At This Point Lockout is Inevitable

by Kevin L Davis (@EsquireSports)

With no major developments occurring in the next few days, it seems inevitable that after June 30th the NBA will be entrenched in its second major labor dispute of David Stern's tenure as commissioner.  Right now both sides seem committed to their positions and unwilling to make necessary concessions needed to begin the path towards a deal.

Hopefully things change soon, but as it stands their is a humongous divide between the Players and the Owners.

Players Speak Out On Current Status of Labor Negotiations...Said to Be Livid

by Kevin L Davis (@EsquireSports)

Now that the latest round of negotiations between the NBA's Players and the Owner's are done the Players are taking to the press to voice their displeasure with the proposal being offered by the Owners'.  While this is a risky strategy that risks turning off the American public I like what the Players are doing. They are making it known, that the Owners are making a proposal that takes away core values that Players of the NBA have enjoyed forever, and they will not accept it and are clarifying their position to the press with statements that have been measured and showed unity. 

The message from the Players was clear, the small amounts of progress that have been made in this proposal (no longer asking for contracts being partially guaranteed, no longer having a true hard cap) are not significant enough to make a difference. The fact that the Owners are trying to retroactively take money that the Owners and Players already agreed that belongs to the Players only makes it worse.

Basically it goes like this, you never want to piss of your adversary in a one-on-one negotiating situation. While some reports have correctly stated that you don't want to start with your final offer, you also don't want to begin an outlandish offer that mobilizes your opponent.  I think its possible that the Owners' have done just that.

From what I can tell, the Players don't feel that the Owners are treating them with respect with these tactics.  First off tho the Players' this insistence towards taking past money that the Players' feel they have already earned and collectively bargained is mind boggling.  

Another issue that is also of supreme importance in these negotiations, is the economics of the league.  Right now the Owners and Players differ fundamentally on how the economics of the league should function once the new CBA is implemented.  Everybody agrees that in the previous collective bargaining agreement small-market teams suffered financially.  The disagreement lies in how this issue should be addressed.  

Players feel that the problem can be solved by larger market teams sharing more revenue (mainly from local TV deals) to support these struggling franchises, and the mechanism to determine how revenue will be shared should be negotiated now.  However, the Owners think these CBA negotiations should only include the manner in which Players should bare their share of the burden, and the way Owners should split money amongst themselves should not be collectively bargained.  

Until one of the sides change their stance on key economic issues and the Players are treated with more respect in this process, expect a protracted lockout.

Owners Make Latest Proposal.....Offer "Flex Cap"

by Kevin L Davis (@EsquireSports)

In their latest offer made to solve the labor impasse, the Owners have offered the Players what has been termed a "flex cap." While all the details of this system have not been explained, this system would include a "target cap number" of $62 mil, but in certain situations teams would be allowed teams to go over the cap, and certain exceptions would remain.  Players also would be guaranteed that they would receive a slice off the revenue pie that would be no less than $2 bil annually over the course of a 10 year CBA.

The dropping of the insistence of a "hard cap" coincides with my expectations. I never expected a hard cap to be implemented during this labor dispute. This is one of the biggest rights afforded to NBA players, so expect Players to right tooth and nail to keep it.  Seems now that even the Owners understand this as well, but I'm not sure if this is enough deviance from the "hard cap" to please the Players.

Petition to Allow Collegiate Players to Receive Compensation

By Kevin L Davis (@EsquireSports)

For those that don’t know, the NCAA has rules which require players to be amateurs to play for their universities. Because of this players lose their eligibility if they are paid in anyway for playing, including profiting off their likeness.  Yes they do get their scholarship and certain other academic benefits, but that’s it.

What this means is these players are also not allowed to receive payment from schools, AAU coaches and agents; they also can't get paid for commercials, shoe deals, aren't entitled to a share of their jersey sales, don't get paid for inclusion in video games, etc. 

To me this system is blatantly unfair.  While I don’t think the school’s themselves or the States, the funding source of public universities, should pay athletes (could you imagine supporting a tax-hike to support paying players when schools are being closed?) I think any of us who attended college for years on end would agree that the living expenses amassed during your stay there are enormous.

These costs and the restriction from making any income off a player’s celebrity status, causes the enticement of accepting illegal benefits from unsavory characters that much harder to resist.  The result of that temptation has brought proud programs like USC and Ohio State to their knees as indiscretions of players and coaches come to light.

