Billy Hunter Q&A

[Moranis]

http://sports.yahoo.com/nba/news;_ylt=AiS1Pu2YGIYW36S9cfgNEGE5nYcB?slug=mc-spears_nba_lockout_billy_hunter_101311

Players Association executive director Billy Hunter is expecting a united – not hostile – crowd when he meets with some of the NBA’s locked-out players at a Beverly Hills hotel on Friday. The players, Hunter said, have been preparing for two years for the possibility the lockout might force them to miss games, so the NBA’s decision to cancel the first two weeks of the season shouldn’t have come as a surprise.

Commissioner David Stern has vowed more cancellations will be forthcoming, saying Thursday that if a new labor agreement isn’t in place by Tuesday – the same day the two sides are scheduled to meet with a federal mediator – the league’s schedule through Christmas could be cut.

Billy Hunter says the union's negotiations with the NBA have become "an issue of will."

Hunter spoke with Yahoo! Sports about the status of negotiations on the eve of his players meeting.

Q: NBA commissioner David Stern said Thursday that if there’s no labor agreement by Tuesday his “gut” tells him there will be no basketball on Christmas. What do you think of his comments?

Hunter: “Well, that’s from Stern’s perspective. He has a right to make that representation if he feels that way. I can’t respond to that. All I can say is we’ve tried to make an agreement with them. We put a more than fair offer out there with a $1.1 billion giveback over six years. We believe it guarantees profit and addresses the whole nine yards. But I think they want more – and they just can’t get it all off the backs of the players.”

Q: Have you had any conversations with the NBA since Monday?

Hunter: “No. Not at all.”

Q: Any correspondence of any kind?

Hunter: “No. None.”

Q: How do you think the federal mediator can help the negotiations?

Hunter: “All he can do is to get the parties together to see if there is some middle ground that we are comfortable with. That’s all he can do, get one party to move toward the other in efforts to make an agreement. He can’t force us to do anything. It’s non-binding, so if either side believes it’s not in their interest to make a deal or compromise to the extent where it’s necessary, there’s nothing to compel them to do it.”

Q: Do you have any optimism for a deal now or is it just doom and gloom?

Hunter: “It’s not an issue of doom and gloom. It’s just an issue of this [meeting with the mediator] is one more effort to try and see if we can reach a deal. We are trying to exercise every option and pursue every avenue. And this is an avenue. The public is aware. The public is watching. The public is saying they want us to get a deal. And we are going to be in front of a neutral third party who can help bridge the gap. He can read from our side, he can read from Stern’s side and say, ‘Hey, this is what I think you need to do, this is what they need to do,’ and convince both of us to do it.”

Q: How tough of a position is the union in in trying to come up with the right deal to satisfy the star players, the midlevel exception players, the lower-paid players, by NBA standards, and the rookies?

Hunter: “We did it in ’98. We did it in 2005. Our goal, our aim is to always come up with a deal that protects at least 80 percent of our membership. Nobody is going to be totally happy because it’s a compromised deal. We can design an agreement that could represent most of the interests of our players, so that every player will continue to get paid as they’ve done in the past. The issue that we are struggling with is whether we are willing to accept a hard salary cap, which we’ve indicated that we are not. [The NBA] contends that they are worried about three franchises in New York, L.A. [Lakers], Chicago and possibly New Jersey being [at a competitive advantage]. Our contention is we can impose a luxury tax. It could be a punitive tax, but it can’t be a tax that creates a hard salary cap.”

Q: Do you think both sides can come to an agreement by Tuesday or is it wishful thinking?

Hunter: “It’s not an issue of time. It’s an issue of will. If you are in a room and you want to make a deal and there are three major issues that are holding you up, if you can come to a compromise on those three areas than you have a makings of a deal. It’s not a nature of time. We can go in and do a deal if they want to go in and do a deal. We can do a deal in an hour, two hours if we can agree to the major terms. And after that you got to work on everything else. Everything else will fall in place.”

Q: What has been the most frustrating part of negotiations?

Hunter: “I don’t think [the owners] are negotiating in good faith. That’s what’s frustrating. David Stern told me three years ago – and I keep reiterating that because people keep pulling up their cup on it – that they were going to lock out [the players] in order to get what it was they wanted. And what he’s done is done that. [Stern] said he was going to lock out [the players] and his owners were prepared to lock out to get what they wanted. It’s driven pretty much by the small-market teams. They actually want revenue sharing in the big markets, but the big markets have said, ‘OK we’ll give revenue conditioned upon you getting the deal in place that we think has to be there because we don’t want to go into our pockets as much as we may have to. We think you should get it off the backs of the players.’ So that’s what he’s done. He’s stated an extreme position from the get go and he’s negotiated that way. So here we are.

“We’ve been negotiating for almost three years, and here we are at the 12th hour when all of the sudden they make a slight move. But then on top of that, they then decide that they want a hard cap. So then when you get close to the economics of the number, then they get close to the system. And they know that the system is very important. If we give on the economics, we are not going to give on the system. And so all of the sudden you reach a possible agreement on the economics and now the system becomes a problem. So it’s like a moving target. It’s frustrating. It’s frustrating because the whole intent and purpose and whole strategy has been to break the resolve of the players.

”[Washington Wizards owner] Ted Leonsis – go look at some of his quotes. Leonsis said that David Stern promised them they were going to get a system like the NHL, and the only way they can get that system is to break the players. That’s what they’ve done. There is nothing complex about what is going on. It is as clear as the nose on my face. I keep calling them out on that, but people don’t write about that.”

