If you thought LeBron James had power as a player, wait until you see him as a negotiator.
Chris Paul and LeBron James on the same NBA team? It would make for an impressive pairing. Paul and James on the same union negotiating team? It might not sound as awesome, but it could be far more important to the future of the NBA.
Paul and James may never become NBA teammates, but they have now joined hands to lead fellow players in collective bargaining with the league. On Friday, James was unanimously elected as the first vice president of the National Basketball Players Association (NBPA). He will be Paul’s right-hand man as the NBPA prepares for a contentious labor negotiation with the NBA. Although the current collective bargaining agreement runs through the 2020-21 season, a more relevant date is Dec. 15, 2016. Anytime on or before that date, either the NBA or NBPA can exercise a clause that would terminate the CBA on June 30, 2017. As I explained in a SI.com column last October, the NBA’s new nine-year, $24 billion contract with ESPN and Turner makes the league more likely to exercise the termination clause.
The NBPA is also poised to opt-out. Players are frustrated by NBA teams being sold for record-breaking amounts all the while players receive a smaller split of Basketball Related Income (BRI). BRI refers to revenue collected by the NBA for most aspects of league business, including ticket sales and television contracts. Players and owners roughly split BRI 50/50, but under previous CBAs players received a higher percentage. While the mechanics are complicated, BRI impacts how much players earn. A higher amount of BRI means a higher salary cap for NBA teams. While players receive a 50/50 split of BRI, NBA owners pocket the huge amounts of money when selling teams. The Los Angeles Clippers sold for $2 billion in 2014 and the Atlanta Hawks will likely be sold for over $750 million.
The NBA, meanwhile, insists that a number of its 30 teams—perhaps as many as a third—are not profitable and the league has independently-audited records to prove it. The league also stresses that part of the NBA’s popularity is driven by cost-controls and fair play policies that ensure every team has a chance for success. This economic landscape for teams means better salaries for NBA players. Also, while owners receive money when selling franchises, those owners paid for those franchises. Plus, some of the money owners receive in a sale might be needed to pay off money borrowed to sustain operations.
The bottom line is that we are likely only 20 months away from the start of the next great labor crisis in the NBA. It is a crisis that would imperil the 2017-18 NBA season and potentially bring about a lengthy lockout and antitrust litigation.
With the cloud of a labor crisis nearing, the addition of James to the NBPA’s leadership team could significantly change the union’s priorities and the bargaining dynamics. Consider the following five questions.
1. Will Paul/James look out mostly for fellow superstars in CBA negotiations?
One of the dangers of a leadership team led by two of the best players in the NBA is that relatively few NBA players share their perspective. To be sure, NBPA executive director Michelle Roberts will also play a key role in shaping the NBPA’s priorities. The same is true of other members of the NBPA’s executive committee, which includes lunch-pail players like Willie Green and Anthony Tolliver. But Paul and James, who are both “max contract” guys, will clearly set the tone. This is especially true since Paul and James are considered close friends. Along those lines, it seems possible, if not likely, that NBA players with other perspectives might feel intimidated by a star-studded and influential tandem like Paul and James. Paul and James certainly represent a higher prestige among NBA players than the trio who served as the NBPA’s president and two vice presidents, respectively, during the 2011 labor crisis: Derek Fisher, Maurice Evans and Roger Mason.
James, in particular, has been an outspoken critic of collectively bargained limits on salaries for NBA stars. In 2013, he characterized the difference between the amount of money he earns to play in the NBA and the amount of money he would earn if there were no limits on NBA salaries as a “sacrifice.” He further opined, “I don’t think my value on the floor can really be compensated, anyways, because of the [CBA].” At other times, James, who will earn about $20.6 million playing for the Cavaliers this season, has suggested he would consider offers to play in other pro basketball leagues where salaries are market-based rather than capped. In 2008, for instance, James mused he would consider playing in Greece for $50 million a year.
