On January 29, the league office submitted a written CBA proposal to NBPA executive director Billy Hunter and the NBA Players Union. A few weeks later, both parties met in Dallas on the Saturday of NBA All-Star weekend. The League was represented by 12 owners, along with David Stern and his staff. The Players union faction included Hunter and staff, NBPA President Derek Fisher and Executive Committee members Maurice Evans, Keyon Dooling, Roger Mason, Theo Ratliff and Chris Paul. In addition, the union was represented by a cache of the League’s All-Stars, some of whom were scheduled to become free agents come summer time, under the current CBA. The list included Kevin Garnett, Rajon Rondo, Paul Pierce, Carmelo Anthony, LeBron James, Dwyane Wade, Joe Johnson, Chauncey Billups and Al Horford.
Following the meeting, the Union held a press conference at the Hyatt Regency Reunion Tower, briefing a sizeable media contingent on the status of the negotiations. Standing at a podium with the committee members at his side, Hunter explained that the league’s proposal was “unbelievable” and its severity and timing had brought the players together. The Union cited a number of elements about the League’s proposal that it resented, most notably, the elimination of guaranteed contracts, modification of current deals to fit within the new proposed salary cap and the elimination of the midlevel exemption. Hunter stressed that the league hoped to reach a new agreement prior to the July 1 free agency period, before LeBron and several other max players were set to cash in. He made it clear that the union was in no hurry to strike an agreement – there were 16 months left on the current deal at the time.
Following a very contentious meeting earlier that morning, Hunter claimed that the NBA pulled its proposal off the table and agreed that it was essentially a non-starter. It appeared that the Union had won round one, and the expected free agency bonanza of 2010 was still scheduled as planned.
The commissioner struck back the next day, staging his press conference at the most optimum time to ensure as many media members as possible. Two hours prior to the All-Star Game, Stern sat alone with a microphone at a table in a spacious media room at Cowboys Stadium, to a standing room crowd of reporters. For a half hour, Stern put on a virtuoso performance, cracking jokes and inciting laughter throughout. He mocked union lawyer and lead negotiator Jeffrey Kessler, referring to him repeatedly as the PA’s “threatening lawyer”, refusing to name him directly even when specifically questioned by a reporter.
“I would rather not further his career,” he explained, while making it very evident to everyone in the room that his Huckleberry was indeed, Kessler.
At one point Stern quasi-joked, “I’ve only been at this since 1966. I started when I was in a crib.” In between laughs, Stern subtly made the NBA’s case for its proposal without citing specifics.
He mentioned that the league will continue to lose hundreds of millions of dollars each year under the current model. In the end, he didn’t say much, but he didn’t need to. He was waiting for a bigger stage.
A week before the tip off of the NBA season, Stern went on the offensive. He made his annual media rounds and spoke of $350 million losses and the need for a major player payroll reduction in order for the league to become profitable. Stern emphasized a 33 percent pull back – about $750-$850 in player salary cuts. He upped the ante by mentioning the possibility of contraction, gaining even more media attention. Remarkably, his comments arrived just months after a very live free agency period that resulted in $2.5 billion in new salary, according to the New York Times.
Hunter responded to Stern’s media appearances with a statement of his own.
“If the owners maintain their position it will inevitably result in a lockout and the cancellation of part or all of the 2011-1012 season,” Hunter wrote. “The players and union will prepare accordingly.”
The Union position is that the system works and the league needs to examine other issues to bridge the gap, such as developing a shared revenue model similar to the NFL. While NBA teams share national television revenue, they don’t pool local television revenue or gate receipts – the NFL does.
It’s difficult to predict where this will all end up, but the hope is that both parties can come to an agreement that helps the game grow. Over the course of the season, we intend to review CBA issues thoroughly. To begin that process, I have decided to examine the current contracts in the NBA. To streamline the concept, I focused on individual player salaries for the 2010-2011 season. Using the HoopsHype salary data base, I broke down NBA players into four tiers based upon salary.
Tier 1 represents players earning $15 million and above, Tier 2 counts players earning between $9-14 million, Tier 3 features players earning $4-8 million and Tier 4 is the minimum salary tier for players earning less than $4 million. In each tier, I compare 10 appropriate contracts with 10 questionable contracts.
Since the league office hasn’t expressed interest in adjusting the rookie salary scale, any player under a rookie deal was exempt from each tier. Players like Kevin Durant, who have inked extensions but are still playing under the final year of a rookie deal, were excluded. Also, salaries are rounded up. For example, LeBron James is scheduled to earn $14.5 million in 2010, so he has been rounded up to $15 million.
Tier 1 Player: $15 million-plus
Appropriate: Each player listed is considered a franchise player and has continually played at an All-Star level. The crème de la crème.
Questionable: Hard to believe Lewis makes more money than some of the league’s most talented superstars. Arenas, Redd, Ming, Martin, Stojakovic and Brand have been hampered by injuries.
Tier 2 Player: $9-14 million
Appropriate: The group is comprised of several Team USA members and some of the game’s younger talents. Rondo’s salary appears to be a bargain in the current marketplace.
Questionable: There are solid players here, but it’s hard to argue that salaries match production.
Tier 3 Player: $4-8 million
Appropriate: Millsap, Artest and JR Smith seem a bit underpaid when you compare them to some of their contemporaries in tier 2.
Questionable: Tier 3 is where a glut of questionable contracts are in play. After examining the salaries of players in this tier, one can understand why the league is hoping to eliminate the mid-level exemption.
There aren’t enough comps available to put together a comparison of appropriate/questionable contracts when it comes to players in the $4-6 million range. While there are plenty of questionable contracts in this realm, there are very few players in the league earning salaries within the range that can reasonably argue their pay is below market value. The outliers include Brad Miller ($4m), Kendrick Perkins ($4m), Marc Gasol ($3m), Glen Davis ($3m) and Matt Barnes ($2m). Tier 4 salaries were not examined for this particular exercise since most of those salaries involved rookie scale deals.
This exercise was not done with the intention of demeaning any NBA player. It should serve as an examination of the inconsistencies of the NBA salary marketplace under the current CBA. It is far from perfect and purely subjective. There are all kinds of considerations teams make when considering a free agent: production, age, potential, etc. are all factored in. Because of the variables, it is difficult to make clean salary comparisons.