From the monthly archives:

September 2011

Kevin Pritchard Interviewed for Raptors’ GM Job

by Jared Wade on September 20, 2011 at 5:30 pm · 0 comments

Philadelphia 76ers general manager Ed Stefanski, San Antonio Spurs assistant GM Dennis Lindsey, Indiana Pacers pro personnel director Kevin Prichard and former New Orleans Hornets GM Jeff Bower traveled to Toronto in recent weeks to meet with Colangelo, sources said.

There’s no clear frontrunner, but several sources have reason to believe Lindsey could hold an edge over the other three candidates.

If he ends up getting the job and ejecting from his role in Indiana’s front office, Kevin Pritchard’s time with the Pacers will go down in history with the unmemorable tenures he likes of Peja Stojokovic, Tim Hardaway and Kenny Anderson. Which would be quite an honor.

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CBA Talk: Splitting the Baby

by Tim Donahue on September 19, 2011 at 8:30 am · 10 comments

There was lots of activity last week, and as we sit here today, we’re either close to or very far away from having a season. In any case, Harvey Araton of the New York Times put on his thinking cap and came up with an interim solution:

Having already agreed to a reduction in total revenue, from 57 percent to a reported 53, the players should not be expected to give everything up at once, and not if it is unclear that it’s necessary.

But if the owners can prove in three years that at least one-third of the teams are still losing money, then the agreement should allow for the implementation of a hard cap to be phased in over the following two years, allowing teams over the threshold to prepare for it.

Conversely, if the league continues its upswing, its revenue streams are growing as the union has claimed they will and fewer teams are in the red, then the deal could proceed for its duration with the soft cap.

This is a creative solution that is certainly worth considering, but there could be some obstacles. The most significant of which is the thought of getting three years down the road and revisiting the whole financial argument over what are “true” losses again. It could take months just getting the two sides to agree on how that would even be defined.

Second, regardless of how much people want it to go away, most, if not all of the owners would like a system with a hard cap. While it would be simple to lay the blame at the feet of Robert Sarver and Dan Gilbert, the truth is it’s unlikely the two of them have enough juice within the community of owners to derail a deal. Though they may be the most vocal – perhaps obnoxious – of the “hawks”, they must be getting support from some of the other owners, possibly including the influential pair of Boston’s Wyc Grousbeck and Dallas’ Mark Cuban. The internal machinations of the owners is only a subject for speculation for us.

However, Chris Broussard’s discussion of the subject gives a solid summary of the motivations:

There are three reasons why the owners favor a hard cap, with each owner falling into one of the three camps. Some, such as some big-market owners, want a hard cap because of the increased revenue-sharing plan that’s coming. Some want a hard cap so that they cannot be outspent by their opponents, and others want a hard cap to protect themselves from giving out bad contracts, according to sources.

So, pretending that we on the outside get to put ideas into the conversation, I’d like to offer up another attempt at a structure that both sides might find workable.

The Proposal

BRI Split

Players would receive a guarantee of 53% of BRI.

This is the most widely rumored figure from last week’s abortive meetings. It does not represent significant movement from the 54.x% offered at the end of June, but for the sake of staying consistent with Harvey’s solution, let’s use it.

The Cap System

The system will include both a soft cap – more accurately described as a “threshold” – and a hard cap. Structurally, it is similar to the “flex” cap system previously proposed by the owners, but it is not the same. The mechanics would be:

The “soft cap” or “threshold” would be set by reducing BRI by $100 million to cover benefits, then taking 47% of the remainder and dividing by 30 (or total number of teams). Teams may spend above the threshold using an exception system that will be largely the same as the previous system – with changes to be outlined below.

A hard cap – which no team will be allowed to exceed at any point during the season – will be established by reducing the BRI by $100 million, then taking 65% of the remainder and dividing by 30 (or total number of teams).

A salary “floor” will be established at 75% of the soft cap. Any team who fails to meet or exceed this baseline in payroll will be ineligible for participation in the supplemental revenue sharing program.* (* This is assumed to be the new program, which is expected deal with currently unshared revenue streams. The team will still receive their share of the national revenues – including television – as they do now.)

The luxury tax will be abolished. It will be unnecessary with the hard cap, and its revenue sharing function will be replaced in any new revenue sharing program the league implements.

