Arizona Republic On The Lockout

[Way Of The Ray <wayray@ix.netcom.com>]

           NBA preseason put on hold                                           

           NBA teams, players stand firm on salary cap
           
           
           Arizona Republic
           Sept. 27, 1998                                                  

           Already, the NBA has put off the start of training camps and
           begun slicing into its preseason schedule.                        
                                                                          
           And with every day that passes without another round of labor
           talks between the NBA and the players it has locked out, the   
           chances of the 1998-99 season beginning on schedule on Nov. 3
           dwindle.                                                         

           There has been no progress since the NBA's owners voted to      
           reopen the collective bargaining agreement and locked out the 
           players.                                                            

           In fact, there has only been one meeting of any substance,      
           and the group of owners in attendance walked out of it.         
                                                                             
           While there are a number of issues to be weighed, the dispute    
           really comes down to one - whether there will be a so-called
           hard salary cap or a soft one.                                  
                                                                            
           The owners want a hard cap, which would eliminate the         
           so-called Larry Bird exception that allows clubs to re-sign
           their own free agents with a certain length of service to new    
           contracts without cap limitations.                          
                                                                       
           It's the reason Michael Jordan could earn more than $33         
           million last season when the league's salary cap for an
           entire team was almost $10 million below that.                
                                                                            
           NBA Commissioner David Stern has said that half of the         
           league's 29 teams either lost money or broke even last           
           season, and the skyrocketing salary structure is the reason
           for it.                                                       
                                                                          
           Simply put, the union isn't buying that.                            

           Players, according to the league, received about 57 percent    
           of basketball-related revenues taken in by the NBA last        
           season. The owners wanted that figure below 50 percent to      
           ensure continued growth. The union believes the owners are
           making plenty of money, even with the players getting a
           larger piece of the pie.

           "There are a lot of different twists and subplots to this,"
           said Suns forward Danny Manning. "I don't want to see a hard
           cap or for them to take away the Bird exception. The league
           just signed a new television deal that's worth twice as much
           as the last contract. NBA coaches are the highest paid in
           professional sports. They averaged more last year than the
           players."

           That new television deal with NBC and Turner Sports is
           reportedly worth $2.7 billion over four years. The players
           also point to new revenue streams that have opened up for the
           owners. In the 1990s, 10 teams have built new arenas or had
           substantial renovations done to their old home. At least four
           other teams are due to move into new arenas soon.

           A state-of-the art arena can be a money-making machine
           because of luxury suites and advertising signage. Even the
           names of the buildings are for sale.

           But despite $1.7 billion in league revenues last season, NBA
           Deputy Commissioner Russ Granik says the NBA as a whole was
           not profitable for the first time in 13 years.

           Other issues include the league's drug policy, which doesn't
           prohibit marijuana, the rookie salary scale, and the minimum
           salary for veteran players.

           League sources say that before the owners walked out of the
           earlier meeting, Suns President Jerry Colangelo, a member of
           the NBA Labor Relations Committee, made a proposal that
           apparently asked for player concessions on the drug policy
           and rookie scale in return for a compromise on some other
           economic issues.

           The proposal apparently piqued the interest of the union but
           was not welcomed by some owners.

           "I can't comment on that," Colangelo said this week.

           The ice might be broken when arbitrator John Freerick, a
           Fordham University law professor, issues a ruling on whether
           the league must honor its guaranteed contracts during a
           lockout. If the league has to pay the guaranteed contracts,
           it loses much of its leverage.

           But Miami's Dan Majerle said it could work the other way
           because there are about 190 free agent players who would not
           get paid.

           "It could split the players if only the guys with guaranteed
           contracts are getting paid," he said.

           Chicago free agent Joe Kleine said a ruling for the owners
           would leave the process back at Square One.

           "It could mean a lot, or it could mean nothing," he said.

           But Manning believes it will at least mean the resumption of
           talks because both sides will then know where they stand.
           Until Freerick rules, which is supposed to be by mid-October,
           neither said has much incentive.

           "Either way that decision goes, it will bring both sides back
           to the table, in my opinion," Manning said.
                                            
                                   Copyright 1998, Arizona Central