NBA losing a lot of money with labor strike
NEW YORK (AP) – Anyone who has been to a car dealership, or bought a home, understands how negotiating works.
One side offers a number, the other counters, and they meet somewhere in the middle and make a deal.
That’s not the way it’s working in the NBA’s labor standoff – even with potentially $2 billion at stake for each side.
Owners and players keep insisting they are ready and willing to make the necessary financial step for an agreement. Yet talks have broken down each of the last two weeks with little movement and the same type of answer: “We’re here, they’re there, and that’s that.”
That won’t get players back on the court or fans in the seats.
And with both sides so entrenched, it might be a question of when, not if, another round of cancellations will be necessary.
“I don’t know,” Commissioner David Stern said Friday when asked about the next deadline. “We just had a difficult day. We’ll go back, we’ll go to the office Monday and see what to do about this big mess.”
They could start with a phone call to the players’ association to schedule more talks, and the sides likely will meet again soon. But it will remain pointless if neither side is prepared to offer compromise.
Owners are insistent on a 50-50 split of basketball-related income. Players have proposed reducing their guarantee from 57 percent down to 52.5, saying that will transfer more than $1.5 billion to owners over six years.
And when neither side would go further Friday, NBA officials said union executive director Billy Hunter ended the session.
“Billy said, ‘My phone is ringing off the hook from agents and players telling me I cannot go under 52 percent’ and he said unless you’re willing to go there, we have nothing to talk about,” Deputy Commissioner Adam Silver said.
The difference between 50 and 52.5 percent is about $100 million annually, based on last season’s revenues, or $1 billion over the course of the 10-year agreement the NBA is seeking.
The cost of not making a deal?
“We expect there to be a $2 billion loss for us for the loss of the season, which we will then begin to dig out from under and try to get back, if there were a season’s loss,” Stern said. “And the players would lose $2 billion. Period.”
The losses already have been piling up. Stern said wiping out the preseason schedule, which would have ended Friday, cost the league $200 million. The first month of real games adds another couple hundred million, and Hunter has said missing a month would cost the players about $350 million.
But that’s not enough to make players agree to a deal they say would cost them money and limit their options in free agency.
“We think we gave more than enough, and that’s what we constantly said to them: ‘Look, we did what it was you said you needed, we did it,”‘ Hunter said. “And now all of a sudden, every time we did it, it’s like their eyes got bigger and they wanted more and more and more. So finally we just had to shut it down and just say it can’t be.”
Stern has made it clear that owners’ future proposals could be made with the losses in mind. Players eventually will get their money, just less of it, but the damage to businesses that rely on the game won’t be recovered.
“I think it is hard for the average person to understand what it is they’re arguing over,” said Jim Taggart, the manager of The Four’s, an upscale sports bar across the street from Boston’s TD Garden. “A lot of the people that work concessions at the Garden come in here, and their pay is budgeted into how they pay their mortgages, how they put their kids through school.
“Events at the Garden are just absolute big business. There’s a whole ancillary economy that depends on the Garden, and it’s pretty far reaching, all the restaurants and parking garages.”
The sides are much closer after three straight days of meetings in consecutive weeks. Besides the BRI split, the list of remaining items is down to just a handful, such as the ability of teams over the luxury tax threshold to use the midlevel exception or participate in sign-and-trade deals.
Those are important to players. The top-spending teams are mostly the ones in the biggest markets, and players want to know teams in the most desired cities won’t be prevented from bidding on them.
“What we did not want to do and what we don’t want to do is take taxpaying teams completely out of the market for other teams’ free agents,” union president Derek Fisher of the Lakers said. “We want our midlevel players to be able to sign contracts or at least have the opportunity to sign a contract wherever they would like to play.”
There had been a sense of optimism going into Friday after both sides acknowledged progress on the salary cap system over the previous two days. But they hadn’t talked about the split, and sure enough, once they did things fell apart again.
Wasted was the meeting room the NBA had reserved through the weekend at a top New York hotel, where it hoped to be announcing a deal by Sunday. The next talks haven’t been scheduled, but the sides reconnected quickly after the last breakdown.
“Each time I come here, we’ve come in thinking we may be here for weeks and we’re not going to leave the room,” Fisher said. “But sometimes they end and you assume you won’t talk again for weeks and you’re back the next day.”
AP Sports Writer Howard Ulman in Boston contributed to this report.
Follow Brian Mahoney on Twitter: twitter.com/Briancmahoney.