Are Mark Cuban’s Comments Evidence of Collusion?

Mark Cuban http://probasketballtalk.nbcsports.com/2014/10/08/mark-cuban-if-players-want-to-get-rid-of-max-contracts-they-have-to-give-up-guaranteed-contracts/

“If you give up guarantees, [i]t’s a trade-off….” “It was discussed during the lockout time among owners, but never got anywhere. So it was just one of those trial balloons. I’m not offering this as a negotiation, I’m not suggesting it, all I’m saying is that was something we discussed before, and max contracts are always big question, guarantees are always a big question. But we have two years before that’s even an issue, so no point discussing it now.”

While many of us read Cuban's comments and focused only on the impact on future labor negotiations; I could not help thinking that Cuban's words sounded a bit like the owners were discussing colluding to change the market which results in guaranteed deals (just as the NFL was accused of doing during the supposedly "uncapped year").

As I've stated many times before the only NBA contracts mandated by the CBA to be guaranteed are those belonging to 1st round picks on their rookie deals.  Any other guaranteed contract is the result of the negotiations as they exist in the current market.

With that in mind; its hard to not read Cuban's comments and feel that the owner's were discussing artificially changing the market which results in the lion's share of the workforce receiving totally guaranteed deals.

Exmining Impact of New CBA After Uneventful Trade Deadline

Speaking to reporters earlier in February Stern was quoted as saying "[i]t's not about size, it's about revenue, San Antonio is a small market ... four championships, pretty good. Oklahoma City? Pretty good."

"Teams are going to have to manage well to get the best players they can," he said. "They'll have to manage well to hire the best coach, manage well their roster under the cap, manage well with tickets and sponsorships to do the best business they can. Every team has the ability to be competitive and profitable under our current system.

"It's not about market size. It's about management."

Seeing that I’m not the biggest advocate for parity I gave only a passing thought to these comments until last week’s dud of a trade deadline.  Its normally an annual tradition in the NBA for one of the teams that feels they are on the verge make a move to add a real contributor at the deadline; however last Thursday we saw no such things.  Instead [according to RealGM] this year marked the first time in 6 years that not a single all-star was dealt at the all-star break.

So what role does the new Collective Bargaining Agreement (CBA) have to do with this?  Depends on who you ask -- most seemed to erroneously believe sweeping changes would be felt immediately after the CBA was ratified, it always seemed logical to me that the majority of teams would not truly change course until the more punitive portions are implemented.  Now that teams know that we are mere months away from the aspects discouraging overspending being put into operation we are seeing that the vast majority of teams are being more fiscally responsible.

What are these punitive portions you ask?  Good question, and to answer it I’ve taken snippets from Larry Coon's excellent FAQ on the NBA’s salary cap to detail four different ways that the new CBA attempts to make management and not market size the most vital aspect to running a successful franchise >>>>> http://www.cbafaq.com/salarycap.htm.

