Labor Situation May Be Messy, but Both Sides Need a New Deal

How do you like the NBA season so far?

We’ve got a two-week cancellation that will soon be a one-month cancellation; a union president, Patrick Ewing, waging a brave defense of the status quo, especially the part that lets him earn $18 million a year, and a commissioner, David Stern, pledged to return his industry to prosperity, even if times don’t look too bad with all those teams paying coaches $5-million salaries, not to mention Stern’s $8 million a year.

(We think that’s Stern, anyway. Yo, Dave, what’s with the beard? Is there a tattoo that goes with it? You do one too many disciplinary sessions with Dennis?)

This struggle between the obscenely rich and the merely affluent is unseemly, to say the least. Amazingly enough, it’s necessary.

Despite all the teeth-gnashing by columnists, talk-show hosts, et al., doing their man-of-the-people numbers, the NBA had to reopen this deal. Despite the players’ cries, they need it redone too.

The important thing isn’t how many games they’ll miss but rather coming out of it with a deal that works for everyone, unlike the current deal that works for only a few glamour franchises and star players.

The players’ middle class is eroding. Last season, while 38 earned $5 million or more, 60% of union members made less than $1 million, and 20% were at the minimum, $275,000.

Moreover, the supposed “stars”--or rather the merely talented--have been given dismaying leverage, allowing them to sneer at cities, teams, coaches, societal conventions and actual laws.

In Philadelphia, Allen Iverson, having violated several firearm and substance statutes while leading the 76ers to sixth- and seventh-place finishes, is going into his free-agent season, whereupon, under current rules, he would get $15 million to $20 million a year, probably somewhere else, because he wouldn’t want to chain himself to a losing team, leaving the 76ers in the ditch where he found them.

In Minneapolis, better behaved youngsters have proven a challenge too. Stephon Marbury wants $126 million like Kevin Garnett but isn’t sure he’ll accept it in Minnesota, which, he says, is cold and doesn’t have hot dogs like the ones in Brooklyn. To his credit, Garnett has worked hard, looked promising and hasn’t insulted local fans. But he has yet to become a $21-million-a-year player.

Then there’s $10-million-a-year Chris Webber. Coming off his second trade--and third arrest--he’s refusing to acknowledge he’s a Sacramento King, trying to force the Kings to move him to a better team in a town with more (shudder) night life. Antoine Walker ran up big numbers for bad Boston Celtic teams, convincing himself, at least, that he’s a $100-million player. Less convinced, the Celtics are offering him around.

Leverage should go to those who have proved they’re worth it so the rookie wage scale has to go from three years to five. Thankfully, the union will bargain on this point, understanding that it owes more to members with years of service than starry-eyed 19-year-olds with great vertical leaps and no clue.

By the same token, Stern should double the minimum to $550,000 a year, at least, and add an exception for one player at the league average, around $2.5 million. It’s only fair to players--not to mention a tasty carrot in bargaining--and will have little impact on owners’ bottom lines.

The real problem is owners’ insistence on “cost certainty” versus the players’ vow never to accept a “hard cap.”

That’s the one they’re poles apart on. When they solve it, everything else should fall in line quickly.

Of course, they haven’t even started.

Cost Certainty in an Uncertain World

In America, we like to think people are entitled to a return on their investments.

Not that the NBA is much like any America you or I know.

Take the under-performing Milwaukee Bucks, who draw indifferently in a small, cold-weather city and lose money. Owner Herb Kohl, recognizing his market’s limitations, has enforced an “internal cap.” Last season, his payroll was $24.9 million, 28th in the league, ahead of only the Clippers.

However, Kohl isn’t selling or moving the team or even browbeating the city for a new arena. In his day job, he’s a U.S. senator whose family owned a string of supermarkets and department stores. His personal fortune is estimated at $200 million to $300 million. In a congressional disclosure, he listed his income last year at $12 million.

Suggesting that the Bucks’ losses that worry Stern aren’t disabling, Kohl recently hired George Karl as coach, signing him to a $20-million, four-year contract.

As capital investments, sports teams appreciate in good times and bad, the way California real estate did in the ‘70s. Other teams are owned by billionaires like Portland’s Paul (Microsoft) Allen, Orlando’s Rich (Amway) DeVos and Miami’s Micky (Carnival Cruise Lines) Arison, and by corporations like Comcast, Turner Network, Ascent Entertainment and Cablevision.

Nor have any independents been seen panhandling.

Jerry Buss, who has no outside businesses anymore, lives off his Lakers, but, you know, it’s a living. The Lakers reportedly grossed $170 million over the last two seasons--with projections for 1999-2000, their first in the Staples Center, at a staggering $135 million.