Exceptions/Cap Holds/Matching Salaries for Trades

As noted above, all previous exceptions will remain – Bird, Early Bird, Mid-Level, and Minimum – with the following change:

The Bi-Annual exception will be abolished, but replaced with a Tri-Annual Mid-Level Exception (TAMLE). This would be a second Mid-Level Exception (MLE), but with limited use. Like the standard MLE, it can either be used in full, or broken up. However, once any part of it is used, it is frozen for three years. If the full amount is used, then it is unavailable to the team for the next two years. If part is used, then the remainder will be available for use in the current year, or the next two.

Cap Holds (or the “free agent amount”) are assumed to function in the same way as under the current system.

There will no longer be a requirement for matching salaries in trades. The only requirement is that once the trade is complete, neither team may exceed the established hard cap.

Of course, the single biggest change for all of these will be that there will be a hard cap over which none of these will be available for use.

Escrow/Meeting the Guarantee

Just as under the previous system, a soft cap and exceptions can be expected to result in the total negotiated salaries and benefits exceeding the percentage of BRI guaranteed. In this program, 10% of players’ salaries will be held in escrow.

If the total salaries and benefits are below 53%, then the players will receive all of their escrow back, plus any additional monies needed to meet the 53% guarantee, just as happened this year. If they exceed 53% by the escrow amount or less, then the owners will keep the overage from escrow and return the balance to the players, just as happened pretty much every year before last year.

If the overage exceeds the escrow, the players will keep anything over that amount. For example, if the amount held in escrow is $175 million, and the overage is $200 million, the owners will keep the $175 million, and the players will keep the $25 million.

If this happens two years in a row, then that will result in a 1% increase in the BRI guarantee to the players for the remainder of the agreement. This will continue throughout the agreement, so if the owners were to exceed the guarantee plus escrow in every year of a six-year CBA, the annual BRI guarantees would be 53%, 53%, 54%, 55%, 56%, 57%.

CBA Length

This proposal is for six years – with a caveat. If a one- or two-year transition period is used to allow teams to adapt to the hard cap (most notably, the Lakers), then I would change the proposal to seven years. The goal is to have five full years with the system fully implemented.

The Dollars

The Forecasted Revenue (BRI)

Trying to project the future revenue streams for the NBA is problematic at best. For someone on the outside like me, it’s little more than a sophisticated wild ass guess. For that reason, I’ve elected to keep it simple by projecting a flat 4% growth off of the 2011 BRI number of $3.817 billion. The 4% figure seems to be widely accepted within this conversation.

It’s true that such a steady curve is unlikely – particularly given potential impact of the new Lakers local TV deal, as well as the new national TV contract that would come up before this expired. Yet, while it’s true that such fluctuations will have practical impacts, they are not material in this forum.

(in Billions USD)

The “Soft Cap” Threshold

These projection show that even at the lowered BRI split, the threshold will continue to climb. This is driven both by the steady growth and a slight change in methodology. Whether or not this slight change is adopted would make very little difference in the practical use of the system.

The reduction of the BRI from 57% to 53%, and the soft cap percentage from 51 to 47 will naturally result in a slightly lower soft cap than would have been seen under the previous CBA. This is illustrated in the chart above by the green and red bars.

The Hard Cap

And this, more likely than not, is where it either all comes together, or people leave the room in a huff. This may be a “blood issue” for the union, but it’s also something that Stern has said the vast majority of the owners want. We need to get this from “non-negotiable” for the NBPA to something they can live with, and the avenue comes from something Alan Hahn reported Billy Hunter himself said:

Even some of the debate over the hard cap system is a matter of semantics. Hunter said the union isn’t fundamentally opposed to a hard cap because, he said, they would accept a hard cap with an astronomical 65 percent share of the BRI. In other words, set the hard cap at a ridiculously high number that only a few teams could afford to hit.

It is sometimes a gift (and sometimes not) to be able to willfully ignore part of what someone is saying. That is to say, to understand the speaker’s intent, but to also hear it “wrong” in such a way as to open a new door. Clearly, Billy Hunter is telling the owners that he cost of getting a hard cap is too rich for their blood.

As you know by now, I elected only to hear the “65 percent” and Alan Hahn’s added “set the hard cap at a ridiculously high number that only a few teams could afford to hit it.” And now I can say that I have a hard cap that Billy Hunter will accept, even though it’s not quite with a straight face.

Under this proposal, with the actual BRI of $3.817 billion, the 2011 hard cap would have been about $80.2 million. According to Shamsports, only three teams exceeded that amount – the Lakers, the Mavericks, and the Magic. Using Patricia Bender’s info to go back to 2006, you’ll find eight in 2006, four in 2007, and seven each in 2008 through 2010. It’s a number that will be difficult to reach, even without the luxury tax as an additional curb on spending.

