NBA Labor Talks Continue in Disagreement

NBA Labor Talks Continue in Disagreement

The labor talks between players and team owners in the NBA ended on Tuesday still on a note of disagreement, although both sides have already resorted to provocative moves and a fast-approaching deadline is adding pressure.

The players’ union offered its latest proposal to the team owners: a reduction of salary over the next five years of a total of $500 million. The owners responded with a proposal that would guarantee players a minimum of $2 billion every year over the next decade.

Despite these bargaining notes, almost five hours later, the two parties still did not look any closer to sealing a deal, and a lockout was still in place for July 1.

The two sides will meet again on Friday. This meeting will likely be the last time they can negotiate before the declaration of impasse.

Of course, Tuesday experienced a bit of a softening of the language, despite the remaining major obstacles, such as the team owner’s doggedness for having a salary cap and for reducing compensation to players.

Billy Hunter, players’ union executive director, commented, “I don’t even want to talk lockout now.” He added that there appeared to be a greater interest in reaching a deal. The parties reportedly made some headway on Tuesday’s meeting.

The $2 billion offer that NBA put on the table this latest time is an amount close to what the players already make currently, given the average of $5 million salary per individual player.

David Stern, NBA Commissioner, kept from classifying it as his last offer, but he labelled it to be “the best shot” they had to show the players they were in good faith and would go as far as possible in order to prevent a lockout.

Although the owners’ offer seems to be generous, it still translates to a big cut for the players’ salary, estimated at a minimum of $7 billion for the ten-year period versus the current system.
Under the current system, the players can make roughly $2.17 billion in terms of salary and benefits for the season of 2010-11. The union therefore views the $2 billion salary guarantee as a rollback and even as a freeze in salary.

Stern admitted that the players’ share could still increase during the ten-year period depending on revenue benchmarks, but the players’ union is not that convinced.

Despite that, Hunter conceded that the owners’ last offer was the first move they had made over the two years that they had been negotiating.

The players’ union’s proposal of a pay cut of $500 million for five years was dismissed by Stern for being “modest.” This pay cut would result in the lowering of the players’ league revenues share from 57 percent to 54.3 percent.

A 50-50 split of league revenues are more what the owners are looking for, albeit after basketball-related income is properly redefined.

With the redefinition, though, players stand to lose close to $900 million or even $1 billion, prior to the calculation of the 50-50 sharing.