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Decertification: NBA players' nuclear option

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BRIAN MAHONEY
November 5, 2011

NBA players could have a choice Saturday: Accept a 50-50 division of basketball-related income or risk having more owners join the hardline faction that wants a 53-47 split in its favor— and a hard salary cap.


When talks resume, they may quickly break down unless the sides can compromise on positions that seem to be hardening by the minute.


A person briefed on the owners' position Friday told The Associated Press that there were many hardline owners who want a deal at 53-47 in their favor as well as a hard cap, and that the rest wouldn't go beyond a 50-50 split.


Players have been seeking 52.5 of revenues in their favor — leaving a gap of about $100 million annually vs. the owners' proposal — and there is a group of players who have discussed decertification of the union if they are forced to accept less than 52.


Both sides return to the bargaining table Saturday with federal mediator George Cohen, with some salary cap system issues still unresolved along with the BRI split.


Only one thing appears certain — the threat of losing the season has never been greater.


Two people with knowledge of the negotiations told the AP that the divide between the sides could grow wider if serious progress isn't made this weekend. The people spoke on the condition of anonymity because they were not authorized to speak publicly on the negotiations.


"Both sides started out with everybody together. Everybody was together because both sides were asking for the world," one person said. "Now we're into real life, and neither side is going to get everything we want."


At issue from the beginning has been the division of about $4 billion in revenues, along with a system makeover that Commissioner David Stern insists must happen to fix what he considers a broken economic model.


Owners are determined to reshape the league by creating a system like the NFL or NHL, where spending is capped and small-market teams truly can compete with the big boys. But reforming the NHL's financial structure wiped out the entire 2004-05 season. And the NFL is making money, not losing it.


The players have offered to reduce their guarantee of BRI from 57 percent to 52.5 percent, a concession they feel is more than enough to cover their end of the league's stated $300 million in annual losses. Owners have offered a 50-50 split, along with significant changes to the system that include a more punitive luxury tax on teams that exceed the salary cap, shorter contracts and a lower mid-level exception.


But that 50-50 split is unacceptable to the players, as well as some owners, who want the players' share to be no higher than 47 percent.


"When people hear 50-50, they think, 'Oh, it's going to be a partnership. That's half,'" Miami Heat guard Dwyane Wade told the AP in a recent interview. "No. It's not. That's not how it works."


And one person with knowledge of the discussions said there's no guarantee a majority of owners would be "willing to do 50-50 for very much longer."


That's a big reason why decertification talk bubbled to the surface this week amid reports that union president Derek Fisher and executive director Billy Hunter are not seeing eye to eye. The union spent most of Thursday trying to project a united front even as a group of about 50 players held two conference calls to build momentum to eliminate the union.


Although Miami Heat owner Mickey Arison was fined last week for hinting on Twitter that he was ready to get a deal done, about a dozen small-market owners are pushing for even more concessions. So the league has invited all 29 owners to New York for a meeting on Saturday to affirm their bargaining position. There are about 20 owners who have not actively participated in the talks who must be brought up to speed on the latest offers.


A group of about a dozen owners, led by Charlotte's Michael Jordan, was upset that players were offered a 50-50 split and want the players' share to be no higher than 47 percent, one person told the AP as first reported by The New York Times.


A deal at 50-50 wipes out about $280 of what owners say were $300 million in losses last season.


Among the system issues already agreed upon are a more punitive luxury tax for teams who spend over the salary cap, a reduction in the midlevel exception from about $6 million to $5 million annually and the shortening of contracts by one year.


The big hurdles remain the revenue split and the owners' desire to limit teams who pay the luxury tax from using the midlevel exception to sign veteran free agents.


Wade is one of a handful of big-name stars — Boston's Paul Pierce and Orlando's Dwight Howard were among the others — to sit in on the conference calls to discuss decertification.


The move could swing some negotiating leverage to the players, antitrust attorney David Scupp said Friday. But he added that taking the fight to court through an antitrust lawsuit also would make it difficult to resolve the matter in time to have a season.


"Once you get the courts involved and you end the collective bargaining process, it does slow things down and it does make it a little bit more complicated," said Scupp, who works at New York-based law firm Constantine Cannon.


The first month of the NBA season, originally scheduled to tip off Tuesday, already has been canceled, with more games on the chopping block if an agreement is not reached soon.


During the NFL lockout this summer, the NFLPA did decertify, which allowed a group of players to file an antitrust lawsuit against the league.


Labor unions are granted exemptions to U.S. antitrust laws that prohibit staples to their economic models such as salary caps and college player drafts because they are agreed upon under collective bargaining. If there is no union, antitrust laws would once again apply.


"It gave the NFL players another weapon," said John Hancock, a labor law expert with the Detroit firm of Butzel Long. "It did give the players something more to hold on to. But ultimately, both sides just got together and decided, 'This is silly. We don't have any life-or-death issues. Why are we doing this?"


Whereas NFL players and owners were fighting over how to split billions of dollars of revenue, the NBA says it lost $300 million last season and that only eight of its 30 clubs made money.


Pittsburgh Steelers safety Ryan Clark said he believes disbanding the union helped the NFL players.


"It's not going to help them, though," Clark said. "Their owners are really losing money. Our owners weren't."


Even if players do go forward with decertification, their chances of success in the courtroom could be harmed by their football brethren's experience there this summer. A federal judge in St. Paul, Minn., initially ruled that the NFL union's antitrust case had merit and issued an injunction that forced the league to lift the lockout.


But that ruling was overturned on appeal to the 8th U.S. Circuit Court in St. Louis, and the two sides came to agreement on a new deal in July after losing only one preseason game.


"Given what happened over the summer with the NFL players, the NBA players have an uphill battle toward getting the lockout (lifted)," Scupp said.


The NBA already has filed a lawsuit seeking to retain their non-statutory labor exemption even if the players dissolve the union. U.S. District Judge Paul Gardephe did not immediately issue a ruling when the two sides met in court this week.


One person with knowledge of the league's thinking said that decertification wasn't an immediate concern because of the long-term impact it would have on the negotiation process.


"If they've decided to do that," the person said, "they've decided to lose the whole season."


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AP Sports Writers Jon Krawczynski in Minneapolis, Tim Reynolds in Miami and freelance writer Chris Adamski in Pittsburgh contributed to this report.



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