Billy Hunter, the executive director of the National Basketball Players’ Association said the players would not even get back to where they stand now financially until the last year of a 10-year collective bargaining agreement.  The present agreement ends on June 30, so time is limited the parties hope to get a deal done prior to a likely lockout.

The NBA recently proposed something it calls a flex salary cap to the players.  But the players’ union said the flex salary cap is a hard cap, not a flexible one, and the union is not interested in it.  At the moment, the salary cap issue seems to be the biggest hurdling point towards reaching a new agreement.

NBA commissioner David Stern said the flex cap places a limit on spending, but teams would still be able to go over it up to a certain point.  However, the players say there is still a spending limit that eventually comes into play.  Stern added that the players would be guaranteed at least $2 billion every year of a 10-year agreement, which is a little less than what they made this year.

Stern said a player’s average wages would be approximately $5 million and the players and owners would eventually split revenues 50-50. Right now the players are raking in 57% of revenues, and the league wants to reduce that to 54.3% over the first five years of a new deal by reducing salaries by more than $500 million. This includes an 8% cut in pay in the first year of a new agreement.  Stern didn’t say this was the league’s final offer, but did admit it is getting close.

The NBA wants to introduce a salary cap of about $62 million, but allow teams to spend more than that before reaching a limit that they can’t go over.  At the moment, there is a soft salary cap in place and clubs can exceed it as long as they pay a luxury tax when exceeding the limit.  This year’s cap was set at $58 million, but some teams, such as the Dallas Mavericks, spent more than that (well over $70 million).

The league also wanted to introduce non-guaranteed contracts, but later dropped the issue and said it would leave things the way they are now.  But the players said they have had guaranteed contracts for 40 years, so the league is not really making any large concession by dropping the issue.

There is some light at the end of the tunnel, though, as Billy Hunter feels the owners are interested in coming to an agreement and is hoping the NBA will not see its first work stoppage since back in 1998.  But the union and the league said they are still far apart and more meetings will need to take place soon to get things done in time.

The two sides have exchanged a total of 10 proposals since negotiations began and there are likely to be a couple more before a new agreement is executed.

NBA Close To First Work Stoppage Since 1998 from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

All three agents found opportunities with NBA teams on the west coast of the United States, but there is no reason to look too much into that.  The three gentlemen also had law degrees, which is rather interesting to note considering that in the 2008-09 NBA season, only one General Manager had a law degree – Donnie Walsh of the New York Knicks.  However, in addition to the hiring of Myers, Babby, and Levien, Rich Cho (General Manager of the Portland Trailblazers) and David Kahn (President of Basketball Operations for the Minnesota Timberwolves) have been hired by their respective teams in the past couple of years, and each has a J.D.

Many basketball agents and attorneys would consider the title of NBA General Manager to be a dream job, and it seems to be coming more of a possibility in today’s day and age.  Whether you have such an interest or not, I encourage you to read through a recently published article titled, “National Basketball Association General Managers: An Analysis of the Responsibilities, Qualifications and Characteristics” written by Glenn Wong of the University of Massachusetts at Amherst and Chris Deubert of Ginsberg & Burgos, PLLC.  It has everything from the demographics and career paths of NBA General Managers to the Duties of an NBA General Manager.

The entire published article is embedded below, but first, here are a few notes I took while reading it:

• In 2008, the average NBA salary was $5.34 million, the highest in pro sports.
• NBA General Managers are generally involved in almost all operations of the team, including finances, marketing, stadium issues, media, public relations, coach selection, scouting, contract negotiations, and player personnel decisions.
• The NBA was the first U.S. pro league to implement a salary cap.  The cap was $3.6 million per team in the 1984-85 season.
• The salary cap in the 2010-11 NBA season was $58.044 million.
• Under the current collective bargaining agreement, which is about to expire, players are guaranteed at least 57% of Basketball Related Income in total salary and benefits.  Teams must spend at least 75% of the cap.
• Salary cap exceptions include the Bi-annual Exception, Mid-Level Salary Exception, Minimum Salary Exception, Traded Player Exception, Veteran Free Agent Exception (aka the Larry Bird Exception) – all discussed at length in the article.
• The average playing career of an NBA GM is more than double the average NBA playing career.
• Only 4 GMs in the 2008-09 NBA season had not played college basketball.
• In the 2008-09 NBA season, 50% of the then GMs had NBA coaching experience.
• Only 4 GMs in the 2008-09 season had advanced degrees.
• The average age of an NBA GM in 2008-09 was 50.1.  Only two GMs were under 40.

