Sunday October 30 2011 – 2:58pm Eastern – Toronto, ON

The weekend is about to end … and there is still no agreement in the National Basketball Association.  All of the optimism from just a few days ago quickly went out the window on Friday evening when the league announced that games up to and including November 30 had been cancelled and the Lockout was going to continue for the foreseeable future.

So what comes next?

Nobody knows.  Other than those on the negotiating committees for the Owners and the Players … nobody truly knows when a deal will be reached or when the two sides will even sit down to meet again; secretly or planned.  “We’re not sure when we’ll meet again” is what Union Exec. Billy Hunter told the media in New York City on Friday.

And the frustrating thing for everyone — fans, arena workers, support staff, local business in and around arena across the NBA map — is that the two sides are still closer than they’ve ever been.  Yes, I’m speaking in present tense … not past (as in “WERE close”).  As a well-placed NBA source told me, there is a deal to be had here.  That same source told me that he believed if the players were offered a 51-49 split of the BRI (Basketball Related Income) while preserving the current system points that have been agreed upon, the Union would likely accept that deal.

I trust that source completely … and if he is right … this battle has really boiled down to a difference of 1 – 1.5 per cent.  That’s it.  The owners have officially proposed 50/50 while the players are trying to hold tight on 52-48 (or 52.5/47.5 depending on who you believe).  Thus, if each side gave up 1 per cent, it sounds like this would get done.  ONE.  PER.  CENT.

And what does that money really mean?  How does it all break down?

Check out the financial fidgeting that CBS Sports’ Ken Berg had in his piece on Friday:

———-

“…If Hunter had been willing to move from 52.5 percent to 51 percent Friday, that would’ve been a $60 million concession in Year One of the deal to get back the lost games worth $400 million — a net gain of $340 million. Instead, the players decided it was better to lose the games, and thus $400 million, which made it a $740 million decision to walk out of the room without a deal.

If Stern had been willing to move from 50 percent and meet Hunter at 51, it would’ve been a $40 million concession for the owners to get their approximately $400 million share of the lost November games — a net gain of $360 million. But instead of offering to make the economic move Stern had said Thursday night he was prepared to make, he decided it was better to lose the $400 million — a net swing of $760 million. So collectively, Hunter and Stern cost their business $1.5 billion by walking away without a deal Friday.”

———-

Keep in mind, the other 5-6 issues or system changes have been all-but agreed upon.  Those include things like:
- cap holds
- days to match free agent offers
- eliminating other cap holds

And the 2 big ones:
- mid-level for tax-paying teams
- sign and trade for tax-paying teams

The owners were looking to get rid of the mid-level exception altogether.  Instead, it looks like that option will stay in place for teams at a figure of $5 million and the owners have agreed to 5-year contracts for free agents that re-sign with their current teams and 4-year deals for free agents that are looking to jump ship to a new club (that’s down from the 4 years and 3 years they originally wanted).  Plus, it looks like the 2 sides have agreed to an amnesty clause that would allow teams a chance to chop one salary from their current payroll.

So, again, it comes back to the BRI … and what looks to be a staring contest between the players and owners over 1 per cent.  And the math just doesn’t seem to add up.

E. Smith

Monday October 24 2011 – 7:01pm Eastern – Toronto, ON

Their 2011/12 season may be floating in the wind right now, but I’ve got to hand it to Dwyane Wade, Chris Paul, and Carmelo Anthony (and, obviously, the folks at NIKE) for this outstanding new ad.

The Jordan brand is alive and well in this full-length version ‘commercial’ – “Love The Game”.

Word is Nike will officially unveil this spot during the 3rd quarter of Monday Night Football this evening.

Thanks to CNBC’s Darren Rovell for first bringing this to my attention via Twitter.

E. Smith

Thursday October 20 2011 – 3:46pm Eastern – Toronto, ON

16 hours of negotiating (with an arbitrator) on Tuesday.

7 hours yesterday.

The two sides — the owners and the NBPA — went into the room at 2pm today.  And they’re still there.

Could a new Collective Bargaining Agreement be coming soon?

