NBA Contraction?

[Tenacious_Dio]

Probably just a bargaining chip for the upcoming CBA negotiations.

NBA owners float contraction along with huge pay cuts


Oct. 21, 2010

NEW YORK -- In explaining the state of collective bargaining negotiations Thursday after what he termed a "blessedly uneventful" meeting with NBA owners, commissioner David Stern revealed just how drastically the league wants to reduce player salaries.

But what might have been low key for owners was a horror show for players. In short, as soon as the Year of the Big Three is over, Stern will look to shave players' salaries by one-third in a new CBA.

"What we told our players initially is that we'd like to get profitable and we'd like to have a return on our investment," Stern said. "And there's a swing of somewhere in the neighborhood of between $750 [million] and $800 million that we would like to change. That's our story and we're sticking with it."

In another staggering development, CBSSports.com learned that salaries may not be the only area cut as the NBA tries to gets its financial books up to speed with the explosion in popularity the league will experience this season. A person with knowledge of the owners' discussions said the league "will continue to be open to contraction" as a possible mechanism for restoring the league to profitability.

The owners' ongoing talks about competitive balance, profitability and revenue sharing have included the notion of whether teams are operating in "the best available markets," the person said, and whether reducing the number of teams from the current 30 would help improve the product and the bottom line.

I'm all for that. Saying goodbye to the Grizzlies, Timberwolves, Bucks and Bobcats would save the league a few hundred million in needless salaries and improve the product dramatically. When the NBA had 23 teams in 1980-81, having multiple Hall of Famers on the same team was the norm. Back then, the Heat would've been nothing special. Today, they're a national spectacle covered 24 hours a day.

Billy Hunter, executive director of the National Basketball Players Association, was traveling Thursday and unavailable for comment. But typically, sports unions have resisted efforts to jettison teams because of the resulting job losses. For example, eliminating the two most revenue-challenged NBA teams would mean the loss of 30 player jobs, not to mention coaching and front-office positions. Based on gate-receipts data, the teams that have struggled the most in the past two years of the current CBA are Memphis, Minnesota, Milwaukee, Indiana, Atlanta and Charlotte. The Sacramento Kings are a clear candidate for relocation, given that their stalled efforts to build a new arena resulted in what Stern termed a "disappointing" update on that franchise's future at Arco Arena.

Timberwolves owner Glen Taylor, one of those small-market owners, said the planning committee is "making progress" on a new revenue-sharing plan that is being worked out in lockstep with collective bargaining.

"I don't want to say we have the model," Taylor said. "I would say that we're looking at a number of different models."

After two days of meetings with the full Board of Governors, Stern pulled no punches in quantifying just how much salaries would need to be reduced to stem losses that NBA officials pegged at $380 million last season. Deputy commissioner Adam Silver, who is spearheading the labor negotiations, revealed Thursday that the league currently is projecting between $340 million and $350 million in losses for the upcoming season -- despite robust season-ticket renewals and record new season-ticket sales generated by the historic summer of free-agent movement that landed LeBron James and Chris Bosh in Miami with Dwyane Wade, plus Carlos Boozer in Chicago and Amar'e Stoudemire in New York.

Do the math: Reducing salaries by $750 million from their 2009-10 level of $2.3 billion would represent a 33 percent reduction in pay and benefits. The NBPA is "far from accepting that," Silver said.

No wonder. Such a dramatic reduction in salaries would be akin to the players accepting 41 percent of league revenues compared to the 57 percent they receive under the agreement that expires at the end of the 2010-11 season. But it isn't that simple; Stern had better hope so, or we're heading for a work stoppage faster than LeBron can say South Beach.

Stern conceded that "business is good," and pointed out that as revenues rise, player salaries rise with them. "It's a sliding scale," the commissioner said after his session with the media was over.

But more than that, the point league officials have made to owners -- both during bargaining sessions with the labor committee and to the full Board of Governors on Thursday -- is that significant savings could be achieved by changing the NBA's economic model without forcing the players to take such a big cut. League negotiators believe a hard cap, shorter contracts, less guaranteed money and a revamped revenue-sharing system with what Stern called "modest performance standards" would go a long way toward improving competitive balance and satisfying Stern's goal of assuring "all teams will have an opportunity to be profitable."

In other words, instead of eliminating entire franchises or forcing the players to accept a nearly billion-dollar pay cut, some of the problems could be solved by giving teams a way to get out of bad contracts. In much the way teams would have to meet certain performance standards under the revenue-sharing system they're concocting, players making millions would have to meet certain standards, too. Eddy Curry, who can't play anymore yet is making $11.3 million this season, isn't good for business.

Clearly, neither is a lockout coming on the heels of what could be the NBA's most successful season ever -- albeit, one awash in red ink.

"There's an increasing understanding on both sides of the risk of not getting a deal," Stern said.

And plenty of sacrifice, apparently, to go around.

For more from Ken Berger, check him out on Twitter: @KBerg_CBS

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