SBD/August 3, 2011/Leagues and Governing Bodies

NBA Lockout Watch, Day 34: Stern Explains League's Legal Strategy

NBA Commissioner David Stern yesterday said the league filed an unfair labor practices claim with the NLRB and a lawsuit against the NBPA because union officials are "not serious about making a deal with the NBA." Stern appeared on ESPN's "SportsCenter" and said of the union, "They’re so busy talking about their decertification strategy following the leader, attorney Jeffrey Kessler, who did it for the NFL players, and in engaging in conversation with agents about it and talking about it constantly that we think that is distracting them from getting serious and making a deal.” Stern in May said litigation is "not appropriate to making a deal." When asked what had changed since then, Stern said, "The continued threats by the players of decertification. Our own view on that is if it’s going to happen, then let’s have it happen, let the courts decide ... and let’s get on with it rather than the posturing that -- in our view -- is going on with the players.” ESPN's Jay Harris asked Stern, "Why go to battle right now when the NBA seems to be rising in popularity?” Stern: “The agreement that we have caused the NBA to lose $300 million last year. The owners think, given the investments that they make, to generate $4-point some-odd billion for which the players take $2.2 billion, expenses are spent on everything else and the owners lose $300 million is not a model that the owners want to continue any longer.” Asked about the prospects of reaching a new CBA before the NBA misses regular-season games, Stern said, "I wouldn’t dare give a specific date, but ask me again in September because we’ve got to all together -- players, owners -- gear up the season" ("SportsCenter," ESPN, 8/2).

UNLUCKY NUMBER 13: The NBA named 13 individual players as defendants to represent the class of all NBA players in the lawsuit it filed yesterday against the NBPA in N.Y. federal court. Those named represent NBA players in different situations, from All-Stars to free agents to a second-round draft pick. The NBA is asking that the court recognize these players as representatives of the class of all 420-plus NBA players.

PLAYER NBPA POSITION
Lakers G Derek Fisher President
Spurs F Matt Bonner VP
Bucks G Keyon Dooling VP
Wizards F Maurice Evans VP
Free agent G Roger Mason Jr. VP
Hornets G Chris Paul VP
Free agent C Theo Ratliff VP
Free agent C Etan Thomas VP
Free agent G James Jones Secretary/Treasurer
Knicks F Amar'e Stoudemire Player rep
Free agent F Mike Dunleavy Jr.  
Kings G Jimmer Fredette*  
Warriors G Charles Jenkins*  
NOTE: * = '11 draft pick  
   

The lawsuit seeks declaratory judgment on a number of issues, including that the ongoing NBA lockout does not violate antitrust laws and that the Norris-LaGuardia Act prohibits federal courts from enjoining a lockout. The lawsuit also seeks a declaratory judgment that would void guaranteed player contracts if the NBPA were to decertify and if the decertification was held to be valid. NBPA Exec Dir Billy Hunter in a statement yesterday said that the allegations in the lawsuit, as well as the unfair labor practices charge, were without merit and that the union would seek to have the actions dismissed. The NBPA has “not made any decision to disclaim its role as the collective bargaining representative of the players and has been engaged in good faith bargaining with the NBA for over two years,” Hunter said. In the lawsuit, the NBA noted that it has had a collective bargaining relationship with the NBPA for over 40 years and that the two parties have entered into 14 CBAs during that time. “In virtually every collective bargaining negotiation since 1970, the players have commenced or have threatened to commence antitrust litigation as a tactic to pressure the NBA to accede to the Union's bargaining demands,” the lawsuit states (Liz Mullen, SportsBusiness Journal). SBNATION.com's Tom Ziller reported Fredette and Jenkins are "included in the list of defendants because they are from New York, the suit was filed in New York and the NBA needed to make sure New York residents not under NBA contract were included in the suit" (SBNATION.com, 8/2).