The latest from Adrian Wojnarowski of Yahoo Sports (one of the best NBA writers in the biz) says the two sides are close on some issues like the Mid-Level Exception and a proposed “bonus pool” that could see young players earn more money based on incentives.

You can read Wojo’s piece here:  http://sports.yahoo.com/nba/news?slug=aw-wojnarowski_nba_labor_talks_101911

There is also talk of an increase in Revenue Sharing — from the current $50-$60 million to about $150 million.

And positive vibes are flowing RE: a compromise that may be ‘close’ on the split of BRI (Basketball Related Income).  A flex-split (for lack of a better term) seems to be gaining momentum … with neither side getting less than 49% and no more than 51% (all based on the amount of revenue that comes in — good or bad).

Sean Deveney, national basketball writer for The Sporting News, joined Paul Jones and me on “The Eric Smith Show” earlier today and shared this from his spot in the bunker at the New York City hotel where these CBA negotiations are taking place.  Here are a few key points/comments from what Deveney had to say to us on Sportsnet 590 the FAN:

There does seem to be a feeling of optimism rumbling around.

Close to the revenue split.  What that number for the BRI (Basketball Related Income) will be though…remains to be seen.

Then it comes down to the “system” (things like the luxury tax, salary cap, etc.

Deveney said he is getting some “good vibes” from what’s being rumbled around in the hotel lobby, etc. in New York City.

The PA has gotten the owners to drop a lot of their demands from earlier – when they were “asking for the moon” – but at the end of the day the owners are still likely to get the better end of this deal.

E. Smith

Monday October 10 2011 – 11:44pm Eastern – Toronto, ON

The NBA has just released the following statement:

———-

NEW YORK, October 10, 2011–The NBA announced today that it has canceled the first two weeks of the 2011-12 regular season because a new collective bargaining agreement has not been reached with the National Basketball Players Association. This cancellation includes all games originally scheduled to be played through November 14.

“Despite extensive efforts, we have not been able to reach a new agreement with the players’ union that allows all 30 teams to be able to compete for a championship while fairly compensating our players,” NBA Deputy Commissioner Adam Silver said.

Refunds plus interest are available for all NBA season-ticket holders for all preseason and regular-season games that are canceled.

———-

For the Toronto Raptors, the following games have now been wiped from their 2011-12 schedule:

Nov 2 – vs PHI
Nov 4 – at CLE
Nov 5 – at MIN
Nov 7 – vs DAL
Nov 9 – vs LAC
Nov 12 – at MEM
Nov 13 – at OKC

The league (and union for that matter) said the primary issue in talks breaking down resolved around “system” changes having to be resolved.  Surprisingly, the BRI (basketball related income) and salary cap weren’t as much of a concern; not today at least.  Commissioner David Stern even hinted that economic issues like the cap and BRI could fall in line if the “system” changes — making referencing to things like taxes, luxury tax, Bird rights, mid-level exceptions, and more.

No new talks are scheduled between the union and the owners but the two sides have said they’ll be in touch.

The stand-off has begun.

E. Smith

Monday October 10 2011 – 4:45pm Eastern – Toronto, ON

Happy Thanksgiving!

Right now … millionaires are arguing (negotiating) with other millionaires in a conference room at a hotel in New York.  The NBA owners and players are trying to hammer-out a new a CBA.

And even though it will take me away from my family … I just want to work.

I originally submitted this blog one year ago today … and my thoughts, feelings, emotions and sentiments have not changed.

Another year has only solidified this fact that much more:  I’m a lucky man.

————–

I’M THANKFUL

(ORIGINALLY SUBMITTED ON … Monday October 11 2010)

I have the honour – and luxury – of being able to cover a professional sports team in a major market in North America.

I’m lucky enough to hold one of only 5 jobs in the entire country; one of only about 120 in the entire world.

While others are performing surgeries, building our cities, or protecting the environment … I’m being paid to watch and talk about sports.

I’m living a dream.

I’m sure Paul Jones, Jack Armstrong, Matt Devlin, Leo Rautins, et al would say the same.

Life is good.

But professional happiness can sometimes come at the expense of personal pain or struggles. That’s why I know that today – and every day – I’m thankful for a wife that supports my career and my choices, 100 per cent.