http://www.cbafaq.com/salarycap.htm#Q21 21. What is the "luxury tax?" Why does it exist? How is it determined? Who pays it? The luxury tax is a mechanism that helps control team spending. While it is commonly referred to as a "luxury tax," the CBA simply calls it a "tax" or a "team payment." It is paid by high spending teams -- those with a team salary exceeding a predetermined tax level. These teams pay a penalty for each dollar their team salary (with a few exceptions, see below) exceeds the tax level. The tax level is determined prior to the season, and is computed as follows:  The amount of tax a team pays depends on the season, the team salary as of the team's last regular season game, and whether the team is a "repeat offender": For 2011-12 and 2012-13, teams pay $1 for every $1 their team salary exceeds the tax level. There is no repeater rate. 2013-14 teams pay an incremental rate based on their team salary. There is no repeater rate. For 2014-15 teams pay an incremental rate based on their team salary. They pay the repeater rate if they also were taxpayers in all of the previous three seasons. For 2015-16 and all subsequent seasons, teams pay an incremental rate based on their team salary. They pay the repeater rate if they were taxpayers in at least three of the four previous seasons. Here are the tax rates beginning 2013-14: Team salary above tax level Non-repeater Repeater Lower Upper Tax rate Incremental maximum Tax rate Incremental maximum $0 $4,999,999 $1.50 $7.5 million $2.50 $12.5 million $5,000,000 $9,999,999 $1.75 $8.75 million $2.75 $13.75 million $10,000,000 $14,999,999 $2.50 $12.5 million $3.50 $17.5 million $15,000,000 $19,999,999 $3.25 $16.25 million $4.25 $21.25 million $20,000,000 N/A $3.75, and increasing $.50 for each additional $5 million. N/A $4.75, and increasing $.50 for each additional $5 million. N/A For example: A team with a team salary $12 million over the tax level in 2011-12 pays a tax of $12 million. A team with a team salary $12 million over the tax level in 2013-14 pays a tax of $21.25 million (the incremental maximum of $7.5 million for $0 to $4,999,999, plus the incremental maximum of $8.75 million for $5 million to $9,999,999, plus $2 million times the incremental rate of $2.50 for $10 million to $14,999,999). A team with a team salary $4 million over the tax level in 2015-16 pays a tax of $10 million ($4 million times the repeater rate of $2.50 for $0 to $4,999,999) if they also were taxpayers in three of the previous four seasons, or pays a tax of $6 million ($4 million times the non-repeater rate of $1.50 for $0 to $4,999,999) if they were not taxpayers in at least three of the previous four seasons.

What it means?  That the days of teams trying to “buy a title” (i.e. spend so much above the rest of the league that they have a completive advantage) may be over.  As the example illustrated the transition to a system involving tax brackets that has even harsher rates for repeat offenders from a dollar-for-dollar tax means costs will skyrocket if teams don’t change their spending habits.

Looks like those habits are in fact changing too. While all transactions have a financial aspect to them, the deals this year seemed to be even more focused on financial ramifications. We saw 2 contenders (Oklahoma City and Memphis) deal away players with all-star talent (i.e. James Harden and Rudy Gay) in large part because their old teams  already had multiple players making big bucks and wanted to cut costs.   In the old days that would have never happened.

http://www.cbafaq.com/salarycap.htm#Q23 23. Other than financial penalties, are there restrictions on taxpaying teams? In addition to the tax payments described in question number 21; taxpaying teams have the following restrictions. Note that most of these restrictions aren't triggered unless the team would be over the "apron" -- the point $4 million above the tax level -- following a signing or trade. - Teams above the apron cannot use the Bi-Annual exception. - Teams above the apron have a smaller Mid-Level exception. Teams above the apron can offer contracts no longer than three years, while other teams can offer four. The starting salary is also lower (for example, in 2011-12 it is $3 million for teams above the apron, versus $5 million for other teams). - Taxpaying teams can acquire less salary in a simultaneous trade. - Starting in 2013-14, teams above the apron cannot receive a player in a sign-and-trade transaction (see question number 89).

What it means? Today’s NBA now there has a true impediment for overspending that goes beyond dollars and cents.  Gone are the days where the only obstacle for improving a team was how deep an owner was willing to dip into his wallet -- now overspending means a team is restricted in the transactions they can make to acquire talent.  

The most significant restrictions come into effect in free agency: now teams who have spent too much are barred from adding an average salaried player using the mid-level exemption (instead they can only offer a contract that is 40% lower to start).  Additionally the loophole allowing teams over the luxury cap “apron” to add top level free agent talent even though they have no cap space has finally been closed.  