As much as the NCAA’s leadership may disagree, I say the only proper reaction to the slew of indiscretions is to abandon their rules on amateurism.  Instead they should adopt rules similar to those proposed by Jay Bilas.  In this article >>> http://www.courtcred.com/college/item/615-jay-bilas-thinks-collegiate-players-should-get-paid.html; Bilas states his belief that the concept of amateurism is morally wrong and a product of past times that is no longer needed.

Bilas went on to say “I don't think that college athletes need to be paid by the universities but they shouldn't be restricted from realizing monetary gains from outside the universities.”  For those that don’t know as well as being an ESPN personality, Bilas is a practicing attorney who went to law school at Duke while also working there as an assistant coach.  During his 3 years coaching the Blue Devils made it to the Final Four all 3 years and won 2 national championships.

In my opinion, Bilas could not be more right.  Changing the rules as he suggested could go a long way in prevent future fiasco’s such USC or Ohio State from occurring.  Players would be able to get paid for commercials, sign shoe deals, etc. and universities would not have to worry about being shamed because of their athletic program or be forced to spend so many of their resources on ensuring that their players aren’t receiving benefits, because a compensation system would be allowed. 

In the words of President Barrack Obama, "it's time for a change."  The reason given to support keeping the requirement that a player must have amateur status to maintain eligibility in the NCAA is normally “that's the way its always been.”  Frankly this is not good enough.  When it is clearly evident that current system is broken, there is absolutely no reason why the status quo should be maintained just in the name of tradition.

Is Today Judgement Day in the NBA's Labor Crisis?

by Kevin L. Davis (@EsquireSports)

Everything I keep hearing from David Stern and from the journalists I respect that have been covering the impending labor dispute (i.e. Ken Berger, David Aldridge, Andrew Brandt, Michael McCann, Chad Ford, etc.), has not instilled confidence in me that the a lockout can be averted.

As most of you know, the Owners have told the Players that it will be obvious by tonight if their will be a lockout after they receive the Players latest counter-proposal.  The problem is although the Owners have backed off their demands of non-guaranteed contracts, I do not think they have relented far enough away from their initial proposal to make anything that the Players put forward be deemed agreeable.

I guess we'll know more in the coming days, but I wouldn't expect to hear any good news from the meetings that conclude today.

Excellent article on labor dispute by Ken Berger

 By Kevin L. Davis (@EsquireSports)

Anybody who reads my blog must check out Ken Berger's excellent article on the meetings between the Owners and Players which has been occurring in Manhattan yesterday and today >>> http://www.cbssports.com/nba/story/15249908/biggest-event-for-nba-this-week-is-tuesday-not-draft-day, 

The entire article captured by attention, but most importantly I took 3 things from that article.  First it seems a sect within the Ownership contingent are motivated to take everything they can from the Players in this labor dispute after they have "experienced life-changing losses in their core businesses, [and] watched franchise values rise at a slower pace than ever before." This faction within the Owners which Berger calls "rogue owners" includes Mark Cuban, Robert Sarver, Dan Gilbert, Wyc Grousbeck, Clay Bennett, and Ted Leonsis.  This intrigues me because I've been speaking for months of a possible rift within ownership, and Berger noticed it too.

Secondly no matter how the Owners try to categorize their offer as splitting revenue 50-50, this is not genuine when the first $900 million is not used in the calculation of revenues.  This point is pretty much spot on, and I have wondered why others haven't called the Owners out for this.

And finally the Players are dropping the ball with silly ideas like another MLE or awarding extra draft picks, instead of worrying about the true issue which is causing so many teams to lose money - insufficient revenue sharing.  The issue of small-markets not generating the money necessary to be profitable could be alleviated if the bigger market teams with huge local TV deals, are forced to share that revenue.  Billy Hunter and the rest of the leaders of the Player's union must put this idea front and center in hopes that it causes the supposed rift between owners to grow.

2 Great Developments for the NBA's Players in Their Upcoming Labor Battle

 By Kevin L. Davis (@EsquireSports)

Over the weekend there were 2 possibly monumental developments occurred that should impact the labor landscape. First off the Owners are no longer insisting on non-guaranteed contracts and now a good sign from the NFL if this article is true >>>> ESPN Reports NFL Owners' Splintering Within Their Ranks.

As I've been saying all year I predict that there will be more unity between Players than Owners, and the fact that Owners of NFL teams can't stay united against a much weaker union is a good sign for the NBA's Players. Why? The Owners have been trying to worsen conditions all the Players (an optimal setting for unity), whereas the issues that Owners have pushed for that help the small market teams hurt the big market teams, and vice versa.