It’s not easy being married to me. My job takes me away from home A LOT. I’m on the road 7-8 months of the year; sometimes coming home for only a day or two before I’m back out on the road again. And even when I’m HOME, many days and most nights are spent at the Air Canada Centre … covering the Raptors and following my dream.

I’ve worked on Christmas Day, hopped on an plane on Xmas Day, missed New Year’s Eve parties, Easter dinner, and countless birthdays.

But my wife never complains. Though she has more dinners without me than with me … though she goes to bed most nights without me as well … she backs me every step of the way and stands by my quest to be a better broadcaster.

Her job is not easy. I’m sure it gets lonely – and stressful – but she knows that I love her and while I’m striving to be a better broadcaster, I’m always working at becoming a better husband and man as well.

Even since welcoming our first child into the world 15 months ago, life has barely skipped a beat. While we both love our son to death, it’s my wife that deserves the most credit for making the transition from ‘husband and wife’ to ‘Mom and Dad’ so smoothly for us while I was still travelling with the Raptors and reaching for the stars.

I miss her when I’m away. Many times I feel that I’m letting her down or that I’m simply not ‘there’ for her enough. And those feelings, I’m sure, will only intensify this year when the season begins and I’m leaving her AND my son behind. He was too young to know that Daddy was ‘gone’ last year … but now he’ll know. He waves when I walk out the door – which is both heart-warming and gut-wrenching at the same time – but he doesn’t know that sometimes I won’t be walking back through that door for a week or more. I can only hope that he’ll understand one day why I do what I do and pray that the time that I do spend with him is enough. I love him more than life.

Family life – and seeing other family members and friends – is one of the FEW negatives that come with this job. But if you’re blessed enough to have a wife and a son that love you and carry you as much as mine do … then you can do and achieve anything!

Happy Thanksgiving babe … and Happy Turkey Day little man. I love you both.

All the best everyone.

E. Smith

Monday October 10 2011 -1:03am Eastern – Toronto

Happy Thanksgiving folks.  I hope you’re enjoying a great day with your family and friends.  I’ll be celebrating with you from 1pm-4pm on “The Eric Smith Show” on Sportsnet 590, The FAN.

Enjoy your turkey hangovers.

E. Smith

Sunday October 9 2011 – 11:56pm Eastern – Toronto, ON

I’d be happy to have one of the owners or a member of the players association tell me that the theory below is wrong.

I’m quite content with the fact that I may be missing something here … or that there’s a flaw in my system that I’m not quite seeing.

‘Cause as it stands now … it would seem like the battle between the NBA owners and the NBPA is about little more than ego.

Neither side wants to appear to be ‘giving in’ to the other.  Neither side wants to appear to be the ‘loser’ in these negotiations.

But after 100+ days of labour war (the 2nd longest work disruption in league history), ego should be cast aside and both sides should realize that they can’t really exist without the other.

If it weren’t for the deep-pocketed owners (even the supposed ‘poor’ ones) who were willing to give millions of dollars to these athletes, there wouldn’t be as many basketball jobs (especially in North America) available to the players.  But if it weren’t for the immense talents of the players, the NBA would not be considered the premier league in the world and the owners would be losing hundreds of millions of dollars per year.  The league, as a result, likely wouldn’t exist.

They both need each other.

Sure, there are still questions about when a ‘cap’ may kick in (at what amount) and whether there will be new rules regarding the Larry Bird exception and other cap wrinkles like the Mid-Level exceptions, etc.

However, the owners have ensured that the players will still receive guaranteed contracts and they will not be subject to rollbacks of their current salaries either.  Plus, the 10-year CBA proposal offers an opt-out to the players after 7 years and the owners have pulled back on their ‘hard cap’ demands as well.

Major hurdles have been overcome, but the ‘ego’ comes into play (in my mind) when we’re talking about the split of the basketball related income (BRI).

All we’ve heard about for days now is BRI.

Under the last CBA, the players received 57% of the BRI while the owner got 43%.  As of last week, the players were willing to go as low as 52% (with the owners getting 48%) and the owners floated the idea of splitting things 50/50.

