As basketball fans are well aware of, David Stern issued an ultimatum to the players’ union to either accept the owners’ latest proposal by the end of business hours Wednesday or these proposed offers will be off the negotiating table. While Stern was adamant to the press in the early hours last Sunday morning that this wasn’t an ultimatum, NBPA President Derek Fisher seemed to call it as it was.
According to sources at HOOPSWORLD, the owners’ latest proposal includes the following:
The N.B.A.’s current proposal to the players includes a soft salary cap, a 50 percent share of revenues for players and these features: Salary-cap and luxury-tax levels in years one and two of the new agreement will be no less than they were in 2010-11. By year three, they will be adjusted downward to conform to the new system.
– Sign-and-trade deals and the biannual exception will be available only to non-taxpaying teams.
– Extend-and-trade deals, such as the one signed by Carmelo Anthony last season, will be prohibited.
– The mid-level exception will be set at $5 million for non-taxpaying teams, with a maximum length between three and four years (alternating annually). The value of the exception will grow by 3 percent annually, starting in Year 3.
– The mid-level exception will be set at $2.5 million for taxpaying teams, with a maximum length of two years, and cannot be used in consecutive years. Its value will also grow at three percent annually.
– A 10 percent escrow tax will be withheld from player salaries, to ensure that player earnings do not exceed 50 percent of league revenues. An additional withholding will be applied in year one “to account for business uncertainty” stemming from the lockout.
– Maximum contract lengths will be five years for “Bird” free agents and four years for others.
– Annual contract increases will be 5.5 percent for “Bird” players and 3.5 percent for others.
– Players will be paid a prorated share of their 2011-12 salaries, based on the number of games played once the season starts.
– Team and player contract options will be prohibited in new contracts, other than rookie deals. But a player can opt out of the final year of a contract if he agrees to zero salary protection (i.e., if it is non-guaranteed).
The proposal is not up to par as far as the players’ association is concerned, but the owners feel that they have made several concessions and compromises in this new proposal in order to make the deal enticing for the players to accept. However, if the proposal isn’t accepted, the owners could turn to a 47/53 BRI percentage, controlled by the owners, a stricter system and a hard salary cap.
Lakers guard Steve Blake was a proponent of accepting the deal and has a base of support behind him from players who simply want to get back on the court and start receiving paychecks again.
On the other hand, there are several players who have publicly stated that they are willing to extend the lockout in order to reach an agreement that they believe is more fair. New York’s Chauncey Billups and Lakers guard Shannon Brown are among this group.
However it seems that the players’ union will choose to stay the course and fight for a new collective bargaining agreement that they believe is fair, with Fisher and Hunter’s announcement on Tuesday that they will decline the offer. Therefore, the rumors of decertification may come true. The main reason behind decertifying the union is so the players could bring a major class-action antitrust lawsuit against the owners.
Next Page: What Decertification Would Mean?
Decertification is seen as a last resort, but it seems we might just be there already. However, several players in the league, who probably saw a drawn out lockout coming, wanted Union Director Billy Hunter to start the decertification process early in the summer because it is a rather lengthy process.
According to Larry Coon, “After decertifying, the players could then bring an antitrust suit against the league, challenge any rules that constitute a restraint of trade, and ask the court to end the lockout. They could also seek treble (triple the amount) damages — up to $6 billion per year. The odds of winning are not 100 percent certain (they never are), but the risk to the owners would be enormous. Such a case could take years to resolve.”*
Coon goes on to say that, “Once the union decertifies, the collective bargaining process would be over — there literally would be no union with which the owners could negotiate. Billy Hunter, Derek Fisher and the other players on the executive committee would no longer be in charge — as a practical matter, control would pass to attorneys. The players also could not reassemble the union for one year without the league’s consent. However, such consent obviously would be granted if the two sides eventually cut a deal.”*
There are definite pros and cons to decertifying. The biggest pro is that the mere threat of decertification could cause the owners to propose a union friendly proposal that would end the lockout. The owners would either concede to operating under the CBA that has been in place for the last twelve years or they would create a new CBA that would essentially bring the players back to the NBA.
The second pro in decertifying is the reality that players can bring antitrust lawsuits to the owners. According to Coon, “Much of the economic structure of the NBA — such as the salary cap, maximum salaries, rookie-scale salaries and the luxury tax — could be challenged under the antitrust laws as a form of price fixing if there was no union.”*
However, there are several cons to decertification, which is the main reason why it has never been done before in the NBA, although they came close to pulling the trigger in 1995. First, decertification would likely put a definitive cancellation to the entire season. The process alone would most likely take months, or even up to a year to complete. Then consider the time for lawsuits to conclude.
Second, decertification would likely void players’ contracts, which is something the owners would want while the players would fight against. However, this could mean that players could be free to play in China, who previously ruled out signing contracted NBA players. China offers the greatest financial incentives among the foreign countries attempting to contract NBA players.
The possibility and talk of decertification is primarily being used as a negotiation weapon for the players. With an ultimatum in place the players are fighting with creativity. However, a big fear is if the league chooses to decertify, the NBA may never fully recover.
This is why Kobe Bryant recently urged that, “we need for the two sides to get together again before Wednesday, because we’re too close to getting a deal done. We need to iron out the last system items and save this from spiraling into a nuclear winter.”**
The players’ association has stated that they wish to continue negotiations to prevent further cancellation of the season, but as the Wednesday afternoon deadline approaches and Tuesday’s announcement that the players will not agree to the proposal, decertification would seem to be the likely next step.
*Source: ESPN.com
**Source: Yahoo! Sports