball -- where the absence of a salary cap has created a two-tiered system of the large market big spenders and the small-market teams that hedge between short-term success and glorified farm clubs -- there are some issues.

More than a year ago, a collection of smaller-market owners signed a petition sent to Stern discussing their troubles in making ends meet. Gilbert did not sign it, though Cleveland is in the middle of the pack in NBA city size. With LeBron James, the Cavs do not have major revenue issues. But other small markets who do not have stars are having trouble, causing a have and have not system. But that it is based on personnel, and not the size of the city, means the league is in better shape that maybe it knows.

The Cavs just had their best-ever season in terms of revenue and their worst in terms of expenses. According to sources, the team ran slightly in the red. But with the salary rebate check combined with the revenues from operating Quicken Loans Arena, it was a pretty fair fiscal year.

However, two weeks ago Stern said fewer than half of the teams made a profit last season. It came on the heels of a series of warnings about falling revenue for the 2009-10 season. After a roughly flat 2008-09, Stern said season ticket and sponsorship renewals indicate there could be as much as 10 percent less income across the board this season.

Stern's public discussion of this and his private release of projections to the owners have infuriated the players' union, which no doubt sees it as an act of collusion to tighten spending on players. Whatever it is, there's no doubt been a pullback. There have been exceptions, but owners started to reduce spending last summer. This summer, as predicted, has seen very few large contracts handed out and dozens of lower-profile players scrambling for short-term scraps.

So Gilbert and the committee will be entering into a stormy situation, with many owners struggling and many players feeling the pain, too. That is why there isn't much optimism of getting a deal done quickly. But it doesn't mean there needs to be a major overhaul.

One thing the owners seem to want is a more even split of the basketball revenue, closer to 50/50 than 57/43 as it is now. Considering that times are tough -- unlike back in 1997 when the economy was doing quite well and these terms were put in place -- the owners have a case.

Also there may be an urge to reduce the maximum salary levels and how the mid-level exception is calculated. This is what the players would call the owners protecting themselves from themselves. What has happened over the last 12 years is too many players got the max because it was generally believed that the best player on each team should have it. In addition, too many players signed for the full mid-level exception because it was often the only thing teams could use to improve in the off-season and owners spent every dime they could.

The length of contracts will also be an issue, as it was for the last CBA in 2005, when the players gave up some ground. How money will be allocated for retired players is also always an talking point.

But while there needs to be some adjustment to help the owners who are getting hammered -- much of it through their own decision-making -- the bones of the system are sound. The NBA should be a model, even if it is a battered one. But it might take a while for everyone to come to an agreement on that.

As labor challenges grow, NBA adds Cavs owner Gilbert to labor committee and ponders future - cleveland.com
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Old 08-03-09, 10:44 PM
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I thought Peter Holt was in charge of this?
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Old 08-03-09, 10:53 PM
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That's what I thought (read) too.
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Old 08-03-09, 11:34 PM
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Good! All the money they make is insane! And most of them don't play for the love of it anymore! They just play for the money.... Also there's no more loyalty anymore in this game. It's all around NFL,MLB,NHL and so on....
Bunch of Over Paid CRY BABIES!! Only 1 player that has been with a team in the last 12-13 years! TIM DUNCAN ohh... Also Kobe but Kobe was bytching about him wanting to be traded... Count him out!
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Old 08-03-09, 11:45 PM
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Thank God for Timmay 21 Duncan!
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Old 08-04-09, 01:16 AM
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I know from our standpoint it seems they are over paid crybabies, and some are absolutely overly dramatic, but i can tell the majority of us here on this board if we were blessed enough to have the skill to play the game as players we would be fighting for every inch we can. What i believe the League needs to do is even more focus on proper money management from a players standpoint, we see to many Antoine Walkers out there.

And on one other quick point, i realize that most articles i read makes it seem like the owners are losing out so big, but most if not all are worth tens if not hundreds of millions and when the team loses 4 million in revenue spread out over a group of investors usually then its tough to get to upset.

It makes me kinda chuckle when we hear about the Bucks in a salary dump (not that I'm complaining), but they are owned by Herb Kohl, US senator and owner of Kohl's, I'm sure he isn't losing to much money!
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Old 08-04-09, 01:22 AM
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Errr maybe but businessmen don't run these things out of the goodness out of their hearts. They need a bottom line met.
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Old 08-04-09, 08:52 AM
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Of Course they want to make a profit, and while the teams maybe nothing more than an expensive toy to them, they didn't become rich without being great businessmen, i am more referring to the fact that it seems like the writing is skewed to show that the owners are really struggling and that the players are portrayed as the greedy ones. Ya digg?
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Old 08-04-09, 11:25 AM
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The owners will have all the clout in this negotiation. They have much less to lose during a lockout than the players will.

$
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Old 08-04-09, 05:08 PM
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Quote:
Originally Posted by Money4Nothing View Post
The owners will have all the clout in this negotiation. They have much less to lose during a lockout than the players will.

$
I don't know, it seems like it would be stupid stupid for the owners to lockout in the wake of the Great Recession. They will take it all the way to the end and we will probably lose at least part of the pre-season, but this time around, my gut tells me they won't lockout. This of course is despite every sports writer claiming the opposite, but I think they are just getting used in the pre-negotiation spin.
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Old 08-04-09, 09:53 PM
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That sucks.

Of course, we're already looking forward to the post-TiMVP era as sucking.
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Old 08-04-09, 10:07 PM
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Man... this better get resolved. I am going to go crazy if the NFL and NBA are in a lockout for 2011!
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