Sports / Basketball

Hoops and Ladders: The Road to the NBA’s New Collective Bargaining Agreement

In 2011, representatives of the National Basketball Association (NBA) and the National Basketball Players Association, the labor union representing the league’s players, sat down to renegotiate their collective bargaining agreement (CBA), a contract between the two organizations that sets the rules for player contracts, revenue distribution, and salary caps, among other things.

At its core, the negotiation was about money, and who gets to make more of it. The NBA, representing the interests of the league and team ownership groups, wanted to see a reduction in the percentage of Basketball-Related Income (BRI) generated by the league that must go toward player salaries. According to the previous CBA, 57 percent of BRI was earned by players and 43 percent by owners. The league also wanted a hard salary cap, making it difficult for teams to spend over a set limit on the salary of any given player. This cap would hinder an especially sought-after free agent’s ability to use an offer from one team as leverage to raise that of another—the end result being that owners would spend less on star players. Finally, the owners wanted non-guaranteed contracts—the ability to discard or renegotiate the contracts of players who underperform, regardless of the expiration date of the original contract. The players association wanted the opposite, seeking to preserve the existing BRI split, a “soft” salary cap, and guaranteed contracts.

The 2011 negotiations were driven as much by narrative as by the particulars of the agreement. The side of this narrative that shaped public perception of the negotiations was rooted in finances: the NBA had lost $300 million over the course of the previous season. The owners told the public the story of a game held hostage by greedy, millionaire players who were completely unwilling to compromise in order to save America’s third favorite sport. But there was also the private narrative of the negotiations themselves, determined by the interactions between the negotiation’s actors and their constituencies. This narrative was colored with hostility and contempt, and it was unable to escape the complicated racial dynamics that have plagued a professional basketball league made up of predominantly black players and white coaches, managers, and owners.

NBA Commissioner David Stern and Deputy Commissioner Adam Silver represented the NBA in the negotiations. Stern had been commissioner since 1984, and he is credited with the NBA’s transformation into a hugely successful international business. Before Stern’s tenure as commissioner, the NBA Finals were aired on tape-delay. The league also had a cocaine problem, and white America saw predominantly black athletes as “high and lazy.” Before Stern, basketball culture—and the game itself—was inaccessible to the TV audience. Stern made basketball family-friendly and marketable, and the sport’s popularity rose. In Silver’s words, Stern “brought modern business practices to sports leagues,” as well as a sharp temper. Stern cleaned up the league through policies such as drug testing and player dress codes, and he was known for taking harsh disciplinary action against anyone—players, coaches, and referees—who broke the rules. Stern’s business acumen and quick-temperedness made the league profitable, but alienated the players along the way. Though respected by the owners he represented, to many others, Stern was a bully.

The players association was represented by its executive director Billy Hunter. An African American, a former collegiate and professional football player, and one of the youngest federal prosecutors in history, Hunter was named executive director of the union in 1996. After a series of scandals following the 2011 CBA negotiations, Hunter left his role in 2013 with a reputation for corruption, nepotism, and incompetence. He was unanimously voted out by a committee of the very players he represented.

With the CBA set to expire June 30, negotiations began in early 2011. From the beginning, neither side was willing to make any concessions on the salary cap or BRI split. As tensions continued to mount, Stern and Hunter remained far apart, and race dynamics quickly entered the narrative. On HBO’s “Real Sports,” host Bryant Gumbel likened David Stern to “some kind of plantation overseer, treating NBA men as if they were his boys.” In his analysis of the negotiations, Gumbel said, “[Stern’s] moves are intended to do little more than show how he’s the one keeping the hired hands in their place.” Similarly, union attorney Jeffrey Kessler, in criticizing the NBA’s “take it or leave it” negotiation strategy, accused Stern of “treating [the players] like plantation workers” instead of “partners.” In response, Stern denounced Kessler’s remarks as an inflammatory ploy to avoid making a deal.

The June 30 expiration date of the old CBA came and went with no new agreement in sight, and the NBA lockout officially began on July 1. Throughout August and September, negotiations resumed and collapsed, during which time there was no contact between teams and players, and players were prohibited from using NBA facilities. The league and the union resumed negotiations in late November and reached an agreement on December 8, ending the 161-day lockout. The lockout resulted in the cancellation of the entire 2011 preseason and the shortening of the regular season from eighty to sixty-six games, costing teams and players an estimated $400 million. On average, each player lost $220,000.