Twenty-First Century NBA General Managers from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

For years, the N.F.L. and the N.B.A. have found their players associations to be unwitting partners. Rather than compete in a free market, management has exploited the weaknesses of unions to inhibit competition. By shielding owners from the scrutiny of antitrust laws, the unions have effectively allowed collusion. More often than not, the result has been union retreat — on salary caps, salary scales and taxes.

Something is fundamentally wrong when the only effective weapon in a union’s arsenal is dissolution. The hard-won early victories — health benefits, minimum wage — have been overshadowed by the sacrifices that players are now not just asked, but also expected to make.

Picture a scenario where the NFLPA decides it will remain a trade association instead of re-certifying as a union.  What then?

Have Players Unions Outlived Their Purpose? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

Lucky for you, this article isn’t about country music. No offense to anyone who enjoys some Garth Brooks.

The Predators acquired Fisher on Wednesday in exchange for a 2011 first-round draft pick and a 2012 third-round selection.

I’ll say this loud and clear: Mike Fisher is a well-paid NHL player. His current contract (signed in 2008) is for 5-years and worth $21,000,000.

That’s a lot of chicken.

Fisher is due $4-million this season, as well as the same amount next season. For his final season (2012-2013), Fisher will be paid approximately $3-million.

The official cap hit for each of Fisher’s contracted seasons? $4,200,000.

However, since the Predators acquired Fisher mid-season, they will only be responsible for $1,354,839.

According to the fine folks over at CapGeek.com, the Predators are projected to finish the 2010-2011 season with $51,013,844 in spending, which would be $8,386,156 under their $59.4 million cap limit. The Predators already had some wiggle room as far as finances are concerned.

On the other hand, the Ottawa Senators needed to make some salary cap room. Like the Predators, Ottawa has a $59.4 million limit. With the ousting of Mike Fisher from their books, the Sens are projected to finish the 2010-2011 season with $57,825,197 in spending, which would be $1,574,803 UNDER the limit.

Mission accomplished.

The Salary Cap Effect of The Mike Fisher Trade from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

When: Thursday, February 10, 2011 (10:00 a.m. – 3:00 p.m.)

Where: Venable Baetjer Howard Moot Court Room at the Angelos Law Center (map)

Agenda:

9:30 – 10 am
Registration
Continental breakfast will be served for attendees in the lobby of the law center.

10-10:45 am
Welcome remarks

• Phillip J. Closius, Dean, University of Baltimore School of Law

Implementing the NBA’s Salary Cap and Collective Bargaining Agreement

• Andre Walters, J.D. ’05, Senior director of legal affairs, Charlotte Bobcats
• Michael Winger, Assistant general manager/legal and administration, Oklahoma City Thunder

10:45 am – 12 pm
Negotiating Professional Football’s Collective Bargaining Agreement

• Richard Berthelsen, General counsel, National Football League Players’ Association
• Dennis Curran, Senior vice president and general counsel, National Football League

12 – 1:15 pm
Lunch
Lunch will be served for attendees.

Luncheon Speaker
Managing a Professional Baseball Team in the Free Agency Era

• Andy MacPhail, President of baseball operations, Baltimore Orioles

1:15 – 1:30 pm
Break

1:30 – 3 pm
The Many Facets of a Professional Football Team
Influential sports agent and UB Law alumnus Tom Condon, J.D. ’81, will be joined by Will Witherspoon, linebacker for the Tennessee Titans, and other panelists involved in the day-to-day negotiations and operations of professional football teams for this discussion.

Cost: Free (RSVP)

Baltimore Law’s 2011 Pro Sports Symposium from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

There has been a flurry of agents who have been dropped by major clients in the last few weeks.

If players don’t get the kind of contract they think they deserve, they fire their agent. That’s the new trend in the NBA. Players are changing agents like they change socks.

The agents, at times, become scapegoats for their clients’ shortcomings. It’s a tough market out there right now. Teams aren’t throwing money around like they once did, especially with a possible lockout on the horizon.

The list of agents who have been fired recently is staggering: Chris Paul fired Lance Young from Octagon; Dwight Howard, Al Horford and Rodney Stuckey fired Aaron Goodwin; Ike Diogu fired Arn Tellem; Roger Mason fired Mark Bartelstein; O.J. Mayo fired LRMR; Andray Blatche fired Eric Fleisher; Lou Amundson fired Mike Higgins; and Marc Gasol parted ways with Herb Rudoy.

Sometimes players think agents can wave a magic wand and get things done. It’s not that easy. Teams have salary cap and luxury tax issues that the players don’t seem to comprehend.

