who will cave first? owners or players

[Chris]

I'm just finally starting to dive into all of this - so forgive my ignorance:

But what exactly is the players point? The owners have presented their side of the story, I'm not sure if I understand the players' side.

They basically believe the system is working, and they don't want anything to change.  While they are willing to make some small concessions to help the league stop from losing money, they don't think it is their place to give up salary, in order to make the business profitable for the owners.

At least this is the stance of union as a whole.  I get the impression that many of the individual players who are not in all the meetings have a very different and more militant view, based more on half truths and propaganda.

come on Chris, the players have offered over 600 million in salary reductions over the next 6 years or over 100 million dollars a year.  That isn't any small chunk of change and would essentially line basketball salaries with that of the NHL (both well below MLB and the NFL) on a percentage basis.  

I think Mo Evans did a pretty good job of explaining their own position and what they view as the owners position.  

Well, that all depends if you believe the league is losing money.  As I personally believe the evidence strongly points to them losing a great deal of money, I stand by my point.  The players are willing to give up money to get the league close to break even, but they will not give up money to make the league profitable.  They believe that needs to be made up from the owners side, and can be done other ways than just cutting players salaries.  

The question I have is why have expenses skyrocketed so much for NBA teams. I have yet to see an explanation for that.

Their revenues (and therefore players salaries) have steadily grown, but their non player expenses have gone far higher to the point where the league as a whole is losing money.

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

[KGs Knee]

The question I have is why have expenses skyrocketed so much for NBA teams. I have yet to see an explanation for that.

Their revenues (and therefore players salaries) have steadily grown, but their non player expenses have gone far higher to the point where the league as a whole is losing money.

This is a very good question.  One I suspect the owners would rather not answer, beacuse it would only stand to weaken their stance.

[Fafnir]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

[Chris]

I'm just finally starting to dive into all of this - so forgive my ignorance:

But what exactly is the players point? The owners have presented their side of the story, I'm not sure if I understand the players' side.

They basically believe the system is working, and they don't want anything to change.  While they are willing to make some small concessions to help the league stop from losing money, they don't think it is their place to give up salary, in order to make the business profitable for the owners.

At least this is the stance of union as a whole.  I get the impression that many of the individual players who are not in all the meetings have a very different and more militant view, based more on half truths and propaganda.

This is not an accurate characterization of the players stance at all.

This players stance is more, "We recognize we will need to make certain concessions to allow the league to become more profitable, however, the owners demands go far beyond that, and therefore are unacceptable".


As shown in the chart Roy references, the owners want to completely decouple player salaries from revenue, as well as any future revenue growth. 

There is also a very good chart provided by Tom Ziller of SBNation


I have a very hard time seeing how the owners can honestly think their demands are fair at all.  They don't just want to reach a deal that allows both sides to share in the financial success of the league, they want to break the union and then force a terrible deal down their thoats.


I will give Stern credit on one fron though.  He has done a really marvelous PR job to this point, and has seemingly been able to brainwash a good portion of the media and fans to somehow find the owners to be in the right.

Can you link to the article that chart is from?  I am not sure I get it, and want to see the context.

http://www.sbnation.com/nba/2011/8/31/2395348/nba-lockout-2011-david-stern-billy-hunter-reset-adjustment
The link is also on the home page under SBNation articles

I think the basic point is the owners want to offer the players a set dollar amount that has no bearing on revenue, which is expected to rise exponentiall in future years, especially with new TV deals due to be signed in the coming years.  In other words, the opwners are trying to shut the players out from sharing in any future growth of the league.

Here is the lead in to that graph:

Instead of looking at the gross dollar amounts dedicated to player salary, let's look at the share of total revenue players would be entitled to under each proposal. Keep in mind that -- as is the case with the TrueHoop graph -- we don't actually know the full details of the NBPA and league proposals; my numbers replicate the work done back a few weeks ago in chart form, with a tweak to the NBPA proposal, which rises to 56 percent by the sixth year. The NBA's proposal allows for increased salary at certain levels of revenue growth, but the details of that have never been released, and I'd prefer not to guess. The base of the league's proposal decouples salary from revenue and sets it at a starting point of $2 billion, so that's what I've used here.

So, essentially, he does not know what the proposals actually were, and he also points out that the leagues offer DOES in fact include increased salaries at certain levels of revenue growth...but since he doesn't know the details, he conveniently left that out of the graph.

Not sure I can put much stock into that graph, since he essentially admitted that it is innacurate, and skewed to make the owners offer look worse than it was.

[Moranis]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

that's how I see it.  I mean Mark Cuban has said numerous times he doesn't care about making money, he just wants to win championships.  When you have that mentality from the owner, of course the team is going to lose money, but I'm not sure how that is the players fault.  

Giving coaches extensions and then firing them the next season and thus paying two coaches salaries.  Not the players fault.  All these frills and extras done for the fans and what not.  Not the players fault.  Extravagant costly arenas that have far more in them then necessary.  Not the players fault.  

