The nba is not over

If you guys were paying attention to my last post, you noticed that i mentioned that the NBA lockout was over. It "was" over... but it seems as the players have declined the newly producded proposal  between them and the Officials. It looks like it will be a holiday season full of football.

THE LOCK OUT IS OVER

The lockout is over but i will still be covering NBA statistics

As of right now, with the players and owners in the depths of a now four month long lockout, the owners have the ball in their hands as they are putting all the pressure on the players.

The owners have revised their proposal and given it to the players union to mull over which, if they were to accept, would mean the NBA season would start on Dec.15 and would consist of a 72-game schedule.

I'm not going to get to excited about this yet, because if we've learned anything over the past few months, it's that no matter how much optimism there is surrounding a meeting, a proposal or a leak of information from a "source," you have to take it with a grain of salt.

The owners are low-balling the players, and quite frankly they have all the leverage, so it's not surprising. In fact, the only ones who seem surprised by the owners actions and proposals have been the NBPA and Billy Hunter.

However, looking at the proposal compared to everything else the NBA has offered, this is the best deal the players have been offered, and it seems that it's the best deal that they will be offered.

Beyond that, I don't think the players union will have the support enough to decertify. There have been a few voices that have spoken louder than others, but decertification pretty much guarantees the cancellation of the season, and I'm not sure the players are willing to go through with that.

It might not be completely their fault that talks went this badly, but if they decertify the NBA public relations machine will pile the dirt on the players as they lay in the graves that they helped dig.

Still, the most intriguing part of this whole ordeal is that D.stern has said that if the offer is accepted by the players then there will be schedule with just 10 games chopped off.

The season won't be incredibly compact, as the league will add a week to the end of the year to stretch out the season just enough so teams are playing games at just a slightly higher rate than a normal 82-game season.

Question possibly

The Golden Rule: He who has the gold, rules
Fundamental Rule of Negotiation: He who cares the least wins

In the NBA, it's the owners who have the gold and care the least.

What do the owners have to lose?
Net revenues from the lost games and any decline in the value of their franchises due to fan alienation and depreciation of assets — namely the players they have under contract.

What do players have to lose?
Salaries from lost games and time cut off from already short career windows.

Why do owners have leverage? 
They have deeper pockets and alternative sources of income. The next most lucrative financial option for players is far worse than the owners’ lowest offer.

Why do players have leverage?
Only a handful of star players have leverage. The owners’ product without the top 20-30 players in the league would stink for at least a few years. Rank-and-file players are more easily replaced and have almost no leverage at all.

Why are labor disputes in sports so weird?
The bosses control the whole sector and face little competition when it comes to hiring labor. Since the merger with the ABA in 1976, the NBA is a monopoly and operates in a manner (it monopolizes!) that would be illegal outside the sports world. Unlike in Silicon Valley, there are no NBA “start-ups.” You cannot create a new NBA team without permission of the incumbent owners. The league also has to approve changes in teams’ location and ownership.

What does this mean? The owners can get together and agree to jointly cut expenses, that is, the player salaries. Players have limited opportunities to play professional basketball in other countries, but realistically, if you are a world-class professional basketball player, you probably want to be in the NBA.

The star players are the only counterweight to management’s power. To a large extent, they ARE the NBA’s product. Because of this, the owners aren’t talking about using replacement players, and some stars are getting decent offers to play overseas during the lockout. These factors are a cause for concern for the owners and put limits on how much they can extract from the players.

Why have past CBAs been so favorable to the players?
In the past, traditional NBA owners were in the game for the fun, the control, and the bragging rights. They made money through franchise appreciation; there was less emphasis on maximizing short-run operating profits. The newer group of owners bought high, are more corporate in orientation, and the financial crisis renewed their sense of vulnerability. They’ve poured a lot of money into those teams and they aren’t comfortable with seeing red on their balance sheets year after year.

Why don’t the players settle?
Perhaps because they have done so well in the past, it’s hard for the players to accept that the owners are dead set on hammering them this time. They feel, correctly, that they have been making all the concessions. Imagine trying to redo your “chores deal” with your spouse, with one side giving in on every negotiating point. As human beings, we are programmed to reject one-sided deals, even when surrender might be the rational choice.

How far apart are the two sides?
The split on BRI (Basketball Related Income) is supposedly the biggest point of contention. Players want 52.5 percent (down from 57 in the previous contract). Owners are “adamant” on 50 percent and started with an initial lowball offer of 37.

Take the NBA’s 2009-10 BRI estimate of $3.6 billion; 2.5 percent of that is $90 million. Let’s say the life of the contract is 6 years. The total value of that over six years, with reinvestment, is around $500 million.

Is it economically worthwhile for the players to hold out for $500 million?
No. Total NBA salaries last year were over $1.5 billion, about three times the amount they are fighting over. Canceling a third of the current season would wipe out the gain of winning the extra 2.5 percent of BRI over the life of the new collective bargaining agreement. Canceling the whole season over 2.5 percent of BRI is insane for the players.

Of course there are other issues relating to the salary cap, like the length of contracts, but the BRI split seems to be the sticking point.

What’s the bottom line?
Can the owners afford to give the players a better deal? Yes.

Forbes magazine estimates that the Knicks franchise, the NBA’s most profitable, is worth about $655 million. The Milwaukee Bucks, the least profitable franchise according to Forbes, still is worth $258 million, and the Clippers, often considered the worst-run team, have a net value of $305 million. The value of the Knicks alone could more than cover what the players are asking for.

Can the players stop the owners from getting a deal that is much worse for them than the previous Collective Bargaining Agreement? No. What the players are willing to agree to is already materially worse than before. The only question that remains is how bad it will get.

Does the players’ line in the sand over 2.5 percent of BRI make economic sense? No, not if they miss many games to achieve it.

Is the owners’ offer fair? Not really.

Should the players take it? Yes.

Will the owners give in and up the ante? Very unlikely.

Will the players be rational and take what is on the plate? We can only hope so.