MAKING THE FIRST MOVE: Legal experts said that the NBA's moves yesterday "were a pre-emptive strike and smart venue shopping." The Second Circuit is an "often-friendly NBA venue and known to be pro-employer." Loyola Law School professor Dan Lazaroff said, "They're going on the offensive here, rather than playing defense." Michelman & Robinson Managing Partner Dana Kravetz said, "Given the potential threat of (union) decertification, it's an aggressive move." Kravetz added, "Getting into court first is sometimes the name of the game and you're dealing with the Second Circuit … [which] has been somewhat favorable when it comes to the NBA and issues of antitrust" (L.A. TIMES, 8/3). Fordham Univ. business law professor Mark Conrad: "They are trying to pre-empt the union. It’s still early, but the owners, to some extent, are emboldened by what happened in the NFL situation." In N.Y., Ken Belson notes it "could take months for the courts or the NLRB to rule on the NBA's claims, particularly because the term 'good faith' is broad" (N.Y. TIMES, 8/3). Former NLRB Chair and Stanford Law School professor William Gould: “It is a very clever, pre-emptive strike. It raises the same issues that have been litigated in the previous football go-round -- whether the union can decertify. ... They (the NBA owners) are not waiting for the players to come after them. They are going right after the players and trying to head them off at the pass" (Mullen). USA TODAY's Jeff Zillgitt notes the NBA "filing in New York and before the players was strategic." The U.S. District Court for the Southern District of New York "has ruled in favor of the NBA in at least two previous suits: (Leon) Wood vs. National Basketball Association in 1984 and the NBA vs. (Charles L.) Williams in 1995" (USATODAY.com, 8/3).

TAKING THE EARLY LEAD: In N.Y., Marc Berman writes the NBA "went on the attack as a preemptive strike in case the NBA follows the NFL players' lead and decertifies the union." If the NBPA decertifies, it "technically is allowed to sue the NBA over the lockout." An NBA official said that the league "believes the union is being distracted by the decertification threat and is using that ploy as its ace in the hole." As a result, the NBA "went to the courts to decide promptly if it is even legal" (N.Y. POST, 8/3). Also in N.Y., Mitch Lawrence notes "several NBA player agents have been pressuring the union to decertify in hopes that it will pave the way for a player-friendly" CBA (N.Y. DAILY NEWS, 8/3). SI.com's Sam Amick reported the NBA's "preemptive strike could force both sides back to the bargaining table for sessions far more meaningful and productive than the one that took place on Monday." With several player agents pressing Hunter to decertify the union, this "not-so-subtle threat just might be enough to quiet that crowd and force both sides into the kind of prolonged discussions that are so badly needed" (SI.com, 8/2). ESPN.com's Lester Munson takes a look at the NBA's legal strategy under the header, "NBA Litigation Reverses NFL Roles" (ESPN.com, 8/2).

PUTTING PRESSURE ON NBPA: In Salt Lake City, Brian Smith notes while the NBPA "has long held decertification in its back pocket," the NBA's lawsuit "has the potential to be a game-changer." If the union "suddenly dissolved and the league’s move was backed by the courts, star players such as LeBron James and Kevin Durant could be up for grabs whenever a new season begins since their contracts were formed within the confines of a CBA." That outcome is unlikely, but "even the possibility puts pressure on an NBPA that already lacks leverage to return to the bargaining table and make further concessions to owners" (SALT LAKE TRIBUNE, 8/3). In San Antonio, Mike Monroe writes, "Don’t doubt for a nanosecond that the league wants every player to pause and consider that his contract could be declared 'void and unenforceable' if the union were to choose decertification and the league prevails in court" (MYSANANTONIO.com, 8/3). ESPN’s Michael Smith said the unfair labor practices claim is “basically code for, ‘You’re not doing what we want you to do.’" Smith: "I don’t think the owners came with a different proposal. Stern's talking about, ‘Well, the players aren’t moving.’ Neither are you! You want them to come to you, but you’re not taking a step towards them. It’s awful hypocritical.” Denver Post columnist Woody Paige said Stern claims the players are not “bargaining in good faith” but the owners “aren’t bargaining with any kind of faith at all because they want to destroy this union." Paige: "They’re not trying to bargain. They’re trying to start the system over again” (“Around The Horn,” ESPN, 8/2).

