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Linda Kenney Baden

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Basketball: A Day Late, A Dollar Short -- Time for Mark Cuban and David Boies to Rescue the Fans

Posted: 11/21/11 03:11 PM ET

One word describes what has happened to the basketball season: lunacy! The whole NBA season is likely kaput, finished, ended, defunct- unless something drastic happens. The fans suffer. The small business people who make their living on the sidelines suffer. Maybe it's time to Occupy the NBA.

What led to this showdown of 'take it or leave it' demands? Why couldn't someone put the two Y chromosome negotiating teams' toys in the freezer long before this point? Thank goodness David Boies is now in control of the players' strategy. I have a suggestion to solve this sport's crisis. Give Mark Cuban the power to rep the owners with full authority to agree to the terms of a contract. Put Cuban and Boies in a room together alone and this matter will be settled in short order. Mark Cuban is street smart, fan smart, and just plain smart. David Boies is a lawyer's lawyer. As we in the profession know, he can do election law, personal rights law, antitrust law, sports law and whatever else law. If Cuban needs help let him call Jerry Buss the owner of the Los Angeles Lakers, or Micky Arison. Arison is the owner of the Miami Heat who recently was fined a half a million dollars by the NBA Commissioner David Stern because Arison tweeted a statement that clearly showed he did not agree with some of the proposals conveyed by Stern on behalf of the collective owners in the negotiations.

Despite this obvious rift between some owners, the lead negotiators for the players, Derek Fisher, a Los Angeles Laker, and Billy Hunter, the executive director of the National Basketball Players Association (NBPA) failed to take capitalize on it and were simply outmaneuvered by David Stern. They should have moved to decertify quickly and pushed the antitrust suit then just like the NFL players did. This would have given them better leverage. Their delay was detrimental to achieving an acceptable timely contract. It is very late to cry to the federal court that the lockout now causes the basketball players irreparable harm, the strict legal standard to get immediate judicial intervening relief.

Were Hunter and Fisher so egotistical about their skills that they thought they could match the bargaining skill of David Stern and the owners? Were they being economical with player money? David Stern arguably is the strongest and most savvy commissioner in all of pro-sports. With the resident combatants the result was predestined. There simply could be no successful negotiation with David Stern given the players that started on the court for the opposing team. It was David against Goliath but this time this David was also a Goliath and this Goliath won. Derek Fisher and Billy Hunter were simply ill equipped to handle the management of the players strike against their adversary. Don't get me wrong I have simpatico for Billy Hunter. After all, he is a New Jersey kid who did a stint as a criminal law prosecutor like myself. But in my opinion, Fisher and Hunter were as slow as tortoises in making effective strategic decisions.

Make no mistake about it; this strike and lockout are all about money. The issues in negotiations discussed mostly in the media are the split of the basketball related income (BRI), the salary cap, and an increase in the luxury tax surcharge. The latter would affect the big media centered teams since they have more money to play with from big broadcasting contracts. The money obtained from the media market lets those teams hire the big names. So the issues of the salary cap and the luxury tax are somewhat intertwined. The fans want to see the superstar players of the hot teams -- the Los Angeles Lakers, the Chicago Bulls, the Dallas Mavericks and the Miami Heat. People come to see the big names, and the big name teams get the big television contracts. Television is presently the name of the game for bringing in money. The big named superstar players want to be able to get a piece of that action reflected in their salary without having a cap.

Near the end of the multi-month negotiations, the carrot got dangled during one of the negotiating sessions with the federal mediator George Cohen: a 50-50 split of the BRI. The players then got hung up on making a counter-offer to the percentage of the splits of income. The owners probably could care less whether the receive 50 percent or 47 percent of the RBI as it is defined at present- it may amount to 200 or 300 million- a drop in the bucket for the owners. The players said no, the owners then said take a newer lesser split or leave it.

Despite the fact the players were outmaneuvered and the season may be lost, what the owners did not count on is that the players did not break. So the real matters can still be addressed. The next ten years is about big money, not merely the percentage of RBI that each side receives. The key issue is the ten-year contract. The owners want a ten-year contract instead of the usual much shorter contract term. A ten-year contract is unheard of in the entertainment field: film, television, music and sports. So why do they want it? The answer has to do with the potential money to be made in the ancillary markets. There are several big matters relating to the money to be made in the ancillary markets: European and other foreign expansion, technological explosion and the player income arena.

The ancillary monies the NBA is capable of making is increasing every day. Is there anyone who does not believe that the NBA will be in Europe within the ten years? That is clearly why Kobe Bryant and other superstars have been asked to play on foreign ground in the off-season so David Stern could introduce the NBA there at the earliest possible date. What will international expansion mean for a ten-year contract? Will it merely make it null and void, or will it substantively prevent the players from getting their fair share piece of the ancillary monies? It is inevitable the NBA will be worldwide particularly in Europe and Asia. With the continued technological expansion in areas we may not even begin to fathom, the value of these ancillary markets coupled with new technologies is going to drastically change the geographical and economic playing field. And by the way, where is the discussion about the income related to new technologies concerning things like video games, merchandising, television/broadcast revenue and whatever else is in the future of the ancillary market money-making stream. These markets could become astronomical cash cows if there is expansion of the NBA into these foreign venues. The owners want a ten-year deal so that they can control the players' incomes with a cap and then freeze them out of an increased share of the monies that are capable of being generated. Once the NBA has a worldwide platform with all possible advances into ancillary marketing, this capping of the players' income hurts the mid-level money player maybe even more than the powerhouse money draws like LeBron James, Kevin Durant, and the future Kobe Bryants. Such a goal reflects both greed and the corruption of power.

Of all professional players, basketball superstars shine brighter and command more money in the ancillary markets than any other sport. So-- calling Mark Cuban to the rescue. Your own history in both technology and sports shows you get it. The real issues relating to this basketball contract need to be solved not contested. Take this over and resolve this mess for the parties and the fans. And while you are at it Mark, can you buy the Dodgers too?

 

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