The significance of James’ antagonistic attitude towards maximum salary limits is that the NBPA has to choose its battles in labor negotiations. Think of a CBA as a bundle of rights. Some of those rights favor players and some favor owners. Each side has to compromise and make concessions in order to obtain the rights in which they place the most value. Owners want restrictions on how much players can make, whereas players want to earn as much as possible. If the NBPA, led by Paul and James, convinces the NBA to agree on higher maximum salaries, the NBA will want concessions in return from the NBPA. Maybe the NBPA would need to acquiesce to more restrictions on salaries for rookie players or to policies making it easier for teams to terminate contracts of lesser-skilled NBA players. The larger point is fighting for the richest NBA players would likely lead to fewer gains for other NBA players.
A related concern is that Paul and James have the economic wherewithal to withstand a long lockout. Paul is reportedly worth around $75 million and James is worth in the ballpark of $270 to $300 million. They could go without pay for decades, let alone years, and likely be fine. The same is not true for many NBA players, who could struggle during a lengthy lockout. If Paul and James express a willingness to play the long game on a labor crisis, they may lose the support of some of the NBPA’s membership.
Paul, 29, and James, 30, are also older NBA players. However, it is not uncommon for NBPA leaders to be among the older players, as older players tend to be more respected and knowledgeable. Fisher, Evans and Mason were in all their 30s during the 2011 labor crisis. One dynamic with older players calling the negotiation shots is that they may expend more energy fighting for benefits of particular importance to older players. Issues like pensions, health care and transition programs for players who retire from the NBA may receive heightened attention.
2. Will James rebuff NBA efforts to raise the age limit?
Shortly after he became commissioner in February 2014, Adam Silver enunciated that his top priority was to negotiate a higher age eligibility rule with the NBPA. This announcement was made before the Donald Sterling saga, but the commissioner continues to regard raising the eligibility rule as a key goal. From the NBA’s perspective, players with more refined skills and bodies are more likely to provide contributions early in their NBA careers than raw teenagers. This is important for a number of reasons, including because players who contribute are more likely to attract fan interest—and fan dollars—and because owners and general managers would prefer to pay for the in-game contributions of drafted players rather than for their development in practices and in D-League games.
The current eligibility rule requires that U.S. players be at least 19 years old and one year out of high school before they are eligible for the NBA draft. International players, in contrast, only must be 19 years old. The distinction in treatment between U.S. and international players reflects the fact that many international players turn pro in other basketball leagues as young as 14 or 15 and are thus ineligible under NCAA rules. Age eligibility restrictions on adults in professional sports are a phenomenon relatively unique to the U.S. In fact, the NFL, NBA and WNBA are the only top sports leagues that prohibit players from entrance until a period after high school graduation. These restrictions are aided by “big time” college sports, which in the case of college football and college basketball serve as a free developmental league for the NFL and NBA/WNBA, respectively.
The NBA would like to see the eligibility rule raised to one that requires players be at least 20 years old and two years out of high school. It is presumed 18 and 19 year old players would either play college basketball or, like Emmanuel Mudiay this season in China and Brandon Jennings in Italy in 2008-09, play as pros abroad. Another alternative is that these players play in the D League, which permits players as young as 18 years old. Wherever they play, these young players would develop skills and hone their bodies but not be paid an NBA first round pick contract.
To date, the NBPA has vehemently opposed an increase in the eligibility rule. Yesterday Roberts was quoted as saying, “Be happy with one-and-done. It’s not going to be two-and-done.” Of course, her predecessor as NBPA executive director, Billy Hunter, made similar remarks before he agreed to raise the eligibility restriction from 18 to 19 years of age as a tradeoff in the CBA signed by the NBPA and NBA in 2005. In 2004, Hunter firmly opposed raising the eligibility rule, noting, “I have always promoted the fact that if a guy was physically and mentally capable of playing in the league, he should come." But when faced with the choice of making concessions that would adversely impact current players or future players (who have no union vote), Hunter and the NBPA’s executive committee not surprisingly gave up rights for future players.