HEADING IN THE WRONG DIRECTION: In Philadelphia, Marc Narducci wrote the NBA "faces the prospect of becoming a true afterthought if there is no basketball this year, which more than a few people are forecasting." One NBA agent said that he "told his players to prepare for not having basketball the entire year." The agent said, “In the end I hope we can have half a year and even at that I say it’s 50-50" (PHILLY.com, 8/2). CBSSPORTS.com's Ken Berger wrote Monday's meeting between the NBA and NBPA was "a 'Seinfeld' negotiation -- a negotiation about nothing -- and we saw David Stern raising the pessimism meter another notch by making the serious accusation that the players are not bargaining in good faith." One source said, "Everybody would be shocked if we didn't lose games. Coaches, management -- they all agree on that" (CBSSPORTS.com, 8/2). ESPN’s Michael Wilbon said, "Nobody thinks, honestly, that they’re going to play basketball on time." He said he has “made other Christmas Day plans because I don’t feel that we’re going to be televising NBA basketball on ABC." Wilbon: "This is not the NFL. It is going to be into 2012 before they’re back” (“PTI,” ESPN, 8/2). The N.Y. Times' Harvey Araton on his Twitter feed wrote, "A major NBA agent tells me he believes owners will dump the season if they get to November without a deal. Just his opinion" (TWITTER.com, 8/2). YAHOO SPORTS' Kelly Dwyer: "If you had any hope for the 2011-12 season to start on time, it's likely been blown to bits" (SPORTS.YAHOO.com, 8/2). In Chicago, Lacy Banks: "If basketball fans thought an NFL-style resolution was in the works for the ongoing NBA ­labor battle, the two warring factions showed Tuesday that this figures to be a much uglier conflict" (CHICAGO SUN-TIMES, 8/3). In Boston, Gary Washburn: "The past two days have painted a discouraging picture regarding the labor issues" (BOSTON GLOBE, 8/3). But CBSSPORTS.com's Gregg Doyel wrote, "Did you learn nothing from the NFL lockout? ... I'm ignoring the nonsense coming out of everyone's mouth. The owners. The union. The media. This is the NFL lockout all over again" (CBSSPORTS.com, 8/2).

Sources say Stern will forego his salary
during the ongoing lockout
LEADER OF THE FREE WORLD: ESPN.com's Marc Stein cited sources as saying that Stern "will not collect on his eight-figure salary during the ongoing lockout." Stern has given "no indication that he will agree to lower his salary when the sides ultimately do hammer out a new labor agreement that is expected to be far more restrictive for players." But sources yesterday indicated that "during the work stoppage, Stern will indeed pass on collecting a salary." His exact compensation is unknown, but three different sources "all put it at $15-to-16 million" (ESPN.com, 8/2).

NOT A CONCERN: Stern yesterday dismissed the notion that NBA players threatening to play overseas during a lockout is a "bargaining tactic, warning it could divide the union and possibly jeopardize players' contracts if they were to be seriously injured." Stern said there are "maybe 10, 15, even 20 players who might, might be able to secure employment, but nothing approaching the NBA system." He added, "If anything, I think there's simply no way that the players collectively can generate more than a couple of hundred million dollars and we have a system that has been delivering $2 billion to them. ... It threatens to split the union because only the high-paying stars, only the superstars, will be able to get any significant number of dollars" (AP, 8/2). In Houston, Jonathan Feigen notes the first month of the NBA lockout "featured a steady stream of players heading overseas," and the international option "has become more credible" since Nets G Deron Williams signed a deal to play for Turkish club Besiktas. Some players have signed deals with an opt-out clause, allowing them to return to the NBA once the '11-12 season begins. Agent Tony Dutt: "I've contacted top Euroleague teams for my guys to see if we can get an offer. There are certain teams over there looking to pay your guys that would be terrific. The problem is getting that option" (HOUSTON CHRONICLE, 8/3).

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