NBA Lockout - The Cohen "Compromise"

As they were setting their clocks back on the east coast at 2 AM, today's lockout meeting had only just wrapped up. I'm dashing off a quick post, based on David Stern's version of events, while the players have yet to hold a press conference. We'll see how well the two stories match up - my feeling is, not much.

According to Stern, federal mediator George Cohen came in with six suggested compromises. Although we don't have all the details yet, the NBA apparently accepted five of the six and presented them to the players in the form of an offer. The players evidently have not accepted this deal - at least not yet anyway. And to be more specific, in Stern's words it was union lawyer Jeffrey Kessler who rejected all of Cohen's points (Stern might understandably hesitate to demonize his players, but he's delighted to paint Kessler as the villain here). 

The key "compromises" (and I'm cribbing more or less all of this from Ken Berger's twitter feed) seem to be:

  • A BRI band from with a minimum of 49% for the players, and a maximum of 51%, depending on actual revenues - the higher the revenues, the higher the players' share, up to 51%.
  • A "mini" mid-level exception for tax paying teams of 2 years and $2.5M.
  • No sign and trade deals available for tax paying teams.

I confess to being unclear on the other suggestions from Cohen - they apparently have to do with the escalating tax for repeat offenders, but the information is pretty sketchy on exactly what he suggested.

From my standpoint, all of this other stuff beyond the BRI is pretty inconsequential. I've been relatively anti-owner through this whole process, but to say that teams paying the tax might be required to give up some of the tools that allowed them to get so far over the cap in the first place seems more than reasonable. The players think that having fewer teams with the full MLE to spend will depress the free agency market, and sure, it will. But let's be clear - in the current luxury tax system, there are usually around 7 or 8 teams paying the tax - with a more punitive tax, it seems safe to assume that there would be fewer still. So the market difference is 25 teams with the option to offer the full MLE instead of 30 - is that really a showstopper for the players? Not to mention that while I've never been a big believer in the idea that a more strict cap would increase competitive balance, it once again seems reasonable to put some restrictions on the teams that are paying taxes to keep them from snatching up all the players. Bottom line - these additional restrictions on tax payers seem like, dare I say, good ideas - at least to me.

But that BRI "compromise" - I must be missing something, because it doesn't seem like a compromise at all. Check me if I'm wrong, but the last meeting ended with the owners suck on 50%, and the players stuck 52%. Wouldn't the logical "compromise" be a band from 50% to 52%? And though again details are sketchy, tweets from reporters on site seem to indicate that the players get 49% up to a certain level of revenues, and then they start getting 57%, up to the point where the overall split reaches 51% for the players. Well, gosh... if that revenue level where the percentage change is set high (and it seems like it may be set at expected growth), then there's a very real possibility that the players would get LESS than they were offered last week. Meanwhile, revenues would have to exceed expectations by quite a bit in order for that extra 8% (from 49% to 57%) to make a big difference in the overall distribution.

So if it comes down to the BRI, which to me it should, I'm not convinced that this "compromise" is a compromise at all. And it's disappointing... because the exact same thing, in a band from 50% to 52% WOULD have been a compromise.

Stern has now given the players association: this deal is on the table until Wednesday, at which point the deal goes to 47% for the players. Nice.

Derek Fisher is speaking as I write this, and as I suspected, the story is coming out a little different. For one thing, the proposed compromises from Cohen seem much more like brainstorming "what ifs" in Fisher's version. Stern just took the things he could live with, slapped them into a proposal and then packaged it to the media as the mediator's plan, not the NBA's plan. Clever. 

For another, it seems the players came to this meeting willing to go to (or very near) 51% - which probably explains why Cohen's band suggestion only goes up to 51%. But just as I was surmising a couple of paragraphs above, it seems to Fisher that the 51% level is not realistically going to be reached.

There's also a major discrepancy concerning how the talks concluded tonight - according to Fisher, the owners made there offer, issued the Wednesday deadline, and said good night. Another ultimatum from Stern.

Fisher's bottom line is that the players association will not accept this deal.

So, if we connect the dots here, the day started where things ended last week, with the owners at 50% and the players around 52% or 52.5%. In today's meeting, the players came down close to 51% and then owners came up to... well, more or less 50%, where they'd been for awhile. They might say that they moved since the band goes up to 51%, but a band from 49% to 51% seems a lot like 50% to me, especially the way this one has been described.

Why am I not surprised? As I've said all along, the owners have all the leverage here - and importantly, they know that. Until November 15th, when paychecks start getting missed and the players solidarity is tested even further. Really, this is all playing right into the hands of the owners - they are willing to meet, but they aren't really negotiating. They'll take the deal they want, but they have no incentive to give in at this point. Maybe later, when the full season is in danger of being lost, they would be interested in accepting something less than exactly what they want. But in this particular no man's land - between 'some games lost' and 'season lost' - they are perfectly happy to wait and play hardball. Remember, the owners still get every penny of their national TV deal provided some games are played this season. 

Still, it sucks - we would now seem to be within a single percentage point, $40M, of reaching a deal. That's a rounding error on the Lakers new local TV deal. That's $22M less than the Magic will pay to make Gilbert Arenas go away when this all over with. 

I hate to say it, but the players should just take this deal. The owners have the leverage, they've used it well, and it's time for this to end. I hate to have Stern win, but it's more important to get back to basketball than to make a principled stand over a percentage point or two. 

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