More on NBA Lockout

Although there haven’t really been any breakthroughs in negotiations, it has been an eventful week to follow the NBA Lockout. November’s games have all been canceled and more cancellations/missed paychecks hang in the balance. Neither the players nor owners are fully united around party line but for now the owners have a discernible edge because the players have zero short-term leverage.

While the owners appear to have a bargaining position such that they will unilaterally impose their will upon the union, it was telling earlier in the week when Miami Heat owner Mickey Arison responded to criticism of the owners’ position on Twitter, responding, “Honestly u r barking at the wrong owner.” For talking out of turn, Arison was fined $500,000 by David Stern. This 40-character outburst seems to confirm what many have long suspected: the big market owners and small market owners are at odds with each other over revenue sharing and have decided to extract everything they can from the players in an effort to avoid or postpone in-fighting. The AP’s Jim Litke writes:

Even if the league’s claim that 22 teams are losing money is correct, successful teams such as the Heat, Knicks, Lakers and Bulls can’t be thrilled with the prospect of losing an entire season of profits to help the poorer franchises squeeze a more favorable deal from the players. But desperate as the fine made Stern look in his bid to hold ownership together, he still has a much easier task at the moment than his counterparts at the union.

Despite this brief parting from solidarity, as Litke alludes to, the owners have been much more disciplined in presenting a united front than the players. For weeks, there have been whispers that players union president Derek Fisher and executive director Billy Hunter have not been on the same page and those whispers evolved into shouts in the past couple of days.

On Monday, Foxsports’s Jason Whitlock accused Fisher of being in David Stern’s back pocket:

This is fact: The belief that NBA Players Association president Derek Fisher has been co-opted by commissioner David Stern — and promised the commish he could deliver the union at 50-50 — caused NBPA executive director Billy Hunter and at least one member of the union’s executive committee to confront Fisher on Friday morning and make him reassess his 50-50 push, a source familiar with the negotiations told Friday afternoon.

Whitlock’s tone towards Fisher was largely negative. Yahoo’s Adrian Wojnarowski, meanwhile, believes that Billy Hunter has been acting in self-interest at the expense of the union throughout the duration of the lockout and is responsible for the players’ lack of leverage in these negotiations:

In the end, there are two courses for the union: Take the deal largely on the table or blow this up, decertify and lose the season fighting the NBA in the federal courts.

Only, it’s too late to decertify. Everyone wanted to do it back in July when the lockout started, and Hunter refused. His decision had nothing to do with legal strategy, nothing to do with leverage or getting the best possible deal for the players. It had everything to do with what it always does with Hunter: self-preservation. He worried about losing power, losing his job, and he sold everyone on a toothless National Labor Relations Board claim that’s going nowhere.

At this point, the optimal economic cost/benefit decision for the players is OVERWHELMINGLY to side with Fisher and take the 50/50 deal right now and start playing again as soon as possible. CNBC’s Darren Rovell tweeted:

For the NBA players who follow me: Missing a month of the seasons costs $400M. Going from 52% to 51% on 7 year deal costs $280M [total]!

It sucks for the players that they could be hardlined into taking an unfair deal but, as Woj stated, their only short-term leverage could come from union decertification and battling the owners in federal courts. Doing this now would all but guarantee the loss of the entire season and no matter how the endless stream of lawsuits and appeals played out, the players would never come close to recouping that lost income. Unfortunately, any further action that the players take in these labor negotiations would be counter to their best interest.

The owners are 100% going to win this round but if they take too much from the players in this “collective” “bargaining” “agreement,” they are going to pay for it dearly in the future. The players as a whole may not have any true leverage right now but NBA stars are among the most recognizable athletes in the world. The NBA is much different than, say, the NFL where fans root for laundry and the players are buried beneath shoulder pads and facemasks. In the NBA, team allegiances are comparatively less important because the players–especially the stars–ARE the product. If the NBA owners choose to pay the players below their true market value because they can do so right now, they run the risk exposing themselves to worldwide and domestic competition.

Right now, the NBA has 12-15 verifiable superstars who are eminently marketable on a global scale. They are in varying stages of their careers–for example, Derrick Rose, Kevin Durant, and Blake Griffin will be around for much longer than Kobe Bryant, Tim Duncan, and Kevin Garnett–but there should presumably be a pipeline that maintains a largely continuous flow of star power. What if five of these stars–or more–formed their own faction and started their own league or worldwide exhibition tour? We’ve seen LeBron James, Dwyane Wade, and Chris Bosh do this on their own team with the Miami Heat. What would stop something similar from happening with an entirely new organization? Currently, this is not necessarily a viable option but over the long-term, if players are being underpaid relative to their true value, market forces will take effect. The owners will win this battle but if they are too greedy they will suffer greatly in the war.


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