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NBA OWNERS REOPEN CBA: STERN WANTS A SYSTEM WHICH "WORKS"
Published March 24, 1998
NBA owners voted 27-2 yesterday to reopen their CBA with the players and "the next three-and-a-half months will determine if this decision results in a civilized duel or labor Armageddon," according to David Moore of the DALLAS MORNING NEWS. The CBA, which had three years remaining, now expires June 30. After the vote, NBA Commissioner David Stern "chose his words carefully, repeatedly refusing to say if the owners would impose a lockout if the two sides can't find common a ground before the contract expires." Stern: "We don't want to speculate." But he did talk of a "threshold of pain" that had been put upon the owners in the current deal and said "no fair-minded person" could say the system is working. Stern: "Rather than focus on specific exceptions, what we'd like to do is say to the players, 'let's agree on a fair split and work with us. Whatever we promise you will get paid, no less and no more.'" Moore: "This means that owners will seek a hard cap to replace the soft cap that now exists. ... The owners focus is to find a way to bring salaries, which are escalating at 14 to 15 percent, in line with the nine to 10 percent growth in league revenues." The NBA and NBPA are schedule to meet on or about April 1 (DALLAS MORNING NEWS, 3/24). Stern: "It's our view that we're close to a system that works, but we didn't quite hit it this last time" (THE DAILY). In Orlando, Tim Povtak speculates that the Heat and Lakers were the two dissenting votes (ORLANDO SENTINEL, 3/24). RESPONSE: NBPA Exec Dir Billy Hunter, in a statement: "It is unfortunate the owners have chosen to forfeit three years of guaranteed labor peace at a time when the industry is so obviously healthy. ... Nonetheless, we are prepared to negotiate with the understanding that every facet of the [CBA] is open for discussion" (WASHINGTON POST, 3/24). ADD IT UP: Speaking in a conference call, NBA Deputy Commissioner Russ Granik said players will receive about $995M, or 57.2%, of the league's projected $1.783B in basketball-related income (BRI) this season. That is $160M more than the percentage on which "the league's ceiling on player payroll, or salary cap, is calculated." The league is "obligated to pay" 48.04% of BRI, or $835M this season. The owners can re-open if the total exceeds 51.8%, or around $900M (Mark Asher, WASHINGTON POST, 3/24). Hunter "disputes some of the percentages tossed around by the league," saying his figures show 55% of BRI will go to player salaries. He also pointed to money the owners receive that is excluded from BRI -- naming rights, signage, team merchandising and a percentage of luxury suite revenue -- "in questioning any economic hardship the league claims." But he did call the idea of bringing salaries in line with revenues a "prudent approach" (DALLAS MORNING NEWS, 3/24). Granik said each team will average $23M per year for the next four years of the current TV deal and gave the example of the T-Wolves paying $21M per year to Kevin Garnett: "[E]ssentially you've given away all your network television revenue. Obviously you have other sources of income, but on a long term basis, that's not a healthy situation (N.Y. TIMES, 3/24). USA TODAY's David DuPree reports that during a work stoppage, NBC and Turner would "make rights fee payments for as long as a year. They'd get reduced payments" in the final year of the deal (USA TODAY, 3/25). DRAFT DODGERS? In N.Y., Mike Wise reports that with "no idea of how the current rookie salary scale will be affected, some of the nation's top college underclassmen might decide to remain in school" (N.Y. TIMES, 3/24). Stern: "I think you can speculate that if you're an undergraduate thinking about applying, you might have some second thoughts if you don't like uncertainty" (THE DAILY). REAX: In Philadelphia, Stephen Smith writes the vote "could lead to a lockout this summer." He adds that front- office officials from each NBA team were instructed not to discuss the labor matter publicly and threatened with an "automatic" $1M fine (PHILADELPHIA INQUIRER, 3/24). In N.Y., Stefan Fatsis calls the move "risky" for a league "that has never lost a game to a work stoppage" (WALL STREET JOURNAL, 3/24). In Milwaukee, D. Orlando Ledbetter takes an extensive look at the league's labor woes and writes the vote is the "first shot in what promises to be a titanic labor battle." Ledbetter adds said that Hunter "figures to be more formidable opponent" than former NBPA Exec Dir Simon Gourdine. Agent Charles Tucker: "They can't mess it up any worse than what Gourdine and his team did. That was a complete sellout" (MILWAUKEE JOURNAL SENTINEL, 3/24). In Seattle, Steve Kelly wrote under the header, "Image-Poor NBA Faces Ugly Offseason," and added that one "can't hide the fact the NBA is in trouble" (SEATTLE TIMES, 3/23). PLAYER AND COACHES REAX: Pistons Player Rep Jerome Williams: "Our major concern would be them putting a hard cap on players' salaries" (DETROIT FREE PRESS, 3/24). The Rockets' Eddie Johnson: "It's going to be bad because I don't think they realize how strong the union is now" (HOUSTON CHRONICLE, 3/24). Mavs GM/coach Don Nelson: "We've made plans for a busy off-season, but it looks like we'll have to trash them" (FT. WORTH STAR-TELEGRAM, 3/24). RAPTORS SALE UPDATE: The league's ownership committee recommended that the league approve the Raptors sale to Maple Leaf Gardens. A vote will take place by fax this week and approval "should take place without any problems" (TORONTO SUN, 3/24). But David Shoalts of the GLOBE & MAIL said the purchase will be delayed "at least another month" until owners meet April 21 in New York (GLOBE & MAIL, 3/24).