These changes work to make cap space more valuable, as the big spenders will not have the same flexibility to continue amassing talent unless the players are willing to pay for peanuts.

http://www.cbafaq.com/salarycap.htm#Q24 24. How does revenue sharing work? How is it different from the luxury tax? The high revenues generated by the big-market teams increases BRI, which increases the salary cap, which increases the amount all teams (including low-revenue, small-market teams) are forced to spend on player salaries -- leading to an unsustainable system. The league's revenue sharing plan works in parallel with the CBA (including the luxury tax) as a one-two punch to address franchise economic disparity. It is designed to help redistribute money from high-revenue teams (generally in big markets) to needier teams (generally in small markets). By 2013-14 all 30 teams are projected to be profitable under this system if they meet reasonable revenue and expense standards.  The NBA also had a revenue sharing system in place with the 2005 CBA. It was funded entirely through luxury tax revenues, and paid an average of $40 million per season. However in many cases teams were getting back money they had put into the pool themselves, so the net redistribution of money was much lower than the gross distribution. Under the old plan teams received much less than under the new plan, with the highest individual receipts averaging $5 million. With the new plan, $181 million is projected to be redistributed in 2013-14, with two teams projected to receive over $20 million each, and seven teams over $16 million each.  The basic idea behind the plan is that teams contribute an equal percentage of their total revenues into a common pool (minus certain expenses such as arena expenses), then receive an allocation equal to a 1/30 share of the pool1. Small market teams with lower revenues will therefore contribute less than they receive, and will be net beneficiaries under the plan. Large market teams will contribute more than they receive, and will be net payers under the plan.

What it means?  Say what you will about how reliable the figures used by the league during the last CBA negotiations were, but the assertion that now every team in the league “should” be profitable is huge.  I also like that the size of a team’s market will determine how much they are expected to pay, so small markets like Oklahoma City or Charlotte are not expected to bring in the same amount of revenue as a big market team like the Knicks.

Seeing the value that the two teams that have been up for sale since the ratification of the new CBA looks like this provision is also having its intended effect.

In conclusion seems that the provisions in the CBA as it relates to the new luxury tax, restrictions on high spending teams and the increased revenue sharing had a will influence the league for years to come.  Mark my words -- the limited transactions completed at the trade deadline was no coincidence, and expect the trend to continue as teams adjust to the league’s new financial climate.  What will the result be? 

No guarantees, but here’s hoping Sterns quote that “[e]very team has the ability to be competitive and profitable under our current system” comes to fruition.

Lockout of 2011: What Effects (If Any) Will There Be Long-Term

by Kevin L. Davis (@EsquireSports)

With the lockout finally over and an unusual NBA season is set to begin (which will start on Christmas Day for the first time in league history), I thought what better way to begin this journey than to examine the effects of the lock-out post-mortem.  Instead of focusing on which side “won,” I thought it would be better to discuss how the NBA as a whole won or lost in 3 key categories:  buzz among fans, financial impact, and competitive balance.

BUZZ AMONG FANS

After a season where ratings where at a record high, fans and analysts steamed for months with doom and gloom projections about the damage the lockout would cause to the league.  As the lockout consumed the entire summer and most of the fall, most seemed to believe that the NBA was inflicting a blow to itself that would cause long-term damage to its popularity, but looking at the positive response I’ve seen amongst fans it seems that they couldn’t have been more wrong.

This goodwill started on the early morning hours of November 26^th when David Stern and Billy Hunter (the leader of the NBPA) announced that a tentative agreement had been reached to end the lockout.  Within instants the outpour of response from the fans proved that any damage was already being forgiven.

Twitter (everyone’s favorite gauge of what’s “hot” nowadays) blew up with posts about the NBA returning and every new station in the country brimmed with excitement about the impending return of the NBA.  For all the disgust fans had of millionaires and billionaires bickering about money, they could not deny their excitement to see their favorite NBA players hoop it up for real.

FIANANCIAL IMPACT

Heading into this lockout the league claimed losses of $300+ mil in the last 3 seasons.  For all the sites who disputed the numbers and the talk about what percentage of BRI the players should give up it almost was forgotten how poorly the league was performing as a whole financially.

While neither the Players nor the Owners ended up happy with the financial split as it was agreed to, it seems clear that establishing a band where the Players share is reduced from 57% to a band varying between 49 and 51% helps remedy this problem.  Assuming the league were to bring in the exact same revenue as earned in 2010-11 this new system would save Owners somewhere between $229 million and $305 million.  This one change seems enough to take a business that has been operating deeply in the red and give it a chance to be profitable.