However, it is also a number that virtually any market could live with to field a contender, particularly given an improved revenue sharing system. People often point out that spending doesn’t guarantee success. That’s true, but not spending clearly restricts the number of ways you can be successful. Look through the teams that went deep in the playoffs with small payrolls, and most will be getting a lot of mileage out of one or two rookie deals. If you roll those teams out a couple years, you’ll find their payrolls often skyrocket.

The Obstacles

I brought them up with Harvey Araton’s piece, I need to try to identify them with mine.

The biggies are straightforward. The owners potentially would want something closer – both on BRI split and cap system – to their previous proposals. The players swear they’ll never accept a hard cap.

I’d caution the owners not to reach too far. Most of the reasoning can be found in my “Meet in the Middle” piece. The hardliners need to recognize a real – and important – gain here, so league as a whole can move forward. This is likely as close as the owners will ever get to their “dream” system, because the NBPA is just too powerful and the cost of cancelling games or a season is far too costly and risky.

The players are a more difficult conversation. Their concerns about what they could lose under a hard cap are valid, though the rhetoric is alarmist and overblown, even under the owners’ proposed “flex” cap. That being said, it needs to be addressed.

Rather than listening to all the “blood issue” talk, I’m going to point to some comments made by Jared Dudley as reported by Brian T. Smith of the Salt Lake Tribune:

The hard cap? As a player myself, no guaranteed deals — that’s basically what a hard cap is; no guaranteed contracts. It’s not football. It’s not injuries and everything. I understand that the common thing is they don’t want players that make a lot of money not playing. Look, if you were a business or you were a restaurant, you don’t pay someone that you think’s not [working]. We’re not going to put it all on the owners. We’re going to take some of the blame. But, hey, we’re willing to work on it. We’re just not willing to give up guaranteed contracts and $800 million.

This proposal doesn’t ask for $800 million. Using the revenue projections above, it averages about $175 million per year. In addition, if the owners can’t control their spending, the players could see their share grow.

It’s true that even a high hard cap like this will squeeze some players, and we may see fewer 5- and 6-year deals fully guaranteed in the out years, it will not be anywhere near as pervasive or immediate as feared. These fears may be somewhat allayed by the addition of the TAMLE and the removal of the requirement to match salaries in trades (provided both teams remain under the hard cap). These offer some benefit to both the owners and the players.

The bigger obstacles are practical. First, I have devoted no time to transition. Immediate implementation would not affect most teams, but there are a very small handful that would have difficulties. The Lakers face the biggest issues, having almost $95 million in contracts next season (13 players) and $91 million in 2012-13 (8 players). This program would target avoiding salary rollbacks, but clearly either an amnesty program or a one- or two-year transition would need to be worked out. On the plus side, these numbers did pass the “Heat check.” I could see no year where the Miami’s big three could not be kept together, though they will be unable to stack up quality MLE vets like cord wood.

Second, if the owners’ spending exceeds the BRI guarantee plus escrow – which would amount to them hitting about 58.9% of BRI – there may be no way for them to roll that back. From a practical perspective, it’s important to remember that these are not centrally controlled, and, even if they were, how can you tell any team they can’t sign a player, because it puts the league over the secondary threshold? Worse, from a legal perspective, you may be guilty of collusion if you even try.

That particular aspect may need to be removed, or the owners would just have to hope they could individually exert some modicum of restraint. In any case, the practical problems come from the change, and, really, the large gap between the 53% guarantee and the 65% hard cap.

But then again, it’s not an altogether bad thing for teams to be further penalized for “throwing good money after bad.” There’s a significant and meaningful discussion to be had about the wisdom of putting ex-players in positions of power where they are dealing with professional agents when millions – sometimes tens of millions – of dollars are on the line. It is imperative the NBA to learn how to develop real front office talent, perhaps even more important than learning how to develop basketball talent.

Finally, it’s not out of the realm of possibility that even this hard cap could end up being permanently out of reach for some teams. This is the core problem with using aggregate NBA revenue and aggregate NBA growth. Neither is evenly distributed among the 30 teams. This is as good a time as any to say that I consider it pointless to implement a hard cap without sensible revenue sharing, and I only consider it marginally less so to implement revenue sharing without some kind of ultimate lid on spending.

Practical Solutions To Be Had

Really, there’s little difference between what the small and mid-market hawks want and are trying to get, and what the “middle class” of players has and is trying to keep. They want to believe they can succeed – prosper – on the court and in the ledger. They’d like to matter, and they’d like some security. That’s both the owners and the players. Meanwhile, those currently prospering – on both sides – are understandably concerned about coming out the other side of this in worse shape.

