NBA Lockout Analysis: What if Owners Actually Negotiated in Good Faith?

| by Hoops Karma

The NBA lockout began on July 1, 2011, but the negotiations that have sought to prevent it have been going on for several years.

Both the NBA and NBPA knew that the CBA would expire on 7/1/11, meaning that for much of the 2010-11 season (and likely the ’08-’09 and ’09-’10 seasons as well), the two sides were trying to figure out the terms for a new agreement that would ensure a season in 2011-12. Theoretically.

As we saw this summer, neither side had any sense of urgency in the negotiations until September, the month before training camps were set to open. So if they weren’t meeting at all over the summer (when the lockout was officially on), I’m going to guess that apart from a few token negotiating sessions at big league events such as the All-Star Game and the NBA Finals, David Stern and Billy Hunter weren’t desperately trying to piece together a deal while the season was going on. So far, I’ve been chalking up this lack of progress to laziness—on both sides. But as a lost season becomes a larger and larger possibility, it’s time to examine the question: Are David Stern and the owners negotiating in good faith?

For the purpose of this argument, let’s say there are three types of owners.

1) Type A are those who want an agreement so that they can make money off of the 2011-12 season. These owners’ teams are located in big, profitable markets and usually have sweet TV deals. Examples: James Dolan (Knicks), Mick Arison (Heat), Jerry Buss (Lakers)

2) Type B are those who want drastic changes to the current system because they’re losing money (or claim to be losing money). These owners have teams in small and have likely handed out a lot of dumb contracts over the past decade. Examples: Glen Taylor (Timberwolves), Herb Simon (Pacers), Joe and Gavin Maloof (Kings)

3) Type C are those who don’t really care one way or the other. Their teams are probably doing okay financially, but they could be swayed by either Type A or Type B owners. Examples: Mikhail Prokhorov (Nets), Maple Leaf Sports & Entertainment (Raptors), Leslie Alexander (Rockets)

As it so happens, there are more Type B owners than Type A owners (probably 10-12 Type B and 6-8 Type A), which means that when David Stern is out there negotiating, he’s going to be carrying out the will of the majority—meaning that he’s seeking an overhaul of the current system. How do I know this? We still don’t have a deal. If Stern had solely Type A’s best interests in mind, he would have reached a deal weeks ago. Instead, Stern’s been trying to get the system that the Type B owners want, which includes a hard cap, shorter contracts, and, most importantly, a much larger BRI share for the owners.

In fact, I’d be willing to bet that the Type B owners feel so strongly about their position that they told Stern they’d be willing to miss an entire season to get a deal that suits him. After all, every NBA owner is independently wealthy—the league doesn’t just let anybody run their teams. And if Stern’s going in there unwilling to accept anything less than the deal his owners want, then he’s just as guilty as they are. He has a duty as the commissioner to the owners, but he also has a duty as commissioner to the fans and everyone else to make sure the league runs properly. And by failing to negotiate in good faith, he’s accomplishing the opposite of that. Of course this is all guesswork, since there’s no way of knowing what (if any) instructions Stern is under. But let’s review the evidence:

-The owners’ opening offer, the one they proposed back in July, had the players getting 47% of the BRI and the owners getting 53%. Under the old CBA, the players received 57% of the BRI, while the owners got 43%. So Stern’s starting offer is 18% lower than the one he agreed to in 2005 (47 is 82% of 57). I don’t care how much things changed since then, it’s still an insult to the players to even suggest 47%. The players are the reason why the league makes billions of dollars, and suddenly the league is telling them that they have to take 18% less? When the owners are the ones responsible for the league’s financial mess? How is this fair? What’s even more ridiculous is that Stern stuck to this lowball offer for months, meaning that the two sides made essentially no progress over the summer. The key to any negotiation is compromise, and bullheadedly sticking to your guns even though your offer is way too low doesn’t sound like compromise to me.

-After a few months of no movement from the 47/53 split, eventually Stern increased the owners’ offer. Yet the highest he would go was 51% (which in reality only gives the players 50% because the owners take some money off the top before they make the calculation). So the owners have come up by three percentage points, while the players have come down by four-and-a-half percentage points (they’ve been offering 52.5%). Seems to me like the NBA has a little further to go before they match the players’ contributions. Remember, the players are negotiating from a number that the NBA agreed to in the last CBA, while the owners 47% was just an arbitrary number. Still, Stern has to be given some credit for negotiating, right? It’s not like he and Hunter started to make some progress and Stern did something dumb like say “Accept our offer or you’ll never get another one above 47%.”

Wait, he actually did that? Again, when two sides want to come to an agreement on something, each side needs to compromise on some issues or else nothing would ever be resolved. The two parties concede a little bit more each time until they reach a middle ground that both groups are satisfied with accepting. By saying “we won’t go above 47%,” Stern is telling the union and the general public that he is not looking to compromise—in effect, that he doesn’t want to make a deal. That is the definition of bargaining in bad faith. (Note: Stern and the owners went against this statement almost immediately, increasing their offer in the most recent negotiating session.)

-Neither side really showed much urgency in getting serious CBA talks going over the summer. Or over the past few years for that matter. Billy Hunter and the NBPA obviously share some of the blame in this case. But Stern and the league also deserve, at the very least, 50% of the blame for the two sides’ failure to meet. And one could argue that Stern deserves much more, considering that his job is to keep the league—which, by the way, is raking in TONS of money—alive and functional. Where was he the past few years? Why wasn’t reaching a new deal his number one priority? If some of the owners really want to miss a season, simply refusing to meet is an effective way of ensuring that little to no progress is made.

-I could go on, but I think this quote from NBA deputy commissioner Adam Silver sums up what I’ve been saying quite accurately, “As much as we would like to find a way for a so-called win-win for both parties…in terms of the future of this league, we don’t think it makes sense.”