Q: Is coming to an agreement on the revenue split as big of an issue as it seemed?

Hunter: “We’re within the zone of the negotiations. An agreement is within reach. [Stern] said he put a 50-50 proposal out there, and now he says he didn’t. Now he is saying he said 47. But he announced to the world that he offered a 50-50 [split], according to him. So if he says they are at 50 and we’re at 53, I would think that we are within the zone of agreement. Meanwhile, we couldn’t bridge that gap. The economics were important enough that we agreed to grant them concessions totaling $1.1 billion over six years. We addressed their financial issues and we made it possible for them to make a profit. It’s guaranteed profit. It’s not as great as they want it to because they’ve talked for two years that they want guaranteed profit of $20 [million] to $30 million per team. The NBA says Billy is calling for a growth in players’ salaries of $7 million. Listen, players salaries are pegged to revenues. If the league does well, the players do well. If the league doesn’t do well, the players don’t do well. That’s how it works. Well, we’ve agreed to roll back to 53 percent.”

Q: How seriously are you considering decertification?

Hunter: “I’m not even resonating on decertification. We have the NLRB and the matter is pending before them. I think that they are probably giving some ruling soon. They got the matter pending in New York. That was an issue driven by agents. So you have to talk to the agents about that one.”

Q: Have you been communicating with the agents or need to?

Hunter: “No. No. Some of the people in my office have, but I haven’t directly been communicating.”

Q: How many players are you expecting at the union meeting on Friday?

Hunter: “There are probably about 50 guys in the area. There is probably more than that. What we are trying to do is identify where most of the guys are congregating, here and Houston, Chicago, down in Miami and Atlanta. We’re kind of hitting those places updating those guys on labor negotiations.”

Q: What is going to be your message?

Hunter: “My message is going to be an update on where we are. We just got to lay it out for them, the proposal that’s on the table with where the NBA is and where we are. We have these things pending with the NLRB [National Labor Relations Board] in New York. And the mediations are scheduled to get going on Monday of next week.”

Q: What kind of environment are you expecting at the players’ meeting on Friday?

Hunter: “Listen, we’ve been preparing these players. The players are saying to me, ‘You’ve prepared us for two years saying we may have to miss some games, so let’s not get stressed about it. If we got to miss some games, we got to miss some games.’ And that’s the attitude I’ve heard everywhere I’ve gone. The players say, ‘Look, we are prepared to stand strong. We’re prepared. If it means we have to miss some games to get a fair deal, we miss some games.’ So I’m expecting it to be that kind of attitude.”

Q: What do you think are the chances of NBA games being played before the end of the year?

Hunter: “Well, David Stern said if there isn’t an agreement reached on Tuesday there won’t be any. So, we’ll just have to take our chances and see.”

[greenpride32]

Listen, players salaries are pegged to revenues. If the league does well, the players do well. If the league doesn’t do well, the players don’t do well. That’s how it works. Well, we’ve agreed to roll back to 53 percent.

This statement is not exactly true.  The league had $4b in revenue last year and lost money.  They could grow revenue to $8b and still lose money.  Revenue growth is only considered "doing well" when it's profitable.  Look at HP's discountinued Touchpad product.  They sold the units at a loss, but it increases revenue.  The more of that product they sell the more money they lose.

[erisred]

Listen, players salaries are pegged to revenues. If the league does well, the players do well. If the league doesn’t do well, the players don’t do well. That’s how it works. Well, we’ve agreed to roll back to 53 percent.

This statement is not exactly true.  The league had $4b in revenue last year and lost money.  They could grow revenue to $8b and still lose money.  Revenue growth is only considered "doing well" when it's profitable.  Look at HP's discountinued Touchpad product.  They sold the units at a loss, but it increases revenue.  The more of that product they sell the more money they lose.

That's not entirely true. HP had already sunk...say, $300 in every one of those Touchpads, so if they didn't sell them they would have eaten all $300 in losses. Selling them at $99.99 meant they only ate $200 per unit...a loss, but not as bad a loss.

You're point about the NBA, though, is different from that. The NBA doesn't have the same "sunk" costs situation, so playing/not playing games might (or might not) be better for their bottom line...given the current division. One of the League's problems is that their non-salary (for players) costs (fixed and variable) have risen much faster than revenue.  They need to lower those costs or hold them in line while increasing revenue. The easiest way to do this is to cap salary costs and everything I've seen out of the owners on the financial side is an open or disguised harder cap on salaries.

They also, on the system side, desire an NBA that is...perhaps...more like the current NHL.  That is not financially "friendly" to the majority of the players in the league. It is going to be very hard to get a majority of the players to approve those changes until they've *really* felt some pain.

[CaptainJackLee]

One of the League's problems is that their non-salary (for players) costs (fixed and variable) have risen much faster than revenue.  They need to lower those costs or hold them in line while increasing revenue. The easiest way to do this is to cap salary costs

I agree with this.

The league biggest financial problem is that non-players salary costs are too high and that the owners attempt to bring them down is by reducing players salaries. Which is obviously nonsensical and won't work. It's just the easier way out.

Much easier than instituting meaningful management reform, prevention of asset striping and robust revenue sharing.

Why don't owners agree on a cap for executives salaries and other non-basketball expenses? Or a cap on the amount of money owners can borrow from their own franchises? Or force new owners to actually self-finance their purchases instead of buying franchises by borrowing against their equity and leave them with unsustainable financial costs that they're now asking the players to pay for?