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Collective Bargaining Agreement

From 2003 through 2008, I worked for two different companies that had plants in the Charlotte area. As a result, I visited the Queen City dozens of time on business. While I don’t miss the business travel, I do miss both the people and the city of Charlotte.

So, it was nice when Brett from Queen City Hoops asked if I’d sit in for a question on their 3-on-3.  QCH writers Mathew and Spencer joined me in answering:

How are small market teams valued in the CBA, and should it be more/less?

A tough question, but one very important not only to Bobcat fans, but also the followers of the Blue-and-Gold. Here’s a taste of my response.

Truth be told, small markets like Charlotte (1.2 million TV households) and Indianapolis (1.1 million) are of dubious value in a league whose revenues are increasingly dependent on local TV revenue. Each would be doing well to get a local TV rights deal that gives them in ten years what the reported new Time Warner deal gives the Lakers in just one. It seems relatively clear that the NBA is far more important to these two markets than these markets are to the NBA.

Don’t worry…that’s not all. I don’t sell us down the river. Click on the link above, and head on over.

Matt Moore of Hardwood Paroxysm and David Walker of  Bobcat site Rufus on Fire answer the other questions.

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CBA Talk: Where the Threat Lies

by Tim Donahue on October 28, 2011 at 11:28 am · 0 comments

What a difference a week makes.

Last Friday saw an explosion of anger as the talks fell apart. This time it was the owners, rightly or wrongly personified by Paul Allen’s awkward silence and Peter Holt’s easy Texas manner, who derailed the negotiations. With David Stern out of the room – for reasons either innocent or engineered – the owners put the cart before the horse by reportedly insisting the players accept a 50/50 split of BRI before negotiations on the system could proceed.

It was a profoundly foolish ultimatum, and it brought predictable results.

So, a week ago, we began the countdown to the cancellation of Christmas (at least for the NBA). It was already less than 30 days to the first day of remaining schedule games, and it was practically impossible to get those games in even with almost immediate agreement. Announcement of cancellations, perhaps even an indefinite postponement to the start of the season, was imminent.

But it never came.

Instead, the two sides teleconferenced on Monday, and the owners held another meeting on Tuesday to discuss revenue sharing. These led to the meetings of the last two days. And now, as NBA.com’s Steve Aschburner writes, optimism abounds:

Wait, no snarky “Or not” qualifier? Nope. If only for a night, the content and tone of the key negotiators’ comments to reporters after another seven-plus hours of collective bargaining talks deserved to stand on their own. As did the fact that, as Hunter and union president Derek Fisher spoke publicly first at the end of this session, Stern was seated in the back of the room. He was smiling, he was acknowledged a couple of times by Hunter and he even answered a question for the union chief, who had been asked when the difficult moves in this labor dance would get made.

“Tomorrow,” the commissioner said.

Stern and Hunter both dropped big doses of optimism on NBA fans and followers, suggesting that the lockout, as long and damaging as it has been, might not see its fifth month.

“There are no guarantees that we’ll get it done, but we’re going to give it one heck of a shot,” Stern said.

Said Hunter: “I think we’re within striking distance of getting a deal.”

However, as Stern said in the wee hours Thursday morning, “Until we have an overall deal, we don’t have a deal about anything.”

Though we lack details, we can guess that both sides are close to agreement on a system, and the range where the BRI split will fall has been discussed ad nauseum. If this was just a deal between two guys – between David Stern and Billy Hunter – agreement today would be a certainty.

But it’s not. This is an agreement between 29 owners on one side and 400-some-odd players on the other.  And, since this is an agreement that has been/will be shaped by these disparate parties, it will not make everyone happy. In his interview with Steve Aschburner, NBPA Economist Kevin Murphy said this:

 ”If there’s a deal here, it’s going to be a deal that nobody likes. That’s what deals are. Nobody walks out feeling like they got a complete victory. That’s initially. But then you get back to playing and you realize, geez, I can live with this.”

So, today (and the days that follow), the hope lies in finalizing a deal that the two sides can “live with.” However, even such a deal is certain to leave some feeling left out. And that is where the threat lies – within the people who see no value in agreeing.

The threat is greater from the owner’s side, but that’s largely a function of numbers. It’s just easier in a smaller group. And if you want to see how much it still exists, simply look past what Stern is saying, and watch Adam Silver in last night’s press conference.

However, there is still a tough sell on the player’s side. While the agents have been portrayed as the wolves here, the people who are “left out” are really the super stars – LeBron James, Dwight Howard, Dwyane Wade. With the advent of max contracts, these players have seen their earning potential cut significantly – and they know it.

For all of the attention paid to the BRI split by the media, it’s the stars (and their attached agents) who are really the only BRI warriors in the fight. They can see the direct impact of each point of split on their paychecks, and the system issues don’t mean all that much to them. They are the wild cards from the union, but fortunately, as illustrated by the ESPN’s recent #NBARank project, they are wildly outnumbered.

If talks break down today, it will be framed around BRI. The most likely scenario will be the owners refusing to go past 50, and the players standing firm at 52. Though this will prompt howls of “$80 million ?!?!?!”, it won’t really be about those two points. It will be about the fringes on the two sides not liking the deal as a whole, and using that difference as as excuse.