Other times, a player’s entourage gets in his ear and fills his head with nonsense. “You should be getting $10 million a season,” they’ll say.

Next thing you know, that player has a new agent.

It is not just in basketball.  Players change agents with regularity in football and baseball, and baseball does not have the salary cap issues that Finnan cites as something basketball players do not seem to comprehend.  And it is not only the small agents who are being fired for those with impressive client rosters.  Arn Tellem, Mark Bartelstein, and Aaron Goodwin are amongst the biggest names in the industry, yet each has been fired by at least one client this year.  It seems as though Goodwin has had the most difficult year of the crew.

Sometimes agents are fired because they have acted in a way that has hurt their clients.  Other times there is absolutely no grounds for the change of representation.  An agent might even give all of his time and energy to servicing a client, earning that client publicity and off-field/court contracts that no other agent would have been able to provide the client, yet the client still decides to make a change.  It often appears that this type of behavior occurs more in the agent profession than in any other profession.

Basketball Agents Getting Fired; Nothing New from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

The main issue in CBA negotiations has, and will be, the percentage of NFL revenues to player salaries.  Other major concerns include, NFL rookie salaries and the legal inability of franchises to recoup signing bonuses from players who breach contracts or refuse to perform.

The authors of the article take the position that the owners cared so much about labor peace and preventing a potential labor stoppage back in 2006, that they agreed to a CBA that had unfavorable terms.  There is a thought that former NFL Commissioner, Paul Tagliabue, lobbied ownership to accept the deal because he wanted his legacy to be that he presided over almost two decades of uninterrupted labor peace.

Many pages are dedicated to providing a formal history of the NFLPA, its major players, and the numerous legal actions it has been a part of over the years of its existence.  It certainly is not a short read, but I believe that it is important to have a good understanding of the history of negotiations between the NFL and the Players Association in order to have a full grasp on what is going through the minds of the bargaining parties today.

The use of media by both sides of the negotiation table is nothing new.  In fact, it was heavily used in the NHL’s battle with the NHLPA earlier this decade.  It is also being heavily employed by the NFL and the NFLPA during this round of CBA negotiations.  This time, new media in the form of blogs and Tweets are involved, as well.

In such contentious negotiations, it is very difficult, and sometimes impossible, to determine which side has a better case.  And at the end of the day, it does not matter; everyone suffers if a season, or part of a season, is lost due to a labor battle.  Is the NFL bargaining in good faith?  Should there be a rookie salary cap?  Does the union truly have all the financial information it needs to bargain?

Interestingly, when the authors released the piece, they wrote that there is no need to create artificial deadlines, “as  these will obstruct the natural development of negotiations between the parties.”  DeMaurice Smith certainly did not agree, as the NFLPA had an “internal deadline” for agreeing to a new CBA, which apparently has already passed.  Going back to my previous point about new media, check out where the news was posted – on the League’s own blog focused mainly on labor issues.

Skip to the end of the IPLJ article and you will see the authors’ predictions, which includes the belief that Ownership will lockout the players.  And then there is decertification talk, which has been gaining momentum as of late.  Every NFL team has approved of a plan to decertify the NFLPA if there is not a new CBA agreed to by March 3, 2011.  I assume that the date is subject to change.  Decertification would mean that the NFLPA is no longer a union; players could then sue the league under an antitrust claim.

Will There Be A 2011 NFL Season? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

By now, if you’re a regular reader of Sports Agent Blog, you’ve also read Josh Luchs’ piece published by Sports Illustrated Wednesday.

Like Darren, I’m sure, I had no idea Josh’s confessional was coming. Josh had told me at least a couple years ago that he was working on telling the story of his life in the business, that he would name names, and that it would be very provocative. I promised I would interview him when the book came out and give him an audience with my clients, and then never really thought about it again.

Then the texts and emails started coming in early Wednesday afternoon. Within an hour, I was sending out my own texts. “Have you seen it?” “Are you reading this?” “Can you believe this?” I just kept sending them, never identifying what “it” was, but no matter. As soon as I’d push ‘send,’ I’d be getting one back from an incredulous friend or client. I’m sure it was the same for Darren.

My clients at Inside the League are the professionals inside the college and football industry. They are the compliance officials and enforcers from schools in five conferences I have as clients; the marketing experts; the workout specialists; the financial planners; and, yes, the agents who have become my audience over the past 10 years. No doubt, some of them have engaged in similar practices to Luchs. That said, I think there is one thing all of them would agree on: the system is broken.

With that in mind, here are four realizations that need to be made.