It’s time for the owners to start caring about what the players care about, and for the players to start caring about what the owners care about. There are ways to make this work. There are ways that may not make everybody happy, but will make everybody think they’ve got a shot. And that goes a long way.

Maybe this is one of them. If not, I’m capable of coming up with endless different ways to try to make both sides feel that they have at least a puncher’s chance of having what they want. If you listen to and respect the desires and motivations of each, but ignore the rhetoric, then there are practical (though imperfect) solutions to be had.

I know there are smarter and – more importantly – better informed people than me involved in the conversation on both sides. I know this can be done.

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CBA Talk: Kill for Money, Die for Faith

by Tim Donahue on September 15, 2011 at 8:30 am · 4 comments

From a purely physical standpoint, there’s almost no difference between the two pieces of paper above. They’re the same size, same weight, and are made from largely the same material and ink. Yet one is worth five times the other.

Why?

Because we believe it to be true. Collectively, we, the citizens of the United States and most of the world, have agreed that these pieces of paper have value. We agree that the markings on them will tell us how much value they have. By shared consent, we have imbued these specifically decorated clippings with power. “Cold, hard cash” is neither cold nor hard, yet thinking makes it so.

We don’t need heroic events or valiant victories against daunting odds to see the power of a shared belief. We need only to walk into our local pub, slap down a green piece of paper similar to those pictured, and get back a nice frosty pint.

And that’s why the money is easy. Everybody comes from pretty much the same place. It’s just math. More is better. Less is worse. It’s why David Stern said, “…we know how to negotiate over dollars when the time comes.”

The system is an entirely different beast. The system — and what it means — is an article of faith. While people will do all sorts of depraved things for money, it’s nothing compared to what they’ll do for what they fervently believe in.

Which is why the following comment from Ken Berger is off base.

But with agreement on the dollars within reach, it seems incomprehensible that the season or a big chunk of it could be lost over how those dollars are distributed.

What Berger misses completely here is that there was never any chance whatsoever of games being canceled over a difference in BRI split. None. The structure remains in place for a settlement in the next few weeks along the lines of what I wrote about on Tuesday. If the owners just want the money, then they’ll play out the charade for a while, then make the money grab. Meanwhile, there was never any chance at playing games until the two sides agreed (or one side acquiesced) on the subject of the system: the cap.

How those dollars are distributed isn’t a minor point.

It is, perhaps, everything.

Or … at least everything to the people who will cast the up or down votes on each side. Each will view the agreement in terms of how it affects them, first and foremost. As we all would, regardless of how twisted that may or may not be.

Tom Ziller of SB Nation recently shared his thoughts on the matter.

That’s why this hard cap is a “blood issue.” Not because it has a lobster’s chance in Maine of creating competitive balance, not because it will hurt all players’ ability to earn. It’s a “blood issue” because owners want to pay less money to supplemental players and because supplemental players want to keep making money. It has nothing to do with the health of the game. It has nothing to do with fans. It has nothing to do with fairness. It’s just stupid.

That’s all well and good. But here’s the problem: both sides believe they are “the game.”

The players believe they are the product, and thus, “the game.” And the owners believe that they are the stewards of the teams, which they view as the product, and thus, “the game.” Each assumes what is in their best interest is in the game’s best interest. So the only way either can “hurt the game” is to give in to the other side, which — in their view — is a stubborn impediment to the future health of the game.

Does it matter whether or not a hard cap will actually create competitive balance? No, it only matters that an owner believes it will help him. In fact, an owner doesn’t even have to believe that. He only has to believe that the current system hurts him.

Does it matter whether or not the fears the players have about a hard cap (best outlined by Zach Lowe’s outstanding piece) are true? No, it only matters that they believe them.

The agents have been portrayed in some corners as a potential bad actor in these talks, and certainly, they are looking out for their interests. However, if they believe that negotiation can only lead to lost paychecks, lost BRI split and the players eventually having to swallow a hard cap, then isn’t their responsibility to advocate a different course of action?

Does it matter that we think that any or all of the beliefs held by members of the two sides are wrong, even silly? No, because they will act on those beliefs just the same.

Supposedly, the actor Willem Dafoe was once asked about taking roles as villains and his response was, “Good guy. Bad guy. Don’t make no difference. Everybody thinks they’re righteous.”

And that’s why this lockout is on the verge of lasting a very long time. No matter how hard we work at creating a narrative around the lockout that features heroes and villains and secrets and lies and intrigue and greed and missed opportunity, it will always be bullshit. We are too trapped in what we believe — in what we want — to give fair reading to what the parties believe. We’re righteous, so how can those who oppose us possibly be?