COMPETITIVE BALANCE

Although the Owners were not successful in getting all the changes they wanted, the new Collective Bargaining Agreement will bring forth several additions that will achieve a more balanced payroll among the NBA teams.  The hope is that these changes will help improve the chances of a team to compete no matter the size of its market.  Will it work?  My prediction is that it definitely will.

The league did greatly improve the revenue sharing system as well as make key changes to the floor and ceiling that teams will spend.  They did this by first increasing the minimum a team must spend from 75% of the cap up to a percentage that once fully implemented will be 90%.  This new floor means that teams will be forced to spend about $9 mil more than the currently imposed minimum (up to $52.2 mil from about $43.5 mil).  A de facto salary ceiling was also created by overhauling the penalty when a team exceeds the luxury tax (currently $70.3 mil in payroll).  Starting in 2013-14 the new more punitive luxury tax will tax teams at an elevated rate instead of at a dollar for dollar as the old rule did.  

While these changes mean that unless an Owner decides he will not be deterred by these steep taxes, the days of big spending teams having roughly double the payroll of small market teams are over.  However the question is how big of a difference will this make?  It has been proven time and time again that in the NBA you don’t win without a star, and next to nothing was done to help small market teams keep their stars. 

While many perceive this is a negative I for one see this as a positive.  While the attention Chris Paul and Dwight Howard are getting must annoy their fan-base it keeps people talking about the NBA.  As seen with the LeBron and Carmelo mini-dramas over the last few years, the energy that produces is good for business.

CONCLUSION

I think it’s fair to say that the NBA as a whole was a big winner in all 3 categories.  Seeing that we only lost 16 games and there will be games on the first major basketball holiday (Christmas) my gut says any ill feelings still lingering in fans will be forgiven. 

Although things got ugly at several points during the lockout, all I can say to both sides is great job getting it done.

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.

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.

My Critique of Excellent David Stern Interview Conducted by Bill Simmons

by Kevin L. Davis (@EsquireSports)

Hello Sportsfans.  Not sure if you all are aware but prior to the weekend David Stern made an appearance on the BS report giving Bill Simmons a rare interview that spanned a little more  than an hour.  If you've not listened to it for yourself, you should definitely check that out >>>>> http://espn.go.com/espnradio/play?id=6856992.

Although I must admit that my views have been slanted toward the players I decided prior to listening to the interview that I would stay open-minded.  Although at times I felt that Stern was condescending and arrogant, and even felt that at times he seemed a little angry and Simmons for bringing up points that didn't paint him or the owners in the brightest light I think for the most part Stern set out to accomplish what he intended to accomplish - to explain to the common fan what the importance of the issues at stake in this CBA and to illustrate the size of the schism that exists between the Players and the Owners, and to present a united front among his contingent of Owners.

Stern accomplished both of these objectives masterfully by calling the NBA Players the "worlds highest paid union" he shows just how well compensated the NBA players are, and by following that up by stating the amount of money being lost by the league annually.  In these shaky economic times, very few fans will have pity on millionaire Players whose lavish salaries are causing their business to be unprofitable.  He also did a good job in arguing why revenue sharing should be kept out of these negotiations and should instead be determined at a later date once Players and Owners have determined the revenue split, as attempting to do that in these negotiations very well could cause a split amongst his Owners.

However this interview also pointed out some of Stern's weaknesses, as condescending, insecure, and quick to anger when he's being challenged.  His continued statements that the players will come around when the offer is explained to them does that (insinuating their too stupid to understand whats going on themselves) and again even more blatantly when Stern snapped at Simmons that he's "been doing this for 40 years, which is much longer than Billy Hunter has" (which seems irrelevant to me when he admits to having lost the last 3 negotiations that he had against Hunter) seems the best illustration of that.  With all do respect Mr. Stern we all know the league has  grown by leaps and bounds under your leadership, you don't have to be so touchy about not feeling as if you got your due.