To keep this from happening, David Stern and Billy Hunter will have to earn all of their money. It seems apparent that these two men are ready to make a deal. Now is the first time in this process that the two sides may be in position for one man on each side to push them together. The task, however, remains herculean.

Five years ago…hell, five months ago…I would have had absolute confidence that the deal would be done once Stern and Hunter started rowing in the same direction. However, neither has ever looked less in control than they have over the course of this lockout. For both, this is almost certainly their last go-round.

Let’s hope they both have one more good day in them.

 

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CBA Talk: Contracts End

by Tim Donahue on October 15, 2011 at 1:10 pm · 0 comments

I’ve been thinking a lot lately about how the end of each deal is widely accepted as the starting point of the next. Mostly, how the previous 57% revenue split in favor of the players so pervasively defines so many people’s perception of how much the players should or shouldn’t get. In order to explain why this doesn’t work as cleanly as it seems, I’ve come up with the following tortured analogy.

The CBA is a contract. And when a contract ends, the offer for the next one is only tangentially based on the end point of the deal. It is also greatly influenced by how the offering party feels about the value received in the previous contract, as well as the value they think they will get in the future.

In these terms, a CBA could be viewed as similar to individual player contracts.

It’s hard to find a perfect real-life example, but for perspective, consider two current two free agents: Nene and Mike Dunleavy, Jr. Nene made $11.3 million last season while Dunleavy made $10.6 million. Nene is an emerging, athletic center. He is highly coveted on the market. Dunleavy is a solid, but flawed role-playing wing. He will be hoping to find a soft landing from a steep descent in pay.

The players consider themselves Nene.

The owners consider the players closer to Dunleavy.

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Today, 8ps9s welcomes Tim Johnson. Tim is a former food industry executive now doing a bit of freelance writing, consulting, and other work in the non-profit sector. He is a passionate, life-long NBA and Laker fan (but I guess we can overlook that). And, as will become obvious, he is also a semi-regular cash game poker player.


In poker, a more subtle version of the bluff is called the semi-bluff. It’s similar to a straight-up bluff, except you’re holding good enough cards that you could win the hand outright. What does this have to do with the NBA contract negotiations? As it turns out, a lot. They have a lot of the hallmarks of a high stakes, no limit hold ‘em hand.

Another aspect of poker is the existence two intersecting axes (that’s more than one axis, not more than one axe) that players can be grouped under. The first is passive or aggressive. This doesn’t denote what cards a player plays, but how he plays them. Both sides of the NBA negotiations, throughout the preliminary hands (pre-lockout) have demonstrated a tendency toward aggression.

The second axis is tight or loose, and indicates what type of a hand a player will play. Will they play a drawing hand, will they bluff, will they “gamble” a bit? The owners are definitely tighter than the players. They have set the narrative starting at big player concessions, and softening only slightly from there. Given the circumstances, the players have a smaller stack (money and playing career), and they’ve been getting a weaker slate of hands (the economy), so they’ve been a bit looser, offering early concessions.

The lockout was the pre-flop, in a poker sense. At this point, everyone has their hole cards, and how they bet them is the precursor to how the hand plays out. Their bets tell a story. The players felt they had a long shot at winning the hand, and the owners felt they had the possible nut hand if they could just raise the players big and long enough. The owners were looking to test the players early, with the imminent threat of an all-in bet (no season). That was their strategy. The players seem willing to split the pot and wait for another hand. But they also don’t want to just cave, so they’ve called all bets pre-flop.

What we’ve come to now is the flop. It is in many ways the most important part of the hand. It’s when the majority of the community cards come out, and where you know for certain whether you have a chance of making a hand, and an indication of how your opponent feels. It’s the time to calculate odds. The players have pretty much checked at this stage, looking for some owner willingness to get out of the hand. The owners have continued to bet, but not hugely, so they might be spooked by the players’ strong reaction to their early bets, and worried about being too aggressive and forcing the players to stay in, if only to save face.

It appears the owners have been working a semi bluff. They think with their chip stack they can risk this season to put the players at risk, but at the same time they realize there’s a downside to a loss. They like their cards, and think they can either draw (litigation) or bluff (players lose too many checks and cave) to a big win, but they are also realizing that the players may get pot committed, and if forced too strongly, have to play it all the way out. Hence the smaller bets here, trying to just get the players to fold after extracting everything they’ll put in. It’s the classic semi-bluff slowdown, since the object of a semi-bluff is to induce a fold, not necessarily duke it out.

We’re about to reach the turn, where real games get canceled. The owners already have the players at a sizable loss. The key for the owners is to know whether they’ve gotten everything, and not push beyond it. Remember, the owners’ hand is not immune from losing. It’s not the nuts, even if it’s favored. Backing off here and accepting the compromise between the positions still gives the owners the hand.

The river comes in January. That’s where someone folds or both risk the big loss. Neither side really wants to get to the river. The stakes go up. Both realize there is a number the players will fold at, and the owners are weighing whether or not they’ve already gotten to it. Both sides are also considering the next hand (a future CBA negotiation). The players will fold if they have enough chips left not to be at a crippling disadvantage in that hand. They’re on the edge of that right now. If the owners push too hard they may give up the season because there’s no real downside. They’d have to play it out and hope to draw well in court or decertification, or a combination of the two.

The owners have a solid win on the table right now. It’s time to take it.

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