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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