Because we all like to keep score once we get into the arena, the NBA players won this one.
The NBA and its players’ association announced Tuesday that they had reached agreement on a six-year contract extension that will avoid a threatened lockout July 1. Players and owners are expected to ratify it in the next week.
“I will say we agreed almost all the way along that this business would suffer greatly from a lockout and that the deal reflects . . . a 50-50 deal,” NBA Commissioner David Stern said at a news conference before Game 6 of the NBA Finals. “Half of it went our way. Half of it went their way, and the central economics really remain the same [as in the current deal].”
Stern said he thought tough talk from Deputy Commissioner Russ Granik and union head Billy Hunter made both sides believe a debilitating lockout was possible.
“We both got encouraged to sit down and try to avoid the apocalypse that we were each describing,” he said.
Among the main provisions: raising the age eligibility from 18 to 19; allowing all first- and second-year players to be “farmed out” to the NBA Development League, including 18-year-olds; reducing maximum contract lengths and annual raise percentages; increasing the annual salary cap $4 million to about $48 million; instituting four random drug tests per season.
Other points include: elimination of the so-called injury list with rosters going to a maximum of 15 players, 12 active per game; no additional luxury tax as the players had feared; an arbitrator’s review of suspensions more than 12 games; no free-agent signings until July 22 because it will take a month to finalize the deal; guaranteeing players 57 percent of league revenues so the average player salary will rise from the current $4.7 million to about $5.5 million.
This is the first negotiation since 1988 when there wasn’t a lockout of some form, even for a few hours as in 1993.
What happened was that for the NBA to keep doing as well as it has, the league had to give up the majority of its hard-line positions to avoid a crippling blow to its image and the game at a time when TV ratings are declining and interest in its premier event, the NBA Finals, has been questioned.
Perhaps ABC should have televised the negotiations.
The pressure this time, as opposed to in 1998 when there was a lockout until mid-January, was the relationship with sponsors, licensers and international partners.
The internal belief in the NBA is expansion, and TV rights fees have been exhausted and additional revenue sources will be hard to find domestically. As a result, “globalization” has been a key strategy.
The NBA feared, however, that on the heels of a shutdown of the NHL over a labor dispute, that business partners domestically and internationally needing some certainty, would react negatively to a lockout even when the league is idle in the summer.
The league went into the negotiations committed to a substantial reduction in contract lengths to three or four years. Hunter said the initial proposals were for no guaranteed contracts even though players would receive the same total amount of money, from which the union could make a distribution to equalize salaries. But Hunter said in his meetings with players, their priority was security and length of contracts over every other issue.
The league became worried with what they thought was the unpredictability of Hunter, with whom they believed they had a firm deal in April.
That evaporated, which led Stern to try to go over Hunter’s head with a message to players in Stern’s “doom” news conference. But Hunter said the players were far less confrontational and involved this time compared with 1998 when strong figures such as Michael Jordan, Patrick Ewing, Karl Malone and Charles Barkley were in the forefront.
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This time, Hunter said the players stayed in the background as he, Michael Curry, Antonio Davis and Pat Garrity faced the league in a final meeting last week. The players were betting the league wouldn’t allow a shutdown to interrupt next season.
This time, unlike 1998, the NBA blinked. It had to have a deal and took the best one it could get without blaring lockout headlines.
“We also want to be viewed as a reliable partner for those . . . involved in NBA-branded products, for the TV partners on a global basis to say, yes, the product will be continuing” Stern said. “In assessing what was possible to get, as against the consequences of doing everything necessary to get it, the better tradeoff was to avoid the lockout.”