Donald T. Sterling, whose Clippers don’t make any money, lives in a mansion on Sunset Boulevard that Cary Grant once owned and has his offices in a Beverly Hills building that Louis B. Mayer built. Donald seems to be riding out this NBA slump pretty well, himself.

We’re not talking about hard times here, only the desire of rich men and companies to stay that way.

Nevertheless, it’s the game whose best interest we’re concerned with and it has profited immensely from the salary-cap system that allowed such cities as Portland, Seattle, Orlando and Indianapolis to compete with metropolises New York and Los Angeles.

Without such hope, a league withers. Witness baseball, in which so many teams like the Expos, Pirates, Royals and Twins pit $15-million payrolls against the $60-million Yankees, and TV ratings, even after this storybook season, are up only marginally in the playoffs.

Moreover, the NBA cap has worked for players too. When it was instituted in 1984, it was $3.6 million a team. In 14 years, it has increased by almost 1,000%.

Of course, distribution of revenues has become a problem recently--for the players and their union.

As no one should weep for “embattled” owners, no one should cry for star players whose salaries should be capped at $10 million to $15 million to leave more for teammates.

Why the union puts its few stars ahead of its many journeymen is its own problem. It’s mostly psychological. The players are impressed by their stars too, urged by their union and their agents not to “let management divide us” and promised that the market will lift them all.

Basketball being a game of a few stars and many helpers, it isn’t true, and the helpers have had three years of market pummeling to learn that.

Unfortunately, they haven’t and will have to forfeit some pay that most of them need a lot more than fat-cat owners, to begin to face reality.

Leverage, Leverage, Who Has the Leverage?

Forget everything that has happened--the stalling, posturing, castigating of the other side--the whole wasted summer was predictable as a script.

Next week, however, when arbitrator John Feerick rules whether 220 players on guaranteed contracts must be paid, everyone will finally know who has the upper hand.

The league has vowed to tie up any unfavorable decision for months, but the players will certainly be tougher to bargain with, knowing they will be paid sometime, unless they’re overturned on appeal.

If the players lose, well, we don’t know how tough they’re going to be as a fighting force in any case. As unionists, they have a lot of attitude, but they’re untested, with a recent history marked by apathy.

(Billy Hunter recently told players to “report” and do media interviews as if camps had opened, underlining that they want to play and are being locked out. He could get up groups in only four cities. In one of those, Chicago, the Bulls’ contingent was made up of two players, Steve Kerr and Bill Wennington.)

There are dovish owners, starting with Allen and Boston’s Paul Gaston, who voted against the lockout, but Stern is the undisputed master of his ship, running it so tightly, teams know little of his strategy, fall-back positions and bottom-line intentions.

Why shouldn’t they trust him? He has always come through for them and, despite the current embarrassment, has things set up in their favor, with the new $22-million-a-team-a-year TV money set to flow and no prospect of a penny’s rebate to NBC until it misses its first telecast--Christmas Day.

Stern surely went to school on the 1994 NHL lockout, led by his former deputy, Gary Bettman. Baseball lost its ’94 World Series to a strike, but the NHL preserved a shell of the regular season and the playoffs. In baseball, they’re still lamenting 1994, but in the NHL, you don’t hear much about it.

Stern, who as recently as 1994 nicknamed himself “Easy Dave,” cherished his perfect labor record, but he plainly knew war was coming after the 1995 David Falk-Jeff Kessler revolt and their subsequent takeover of the union.

What Stern did was pick the time and place, preparing his owners and making his TV deals, making sure they would risk the relatively unimportant games at the start, rather than let the players threaten the playoffs, the disastrous mistake baseball made in ’94.

Of course, if Feerick rules for the players, it will be more like a fair fight between Stern and Hunter and a real mess for professional basketball.

One way or the other, this thing is just about to get under way for real, and about time.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

NBA Players’ Salaries

348 players

More than $5 million: 10.9%

$1 millon-$5 million: 29%

$275,000-$1 million: 39.8%

League minimum ($275.000): 20.2%

Pro Salaries

Salary percentages in the other major sports

NHL

$150,000-$300,000: 2.6%

$300,000-$1 million: 60.2%

$1 million-$5 million: 34.8%

More than $5 million: 2.4%

*

NFL

$131,000: 5.7%

$131,000-$1 million: 71.8%

$1 million-$ 5 million: 22.4%

More than $5 million: 0.1%

*

Baseball

$150,000-$300,000: 8.1%

$300,000- $1 million: 53.2%

$1 million-$5 million: 31.3%

More than $5 million: 7.4%

Note: All salaries are based on 1998 opening day rosters except the NBA, which is based on rosters as of the last day of the 1997-98 season. All salaries are provided by the official Web site of each sport.

Researched by HOUSTON MITCHELL / Los Angeles Times