In reviewing the terms of the new CBA, most analysts agree that the players walked away with a raw deal. The players, each feeling a $220,000 hole burning in their wallets with little to show for it in the new CBA, quickly turned on Hunter. The 2011 CBA includes a provision under which either party may opt out of the agreement by 2017— which is a near certainty, given the considerable dissatisfaction with the 2011 CBA among just about everyone.

Silver replaced Stern as commissioner after Stern’s retirement in February 2014. Over the past two years, Silver has proven just as capable a commissioner as Stern, but importantly, he is better liked by the players. Silver’s first test as league commissioner came in April 2014, when Los Angeles Clippers owner Donald Sterling was caught on tape making racist and derogatory comments about certain African American players. Silver quickly banned Sterling from the league for life and collected a $2.5 million fine, winning the respect of many players.

Not only was punishing Sterling clearly the correct action for Silver to take, but it is also important that Silver’s first crisis, in a league that has not always been sensitive to the requests of its players, resulted in a decision popular among players. Silver made the players feel heard in a way that Stern did not. Kevin Johnson, former NBA All-Star and players association employee, said in support of Silver, “The players spoke, they acted, and they were listened to. On this day, Adam Silver is not only the owners’ commissioner, he is the players’ commissioner and we’re proud to call him our commissioner.”

Stern enforced dress codes and drug tests; in contrast, Silver has gone out of his way to rebuild the relationship between the league and the players. He is friendlier and more likeable than Stern—just watch Adam Silver shaking hands with the players at the 2015 NBA Draft. Silver has also made himself more accessible to the media and the fans than Stern ever was. This popularity could help the NBA in two ways come 2017: the goodwill that the players have for Silver could facilitate negotiations, or if negotiations go badly, Silver’s popularity among the fans could translate into increased public support for the league in the negotiations.

Courtesy of Fortune Live Media/flickr.com

Courtesy of Fortune Live Media/flickr.com

 

After the 2011 CBA negotiations, the players association also brought in new people. Michele Roberts was elected executive director of the players association by the players in July 2014. Before her election to this position, Roberts had no previous experience in the world of professional basketball or sports law. Also, she is a woman. These two factors, initially sources of doubt in her ability to do the job, may in fact work to her advantage.

Over her 30 years of practicing law, Roberts rose to prominence as one of the nation’s top trial lawyers. Because of her background, Roberts brings something new to the position she now holds. She commands the respect of the owners as a capable and formidable opponent in a way that the players association’s previous executive directors have not. She is familiar with the adrenaline that accompanies high-stakes negotiation, and perhaps most importantly, she understands the power of storytelling in a way that her predecessors did not.

Drawing from her background as a trial lawyer, Roberts sees negotiation as a dialogue between two competing stories of professional basketball—that of the league and that of the players. In 2011, the owners had complete control over the narrative that accompanied the renegotiation of the CBA: the Great Recession in 2008 took its toll on the league, and the NBA would continue to lose money unless the players—who were already enormously wealthy—did their part to save the game through compromise. This narrative won crucial public support for the NBA, putting additional pressure on the players association during and after negotiations. Roberts is already working to flip this narrative; Silver is working to maintain it. In one of her first interviews as executive director of the players association, Roberts told ESPN, “Let’s call it like it is. There. Would. Be. No. Money. If not for the players. They create the game.” Roberts’ narrative exposes the owners as manipulators who have always had the upper hand, encouraging the public to see the players as hardworking underdogs. In another interview with ESPN, Roberts said, “The commissioner is going back to saying ‘A third of our teams are losing money’—that really got to the players. Everyone was thinking the game is growing, revenue is growing, and then Adam says that.”

Roberts’ relationship with the players she represents will be interesting to watch as it unfolds. As the first female executive director of the union, Roberts’ sex is an obvious difference between her and the players—one that the players have never had to navigate before. Furthermore, Roberts is used to being the only woman in the room. In her pitch to the players before her election, Roberts warned, “My past is littered with the bones of men who were foolish enough to think I was someone they could sleep on.” Roberts’ gender brings a welcome change to the position of executive director, one that may work to the union’s advantage. Perhaps this is what the new world looks like: professional athletes putting their trust and fate in the hands of a woman.

