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NY Times Answers Questions Raised By The Lockout




          November 20, 1998

          All Questions Regarding the NBA Lockout Return to Money



          By MIKE WISE

              The National Basketball Association's labor dispute
              entered its 143rd day Friday. While the league and
          the players union have broken their two-week stalemate
          and will meet in Manhattan Friday for a bargaining
          session, more than 120 games have already been lost.
          The earliest the season can start is the third week of
          December. Players' salary losses will soon top $300
          million, and the owners' losses, through gate revenue
          and local television rights alone, are in the tens of
          millions of dollars.

          But if you ever wonder why
          Patrick Ewing is spending
          more time on his cellular
          phone outside a law office
          than on the court at
          Madison Square Garden, here
          is a basic,
          question-and-answer session
          about what they are
          fighting for and why.

          Q. Is the season really in
          jeopardy?

          A. Perhaps surprisingly to both sides, it actually is.
          Because a month of preparation is needed for training
          camp and a free-agent signing period, the earliest the
          season could start if a deal was struck by Monday is
          Dec. 22. That would leave each team with fewer than 60
          regular-season games. If an agreement is not reached by
          the second week of December, the league would be toying
          with less than a 50-game season -- a prospect that
          could force the owners to declare the season lost.

          Q. What's really holding up the start of the season?
          Money?

          A. Yes. Money, money, money. The NBA last season took
          in roughly $2 billion in revenue, including everything
          from television broadcasting rights to gate receipts to
          the sale of merchandise. When you add up the salaries
          paid to players, from Michael Jordan's $33 million to
          Rex Chapman's $272,500, the league's players reaped
          57.1 percent of that $2 billion. The owners, some of
          whom are claiming economic hardship because of the
          salaries, want a bigger take of the $2 billion. In
          simplest terms, the lockout continues because the two
          sides cannot agree on what is a fair split.

          Q. Everyone is saying no one is getting anywhere in
          these negotiations. Has there been progress?

          A. Actually, there has been significant movement on
          both sides toward managing the growth of salaries.
          Still, each side has a preferred way of achieving that
          end.

          The players have proposed taxing teams that sign
          players to the most lucrative contracts. The taxes
          would then be distributed to teams around the league
          that are struggling financially. Right now, the players
          are insisting that the tax apply only to players making
          more than $15 million a year.

          The owners, saying that such a tax would apply only to
          a handful of players, have laid out a complicated plan
          for imposing specific limits on salaries. They want to
          hold even the league's best players to salaries of
          between roughly $8 million and $12 million. Teams who
          currently have players earning more than the $12
          million would be allowed to continuing paying those
          players at those rates until they retired.

          Both sides have also agreed that if either or both of
          their preferred plans fail to sufficiently contain
          salary growth, they would try another plan.

          Under that scheme, a certain percentage of all player
          salaries would be put aside at the beginning of the
          season. If by the end of the season total salaries had
          made up too big a slice of the NBA's revenues, the
          money that had been initially set aside would be
          returned to the owners.

          Major disagreement still exists on when such a payback
          mechanism would be triggered and how much money would
          ultimately be given back to the owners. The players do
          not want it to be triggered until their salaries have
          reached 60 percent of overall revenues; the owners want
          the triggering figure to be 50 percent of revenues.

          Q. Is that the only money
          question?

          A. No.

          While both sides agree
          there is a need to reduce
          the gap between the money
          paid to the league's
          superstars and the money
          paid to its role players
          and journeymen, they each
          have different ideas for
          remedying the problem.

          Right now, the league's minimum salary is $272,500. The
          owners want to set the baseline salary at $250,000,
          with provisions for it to increase during the course of
          the bargaining agreement. In the third year of the
          agreement, the minimum salary would be $350,000 for a
          player with less than six years' experience and would
          increase by $50,000 for each additional year of
          experience. A player with 10 years of experience -- say
          Tyrone Corbin, who earned the $272,500 minimum last
          season for Atlanta -- could not be paid less than $1
          million.

          The players want substantially more -- a $500,000
          minimum salary, plus $100,000 for each additional year
          of experience above five.

          They also want to alter another special provision that
          exists in the league.