[KGs Knee]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

I'd be inclined t agree its more to do with bad management as well.

However, even it it was just higher costs of getting people in the arenas, the new TV deals soon to be signed should be able to offset the costs.  Basically, if more people are going to watch games on tv, than the networks are going to have to pay more to braodcast the games.


Obviously that doesn't help in the short term, but it would going forwrd, and the players point of contention is they deserve a piece of that (which the owners are trying to prevent from happening).

[Chris]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

That always plays a role.  But the question is, where is the poor management?  And what do you to about it?

I think if the players side can actually pinpoint the poor management, thats one thing, but otherwise, it is a pointless argument.  

And lets also remember that the overpaying of particular players holds no bearing on this, since the players get a certain percentage of the revenue, no matter how it is broken up.

[Chris]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

I'd be inclined t agree its more to do with bad management as well.

However, even it it was just higher costs of getting people in the arenas, the new TV deals soon to be signed should be able to offset the costs.  Basically, if more people are going to watch games on tv, than the networks are going to have to pay more to braodcast the games.


Obviously that doesn't help in the short term, but it would going forwrd, and the players point of contention is they deserve a piece of that (which the owners are trying to prevent from happening).

And like I said before, I don't think the owners are in fact trying to prevent that from happening.

The owners ARE trying to change the definition of the revenue, by taking certain expenses out before dividing it.  But that is very different from completely unpairing the revenue from the players salaries.

[Chris]

Giving coaches extensions and then firing them the next season and thus paying two coaches salaries.  Not the players fault.  All these frills and extras done for the fans and what not.  Not the players fault.  Extravagant costly arenas that have far more in them then necessary.  Not the players fault.  

See, I think the "frills and extras" do plenty for the revenue of the league. 

You are looking at it through the lenses of a die hard fan, but there are a huge number of casual fans who pay a lot of money to the league, because of the show they put on outside of the actual game of basketball.

[KGs Knee]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

I'd be inclined t agree its more to do with bad management as well.

However, even it it was just higher costs of getting people in the arenas, the new TV deals soon to be signed should be able to offset the costs.  Basically, if more people are going to watch games on tv, than the networks are going to have to pay more to braodcast the games.


Obviously that doesn't help in the short term, but it would going forwrd, and the players point of contention is they deserve a piece of that (which the owners are trying to prevent from happening).

And like I said before, I don't think the owners are in fact trying to prevent that from happening.

The owners ARE trying to change the definition of the revenue, by taking certain expenses out before dividing it.  But that is very different from completely unpairing the revenue from the players salaries.

I'm not sure why you would think that isn't what the owners are trying to do, when it seems fairly obvious (to me at least) that is exactly what they want.

Are you saying you believe Stern?

[KGs Knee]

Giving coaches extensions and then firing them the next season and thus paying two coaches salaries.  Not the players fault.  All these frills and extras done for the fans and what not.  Not the players fault.  Extravagant costly arenas that have far more in them then necessary.  Not the players fault.  

See, I think the "frills and extras" do plenty for the revenue of the league. 

You are looking at it through the lenses of a die hard fan, but there are a huge number of casual fans who pay a lot of money to the league, because of the show they put on outside of the actual game of basketball.

Yes, this I do agree with.  Sports have become more than just about a game, as far as attending the actual event is concerned.  I don't really have a problem with pwners having to spend more for this in particular.  There is just no way these expenses are soley to blame for the rising costs, which are rising at rates more than other leagues in this country.

[Chris]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

I'd be inclined t agree its more to do with bad management as well.

However, even it it was just higher costs of getting people in the arenas, the new TV deals soon to be signed should be able to offset the costs.  Basically, if more people are going to watch games on tv, than the networks are going to have to pay more to braodcast the games.


Obviously that doesn't help in the short term, but it would going forwrd, and the players point of contention is they deserve a piece of that (which the owners are trying to prevent from happening).

And like I said before, I don't think the owners are in fact trying to prevent that from happening.

The owners ARE trying to change the definition of the revenue, by taking certain expenses out before dividing it.  But that is very different from completely unpairing the revenue from the players salaries.

I'm not sure why you would think that isn't what the owners are trying to do, when it seems fairly obvious (to me at least) that is exactly what they want.

Are you saying you believe Stern?

I am saying I have seen no evidence this is the case.  The only place I have seen it is in that article, yet in that article, the author even said that their would still be a connection with the revenues and salaries, but since he didn't know the details, he chose not to address it (yet he addressed everything else, that supported his point, without all the details).

As for Stern, he is a slippery lawyer.  He is a master politician, and PR guy, and has mastered doublespeak.  You cannot take anything he says at face value.  But he is also not a liar (because he knows a direct lie will kill his point). 

To be more exact, I do believe Stern when he says that the losses are irrelevant, and that the owners goal is to make the league profitable for them.  I also believe him when he says that the owners are trying to remove some of the risk from themselves, by changing the formula for the revenue share with players, by taking certain costs out before the split is made (why would he lie about that?).

