Thursday, September 22, 2011

My Proposal for Labor Peace in the NBA

by Kevin L. Davis (@EsquireSports)

As the labor debacle wages on, the debate as to whose right and whose wrong is over.  Now if we want to have a season that starts on time both sides are going to have to make major concessions and compromises.

Here goes my proposal as to what should happen so both sides can come away feeling like they achieved key victories, while also making the league more financially stable.

Hard Cap or Soft Cap

This is the key issue right now.  Billy Hunter has called taking a hard cap a "blood issue" that he claims he is willing to lose a season instead of taking, and some owners feel just as strongly that one should be imposed.

I would keep the soft cap in place but would make it a lot "harder."  How you ask - easy by eliminating most of the exceptions that allow Teams already over the cap to bring in players from other Teams (including the MLE) and lengthen the amount of time needed to attain Bird rights. 

This way teams would be limited to go over the cap to sign minimum salaried players or to re-sign their own guys (if they have been under contract long enough to have Bird Rights).

Players Share of Revenue

Currently the Players are entitled to receive 57% of league revenues.  Seeing that everyone agrees many teams are losing money, that percentage is completely too high to ensure the financial health of the league.

Therefore this percentage must be decreased drastically.  I would have the Players decrease their share from 57% to right at 50%.  That is a big sacrifice by the Players, but its worth it if they can keep the soft cap system in place. 

Length of Contracts

The current CBA which allows contracts to be a maximum of 5 to 6 years is too advantageous to the Players.  Period.  In this market where most people can and are being fired on the whim, it is unrealistic to expect NBA contracts to remain as they are where for the most part they are fully guaranteed and extend so far into the future.

I would recommend having Players sacrifice here to shorten max length of contracts to 4 years if going to a new team and 5 years if re-signing.

Effect of Buy-outs/Amnesty Provision

As I mentioned earlier the previous CBA counts all money paid to a bought out player on a team's salary cap for all the remaining years left on the deal.  This means if a Player whose under a 2 year contract for $12 million is bought out for $10 million, then the team takes a $5 mil cap hit for the next 2 seasons.  Because of this in the current system once a relationship sours between a Player and the Team, the only options the Team has are to:

1) keep him and hope things get better,
2) trade him for peanuts,
3) send the Player home and pay him his full salary, or
4) buy the Player out but still have him count fully against your teams cap. 

This level of job stability is basically unknown in America, and with this labor dispute occurring during the current political climate it does not bode well for the Players.  With that in mind, I suggest a system where if a Player is bought out the Team can distribute the money given to the Players over the next 10 cap years (thus lessening the cap hit).  This would give the team more ability to part with troubled players, while still giving the Player the money he is entitled too. 

If that idea doesn't sound good to you I propose in the alternative an expanded Amnesty provision.  In my proposal every 2 years Teams would be able to buy out a Player and he not count for salary cap purposes. 

Revenue-sharing

Here's another of the major issues that must be resolved to end this labor dispute.  Many teams are suffering and because of that this system must be expanded to give teams in smaller markets an infusion of cash. 

While its unclear if the Owners have relented on their demands to be allowed to determine revenue sharing amongst themselves, its clear the whole system of revenue sharing must be expanded. Currently certain items of revenue including that from local TV deals are not included in revenue. I would remove those restrictions and include all moneys earned through operation of the franchise used to calculate revenue.

Conclusion

All the posturing and hard-lining was nice but it is time to get down to business if we want the season to not be interfered with because of this labor non-sense.  At the end of the day we are all fans first and therefore missing games this season would be a huge black-eye for the league.

As I've said all along, although its clear that talent-wise the league is in a great place, there is no guarantee the fans will come back if games are missed.

Wednesday, September 21, 2011

Sorry I've been away....

by Kevin L. Davis (@EsquireSports)

Sorry guys, based on not having Internet access and general exhaustion after taking the Bar in late July I had to take a little time away from writing.  I'm back now.  

That is all.

Little Known Fact - The inter-relation Between Hard Cap and Guaranteed Contracts

by Kevin L. Davis (@EsquireSports)

I read a great article from Henry Abbott a few days back that really explains why the NBA Players are so opposed to accepting the hard cap and its impact on guaranteed deals that I had never considered. It was weird because I always here people commenting on Players guaranteed contracts and saw fans writing about how Players in the NBA are spoiled by their collective bargaining agreement (CBA) that I always assumed the provision promising guaranteed contracts was in the CBA. The truth of the matter is its not.

Abbott explained that there is nothing in the CBA that guarantees the Players guaranteed contracts. They just get them because the current market (which includes a soft cap that allows teams to exceed the cap level) allows teams to be more free with their money, and because of that the vast majority of Players are under guaranteed contracts. The Players position is that if teams were to switch and have a hard cap it would also likely mean the end of guaranteed long-term deals for middle and lower tier players; as teams would lock up their stars forever and then annually fill in their roster around the stars. This is why Billy Hunter has the Players claiming that they are willing to lose the season instead of going for that.