          Currently, a team can, no more than once every two
          years, exceed the salary cap in order to sign one
          player. That player -- Rick Fox was signed by the
          Lakers last year under this provision -- cannot earn
          more than $1 million. The players want that figure
          increased to whatever was the average salary paid to
          players the previous season. Last season the average
          salary was $2.6 million. The owners are proposing a
          less dramatic increase for such players.

          Q. That's all, right?

          A. Not quite.

          The owners and players are also trying to come to an
          agreement on how to treat the salaries paid to rookies
          and younger players. Both are concerned about problems
          made clear in Minnesota's dealings with Kevin Garnett,
          the 21-year-old forward who last season signed a $126
          million deal after just his second season. As well,
          Denver last season found itself forced to trade Antonio
          McDyess because it could not afford to meet his coming
          salary demands. McDyess had played only two full
          seasons for the Nuggets.

          The owners, who are unhappy with the fact that players
          can now gain unrestricted free agency after only three
          years in the league, have proposed a plan under which a
          team would be better able to hang on to a young,
          promising player for as long as five years. Teams would
          retain an option to keep a player for a fourth year or
          let him go, as well as be able to match any offer from
          another team going into the player's fifth year.

          For their part, the players have made a concession.
          They have told the owners they would agree to one of
          two options: the team would either have to commit to
          keeping a player for a guaranteed fourth year at a set
          salary or simply be allowed to match any offer from
          another team after the player's third year.

          Q. How long a deal is being discussed here? And is
          there anything to say that another season, sometime
          soon, will not be compromised by further labor
          disputes?

          A. The players have proposed a deal that would last
          five years, while the owners have proposed a plan that
          would last six years with an option for a seventh year.
          Neither side has discussed the inclusion of an escape
          clause that would allow for an early revisiting of the
          agreement, and so any deal should mean at least five
          years of labor peace.

          Q. Who is likely to crack, and why?

          A. The obvious answer would be the players, who will
          lose an estimated $1.1 billion in salaries if the
          season is killed. Tim Legler, the Washington Wizards
          guard, became the first player to publicly criticize
          the union, on Thursday in The Washington Post. He said
          the only interests being served were those of the most
          high-salaried superstars. While Legler backed off his
          comments Thursday and said that the owners were to
          blame for the labor problems, there is a feeling of
          frustration building among the players. But much of
          that frustration is targeted at the owners.

          So far, in fact, the union appears to have held the
          players in line. Knowing many of the league's owners
          made their money outside of the NBA, players have
          little compassion for teams who claim to have finished
          in the red last season. They do not care that an
          apathetic public has generalized them as greedy.

          The owners appear just as firm. Four years after a
          World Series was lost to labor strife, most owners
          believe Major League Baseball is destroying itself
          economically. Throw in the National Hockey League's
          Pittsburgh Penguins recently filing for bankruptcy, and
          some of the worst fears are beginning to surface for
          small-market teams. In spite of the NBA's economic
          boom, which has produced new arenas and unprecedented
          revenue, the owners feel like befuddled executives at
          MGM Studios in the 1950s; the stars, they feel, are
          slowly killing their cash cow.

          Q. If they crunch numbers and shake hands Friday, why
          can't they start the season Saturday?

          A. It's going to take about a month to start playing
          games for several reasons. One, a free-agent signing
          period of about three weeks is needed to fill out
          rosters. The Bulls, for example, have only four players
          under contract. Two, most of these guys are in decent
          shape but clearly not in NBA-game shape. They need an
          abbreviated training camp and probably at least one
          exhibition game to get their timing back. Three, the
          league has had to give up arena dates because of the
          uncertainty of the negotiations. Finally, lawyers on
          both sides probably need a week to reduce an agreement
          in principle to writing. And Commissioner David Stern
          has no intention of opening up camp until that happens.

          Q. Will Michael Jordan play, and why?

          A. Yes, maybe just to get the last word in on Abe
          Pollin. The owner of the Wizards and Jordan clashed
          behind closed doors several weeks ago. If nothing else,
          Jordan probably wants to detonate for 60 points against
          Pollin's team.


                Copyright 1998 The New York Times Company