Stay tuned guys......this is going to be interesting.

Revamping the NBA’s D-League

 By Kevin L. Davis (@EsquireSports)

The 10 year old NBA D-League model was one of the best ideas of David Stern’s reign as commissioner, but I think even he would agree that the system could use some improvement. With the CBA set to expire this summer, what better time is there to explore totally revamping the system? 

First off let’s explore the existing system. Players are signed by the league itself and then distributed to the individual teams, there are only 16 NBA D-League teams whereas there are 30 NBA teams (which means most D-League teams are affiliated with 2 rival NBA teams), and the rules currently limit NBA to assigning 2 players to the D-League and those players may only be rookies or 2nd year guys. There are not optimal conditions to most effectively develop NBA talent.

With collective bargaining sessions beginning between the owners and players I have included a few suggestions that could improve the quality of the D-League system. While they may seem radical at first, if instituted they could substantially boost league’s effectiveness in developing future NBA talent. While the owners would have to be convinced that scrapping a system of sharing D-League affiliates since it cuts down on expenses, the increase in availability of inexpensive talent should be worth it. I also belief if properly marketed the league could offset much of the increase in expenses. I truly belief there is a sustainable market of die-hard NBA fans who would watch these games if properly marketed. Since these teams are stationed in smaller markets I would strive to create a fan-centric family experience that can be fun for the whole family and start these games earlier in the day at 5 or 6 PM as opposed to 7 or 8 or later like NBA games. 

The players would also have to be convinced to approve this system as many view being demoted to the D-League as an insult and would hate that my proposal eliminates the current system which only allows 1st and 2nd year players to be forced down. However that has to be at least partly offset by the fact that this proposal would create 14 new D-League teams and therefore 168 new jobs (and if I’m correct in forecasting the market that this D-League could have those slots could pay substantially more than the D-League currently pays). Not to mention these new teams would offer an increased potential for coaching jobs or other slots in developmental positions for players in their post-playing days.

With the arguments to lobby both the owners and the NBA Players Association out of the way, let’s explore the actual proposal. First off, as stated earlier every team should be mandated to have there own D-League affiliate. Instead of signing with the league itself, each team should be responsible for hiring its own squad on its D-League team, expanding each NBA team's roster from 15 to 27 (15 NBA contracts and 12 D-League spots). Players would still be available by the draft or to be signed from leagues throughout the world, but I’d totally revamp the drafting process to accommodate the growth. I propose eliminating the D-League draft and expanding the NBA draft to at least 5 rounds. 

As earlier stated I also believe the limitation of only allowing demotion of players with less than 2 years of NBA experience should be scrapped. The only question is where should the magical boundary line be placed? I think everyone will agree that when players are eligible to be drafted at 19 years old, it is very foreseeable that some guys may need long-term development. Since the current system calls for 2 years after a player joins the league, and a player who exhausts his entire college eligibility would normally be 22 years old I propose a rule where any player under 24 years old (2 years over 22) could be able to sent down to the D-League without gaining his consent. Veterans (24 years old or older) signed to NBA contracts could only be demoted to the D-League if the team has gained his consent. This allows true long-term development, while having the added benefit of allowing NBA teams to use their D-League team for rehabilitation.

These changes would usher in an era of true development for NBA teams.

Major Misconceptions Regarding the Labor Dispute between the NBA’s Players and its Owners

by Kevin L. Davis (@EsquireSports)

As most of you know, this summer the NBA faces a labor dispute that threatens to end next season before it even begins. While many view the system as broken, I completely disagree. I feel that the NBA’s luxury tax scheme is the best system in American sports, forming the ideal balance between the MLB where there is no cap and the hard cap employed by the NFL, and attempting to change that system would be a disaster.

In my opinion, all a hard cap does is tell good owners like Mark Cuban that they can't pour money into their investment (i.e. their team), because some teams have owners like Donald Sterling that would rather use their team to make a buck instead of win. To me that is counter-intuitive. We should celebrate owners who are willing to spend on their team, instead of seeking to protect owners who routinely under-spend. I'm all for increasing the luxury tax penalties to defer teams from massively overspending, but to me implementing a hard cap (and in turn eliminating the MLE, “Bird” exemption, etc.) is a bad idea.