Since then, word has leaked out that the players are actually (supposedly) staying firm on 53% and they aren’t willing to budge beyond that number.  The owners, meanwhile, are locked in on their 50/50 proposal.

According to several reports, every percentage the union is willing to drop its share of BRI is equal to $40-$50 million. So if the players give up another 2% and drop from 52% (their original ‘lowest offer’) to 50%, they’ll be leaving $80-$100 million per year on the table.

Union Exec. Billy Hunter is also on record saying that every month of regular season games that is lost in the NBA is worth around $350 million to the players.

So, if the NBA is dark for November, the players will, collectively, lose $350 million.  If they miss December … we’re up to $700 million.  Heck, miss January and start in February (like in 1999) and we’re over a BILLION dollars in lost salary now!

Now let’s go back to the BRI drop — going from $80-$100 million in losses if you slip from 52 to 50.

The length of the owners CBA offer was 10 years with an opt out after 7 …

Let’s assume the players take that opt out.  That means they’d apparently lose $80-$100 million per year for 7 years (if they agree to the 50/50 split with the owners).  That’s $560-$700 million in losses.

Wow!  That is a huge number … and a lot of dough to leave on the table …

HOWEVER…..

Go back to the current lost wages that Hunter has said:  $350 million per month.  Again, if you miss 2 months, you’ll lose $700 million.  Whereas over SEVEN YEARS you’ll lose $560-$700 million.

Huhh?

Does that make ANY sense?

Either my math is way off…or this labour war — with both sides digging in their heels — is crazy.

If they players refuse to come down to the 50/50 split they will likely lose at least 1 if not 2 or more months of the season.  Thus, they’re looking at losing $700 million or more in salaries … just like that.  And they will be fighting this battle to save themselves $80-$100 million per year over the next 7 years.

It’s a wash.  They’ll break even at best!  And if more than 2 months of the regular season is canceled and the players go into their 3rd month (or more) without a paycheque, they’ll simply be losing money; money they could have earned by signing off on the 50/50 split of the BRI.

Granted, the counter argument to this philosophy could simply be:  If it’s so easy for the players to give up $80-$100 million (2%) per year, why don’t the owners take less and swallow the $80-$100 million in lost profits each year?

And that’s a fair point.

But I guess I come from the school of thought that says playing in the NBA is a privilege, not a right.  So while the fans may come out to see the players, there wouldn’t be a show to put on — to showcase those players — without the owners who pay them so handsomely.  Keep in mind, when the NFL and its PA signed a new 10-year deal back in July, the owners got 53% of the revenue while the players will earn 47% of the split.

Hard to see where the NBPA has much ground to stand on – especially when compared to the NFL.

Again, neither side may want to blink.  Nobody wants to be the ‘loser’ in this negotiation (on the surface or from the periphery) … but the PA should bite the bullet and put pen to paper.

E. Smith

Tuesday October 4 2011 – 10:06pm Eastern – Toronto, ON

Two per cent.

Could the NBA season — a full 82-game NBA season — really be in jeopardy over a mere 2% difference between the owners and the players?

I’m trying to piece together all of the information (and rhetoric … and posturing) that is out there and here’s what I THINK I know:

- The owners softened their stance on a ‘hard’ salary cap
- The owners offered a 10-year deal to the players with an opt-out option after 7 years
- The owners pulled their demand for a rollback on players’ salaries

Plus, as a result of at least one (if not 2) of the bullet points above, guaranteed deals would essentially stay in place.

As Sean Deveney of The Sporting News pointed out to me though, many folks — especially the players association — believe the owners only made those demands in order to eventually pull them from the table as a ploy; basically saying to the players and to the fans ‘see, we are compromising’ …

That’s what some believe they were doing with their ’50/50′ offer of the split of BRI (basketball related income as well).  There are questions about how legit that offer was … or if it was also calculated posturing or grandstanding by the NBA.

The League claims their offer was genuine and both David Stern and deputy commissioner Adam Silver expressed disappoint in the PA’s reluctance to agree on that 50/50 split.  According to numerous reports, the players would not move beyond their offer of 53% (to the owners 47%) but Deveney told me the number(s) actually got down to 52-48.  The NBPA would not go lower than 52 per cent.

