NBA owners met with members of the players' association Friday for the first time since the league submitted a formal proposal to the players on Jan. 29, the result of which was the union saying it forced the league to tear up what union president Derek Fisher said was a non-starter.
Normally, during what is supposed to be the annual festive celebration of the league's prosperity, NBA commissioner David Stern and union executive director Billy Hunter hold a joint news conference. But the union called its own news conference Friday afternoon, pre-empting Stern's State of the League address on Saturday.
Hunter and Fisher essentially said that everything that was included in the owners' proposal was unacceptable.
"After a contentious, 90-minute session, it was agreed that the owners would tear up their proposal," Hunter said. "So that proposal is off the table."
The sides have until June 30, 2011, to come to an agreement before the league is likely to lock out the players. The union told the owners that it would craft its own proposal and submit it to the owners for further discussion.
Hunter said the league would like to get something done before free agency begins on July 1. However, it seems highly unlikely the union will begin to seriously negotiate with the owners until next season because it does not want to handicap what is sure to be a bonanza summer for free agents like LeBron James, Dwyane Wade, Chris Bosh and Joe Johnson.
Those players all are likely to be "max" players with contracts that could exceed $100 million. Hunter and his team are not going to intentionally undermine the negotiating power of those players to appease an ownership group that desperately wants to get its cost structure in line.
Neither Hunter nor Fisher would commit to a timeline for a union proposal, further enhancing the notion that these negotiations are not going to turn serious until one side begins to feel pain.
Getting something in place by July 1 "is not going to happen," said Roger Mason, one of the players on the negotiating committee. Hunter said the union would entertain any new proposal submitted by the owners, though they'd hold the right to "objectively dismiss the proposal."
"While we do not agree with the players association's characterization of today's meeting or the status of the NBA's bargaining proposal, David will address the subject of collective bargaining during his media availability prior to All-Star Saturday night," NBA deputy commissioner Adam Silver said.
Stern seems intent on regaining control of the finances for a league that he says has more than half its teams losing money.
Word had started to leak in recent weeks that ownership was going to take a hard line in their opening salvo of negotiations. Hunter said the proposal "was five times worse than what we expected." Fisher characterized the league's proposal as all take and no give.
Hunter said the league is proposing several things the union finds egregious:
1. The league wants to eliminate fully guaranteed contracts.
2. The league wants to reduce the players' percentage of basketball related income from 57 percent to 40 percent once it calculates a formula that introduces expenses into the equation.
3. The league wants to implement a hard cap, which will effectively eliminate the Larry Bird exception, or the ability for teams to go over the cap to re-sign their own players.
4. The league wants players re-signing with their own teams to be able to sign a maximum of four-year contracts, down from six, and everybody else to be able to sign a maximum of three-year contracts, down from five.
5. The league wants players who currently have large contracts to retroactively modify them to fit into the new model.
"We were very clear about our understanding of what the proposal held and that there was not any way we were going to be able to use it as a starting point for future collective bargaining negotiations," Fisher said. "We all agreed in the room that the NBA's proposal could not be used as a starting point."
Hunter said the primary thing the league's proposal achieved was galvanizing the players perhaps before they realized things were getting serious. Boston's All-Star power forward Kevin Garnett hinted at player anger earlier in the day, when the players met with the media.
"It is different from the perspective of what is being presented going forward and us having a new model," Garnett said. "That is what is kind of [maddening]. You tend to look and get hit with a cold snowball, if you will, because I have seen it and I have been through it and it is a bit ridiculous, to be honest."
Initially, Stern, his staff and 15 owners were scheduled to meet with the union's negotiating team. But once the players started to realize the severity of the proposal and the repercussions it could have on their futures, a group that included Garnett, James, Wade, Paul Pierce, Johnson, Amar'e Stoudemire, Carmelo Anthony, Bosh, Al Horford and Rajon Rondo skipped their league-mandated community service to join the union's leadership group of Fisher, Keyon Dooling, Mason, Maurice Evans, Theo Ratliff and Adonal Foyle.
James apparently spoke in the meeting, as did several other reputable players who expressed anger at the sentiment that ownership was trying to crush the union. Phoenix owner Robert Sarver, San Antonio's Peter Holt and Boston's Wyc Grousbeck were the most vocal members of ownership, according to Mason.
Hunter and several others said the meeting became heated at times, and the All-Stars who planned to stay for only 40 minutes before departing for their obligations ended up staying the entire time.
"I think that they [the owners] maybe underestimated the response, the blowback that they were going to get from the proposal," Hunter said. "Pretty much everything they could think of in the last 15 years was in that proposal."
The league is hoping to fix several elements of the current CBA. The league's top-paid player, Houston's Tracy McGrady, who earns $23 million, has barely played this season. Most of the trade discussions have revolved around teams saving money rather than getting more competitive. Many teams are losing money as their fan base dwindles.
Fisher said players understand that in tough economic times some concessions need to be made by both sides. However, he also said he does not see the players willing to necessarily commit to giving anything up in negotiations.
Ultimately, it seems, the union wants to discuss some form of revenue sharing in which small-market teams would be propped up by larger-market teams which have higher television revenue and gate receipts. That would replicate the NFL's model, which has been largely successful because of enormous television revenue.