[KGs Knee]

I think the cost of doing business has just skyrocketed.  Simple things like fuel for the jets have skyrocketed.  They have to pay more for things like security as well, and upgrading facilities. Teams also are having to invest a lot more to get people to games, particularly in the cities that aren't drawing well.

Anyone who went to C's games in 2006 knows what I mean.  Things like the in-game entertainment (Giant HD scoreboards), concerts after the games, and all the other ways they are using to entice fans to come to the games instead of just watching them on their HD TVs.  

And then there are the investments on the marketing end, etc.

The costs have certainly skyrocketed. I'm skeptical if its just the price of things however, I'm taking the view of its poor management is more likely.

I'd be inclined t agree its more to do with bad management as well.

However, even it it was just higher costs of getting people in the arenas, the new TV deals soon to be signed should be able to offset the costs.  Basically, if more people are going to watch games on tv, than the networks are going to have to pay more to braodcast the games.


Obviously that doesn't help in the short term, but it would going forwrd, and the players point of contention is they deserve a piece of that (which the owners are trying to prevent from happening).

And like I said before, I don't think the owners are in fact trying to prevent that from happening.

The owners ARE trying to change the definition of the revenue, by taking certain expenses out before dividing it.  But that is very different from completely unpairing the revenue from the players salaries.

I'm not sure why you would think that isn't what the owners are trying to do, when it seems fairly obvious (to me at least) that is exactly what they want.

Are you saying you believe Stern?

I am saying I have seen no evidence this is the case.  The only place I have seen it is in that article, yet in that article, the author even said that their would still be a connection with the revenues and salaries, but since he didn't know the details, he chose not to address it (yet he addressed everything else, that supported his point, without all the details).

As for Stern, he is a slippery lawyer.  He is a master politician, and PR guy, and has mastered doublespeak.  You cannot take anything he says at face value.  But he is also not a liar (because he knows a direct lie will kill his point). 

To be more exact, I do believe Stern when he says that the losses are irrelevant, and that the owners goal is to make the league profitable for them.  I also believe him when he says that the owners are trying to remove some of the risk from themselves, by changing the formula for the revenue share with players, by taking certain costs out before the split is made (why would he lie about that?).

Well, that is a fair take on the situation then.  This isn't the first time I've seen that the owners proposal seeks to decouple salary from revenue though (I just can't remember the exact articles).

To me though, all you have to do is look at the proposals the owners have offered.  So far, every offer they have made has gone way beyond just getting to a point that is fair for both sides.  Now, none of the players offers have really gone as far as to achieve fairness for both sides, but, their proposals are far closer to the supposed "middle ground".


To listen to the players perspective, they seem genuinely willing to meet half way, while the owners have made it a point to be very vague on specifics, other than to state they're losing money and want major give backs from the players.  The impression I'm left with is that the owners want more than just fairness for both sides, but instead, would love to essentially screw the players if they can get away with it.

[RebusRankin]

As an anecdotal note, I go see the Wolves every year. For the past three, I've had great deals on tickets (good lower level seats for $35) and get emails about promotions all the time. The arena is never full and I have seen the Celtics and Magic in that time. The owners are losing money.

[Chris]

To me though, all you have to do is look at the proposals the owners have offered.  So far, every offer they have made has gone way beyond just getting to a point that is fair for both sides.  Now, none of the players offers have really gone as far as to achieve fairness for both sides, but, their proposals are far closer to the supposed "middle ground".

Personally, I think this is a bit of an illusion, based on the fact that the players offers have not been worse than the current system.  So, the fact that they are actually giving ground from the current system looks like they are actually giving things up, while the owners are just taking things away.

However, I think if you look at it where the middle ground is a new system that guarantees the owners a profit, providing the league continues to bring in revenue at a similar level, while also maintains a salary structure for the players that keeps them as the highest paid professional sports league on average (by a pretty large margin), then I think you have both sides pretty much equally distant from that line.

Once they start working from that middleground, then I think they can get something done that is fair for both sides, and will be best for the sustainability and growth of the league going forward.

The problem right now is that the owners are working from that baseline (and of course lowballing, as any negotiator does at the beginning of negotiations), but the players are still using the old system as the baseline.  So, even if they sit down at the table, and the owners start making conscessions, the players can't make the mental leap to realize that they actually are concessions, since, based on the old system (which is irrelevant in this negotiation), it is not actually a concession.  

Furthermore, I think the agents and lawyers for the players know exactly what is going on.  They have seen the numbers, but they also know that their only chance to get the owners above that middle line, is to dig in, and refuse to work from that middle line.  So, they don't really explain this to the players, they just keep feeding the fire, and letting them dig in, knowing as agents (who have a lot longer shelf-life than players), they will benefit a lot more from even the slightest budge by the owners, than the players would.