For all the criticism that the league receives because of the system currently in place, I ask does performance of small market teams suggest a change is needed? I would say no. San Antonio, a team located in a small market, spent the majority of the season as the team with the best record in the league, Oklahoma City and Memphis, 2 other small markets, were among the final 8 teams last year remaining in the playoffs. Data suggests that if a team is managed well no matter what city you place it in it will succeed, and that if that team is not run well being in a large market won’t save it.

With that in mind I introduce my next point – the NBA is currently in a great place, and if games are lost in an effort to overhaul the system, fans might be turned off. This basically comes down to the old adage “if it ain’t broke don’t fix it.” Ratings are at an all-time high right now and as this last post-season just proved there are a lot of interesting story-lines and compelling talents both young and old to carry the game. There is absolutely no need to risk turning off the fans by labor disputes and legal wrangling when the on-court product is so good.

In addition, although Stern has made it clear that he would like to see sweeping changes to the current Collective Bargaining Agreement (CBA), history doesn't suggest Stern will get most of what he's demanding. I want to enter this profession so I study it religiously. What I've noticed is Stern talks tough like this every time there a CBA is about to expire, and media members and fans eat it up, believing that Stern is this all-powerful dictatorial leader and that the players will yield to anything that he wants. 

The problem is that unlike the picture the media portrays, the NBA has a very strong union. Billy Hunter is a solid leader who is not going to bow down to Stern. The NBA is the sports league where the players are more visible than any other sport and because of that it is very much a player-driven league. I don't see huge sweeping changes happening.

Yes I know, it sounds good in theory but unfortunately that’s not how it goes. Billy Hunter knows that the fans tune in to watch his players play not because of the Owners, and uses that fact to negotiate with strength. Want proof, just look at what happened the last time there was an opportunity to negotiate the CBA. According to Chad Ford this >>>>> is a list of demands the Owners had back in 2005:

1. An increase of the age limit of 20 or 21 (was 18 prior to the new CBA), 
2. Reducing the maximum length of contracts would be 3 or 4 years if re-signing (was previously 6 or 7 years), 
3. Reduction in the maximum raises in contracts to 5% (down from 10 to 12.5%), and 
4. Teams would be subjected to a super luxury tax if they exceeded the cap too much.

Of those things here's what the Owners and Players actually agreed to:

1. Age limit of 19,
2. Maximum contract length went down 5 or 6 years,
3. Raises went from 10% to 8% if go to new team; and 12.5% to 10.5% if re-sign,
4. No super luxury tax imposed,
5. The players slice of the revenue pie was guaranteed at 57%, and
6. The formula used to calculate salary went up from 48% to 51% of revenues, raising the amount of money each team could spend on players pretty substantially.

Keep that in mind when you look at the upcoming labor dispute between the Owners and the Players. I believe there is a great deal of misinformation out there and a lot of it seems unfairly biased towards the Owners. 

So with that in mind here goes my thoughts of the important issues that will come up during this summer’s lockout. Enjoy.

COMPARISON OF UNITY OF OWNERS vs. PLAYERS

FAN #1: Look, the NBA Union is about to be busted. 2/3 of the NBA Owners wont stand being farm teams to bigger markets when those big markets have just as much ability to draft and cultivate their own talent.

MY RESPONSE: Too bad the other 1/3 of the Owners have power as well. Not to mention their teams are in big markets and have more power and money than the average owner. Do you really think Dolan and Buss and the Arison’s who own the Heat are going to willingly agree to a hard cap? Do you think they're going to start sharing their revenue from local TV deals so teams like the Kings and Hornets can compete on an even playing field with them? I don't.

I seriously believe that the notion that at the end of the day all the Owners will present a united front while the players won't is ridiculous. In February or March when ESPN was beginning their coverage of the NFL labor dispute they had Tedy Bruschi on. The Sportscenter anchor continually tried to get him to rip the Players Union and Bruschi wouldn't. He said they're doing the right thing, the Players should never give up money/rights because if they do the Players of the future will never get them back. Bruschi said they should fight tooth and nail to make sure they don't give back a penny, because their not just representing themselves but future generations of Players. 

If I were a leader in the NBA Players Union I would have e-mailed the Youtube link of that interview to my entire union. If the leadership does their job and stars continue their involvement in negotiations I could see the loyalty and sense of responsibility to their brothers being greater within the union than with the Owners.

THE NBA NEEDS TO DO SOMETHING TO STOP STAR PLAYERS FROM “LEBRON-ING” THE TEAM THAT DRAFTED THEM

FAN #2: The NBA needs to do something about teams losing out on star players ditching their teams to go to big markets when their contracts are up. If this is allowed only 6 or 7 teams will have legit chances to win each any every year.