The owners want to control their business, and the players want to keep what they think they’ve earned. Each will do what they can to get what they want — nay, what they feel they deserve. The owners have locked the players out. Whether or not they will cancel games or even a season to achieve their goal depends on how many of them are “devout in their faith” in the need for a hard cap. The players will resist, go overseas and possibly seek legal intervention in one form or another (probably decertification and anti-trust litigation) to achieve their goal.

I don’t know what the outcome will be. I know what I want, and what I don’t want, but those are ultimately of no importance. This confrontation has been brewing since before the last lockout, and it has to play all the way out sometime.

For those hoping for a full season, hope that this really does become just about money.

People will kill for money, but they’re rarely willingly die for it. If it remains focused on the hard cap and the system, then it’s far more likely to become a crucible. If that crucible lasts a season — or results in decertification — then no one has any idea how the NBA will come out the other side. But that is of small concern to those emboldened by the courage of their convictions.

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CBA Talk: Why the Owners Might Move Enough to Get the Players to Meet Them in the Middle

by Tim Donahue on September 13, 2011 at 12:50 pm · 6 comments

After weeks, months and, arguably, years of preparing for the likelihood of a long, frigid winter for the NBA and its players, did last week bring a sudden and unexpected thaw? Consider what Sam Amick referred to yesterday as “the reading of the labor tea leaves.”

On the heels of Roger Mason’s now-infamous tweet in which the NBPA vice president wrote, “Looking like a season. How u,” but later claimed his account was hacked, one league source claims that union president Derek Fisher text-messaged numerous players last week indicating that some progress had been made and imploring them to be physically prepared just in case the season started on time. There was another curious happening on Thursday, when — according to ESPN’s Chris Broussard — NBA deputy commissioner Adam Silver attended the U.S. Open with Wasserman Media Group CEO, Casey Wasserman [whose company employs NBA power agent Arn Tellum and serves his stable of clients, which includes Pau Gasol, Joe Johnson, Brandon Roy, Al Horford, Russell Westbrook, Tyreke Evans, LaMarcus Aldridge and Danilo Galinari].

With much of the NBA blogosphere begging for activity daily since June 30th, they should be pleased with both last week and this week. Last week brought the optimism so many were seeking. An owner/player meeting today includes an expanded group of representatives for each side. On Thursday, the two sides will break into their individual conclaves to let their constituents know the current state of the negotiations. (The owners will meet in Dallas and the Derek Fisher will take the NBPA reps to Vegas, where about 40 players are slated to participate in the Impact Basketball Academy summer league.)

Of course, we could just be in for a much-needed lesson in the difference between activity and accomplishment, as Ken Berger cautions.

According to five people briefed on the three days of high-level talks over the past two weeks, the two sides essentially are in the same place they’ve been since the owners’ most recent formal proposal in late June: billions of dollars apart.

“I don’t think they’ve made any progress there at all,” one of the people briefed on the negotiations told CBSSports.com. “They’re talking a lot, and the conversations are more cordial. But as far as the real numbers, I don’t think there’s anything there.”

So what we hear on a daily basis could mean everything, nothing or anything in between. One month from now, we could be analyzing free agent moves and training camps or we could be sitting exactly where we are. As has been the case for two and a half months, nothing will be any different, until something is actually different.

Hawks, Doves and Henry’s Owner Headcount

On Friday, TrueHoop’s Henry Abbott posted one of the most useful pieces of the lockout thus far — his “best assessment of where the 30 owners stand at the moment” in terms of their bargaining positions. And his research has led him to conclude that the ownership group is more fragmented than David Stern would have you believe.

The way the NBA tells it, all 30 owners are perfectly united, on every issue from hard caps to revenue sharing.

Of course, it cannot be so. Human nature dictates some owners are doves — eager to play the upcoming season — while others are hawks who would risk ditching a season in the name of a new collective bargaining agreement that strongly favors owners.

If the harbingers of progress are real (denials, notwithstanding), and the two sides are on the verge of an agreement that prevents the cancellation of games, then it tells me that the owners have moved considerably from their most recent public position. The reasons why the owners — who have been broadly portrayed as unreasonable bullies in this conflict — may actually be dealing from a semi-permanent position of weakness can be seen by using Abbott’s research to break things down a little further.

