NEW YORK (AP) — NBA owners, losing hundreds of
millions of dollars a year, wanted an overhaul of the financial system to
ensure themselves a chance to profit.
Players, believing they were the driving force
behind record TV ratings and revenues, wanted to keep what they felt they
deserved.
Now, negotiations that have lasted nearly two years
need to end in the next few days.
Commissioner David Stern said he will cancel the
first two weeks of the regular season if there is no agreement on a new deal by
Monday, costing both sides money and driving away some basketball fans who
might never come back.
"There is an extraordinary hit coming to the
owners and to the players," Stern said.
Not to mention the people who work in the game and
the businesses that depend on it.
Stern has repeatedly said owners had two goals in
the talks: a way to escape losses and a system where all teams could compete
equally, noting that the NBA's small-market clubs aren't nearly as successful
as Super Bowl champions like Indianapolis and Green Bay.
The problem, they said, was a system that
guarantees players 57 percent of all basketball-related income, which includes
gate receipts, broadcast revenue, in-arena sales of novelties and concessions,
arena signage revenue, game parking and sponsorship dollars.
Another problem is a salary cap structure that
allows teams to go well beyond it if they were willing to pay a luxury tax,
which the big spenders in big markets such as Los Angeles and New York could
easily afford.
The sides are still divided over the revenue split
and the cap, and players insist they would rather sit out games than take a
deal that would eliminate gains they fought for years ago.
"They're going to sacrifice — if they lose
games, they miss money and all that. They feel they have to take a stand the
same way players took a stand for them before they were here. It's actually
quite inspiring to listen to them articulate that," said players' attorney
Jeffrey Kessler, who also represented NFL players during their four-month
lockout this summer.
"I think they saw how the NFL players stood together
through tough times and ended up with a deal the NFL players thought was fair.
They're thinking they're going to do the same thing."
The cost, for both sides, would be staggering.
Stern predicted a $200 million loss just for the
cancellation of the NBA's entire preseason schedule. If arenas are dark on Nov.
1, when the real games are supposed to start, the damage will be even greater.
"They're in the hundreds of millions of
dollars," Deputy Commissioner Adam Silver said. "We're not prepared
to share the specifics. But, yes, we've spent a lot of time with our teams
walking through those scenarios of lost games, and the damage is enormous, will
be enormous."
Players' association executive director Billy
Hunter said players would lose $350 million for each month they're locked out.
The hardest hits likely will be felt by those off
the court — from the 114 people the NBA laid off in July to businesses that
depend on fans flocking to the games.
From the parking lot of his Crown Burgers
restaurant in downtown Salt Lake City, Mike Katsanevas can see the edge of
EnergySolutions Arena, its blue-and-green lights already twinkling at dusk.
What he may not see at all this year are the
hundreds of fans who routinely pack his 224-seat restaurant before each Utah
Jazz game, parking their cars for free if they order $14 in food, including his
famous made-to-order patties crowned with pastrami.
"For us, it's a tremendous impact if these
games don't go through," said Katsanevas, whose family owns the restaurant
just a block north of the arena and five others in the metro area. "Before
it used to be our gravy. But now with the economy and everything else that's
going on, it's become a necessity."
He said all of his 41 employees will see their
hours cut if the lockout continues.
Players and owners did narrow the financial gap
before talks broke down Tuesday. Players proposed lowering their BRI guarantee
to 53 percent and owners increased their formal offer to 47 percent. Stern also
said he discussed the idea of a 50-50 split, which was rejected by players.
With each percentage point equivalent to roughly
$38 million of last year's BRI total of $3.8 billion, the union believes a
reduction from 57 percent to 53 percent is enough of a concession, saying it
would transfer more than $1 billion to owners in six years.
So while sharing 50-50 sounds great in
kindergarten, it may not work for NBA players.
Stern said the league had backed off other demands,
like salary rollbacks and non-guaranteed contracts, while offering players a
chance to opt out of the agreement after seven years. So there is hope of a
compromise in the coming days.
Both sides insist they are committed to making a
deal, although Silver confirmed last season that some money-losing teams would
be better off if there were no season.
Fans wonder how the NBA could be on the brink of
self-destruction over a few measly percentage points when its popularity has
soared. The historic free agency period of 2010, which put LeBron James in
Miami alongside Dwyane Wade and Chris Bosh, brought a new level of interest
that carried right through the Dallas Mavericks' victory over the Heat in the
NBA finals.
But in announcing the lockout on June 30, Stern
noted that small-market owners didn't particularly enjoy the season or feel
included in it, and many have little incentive to go back to a system that
looks like the old one.
Nor would players want to play under a system that
restricts free agency or limits their earning potential. Hunter and union
president Derek Fisher of the Lakers have said they are prepared to sit rather
than accept a bad deal.
That could be the outcome, as damaging as it seems,
without a big change in a short amount of time.
"I haven't talked to all 400-plus guys, but
the guys that I have talked to are all on the same page. While it would be
devastating for fans and everything like that, right now we're dealing with
some serious business," Detroit's Ben Gordon said. "One thing Derek
said is we have to stand for something. It's not only today we're playing for —
it's also tomorrow, for the guys who aren't in the league yet."
AP Sports Writers Rachel Cohen in New York and Lynn
DeBruin in Salt Lake City contributed to this report.
Copyright 2011 The Associated Press.
(AP
Photo/Bebeto Matthews)
