The scene was ripe for a deal. Owners and players had finally met for three consecutive days. Mediation seemed to be working, removing emotion and providing rationality to the talks. Several issues were discussed, including the ever- sticky basketball related income (BRI) and luxury tax. The owners revealed a new revenue sharing plan that would increase to $150 million annually, nearly tripling the current $50-60 million. Progress was being made and optimism was growing that a full season of 82 games could be played by shortening the first round of the playoffs.
Commissioner David Stern came down with flu-like symptoms and was unable to attend Thursday’s sessions. The NBA’s Board of Governors, which is comprised of the league’s 32 owners, was meeting just a few blocks from the downtown hotel where the mediation was being held. Something happened in that meeting that would change the course of the talks. San Antonio Spurs owner Peter Holt told everyone that the owners needed a system that gives everyone the chance to “… make a few bucks.” Portland Trail Blazers owner Paul Allen arrived at the talks for the first time to present the hard-line stance of the owners. The owners officially proposed the 50-50 split and told the players that no more negotiating would be done until they agreed.
The outcome? After 3 days and over 30 hours of mediation, the talks broke down completely with no further talks scheduled. A statement from the Federal Mediation and Conciliation Service stated that “the parties have not achieved an overall agreement, nor have they been able to resolve the strongly held, competing positions that separated them on core issues.” The situation was so dour that George Cohen added in his statement that “… it is the considered judgment of myself and Deputy Director Scot Beckenbaugh, who has been engaged with me throughout this process, that no useful purpose would be served by requesting the parties to continue the mediation process at this time.”
Union chief Billy Hunter is convinced that small-market owners, such as Holt and Allen, are holding up the process. He noted that Micky Arison of the Miami Heat, Dr. Jerry Buss of the Los Angeles Lakers, Mark Cuban of the Dallas Mavericks, and the New York Knicks’ James Dolan were all owners who were ready to make a deal. They just didn’t have enough votes to push through.
The players’ last offer re: the BRI was 52.5%. Union economist Kevin Murphy also devised a separate BRI plan of a 50-53 band that would give “the players getting as little as 50 percent if revenues came in under projections and no more than 53 if revenues grew more.” It’s especially telling that the owners’ would stiffen their position when Stern was absent, as the talks seemed to be progressing nicely. You don’t meet for 24 hours in 2 days and not make any progress.
The owners have a lot of nerve looking to “make a few bucks” when the American public is suffering. More than half of the league arenas are built and financed with local taxpayer money. The city of Memphis has threatened to sue the Memphis Grizzlies over the lockout. If the FedEx arena were to sit idle for the NBA season, the Memphis taxpayers stand to lose $18 million. The players aren’t off the hook either. They have made several concessions to the owners, but some mid-tier players are dependent on their NBA checks to support their families. The stars are fine, but what happens in the middle of November when those checks don’t come? The union has to recognize that it represents everyone, from Kobe Bryant and LeBron James to Earl Barron and Royal Ivey.
With more cancellations expected, both sides are losing money and lots of it. Though no more meetings are scheduled, Union president Derek Fisher is remaining in New York over the weekend, hoping that the phone will ring. Hopefully, Stern will get over his flu and get back to business. It’s in their best interests to get a deal done soon, or they might not have a fan base to come back to.