Though Abbott’s piece is based upon some speculation, it is relatively well-founded speculation. He lists “more than a dozen well-placed sources” that include “people directly involved in the talks, owners, players, CBA experts.” So for the purposes of this discussion, let’s presume it is at least accurate enough to base a worthwhile conversation on.

The simple tally is as follows:

17 “Hawks” (who would risk the season in the name of a new CBA that strongly favors owners)
12 “Doves” (who are eager to play the upcoming season)
1 Unclear (Alex Meruelo, who owns the team in Atlanta I won’t name for the confusion it could create)

Even if you were to cede Meruelo to the side of the hawks, 18 to 12 does not represent a strong majority. This count would dovetail with a comment Abbott made a few weeks suggesting that only about four owners needed to be moved out of the hawk category to get a deal signed with the players. Therefore, let’s take his arguments and break the owners down even further.

(Bucks owner and hawk hardliner Sen. Herb Kohl (D-WI) on what he thinks of the current CBA.)

Hawk Hardliners – 7

Jordan (CHA), Gilbert (CLE), Kroenke (DEN), Heisley (MEM), Kohl (MIL), Sarver (PHO), Maloofs (SAC)

These guys want big changes in the CBA and robust revenue sharing. But they are not a particularly influential group and are further muted by the possibility that they may not agree to any compromise that the players could swallow.

“Hockey” Hawk Hardliners – 2

Tannenbaum (TOR), Leonsis (WAS)

These guys also own NHL team. They lived through that league’s canceled 2005 season and came out OK. But they may be drawing parallels that are or aren’t sound. The answer to that isn’t something we could know unless an NBA season, in 2011-12, gets cancelled.

Private Equity Hawks – 2

Gores (DET), Harris (PHI)

These two come from the private equity world and are brand-new owners who are probably looking at the bottom line more closely than previous owners.

Hawks Who Had Success But Want Better Returns – 6

Grousbeck (BOS), Cuban (DAL), Allen (POR), Taylor (MIN), Holt (SAS), Miller (UTA)

Cuban and Holt probably fit the bill best for “smart owners who know how to succeed in current system, but recognize it includes huge amounts of luck if you’re not the Lakers.” If there is common fear among these guys, it’s that if they fall, they might not be able to get back up again. (See: Glen Taylor). But it’s not the individual motivations that matter here as much as who these guys represent. This group includes some of the most successful and stable franchises in the league.

(Jerry Buss enjoying some “psychic benefits” of owning the Lakers.)

Doves in Huge Markets Who Are Doing Just Fine Under the Current CBA – 3

Buss (LAL), Reinsdorf (CHI), Dolan (NYK)

It seems to me that there is really no way these three franchises don’t come out of this worse in any “reset” of the system. The current structure gives them big advantages that they are financially capable of exploiting. Perhaps Chicago might see some advantages compared with the other two (Jerry Reinsdorf is a much more conservative spender than the other two), but really, all three would probably be better off continuing the old CBA.

Doves in Strong Markets And/Or With A Large Incentive to Play This Year – 5

Lacob/Gruber (GSW), Bennett (OKC), DeVos (ORL), Arison (MIA), Alexander (HOU)

These guys range from “I’m OK with the current system” to “we gotta play this year.” Bennett and DeVos may benefit long term from changes to the system, but they won’t vote to lose this season. (Durant/Westbrook have too much short-term potential and Dwight Howard may only have so much time left in Orlando.) Arison needs the season (LeBron/Wade/Bosh won’t be around forever), and Golden State and Houston are doing well enough in their larger markets to be OK with how things currently stand.

Dove Living the American Dream – 1

Prokhorov (NJN)

Mikhail is immensely wealthy and owns arguably the league’s worst-performing franchise. But he will soon be moving to a huge market in Brooklyn and is trying to hang onto a superstar (or near-superstar) in Deron Williams, as Abbott noted. The history of the franchise suggests that its owner would take a hard line, but hope for future and the kind of money tailor-made to exploit the old system keeps him dovish.

Dove Named Donald Sterling – 1

Sterling (LAC)

I can’t begin to really explain the machinations here, but the short answer is that Donald Sterling will figure out how to make whatever system exists work to his advantage — financially. Besides, it’s certain he doesn’t want to lose another season of Blake Griffin.

League-Owned Dove – 1

NBA (NOH)

As Abbott puts it: “As the NBA owns the team, the good money is that this vote will echo whatever Stern wants. And by the time Stern presents a deal to owners for their votes, it’s a sure thing he’ll want it to pass.” In short, the league won’t put up any fight against its own proposal.

