NEW YORK —Two weeks of NBA games are lost. Many more could be in jeopardy.
There’s a “gulf” that separates owners and players, and they will have to close it quickly to avoid further damage to the schedule.
Sticking to his deadline, Commissioner David Stern wiped out the first two weeks of the season—exactly 100 games—after more than seven hours of negotiations Monday failed to produce a new labor deal and preserve the Nov. 1 season openers.
The cancellations mark the NBA’s first work stoppage since the 1998-99 season was reduced to 50 games.
Clashing more over the salary cap system than economics—but still far apart on both—Stern said the sides are “very far apart on virtually all issues. … We just have a gulf that separates us.
“With every day that goes by, I think we need to look at further reductions in what’s left of the season,” he added.
Stern said last week that he would cancel the first two weeks of the season Monday without a new collective bargaining agreement to end the lockout. The two sides expect to remain in contact, but no additional formal talks have been scheduled.
Stern said he was “sorry” and “sad” to report the cancellations.
“We certainly hoped it would never come to this,” he said. “I think that both sides worked hard to get to a better solution. We think that we made very fair proposals. I’m sure the players think the same thing. But the gap is so significant that we just can’t bridge it at this time.”
Union president Derek Fisher(notes) agreed, emphasizing that missing any games puts the season in jeopardy. He also stressed this was a lockout, not a strike, and that it was the owners’ decision not to be playing basketball.
“This is not where we choose to be,” he said. “We’re not at a place where a fair deal can be reached with the NBA.”
The cancellation includes all games scheduled to be played through Nov. 14, and affected arenas have been authorized to release those dates.
Based on last year’s average announced attendance leaguewide (just over 17,300 per game) and the average ticket cost last season, those now-canceled 100 games represent nearly $83 million in lost ticket sales—before the first concession or souvenir is sold and before the first car pays to park.
Season-ticket holders, however, get refunds, plus interest, for all canceled games.
Though disappointing to both sides and especially to fans, the result isn’t a complete surprise. The union had warned players for years to save their money, knowing a work stoppage seemed likely, and executive director Billy Hunter repeated that players won’t cave once they start missing pay checks next month.
“I think it goes back to a comment that David made to me several years ago when he said, ‘Look, this is what my owners have to have.’ And I said, ‘The only way you’re going to get that is if you’re prepared to lock us out for a year or two, and (this) indicated to me that they’re willing to do it,” Hunter said. “So my belief, my contention is that everything he’s done has kind of demonstrated that he’s following that script.”
With another work stoppage, the NBA risks alienating a fan base that sent the league’s revenues and TV ratings soaring during the 2010-11 season. And the cost of cancellations would be staggering. Deputy Commissioner Adam Silver said the league would lose hundreds of millions of dollars; Hunter estimated players’ losses at $350 million for each month they were locked out.
Now ushers, security personnel, parking lot attendants, concession workers, restaurant employees and others all stand to have their hours cut or join the country’s 14 million unemployed. A few teams also have either trimmed their staffs or instituted sharp pay cuts—some did that as the lockout began—and more layoffs could be forthcoming.
Hunter said he didn’t think the full season was at risk yet and stressed it would be a mistake for the NBA to chance it coming off a season when revenues and TV ratings soared.
“I think it would be foolish for them to kill the season, and we’re coming off the best season in the history of the NBA and I’m not so sure in this kind of economy that if there is a protracted lockout whether the league will recover,” he said. “It took us a while to recover from the ’98 lockout, and I think it will take us even longer to recover this time around.”
For the second straight day the sides focused on system issues instead of the division of revenues. Stern rattled off concessions the league had made there, allowing guaranteed contracts, not rolling back salaries and giving players an option to shorten the deal.
Players say they moved there, too, offering to reduce the value of the midlevel exception to $5 million for a maximum of four years, and reducing contract lengths to five years for players re-signing with their own teams to four years for changing teams. The league wants those, currently six and five, down to four and three.
Insisting it needs a system that allows all teams to compete no matter the market size, Stern and Silver said the sides are still apart on annual raises for players and the luxury tax for teams. Players counter that the league’s idea of making the luxury tax more severe would have acted as a hard cap, scaring too many teams from spending above the cap level.
“We’re surprised that’s what still separates us,” Silver said. “We would think that the players in this league would also want a system in which players on every team, if they play for well imagined teams, are on equal footing. I think it’ll create a better game, and we think it’ll create hope for more fans in more communities and it’ll ultimately lead to more interest in our game.”
Stern said the players still proposed they get 53 percent of revenues, whereas the league proposed they get 47 percent. The two sides had discussed a 50-50 split last week, but only in informal discussions, and given each BRI point was worth roughly $40 million last season, the gap between 3 points and 6 points is about $120 million in the first year of a deal.
Meeting Monday were: Stern; Silver; owners Peter Holt of San Antonio, Glen Taylor of Minnesota and James Dolan of New York; senior vice president and deputy general counsel Dan Rube; plus Hunter; Fisher of the Lakers and vice president Maurice Evans(notes) of the Wizards; and attorneys Jeffrey Kessler and Ron Klempner.
Players reacted quickly—and in some cases, strongly—on Twitter within minutes of the cancelations being announced.
Miami guard Dwyane Wade(notes) said the situation “just got real” after he learned the first two weeks are now gone, then lashed out at Stern’s comments in a second post by saying they hurt employees at arenas around the league, other businesses that thrive off NBA business and the league’s fans in general.
Minnesota rookie-to-be Derrick Williams(notes), the No. 2 pick in this year’s draft, tweeted that going overseas may now be an option for him.
The success of last season—on the court, at the box office and in the headlines—convinced many that the sides would never reach this stalemate.
But small-market owners were hardened after watching LeBron James(notes) leave Cleveland for Miami, Amare Stoudemire(notes) bolt Phoenix for New York, and Carmelo Anthony(notes) later use his impending free agency as leverage to secure a trade from Denver to the Knicks. They wanted changes that would allow them to hold onto their superstars and compete for titles with the big-spending teams from Los Angeles, Boston and Dallas who have gobbled up the last four championships.
As the lockout drags on, Stern’s legacy as one of sports’ best commissioners is weakened. He turned 69 last month, and although he hasn’t said when he will retire, he did say this will be his last CBA negotiation after nearly 28 years running the league.
He has insisted all along he wouldn’t worry about the damage to his reputation and that his only concern would be getting the deal his owners need.
It’s uncertain when that will be.
The sides didn’t agree until Jan. 6 in 1999, just before the deadline for canceling that entire season. The league ended up with a 50-game schedule, often plagued by poor play as teams were forced to fit too many games into too small of a window.
They could keep meeting now and agree to a deal much sooner this time. Or perhaps the divide is still too great and they will decide there’s no reason to rush back to the table.