With the hourglass running out to avert an NBA lockout, indications are pointing to a lengthy work stoppage.
Two experts interviewed on an ESPN Radio podcast agreed that NBA owners appear willing to sacrifice the upcoming season to gain the concessions they are seeking from players.
Former deputy commissioner Russ Granik, lead negotiator in the past four collective bargaining agreements, said the view of management has changed dramatically since the last labor deal in 2005.
"The sense I'm getting is that it's much like it was in 1998-99, that owners seem to be wedded to getting at least a large measure of changes they're asking for, and my feeling is they would be prepared to lose a season if necessary," Granik said in the podcast with ESPN's Ryen Russillo.
The NBA's last work stoppage resulted in the 1998-99 season being shortened to 50 games.
Larry Coon, a leading expert on the CBA, said that in the owners' view, "the downside of losing a whole season is less than the downside of playing another season in the system they see as broken."
While considerable attention is being given to issues such as hard or soft salary cap and profit sharing, both experts agreed the key to a settlement lies in determining the players' share of the revenue pie. The critical point of contention is what portion of revenue should be divided.
The players currently receive 57 percent of gross revenue. The owners are seeking to alter the formula to a percentage of net revenue, which Coon noted could result in reducing players' salaries by as much as a third.
NBA management claims that as many as 22 teams are losing money. Players have taken exception to including debt service from the purchase of teams in calculating losses and in how much they should have to share in the financial burden of franchises.
So while negotiations will continue up to the current CBA expiring at midnight Thursday, a line in the sand is being drawn for what could be a lengthy standoff.
Coon said that the longer the lockout, the more the advantage shifts to the owners. Despite lucrative salaries, most players cannot afford to miss many paychecks. That makes Nov. 15 the most critical date on the horizon as it would mark the first time the players won't get paid.
They are making their stand on the long-term financial health of the league and teams, while the players tend to focus on short-term considerations of their contracts and careers.
But the league will be affected, too, once it goes into lockout mode, as the uncertainty of the season will lead sponsors to allot resources elsewhere.
So where will it end? Coon said the league will be in the black if the players' share of revenue is reduced to about 52 percent. The question is how much further owners will be determined to push the take in their favor.
He did say it is likely that if owners get the revenue split they're seeking, they will give up insistence on a hard salary cap that would prevent teams from exceeding the ceiling limit even to retain their own players (the so-called Larry Bird exception). Sign-and-trade deals have done more to drive up costs, he said, and could be eliminated.
Granik said he didn't believe owners are intent on breaking the players' union, but that they are very determined to get a deal that is more palatable to them than the one that expires Thursday. It remains to be seen the cost of reaching that equilibrium.
(c) 2011, Sun Sentinel.
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