(And remember, the agents warned the players – in the letter they sent out on Monday – to not go below 52% (see my blog from Monday for more details)).

If that is indeed the case … I think the doom and gloom that has been forecast by many is a bit premature.

By dropping from 57% (the share of BRI the players got last year – under the final year of the old Collective Bargaining Agreement) to 53 or even 52%, the PA is saying they’re giving back approximately $250 million dollars (give or take) to the owners.  And the owners claimed they lost $300+ million last season (figures/fact that have been greatly disputed by the union anyway).

Thus, the players – by dropping 4-5% of their BRI – would be bringing the owners very close to a break-even point in one fell swoop.

Yet the question must be asked …

If the players are willing to go as low as 52% … why not give up another 2% and go to 50 … and call it a day?

Should they have to?

No.

Are they giving up a lot of money?

Yes.

But it is hard for most fans (including yours truly) to comprehend (or sympathize with) how an even “50/50 split” is a bad thing for the players or for the owners.  There wouldn’t be a league without the players; the highest caliber basketball players in the world.  But there wouldn’t be a league for the players to play in — to be employed in and make millions of dollars in — without the owners and their respective franchises.  What better way for both sides to say ‘we need each other’ … than calling it ‘Even Steven’ ?

Plus, while the PA may believe they’re giving up far too much by dropping from 57% all the way down to 50% … the 2% difference in what they were willing to offer (52-48) carries a ‘value’ of approximately $100 million.  As Henry Abbott so succinctly put it on ESPN.com, are the players going to squash a potential deal over $100 million?  Are they going to walk away from the owners’ proposal of no rollbacks and no hard cap … over $100 million?  Are they going to sit idle for weeks or months for $100 million?  Heck, they’re sure to lose more than $100 million (collectively) if they’re sidelined for any extended period of time!

And if this battle does end up in the court rooms – with some (many?) agents still pushing for decertification of the union – just how much money would be lost by the PA in legal fees?  As Abbott pointed out … dare we guess that figure could quickly rise at, near, or above that same $100 million mark?

NBA fans have to hope that the two sides can put their egos away and get a deal done … ’cause this seems like a case of two sides that were making progress (maybe even getting close?) until somebody said the wrong thing and all hell broke loose and all good vibes were quickly cast aside.

Now the league is threatening/warning to cancel regular season games as of Monday … with the two sides not scheduled to talk on Wednesday or Thursday and Yom Kippur being observed from sundown on Friday to sundown on Saturday.  That doesn’t leave a lot of time to get back to the table.

All over 2 per cent?

E. Smith

Monday October 3 2011 – 11:39pm Eastern – Toronto, ON

Six of the most powerful agencies connected to the NBA issued a joint ‘warning’ to the Players Association on Monday afternoon:

Don’t give in.

Arn Tellem (Wasserman Media Group) Dan Fegan (Lagardere Unlimited), Bill Duffy (BDA Sports), Mark Bartelstein (Priority Sports and Entertainment), Jeff Schwartz (Excel Sports Management) and Leon Rose and Henry Thomas (Creative Artists Agency) collectively penned this warning letter to their clients:

(NOTE:  the letter was originally obtained and published by Turner.com and has since appeared on SI.com, ESPN.com, and others)

———-

Dear Player,

I am writing to you because the negotiations between the NBPA and NBA owners are at a critical stage. You must take action and protect your rights.

Your Voice Must be Heard

Any deal you and the owners agree upon will have a major impact on you, your family, and your career.

·Educate yourself on the specifics of the negotiations and proposals that have been made.

·Demand a full vote by all players on any proposed deal between the players and owners.

·Contact the NBPA to ask questions and speak out about the issues that will directly impact you and your family.

The Current Proposal Hurts Your Earning Potential

The NBA demands deep cuts and major “givebacks” that will cripple your earning potential and the earning potential of every future NBA player.

·The NBPA offered to reduce the players’ share of BRI from 57% to 52%. This will result in a transfer of over $200 million per year or a minimum of $500,000 per player back to the owners.

o This results in at least 8% or more of your salary being withheld by the owners each season through the escrow withholding. This applies to all contracts, including contracts signed before the lockout. You may never receive this money back.