All in all though this interview shed great insight on where things currently stand in this labor dispute.  In order to get things going the Players simply must realize that will receive a smaller share of the revenues.  Now we just have to find middle ground where both the Players and the Owners will be satisfied.

I still think the offer reportedly made by the Owners which would allow the Owners to be the sole recipients of the first $900 mil in revenues, and then to split remaining revenues 50/50 goes too far, but at least that forms a basis to start.  Additionally middle ground must be reached on revenue sharing.  Personally I still believe that it should be apart of these negotiations, however I do agree that the revenue split must be determined first before the league can figure out an effective way to split those revenues.

Billy Hunter Admits That He Expects There Will Be No NBA This Year

by Kevin L. Davis (@EsquireSports)

While speaking to an audience composed mostly of lawyers at the American Bar Association, Billy Hunter said what most of us have expecting all season - that chances are the upcoming season will be cancelled as this labor dispute drags on.  Although this statement has been repeated time and time again over the last year or so, I believe this is the first time that Hunter has stated publicly that he expects the season to be cancelled.  

Hunter went on to point to what he views as the problem leading to the more contentious manner behind this whole labor dispute, the changes in the constituency of ownership.  At one point Hunter said "[i]n the last six or seven years, there is a new group of owners to come in who paid a premium for their franchises, and what they're doing is kind of holding his feet to the fire."

Whether you agree or disagree with these tactics at this point it seems clear that if there is no resolution soon the true losers here will be the fans.

NBA Files Lawsuit Against Players and File Unfair Labor Charge

by Kevin L. Davis (@EsquireSports)

Remember how I said the meeting yesterday had to be seen as good news?  Scratch that.  The owners and David Stern have now filed a lawsuit against the players as well as filing a charge with the National Labor Relations Board against the Players accusing them of unfair labor practices, specifically for failing to bargain "in good faith" and of "impermissible pressure tactics" in labor talks.

From the information that has been made available to the general public, it seems the league has little chance of success with either of these proceeedings.  Why do I say that?  

First off you must as I'm sure many of you remember, these negotiations didn't take the turn into the current bitterness until David Stern famously told the Players that he knows where “the bodies are buried” in the NBA....because he had buried some of them himself.  Sounds to me that Stern and not the Players started that.

Also you must remember why the league is currently locked out.  The Players had no problem with the old CBA, and would still choose to play under it if given the option.  We're only in lock out mode now because the Owners opted out of the deal and chose to impose that course of action.

I believe the Owners understand that there is a very small likelihood of winning these suits, but are only doing this to try to prevent the NBPA from filing an anti-trust suit against the NBA with the threat of voiding out the Player's contracts if they do pursue a suit.

So as I said, the chance of success for these suits seems low, but they do signal just how far apart the Players and Owners are.  Bad sign.

NBPA and Owners Have First Substantive Talks Since Lockout......No Progress Made

by Kevin L. Davis (@EsquireSports)

Yesterday in what has to be viewed as a good sign David Stern and his high level executives (deputy commissioner Adam Silver, Spurs owner and labor relations committee head Peter Holt, and T-Wolves owner and Board of Governors chairman Glen Taylor) met with Billy Hunter, along with NBPA player-execs Derek Fisher and Theo Ratliff. 

Unfortunately the fact that there was a meeting seems to be the only good news to report. Neither side produced an offer, and it currently appears that neither the Players or the Owners are willing to make any concessions yet. However they did agree to meet again in the coming weeks

Stay tuned sports fans maybe there will be something new to report soon.

No News to Report.........And Thats A Very Bad Thing When it Comes to Collective Bargaining

by Kevin L. Davis (@EsquireSports)

Right now with the lockout in place there seems to be no real news to report on the NBA's labor situation.  The sides have not sat down at the negotiating table recently, and unfortunately that does not look like it will change any time soon.

This is a terrible thing for NBA fans to hear.  Right now the sides are so far apart that they aren't even at the table.  I hope I'm wrong, but its looking very likely right now that games will be missed in the NBA next year.