Regardless of this difference, Roberts does share a common background with many of the players. Significantly, like three quarters of NBA players, Roberts is African American. She was raised by a single mother in a low-income development in the South Bronx. Roberts came from nothing, and through a combination of talent and hard work, made herself something—this personal narrative mirrors that of many professional basketball players, and her common background with many players will help forge mutual respect. Roberts brings a new identity and skillset to a position that she found in desperate need of reform. Stern and Hunter failed in 2011 equally because of who they are and because of the conflicting interests of the groups they represented. Roberts has a foot in both worlds: her roots in the South Bronx foster kinship between her and the players, and her prowess as a trial lawyer has earned her the respect of the owners and taught her how to navigate the world of corporate white America and its news media.

As was the case in every CBA negotiation before 2017, and as it will be in every negotiation that follows, Roberts and Silver both want a deal that ensures that the people they represent make more money. The dynamics of CBAs make it very difficult for each sides to get what it wants—if the owners walk away with a deal that enriches the league, it is because the players make less under the terms of that contract. But unlike in previous negotiations Silver and Roberts each have the respect and admiration of the other’s constituency. In 2011, negotiations came to a standstill because neither side was willing to compromise with the other. The respect that each side has for the representative of the other in the next round of negotiations could translate into respect for that representative’s arguments, and even a willingness to make the concessions necessary to reach a compromise. This mutual respect could prevent the ugliness that characterized the 2011 negotiations, and perhaps even enable Silver and Roberts to overcome the typical negotiation dynamic described previously. In this scenario, both the league and the players walk away with a satisfactory deal, avoiding a lockout that would be against the interests of both parties.

Silver and Roberts are both highly capable agents in their respective positions. Both have indicated that they are prepared and willing to play hardball to get a better deal for their clients. In a negotiation between talented individuals agitating for opposing outcomes, a peaceful resolution may be all the more difficult to reach. Furthermore, to the extent that the side most willing to go into a lockout is the side with the upper hand during negotiations, the likelihood of another lockout in 2017 might actually increase as a result of the changes and competency that Silver and Roberts have brought to their positions and organizations.

Analyzing her own approach to the 2017 negotiations, Roberts told ESPN in 2014,

“A lot of my players tell me, ‘We don’t want a lockout, and we don’t want a walkout, but we don’t want to go down the same road based on the same narrative again… I’m optimistic, but I’m not stupid, and so I’m preparing for a lockout or a walkout… We want to be reasonable, and I think I’ve got a reasonable person on the other side of the aisle. I think Adam is a reasonable man, and he strikes me as someone who wants to do what’s best for the game.”

Indeed, it appears that anyone hoping to enjoy a complete NBA season in 2017 can be secure in their optimism. Both Silver and Roberts have made it abundantly clear that they believe their positions to be reasonable, and have faith in the reason of the other side. The respect that the owners have for Roberts and the players have for Silver appears to have gone a long way toward facilitating civil and productive negotiations—perhaps revealing the true extent to which the crippling animosity that colored the 2011 negotiations was responsible for the lockout. Silver told ESPN, “both sides came to the table with a spirit of partnership,” and he even suggested that an agreement may be reached as soon as next month, despite some persisting differences on “key issues.”

How the dynamic of this negotiation has affected the actual terms of the CBA is more difficult to say. Even though it has only been five years since the last negotiation, the league has seen a nearly $2.2 billion increase in revenue. The most immediate effect of this increase on the 2017 negotiations is that there is a lot more money at stake. The revenue increase also makes it more difficult for Silver and the NBA to implement the narrative that was so effective in 2011. Silver cannot responsibly argue that the players need to make sacrifices to save the game, because the game is no longer in need of saving. This reality gives Roberts near complete control over the narrative of these negotiations, and the ability to play hardball. Alternatively, as Silver and Roberts have both suggested, the two leaders have ushered in a new age of collaboration and mutual respect, and the “spirit of partnership” between the two sides is genuine. The terms of the 2017 CBA will reveal which dynamic prevailed.