NBA Lockout Update: When 'Keeping It Real' Goes Wrong

In case you have avoided lockout negotiation news in the past week, let me provide a quick wrap-up before delving into the most recent developments. I have written on the subject in the past fews days, so here is what you need to know to understand the tenor of the Saturday negotiations:

When representatives for the NBA owners and NBA Players Association recently agreed to resume talks on Saturday, it could hardly be considered a bad thing. Well, apparently a small faction of NBA players (and almost certainly their agents) disagree. Reports have surfaced from the New York Times' Howard Beck and Yahoo!'s Adrian Wojnarowski that approximately 50 players participated in two calls with anti-trust lawyers to explore the possibility of decertifying the Players' Union and suing the NBA under anti-trust law.

The threat of anti-trust litigation will almost certainly affect the quality of the negotiations between representatives for the NBA owners and NBA Players Association, because it signals a lack of good faith in the collective bargaining process by at least some of the union membership. Ultimately, the hope is that this is nothing more than a ploy to create leverage at the negotiating table, because true decerficiation would likely mean the season will be cancelled. David Stern has referred to decertification and anti-trust litigation as a "nuclear option," because it would lead to prolonged litigation of individual player suits challenging potential anti-trust violations like the NBA draft and restricted free agency, which are currently protected from legal scrutiny under labor laws and collective bargaining negotiation doctrines.

Okay, now on to the recent developments:

Lawyers for the NBA and for the NBPA met in U.S. District Court in New York to discuss the league's lawsuit challenging the legality of the lockout in the event of decertification before the Honorable Judge Paul Gardephe on Wednesday. In case you have forgotten the importance of that filing or the legal strategy behind it, I will remind you that the league made a preemptive strike to gain an advantageous legal forum and attempt to cut off the decertification threat at the knees for bargaining purposes [for an in-depth review of what it means, check out the very first Brew Hoop podcast]. The imagery put forth by legal representation for each side during Wednesday's pretrial hearing says it all (courtesy of Sports Illustrated's Zach Lowe, via twitter):

 Zach Lowe 
League attorney, on union's alleged willingness to decertify: "It's like a taking a loaded gun and putting it on the table."
 Zach Lowe 
Judge's response: "It's not clear if there are any bullets in it," meaning unclear if union actually would decertify.

With such a tense negotiating environment heading into Saturday's talks, federal mediator George Cohen agreed to preside over the talks in order to keep parties on point regarding discussion of meaningful issues. Eight hours later, the sides emerged again with no deal in place. What happened this time?

David Stern and the NBA owners made their power play, presenting a proposal that would give players a 50.2 percent share of BRI (with an apparently unattainable 51 percent share under peak circumstances). The league has given the players until Wednesday to accept the deal in what is essentially an informal ultimatum. If the players don't jump by Wednesday, the offers will likely decrease from here on in, and the next best offer on the table is a 47 percent share under a flex salary cap

The pressure is on Billy Hunter and Derek Fisher now. Stern and the owners know there are a lot of players desperate to get back on the court and earn a paycheck, so they are making a hard push on their preferred terms. Hunter and Fisher are reluctant to present the current offer to membership for a vote, because the players might actually be desperate enough to take it. Legacies are at stake for union reps, but livelihoods are at stake for some (most?) NBA players. A bad deal can be a good deal, depending on how you look at it. Some people have wondered why Stern won't just slide a bit more and offer a 51 percent share to the players, but it is important to remember that Stern represents the interests of his owners. With alternative sources of income and a vast array of additional investment opportunities, those men are the ones unwilling to collectively move to a proposal of 51 percent.

It has been said that the Golden Rule in negotiation is "he who cares the least wins," and when it comes to receiving the next NBA-related paycheck, the owners certainly care less than most players. Essentially, the owners are telling those players who have discussed decertification that they will either have to tuck their tails between their legs and accept 50.2 percent, or bet an entire season on success in court. The deadline for acceptance of the most recent proposal is set to expire long before there is any resolution on the decertification issue in court. In the best case scenario for the players down the decertification path, they lose the year in court but maybe get a better deal in the long run (because you have to factor in lost income and opportunity costs of the move too). In the worst case scenario for the players, they lose the court battle and without any remaining leverage the owners keep decreasing their offer to really stick it to them. 

It's pretty easy to see how the informal ultimatum has neutered the last remaining leverage the players hold. If NBPA reps refuse to put the offer up for a vote prior to the expiration date on Wednesday, the offers are bound to get worse. To pull from the imagery of the lawyers, if the NBPA put the gun on the table with decertification talk, the NBA has placed a single bullet in the cylinder, spun that cylinder Russian Roulette style, handed the gun back to the NBPA and said "you first."

At this point, the NBPA has been resolute in its insistence on getting something better than a 50-50 split. They have been "keeping it real" and aren't afraid to talk about decertification. Their chief negotiator, Jeffrey Kessler, is still talking tough, as reported by Brian Mahoney of Yahoo!:

"They came in here with a prearranged plan to try to strong arm the players," he said. "They knew today they were sticking to 50, essentially 50.2. They were going to make almost no movement on the system, and then they were going to say, ‘My way, or the 47 percent highway."'

He added there was no reason to talk again before Wednesday if the owners stick to their current position. [emphasis added]

They can say there is no reason to talk again before Wednesday, but there is one really good reason to talk before Wednesday and put the owners' proposal up for a vote. That one reason: sometimes 'keeping it real' goes wrong...and it could go very wrong for the players if all their eggs are put in the decertification basket.

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