Take Luchs’ story seriously. As Luchs himself admits, part of his truth-telling is done to establish credibility regarding his version of the incident that eventually won him an NFLPA suspension. That said, I know Josh, and I also feel it’s part of the maturity that comes with having a family. About five or six years ago, he and I stood on the turf of Ladd-Peebles Stadium after a midweek Senior Bowl practice. Both of us were nearing 40 with young kids, and we talked about the things men think about when they leave their 30s: what our impact would be, both on the world and on the people closest to us. This was pre-suspension, and already, I could tell Josh was doing some soul searching. I truly believe his confessional isn’t self-serving.

The problem is not as bad – - and much worse – than it seems: Obviously, not every player in college football is getting paid. Not even every NFL prospect. However, it seems safe to say that the top 100 college football prospects each year have all been solicited, and a major percentage of them (maybe half?) have taken benefits. What’s more, if you get a map and draw a line from Miami to Washington D.C., then to Dallas and back to Miami, you’ve drawn a triangle around the area where about 70 percent of payments take place. Obviously, most of the players that Luchs mentions are based on the West Coast, but there are probably 10 such stories that could be told by those who regularly recruit the Southeast. I remember once talking to an agent who recruits the Southeast regularly, and he called paying players “the price of admission” for representing student-athletes from that region. I never asked him if he paid that price.

Players need to stop being treated as innocents. To me, here’s the takeaway quote from Luchs’ story: “One of the misconceptions about the agent business is that the kids are victims, preyed on by people like me. When Alabama coach Nick Saban and others rail against the agent business, they don’t mention that most of the time the player or someone from his family approaches us.” It’s far too convenient to think of these players as children who must be protected. Many of these student-athletes have a sense of entitlement and that extends to the agent process.

It’s time to seize the day. There’s a perfect storm brewing right now. In the last three years, we’ve seen agent-related crises at Southern Cal, Alabama (twice), South Carolina and Georgia; the threat of a rookie salary cap that could remove the pot of gold at the end of the rainbow for top picks and, by extension, their agents; the ascent of a new leader of the NFLPA; and now Luchs’ story. For the first time ever, the story behind the story of college football has been dragged out into the light. No school official can say everything’s fine, that the system flushes itself, or that what he doesn’t know won’t hurt his school.

Obviously, I’ve just skimmed the surface here; there’s so much more to say and to do to effect a real change in the business. My hope is that what we’re seeing and hearing right now is the beginning of an era of honesty in the agent-player community. I hope that’s not a naïve conceit.

It’s Time To Seize The Day from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

But what happens when the lower payroll teams start beating out the big spenders?  Will the big spenders stop throwing their money at the players who have their hands out constantly asking for more?  And will the non-spenders continue to balk at the idea of spending, since they have enjoyed success without dishing out close to the amount of money that the “big market” teams have spent?

Only 3 (Giants, Phillies, and Yankees) of the top 10 teams when it comes to payroll have made this year’s playoffs.  4 teams from the bottom half of payrolls made the playoffs (Rangers, Rays, Reds, and Braves).  Does this mean that parity is possible in a league that is not bound by any type of salary cap?  Darren Rovell says it is not only possible, but that the MLB has the most parity of any sport, with 19 different World Series champions in the past 30 years.

Does Payroll Of Playoff Contender Affect Future Contract Negotiations? from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules

According to the money, our money should be on the Celtics.  And in the Finals, our money should be on the Lakers.  But more importantly than that, it is necessary to realize that three out of the four teams left in the playoffs are in the top 6 in payroll.  The Phoenix Suns are sitting at #9 (payroll $74.9 million).  And last round, 7 of the 8 teams left in the playoffs were in the top 10 in payroll, with only the Atlanta Hawks as the major surprise with the #22 payroll of $65.9 million.

What does this tell us other than the fact that Al Horford is a miracle worker?  That if you want to win in the NBA, you better put your money where your mouth is.  This should quiet everyone who complains that the MLB isn’t fair due to the lack of a salary cap.  The NBA has a cap (albeit a soft one), yet does the playoff landscape say anything of competitive balance?  What it says is that teams that want to win better be willing to pay talented players what they are worth.

Out of the top 10 spenders in the NBA, 9 of the teams made the playoffs (the New York Knicks being the odd team out).  16 out of 30 teams make the playoffs.  Out of the bottom 10 spenders, 7 of them were left out of the playoffs (the Portland Trailblazers, the Oklahoma City Thunder and the aforementioned Hawks being the exceptions).

The NBA: You Have To Pay To Play from Sports Agent Blog - Sports Business, Sports Law, Sports Negotiations, NCAA Rules