The One Dove Pacers Fans Care About Most – 1

Simon (IND)

Simon wants big revenue sharing changes, but he is apparently malleable on the system. At 76-years-old, Herb Simon is reasonably eager to move forward with the Pacers’ turnaround. Given the positive vibes emanating from last years’ finish and the ample cap space available, Simon may just be tired of waiting to finally erase the JailPacer era.

Go Big or Stay Home

Possibly the single most important thing to understand about the negotiation relationship between the owners and the players is also the one that has been singularly (perhaps studiously) ignored.

It is as follows: A lockout is the only weapon in the owners’ arsenal, if they want to make significant changes.

Without that threat, and without the will to act on that threat, the owners are reduced to saying, “pretty please with sugar on it” for anything they want. The NBPA need only play a spoiling action to put the owners to a decision about losing games, and most times, that will be a relatively safe gamble.

The issue faced in this bargaining session is that the owners view the current agreement as to be almost entirely in favor of the players. As such, there is nothing they have that they would be willing to “trade.” Since they have no carrot, they are left with only the stick.

But the lockout, and more importantly, the actual cancellation of games — let alone a season — must be used prudently. Before crossing that line, the owners must be rock solid sure of two things: (1) they will stick together, and (2) they will win.

As we see by the diversity of the list above, sticking together is a problem. Though many owners would like to see significant changes, this new look provided by Abbott’s breakdown — and my further distinctions — makes it hard to see that many would be willing to sacrifice much more than the summer and/or preseason to get them.

Of the 17 hawks listed in the Abbott piece, only seven seem to be entrenched enough to be willing to sacrifice all or even part of a season. And those on the extremes of a vote are always somewhat irrelevant in a negotiation, as little or nothing that transpires will change their minds. These seven (the owners of Charlotte, Cleveland, Denver, Memphis, Milwaukee, Phoenix and Sacramento) are further marginalized by the fact that they hold little influence within the voting community.

Moving to the other end of the hawk spectrum, you have the six owners who are most likely to swing their vote. Their positions seem “soft” to me — at least in this limited context. Dallas’ Cuban and Boston’s Grousbeck seem more likely to want to be hard on the players to avoid any significant revenue sharing reforms. But both, along with San Antonio’s Holt, are going to be highly motivated to get their aging championship contenders back onto the floor as quickly as possible. As rich as Cuban is, he may be swayed to kick the can (meaning any problems he has with the current CBA) down the road six years so he can get a 33-year-old Dirk and the rest of his old squad back on the court in November to mount a title defense.

If the owners are unsure that they will be able to remain unified then they’re probably even less sure of being able to “win.” That is to say that even the cancellation of a full season is unlikely to bring the owners what they want. And it seems that the previous two years of saber-rattling from the owners has put the players in position to last out a year.

Consider this: While some owners are fine with (and some would may actually prefer) a system like the current one, there are zero players who want anything to do with the owners’ proposed changes. So while the owners have largely been portrayed (and specifically, by me) as the more unified group who have the bank accounts to hold out longer, that might be a false narrative. One side features about 18 guys who want a CBA “reset”; the other features 450 guys (plus a ton of high-powered agents and any sponsors that just wants the games to start on time) that want the status quo. Unity comes easy, when all you’re trying to do is get somebody to vote “no” to what they view as “a poke in the eye with a sharp stick.”

Furthermore, the changes the owners want will disproportionally affect the middle and lower rung players, who basically are the union. The question of the lost paychecks can be ameliorated by understanding the structure of the players’ pay. According to Shamsports, 272 players made $3 million or less last season (combined, this group made about $314 million). If I were planning for the union, I would be using the reported $175 million lockout war chest, along with possibly the $26 million filler from the BRI audit to support that block of players through the lockout.

Those players, plus a chunk of the 124 players who made between $5-$15 million last year who are staring at being gutted, would likely give you a rock solid “no” vote to anything resembling the owners last public proposal.

Add to that potential (though limited) overseas opportunities, and it’s realistic to believe that the players could last an entire season or more. While I’ve made the comparison of “guys who’ve learned to hold their breath longer vs. guys with oxygen tanks” in the past, I’m less sure that there isn’t a tipping point in a long lockout where the advantage swings back to the players. None of this even considers what impact an upcoming National Labor Relations Board ruling could have, let alone the fallout from a potential decertification of the NBPA or any other litigation.

What it really comes down to is the inherent problem of having just this one weapon in the arsenal. If the threat doesn’t work, you have to cancel games. If canceling games doesn’t work, you have to cancel the season. If canceling the season doesn’t work, that’s the ballgame.

Now and pretty much forever.