MY RESPONSE: Every year the NBA has always had only 6 or 7 true contenders. I think everyone will agree that the league is better now than it was 5-6 years back when:

• Kobe was playing with scrubs like Smush Parker and Kwame Brown in LA, and demanding to be traded or to have his teammates shipped out for better players
• KG was surrounded by losers in Minnesota, 
• T Mac was wasting his prime with the Magic, 
• AI had a one-man team in Philly, 
• Vince Carter was in Toronto dogging it because his team sucked

WHAT ABOUT PARITY?

FAN #3: The NFL has 30 teams (with the exception of the typical Raiders, Bengals and Lions) whose fans actually believe their team has a chance to win the title at the start of every season, in the NBA only a few teams have a chance to win.

MY RESPONSE: First off the point about 30 NFL teams having a chance to win a Super Bowl just isn’t true. While each teams will have delusional fans who always think this year is our year, true educated football minds can normally call 8 or 9 of the top 12 teams in the league before any games are played. Yes there may be a few more surprises in the NFL but there really aren't that many of them.

Additionally I really don’t think its possible for parity to exist in the NBA. In the NBA, one elite player can make more of an impact on the win-loss record of a team than in any other sport. You generally don’t win titles unless you have a transcendent star. Because of this, there will only be 8-10 contenders no matter how the CBA is constructed.

I'd rather those contenders be good from top to bottom instead of having a league full of teams with 1 or 2 great players carrying trash. Recent history suggests that the general public agrees. Want proof? In the mid 2000s when the league was filled with more parity and there were less stacked teams ratings suffered. Now when the league is filled with teams supports multiple stars like the Heat ratings are through the roof. That’s all the proof I need that where basketball is concerned "super-teams" are more interesting than parity.

POSSIBILITY OF FRANCHISE TAG OR OTHER MECHANISM TO RESTRICT PLAYER MOVEMENT

FAN #4: I hate seeing star players ditch the city that loves them when they become free agents to go to greener pastures. The NFL got it right - teams should be able to slap players who are about to be free agents with a franchise tag or something to keep them as long as they want.

MY RESPONSE: I don’t get the view that players give up basic rights that people in all other walks of life have just because they make more money. A player who honors the commitments of his contract until it expires should have the flexibility to explore his options once it ends.

If the Owners want to ensure superstar players stay home, then they should do their jobs and surround those players with talent. There is no need to give them more control over the players, plus many of the proposals people have suggested (i.e. eliminating free agency) would not be legally valid. The only options that I could imagine that would pass legal scrutiny is to either 1) impose a franchise tag or 2) change the triggering conditions for restricted free agency. 

First let’s explore franchise tagging in the NBA. I see no way that the players will go for it, and think a large chunk of Owners (i.e. those from large market teams) would be opposed as well. The only way to make this idea slightly more palatable is to give the players who are franchised a substantial raise over the maximum allowable deal they could sign as free agents. 

That leaves option #2, expanding restricted free agency. As it stands now star players tend to only hit restricted free agency once in their career, when their rookie deals end. I could see the Owners pushing to try to get players to still be restricted after their 2nd contract ends as well. This way the Owners get the opportunity to match or threaten they will match so that they get compensation when players leave during free agency, while the players don't give up any money, and still get to test free agency. While I still see the Players being hesitant to agree to this option, it seems more agreeable than allowing franchise tagging.

POSSIBILITY OF HARD CAP BEING IMPLEMENTED

FAN #5: Can the Knicks add another star in free agency. They already have 2 huge commitments to All Stars (Melo and Amare) and have to pay Balkman in 2012. I’m afraid that when the NBA adds a hard cap they won’t be able to add anyone.

MY RESPONSE: Even if a hard cap (a salary level which no team can exceed) is instituted expect it to be nearer to the luxury tax threshold ($70.307 mil) than the current cap ($58.044 mil). 

Why do I believe this? Well the average salary for a player in the NBA is slightly above $5 mil a year. Seeing that I believe the Players will do everything possible to keep that salary near the same, then the cap will have to be that high to accommodate the player’s salaries.

In conclusion whether you agree or not, expect the upcoming CBA negotiations to be a lot harder fight than the media has made it out to be. Although you may not agree with me that the new CBA should retain much of the system we currently have in place, I think we all can agree that this labor dispute is not worth losing a whole season.