The addition of James to the NBPA’s leadership team, however, suggests the NBPA may fight harder for future players. James, of course, went straight from St. Vincent-St. Mary High School to the NBA after being drafted first overall by the Cleveland Cavaliers in the 2003 NBA draft. While James is the most successful player to make the jump straight from high school to the NBA, many other players are also success stories. They include Kobe Bryant, Kevin Garnett, Tracy McGrady, Tyson Chandler, Jermaine O’Neal, Al Jefferson, Josh Smith and Monta Ellis (for more on this topic, I authored a law review article on players who jumped straight from high school to the NBA). By skipping college, these players began to earn money earlier in their lives and began their clock to NBA free agency earlier as well. James may be especially sympathetic to the interest of future NBA players, who have no seat at the NBA – NBPA bargaining table.
3. Are Paul and James likely to garner more fan and media support during a labor crisis than past NBPA leaders?
One of the key problems for NBA players in past labor crises is poor public relations. When Patrick Ewing was president of the NBPA during the 1998-99 labor crisis, he infamously complained, “Sure, we make a lot of money, but we spend a lot, too." While Ewing’s remark was the most out-of-touch, other players have also suffered foot-in-mouth disease over the years.
Paul and James seem less likely to fumble with their words. Neither is perfect, of course. James announcing his signing with the Miami Heat in 2010 through The Decision was regrettable. His recent blaming of the media for reporting on tweets that not-so-subtly referred to Kevin Love also seemed ill-advised. But James has usually been an effective and sophisticated voice. By organizing a tentative player boycott in May 2014, James raised the stakes for the NBA in ending Donald Sterling’s ownership of Clippers. James also garnered respect from NBA players (and others) in December 2014 for wearing an “I can’t breathe” T-shirt in honor of Eric Garner, who died after an altercation with a New York City Police officer.
James is also well connected with the media. During a labor crisis don’t be surprised if some of the coverage is more favorable of the players’ side because of James.
4. Could owning an NBA team be in the back of James’ mind?
At only 30, James is reportedly worth in the ballpark of $270 to $300 million. He could easily finish his NBA career worth over a half of billion dollars. James is also an active businessperson and owns sports teams. For instance, along with the Fenway Sports Group (parent company the Boston Red Sox), James has an ownership stake in the English Premier League football club Liverpool. It stands to reason that James may one day want to buy a NBA team. He’d have a realistic chance at doing so and he would join Charlotte Bobcats owner Michael Jordan as an NBA owner who played in the NBA.
Before you ask, James is barred by the CBA from becoming an owner-player (I explained this on SI.com when Jordan reportedly contemplated playing for the Bobcats back in 2011). But as a retired NBA player, James would be able to bid for a team. And if he became an owner, James would likely adopt a very different set of views about NBA economic issues and the distribution of BRI between owners and players. This has certainly been true of Jordan, who was a passionate advocate for players’ interests while a player, but is now regarded as a fighter for owners. Jordan seems unaffected by advocating competing NBA positions at different points in his life.
Where you stand can depend on where you sit. It will be interesting to see if James joins Jordan in avoiding the cognitive dissonance that might arise if you are one side of the debate in the present while knowing you could be on the other side in the future.
5. Does James as an NBPA leader make the NBA more likely to expand abroad?
Silver has repeatedly made comments that suggest the NBA would like to place franchises abroad or perhaps develop an NBA-associated league in Europe. While Silver has carefully stressed the NBA has no immediate plans to enter the European marketplace, it seems clear the NBA is gradually moving in that direction. The NBA has also made exceptional strides promoting its image in China and elsewhere in Asia. None of this is to suggest the NBA wouldn’t consider expansion and franchise relocation options in the U.S.—the city of Seattle seems certainly deserving of an NBA team—but the league’s compass is at least partly pointing outside of the U.S.
For the NBA to realistically expand to Europe or in other parts of the world, there will need to be buy-in by NBA players. Enter LeBron James. He is one of the most recognizable persons on Earth and the global face of the NBA. While James’ views about NBA’s international plans are largely unknown, it stands to reason he could become a pivotal player for the NBA in building support among NBA players. As an NBPA leader, he will now have more influence over players.
Michael McCann is a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. He is also the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law.