Winning without Winning, Losing without Losing

So now the owners are in the grey area where everything can still be walked back. Other than some meaningless summer leagues, nothing has been cancelled, so nothing has been done that can’t be “undone.” If they are going to abandon their hard line so that no scheduled games will be missed then they have to act now.

Given the seemingly fragmented position of ownership shown here, it’s a very real possibility that they could easily abandon their hopes for a “reset” of the system, and settle for a simple money grab that could be gained through a more favorable BRI revenue split. It could be that the “reset” was always a red herring, and this could have been the goal of certain key owners all along.

But then again, maybe the owners are considerably less smart than that and were “fighting the last war.” Maybe after spending the last two months (and/or years) trying to convince the players they were serious, they finally realized the players were serious, too. Then, they contemplated what they were going to have to do if they really were serious. And upon reflection, and perhaps number-crunching, they are not prepared to do it.

In either case, the last two months could have served to push both sides off balance enough that an offer to maintain most or all of the current CBA system (soft cap, Bird exceptions, MLE, guaranteed deals, and contract lengths) could gain the owners a better BRI split — and faster — than otherwise hoped. It seems likely that getting the players down to 50/50, give or take a percentage point, would be enough for all but the seven hardliners above to agree to start the season on time (or as close to it as possible) regardless of the cap system.

Assuming the players are willing to go as far as 50/50 is a risky proposition. But it’s not unreasonable. It’s important to remember that the players — like the owners — are not of a hive mind. And while the BRI split is important to both, the actual percentage is really something of an abstraction to the two sides.

Consider this: Reducing the BRI split to 50/50 would represent a “pay cut” for the players of a little over 12%. How that affects each player, however, remains an open question. Assuming the same cap structure, you would clearly be able to see the impact on max deals, rookie deals and full MLEs. However, what happens with everyone in between?

Let’s pretend for a moment that, under the old CBA, Nene would have signed a 5-year deal averaging $12 million this summer. Now, under a CBA that is unchanged structurally but features a 50/50 BRI split, it is not certain that he would suffer from a 12% pay cut and instead have an average annual salary of $10.5 million. What he will demand on the open market could be unchanged.

This is because non-max, non-rookie and non-MLE contracts are only tangentially a function of the BRI split.

The primary determinant would be the same as always has been: the number of suitors with available cap space, and the ardor with which they will pursue him. The NBA’s salary structure doesn’t even approach being sophisticated or calibrated enough to have any direct effect on that market reality.

Now let’s talk about the impact a system change might have.

Let’s keep the BRI split at 57%, but reduce the max contract length to four or five years, instead of the current five or six years. That saves the owners zero dollars in total and pays the players the same amount. However, it is likely to have a far more obvious and punitive effect on individual players.

By reducing the max length by even one year, you impose a 20.1% reduction on what would have previously been a six-year deal, and a 23.5% reduction on what would have previously been a five-year deal. Of course, the player would have the opportunity to make that sum up on the next contract. But you have to ask yourself — what percentage of NBA actually players sign more than one “big” contract? (Answer: usually only the few that were worth their first big one.)

Unlike the exercise we went through with the owners, we can’t attempt any useful break down of how the league’s 450 players may be inclined to vote. There are just too many individuals with two many unknowable motivations and thought processes. But we can reasonably put ourselves in the mind of Josh McRoberts, the player ranked 250th out of 500 in ESPN’s #NBARank project. If you are him, which is more threatening to you: a reduction in the total amount of money the players will be owed or the reduction in the length of contracts and a hard (or harder) cap that will necessarily curtail guaranteed contracts?

I think we know which Josh would choose.

We will likely hear later today if more owners now seem inclined to let Josh keep his years — and the rest of the player-favorable system — in exchange for a cash grab off the top.

Ira Winderman summed it up perfectly.

We have reached the point of the NBA lockout where things either will move quickly or not at all.

If the owners let go of the system, and the players see significant value in that, then there is probably enough common ground — and common fear — to get a deal done.

If not …

Acknowledgment: Recently, I have had the privilege of receiving access to a team of financial and legal experts formed by Larry Coon. Their purpose was to parse through the league’s financial documents and make sense of the financial issues that underlie the labor dispute. They contributed greatly to Larry’s previous article on the lockout and have provided the foundation for some of the ideas in this piece. Assume the good ones are theirs, the bad ones are mine. Many thanks to Larry Coon for the opportunity and to everyone involved – all denizens of LakersGround.net — for their time and thoughts.

As always, thanks to Jared Wade for his help on editing and generally helping shape the piece into something coherent.

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