A Little More Info on Collective Bargaining

by Kevin L. Davis (@EsquireSports)

In my last article I claimed the the Players may have a valid claim that the Owners have acted in bad faith during the negotiating process based on the tactics they have used against the Players while not elaborating on why. Here is a little information explaining the laws as it relates to collective bargaining which may shed a little light on why I made that claim >>>> http://legal-dictionary.thefreedictionary.com/collective+bargaining

• 1) The employer may not refuse to bargain over certain subjects with the employees' representative, provided that the employees' representative has majority support in the bargaining unit. 
• 2) Those certain subjects, called mandatory subjects of bargaining, include wages, hours, and other terms and conditions of employment. 
• 3) The employer and the union are not required to reach agreement but must bargain in Good Faith over mandatory subjects of bargaining until they reach an impasse. 
• 4) While a valid collective bargaining agreement is in effect, and while the parties are bargaining but have not yet reached an impasse, the employer may not unilaterally change a term of employment that is a mandatory subject of bargaining. But once the parties have reached an impasse, the employer may unilaterally implement its proposed changes, provided that it had previously offered the changes to the union for consideration. 

Duty to Bargain in Good Faith

During the bargaining process, the parties are not required by law to reach agreement. They must, however, bargain in good faith (29 U.S.C.A. § 158[d]). Although good faith is a somewhat subjective concept, courts will look to the entire circumstances surrounding bargaining, including behavior away from the bargaining table such as pressure and threats (NLRB v. Billion Motors, 700 F.2d 454 [8th Cir. 1983]).

What this means in the context of the NBA's Labor Dispute?

The Players have felt all along that the Owners have been making attempts at breaking their Union and made offers so bad that no reasonable union could be expected to take it. The offers have definitely been underwhelming, and if the reported comment attributed to David Stern that "he knows where the bodies are buried because he put them there, is true that definitely sounds threatening.

I'm not guaranteeing a legal win, but it definitely sounds like the Players may have a leg to stand on.

According to ESPN's Larry Coon Owners May Be Exaggerating Figures To Reflect A Loss

by Kevin L. Davis (@EsquireSports)

If you have not read this article from ESPN's Larry Coon I suggest you check it out now >>>> http://sports.espn.go.com/nba/column...ancials-110630. In his article that he wrote based on viewing financial records of two teams (2005-06 Nets and 2008-09 Hornets) he makes 2 main arguments 1) Since the Players can't share in the profit when a team is sold it is not fair that they are burdened with the costs associated with buying the team in the first place and 2) If they don't have a say in the team's management decisions, they don't want to pay the cost when those decisions go awry.

He went on to show that the figures the Owners have been reporting as their losses may be the result of an accounting fiction. While it is true that financial statements are prepared by external auditors, who are bound by their license to do things right and subject to review by the IRS, any person who knows a little about finances you know that depending on the method you use to account for your finances, the profit/loss figures could vary by tens of millions of dollars.

This insistence of bargaining from a position of using these figures and not true basketball-related expenses and revenue could be viewed as an attempt by the Owners to doctor the numbers to exaggerate losses. If Coon is correct, its very possible that instead of 20+ teams losing money only 7 or 8 are, and they seem to be losing less than $20 mil a year.

If this is true and it is happening throughout the league, the Players may have a leg to stand on if the legal route is pursued and they allege that the Owners are negotiating in bad faith. I could very well see a court ruling that The combination of utilizing these figures instead of basketball-related expenses combined with their offers which included taking away so many rights from Players (i.e. guaranteed contracts, hard cap, smaller contract lengths, etc.) in times of increasing viewership and attendance as negotiating in bad faith.

NBA Lockout Offically in Effect

by Kevin L Davis (@EsquireSports)

It is now July 1st, and as expected the Owners have locked the players out.  Reportedly team officials (i.e. coaches, trainers, front office staffs) and their spouses have been told to not contact Players or their families during the lockout whether it be in person, by phone, or by electronic means including social media sites like Twitter and Facebook.

I'll have a few more articles coming soon covering important labor issues related to the lockout over the weekend.

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.