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Wednesday
Oct052011

Rogue of the Week: NBA Power Agents

NBA power agents like Arn Tellem, who represents Derrick Rose and Pau Gasol among others, are making negotiations harder than they have to be.Every year, kids all around the world put together Christmas lists. The first few items might be easy, but there’s often a point where the kid solicits ideas from other kids to fill out their list. Put yourself in the shoes of a typical 10-year-old boy. You’d ask your friends at school, and you’d definitely ask your older brother. He suggests an Xbox 360. Your brother makes a convincing case: an Xbox 360 would be tons of fun, and he knows a bunch of great games for it, having played them with his older friends. Plus, your brother has helped you out in the past; he wouldn’t steer you wrong. There’s only one problem: the price. The Xbox 360 is really expensive, and there’s a possibility that it’s out of your parents’ price range. You could ask for a Wii, which is less expensive and which you have a much better chance of getting. It’s a little less fun than the Xbox 360, but you wouldn’t mind it, and having a Wii is better than having no console at all and waiting until next Christmas to ask for one. Your brother doesn’t see things this way: you shouldn’t have to compromise for the Wii, because you deserve the 360. You’ve been well-behaved all year and got your best grades ever. And your house has definitely become more valuable since your parents bought it. Your brother contends that they must have money (even though they’ve taken out a second mortgage), and that they should have to show you their financial information before you desist on the 360 (okay, that part of this analogy was admittedly forced). There’s a week until Christmas; time is running out. Do you ask for the 360, or “cave” and ask for the Wii?

If you’re an NBA player, this scenario should seem familiar. As the NBA’s tentative opening night, November 1, nears, players are faced with a decision: continue to stay put when it comes to BRI splits and other major issues, or reduce their demands and make a better offer to the owners. They’re getting advice from a lot of sources, prominent among them their agents (the older brother in my example). You see, the older brother isn’t exactly impartial: he wants what’s best for him (the 360), and it doesn’t matter if you have to suffer for a while before he gets it. The Wii is an unacceptable downgrade, and even though you might be okay with it, he isn’t: he wants the full value of the 360. It doesn’t matter to him that the 360 might not be in everyone’s best interests. So what does all this have to do with this week’s Rogue of the Week? Let me explain.

On Monday, news broke that a group of powerful agents—Arn Tellem, Bill Duffy, Dan Fegan, Jeff Schwartz, Leon Rose, Henry Thomas and Mark Bartelstein, who between them represent over 130 NBA players—composed a letter to NBA players, warning them about how to proceed during the lockout. (The story by ESPN’s Ric Bucher can be found here and here’s a copy of the letter). The most important part of the letter instructs the players to “Contact the union to educate yourself and fight for what is important,” specifically:

  • 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.

Roughly translated: don’t change anything from the old CBA. This is one of the stupidest pieces of advice I’ve ever heard. There’s a reason that we’re about to lose the first two weeks of the season: the system’s broken, and neither side is willing to compromise much to fix it. By refusing to yield on any issue, the players aren’t negotiating; they’re demanding. And unfortunately for them, they’re not in a position to make demands—they simply don’t have the leverage. For better or worse, the players and the owners are in this together, and a resolution will only be reached if both sides agree to compromise.

How ridiculous are the agents’ demands? Let’s go point-by-point:

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

This is the one that makes me mad. The BRI split, according to the most recent CBA, was 57% players, 43% owners. As far as pro sports are concerned, that’s a pretty sweet deal. The NBA has been lobbying to switch it to 46% players, 54% owners. That’s not fair, but it is clear that for a deal to get done, the players HAVE to come down from the 57% figure, which is what the agents are arguing against. There is no scenario in which the owners agree to a deal at 57%, so why even bother trying to get that number if you’re the players? Agree to somewhere in the 50-54% range, but don’t demand 57%. The owners would rather face a 10-year lockout than agree to that again.

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

My problem with this one can essentially be repeated for every bullet on the list: don’t lock yourself into a set position. Sure, the players like the Bird and Mid-Level Exceptions the way they are, but there’s no reason that they can’t be tinkered with a little in order to get something from the owners on another issue. Why put yourself in an inflexible negotiating position from the get-go?

No reduction in Maximum Salary from existing levels.

Kobe Bryant is slated to make over $30 million in 2013-14. Yet it seems as if any new agreement will involve some restructuring of the salary cap. By refusing to lower Maximum Salaries, the players could make it extremely difficult for teams with an aging superstar like Bryant to get under the cap and remain competitive. Any discussion of a new salary cap has to involve a discussion about Maximum Salary, and, just like my previous point, if you lock yourself into a position, you have very little wiggle room when it comes to negotiations.

No reduction in Contract Length from existing levels.

Contract lengths need to come down. Owners can’t stop themselves from handing out dumb contracts, which means that teams like Atlanta pay Joe Johnson $119 million over six years or teams like Orlando (now Washington) pay Rashard Lewis $118 million over six years. The sad thing? If Atlanta didn’t offer Johnson that deal, he’s probably signing somewhere else. So teams are faced with the choice of overpaying for stars, or letting them walk so that someone else can overpay them. Reducing contract lengths won’t solve the problem, but it will help free teams from oppressive contracts much sooner than the current system would allow.

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

I don’t have any major qualms with this one, but again, why commit to a set position? Oh yeah, because the agents make out like bandits right now and want to make sure everything stays the same.

So to bring this back to the beginning, essentially the agents are that greedy older brother that only wants the 360 and doesn’t care if you (the players) get screwed over waiting for it. The agents love the current system and don’t want their wallets to take a hit with a new, owner-friendly CBA. Let’s just hope that the players’ good friend, Billy Hunter, has enough sense to argue what’s in the best interest of the players and the league, and not a bunch of selfish agents.

 

Stupid NBA Move of the Week

I have to give the NBA some credit: it looks like they’re finally starting to give in on a couple of issues (the hard cap, a 46-54 BRI split), even suggesting that a deal could be reached with a 50-50 BRI split (though the players would not even negotiate on that point). So my question is: What took so long? Why did it take three months for the owners (and, in fairness, the players) to budge on these issues? Both sides were obviously going to have to make sacrifices, but why couldn’t they have done this in August as opposed to October? Now that the negotiations have finally gotten past the initial staring contest phase, both sides can finally make (a little) progress.

On Tuesday, David Stern announced that the rest of the NBA preseason has been canceled and that the first two weeks of the regular season will follow if a deal is not reached by Monday. Since there are no more meetings scheduled at the moment, right now I have as good a chance to play in an NBA game November 1 as any NBA player would. This was a Stupid NBA Move three months in the making. I cautioned all summer against the NBA/NBPA dragging their feet in negotiations, knowing that it would come back to bite them in the fall. And lo and behold, that’s exactly what’s happening now.

 

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