·The owners demand mandatory reductions in all player salaries in addition to the escrow withholding, including “claw backs” from all existing contracts by as much as 10% per year.

o With an 8% escrow and a 10% “claw back,” each player will likely return 15 – 20% of his salary to the owners at the end of each season.

·A reduction of the players’ share of BRI to 52% will result in severe restrictions on free agency and your ability to obtain your true market value.

o Every NBA team’s Salary Cap will be significantly reduced, leaving teams with much less Salary Cap room to sign free agents.

o Teams will possess all of the leverage because there will be fewer teams competing for your services.

o Players will compete against each other for shorter and smaller contracts than the contracts that were available under past systems.

o A reduced salary cap reduces the Maximum Salary.

o The NBA demands a reduction in the Mid-Level Exception salary and contract length as well as new limitations on Bird rights. This will severely restrict usage of these very important exceptions and harm your ability to negotiate a fair contract.

Refuse Any Deal that Excludes the Players from the Explosive Growth of the NBA

The owners demand a long term deal with the players but do not want to share in the tremendous growth and success of the league over the past six seasons.

·Over the past six seasons:

o The NBA enjoyed record attendance, sky-rocketing television ratings, and ever increasing television rights deals;

o NBA franchise values have continued to escalate and set records (compare the sales of the past six years to previous sales); and

o International growth is rapid and constant with a growing worldwide television audience and more games played internationally.

·During the 2010-11 season, the NBA experienced its highest revenues ever.

·Demand to see the complete financial records of the owners over the past six seasons, including their related entities (such as regional sports networks and arenas).

Never Respond to Ultimatums or Threats– Stand Strong for Your Principles

The owners will threaten a doomsday scenario, but you must not yield to their ultimatums or threats.

·The NBA seeks unprecedented and unjustified changes to the collective bargaining agreement.

·Do not acknowledge “scare tactics” and fight to achieve your goals. You fought your entire

life to reach the NBA and must not let your right to receive fair compensation be taken from you now.

·Careers are short with limited time to maximize your earnings and limited opportunities to share in the money you help generate for the league. If you don’t fight to preserve your rights now, you will pay the price in each pay check you receive for the rest of your career.

·It is your career, your family, your income, your future. What will you do?

Participate in the Process and Protect your Individual Right to Bargain

When the time comes, you must demand that the NBPA submit any proposed agreement to a vote by all NBA players and provide every player with a reasonable amount of time to review and consider the proposed deal. We urge you now to become involved and educate yourself. Knowledge is power!

Contact the union to educate yourself and fight for what is important:

·No further reduction of the percentage of BRI received by the players.

·Maintain existing structure of the Bird and Mid-Level Exceptions.

·No reduction in Maximum Salary from existing levels.

·No reduction in Contract Length from existing levels.

·No changes to Unrestricted Free Agency and improve Restricted Free Agency.

Any deal must include these points. Remember, it is not about when or how fast a deal is reached, it is about taking the time to secure the best deal.

We are here to support you. We welcome the opportunity to address any questions or concerns you may have.

———-

Though the agents did not directly use the word “decertification” … it’s no great secret that bringing this battle (negotiation) between the owners and the PA to the courtroom is seen as a preferred option at this point for many of these same agents.

Clearly the agents are trying to have their voice(s) heard right now.  The players are entering negotiations on their own – with the union head, Billy Hunter, and their executive committee (Derek Fisher et al).  They aren’t leaning on their agents or representatives to make decisions or to cast votes.  Thus, these 6 powerful agencies are doing their best to inform and advise the players of what to watch for — and what not to sign!

Tuesday is looked at as the most important day – to date – we’ve seen in the NBA Lockout.  If a deal can miraculously be agreed-upon by the two sides, the full 82-game NBA season should be saved.  But if the two sides walk away from their latest bargaining session in New York with no deal in place — or no real optimism at all — more pre season games will be canceled and NBA Commissioner David Stern will likely announce the first wave of regular season games are hitting the chopping block as well.

E. Smith