If you’re not quite sure about the particulars of the NBA Lockout and what could potentially be done to resolve the labor impasse for the long-term viability of the game, you’ve got two pieces of media that should get you up to speed quite quickly and informatively. The first is this interview with one of the league’s most influential power brokers and agents, David Falk. You should also read Bill Simmons’ recent article that outlines a multi-step solution to the lockout. Simmons’ piece is long and delves deeper into the issues, but the two both touch on what I’m now convinced is the biggest problem facing the league — overpaying the role players on a team that have no business taking home high seven or even eight figure yearly salaries that are guaranteed for the life of the contract. Take a listen to Falk, then read Simmons and you’re well on your way towards having the necessary info to opine on the situation one way or another.
Falk joined 106.7 The Fan in Washington D.C. with Mike Wise and Holden Kushner to talk about if he thinks big-name players will go overseas to play and earn a check during the lockout, how he’d best summarize the primary issues being negotiated during the work stoppage, his opinions on David Stern’s role in the negotiations, if he thinks existing guaranteed contracts will be grandfathered in after explaining why he thinks the players are receiving too much of the financial pie, how he thinks there are viable solutions to the mess and how he’d love to mediate the negotiations, and what he thinks are the most broken aspects of the NBA system.
If he thinks there’s really a strong possibility that certain players will go to Europe to play during the lockout:
“I don’t think so. First of all, I’ve been discussing this with my own clients. I had a client in 1989 who was the National Player of the Year named Danny Ferry. He got drafted No. 2 by the Los Angeles Clippers, and he had personal reasons why he didn’t want to play for the Clippers at that time. His first year, he played for a team in Rome called Messaggero. It was owned by a very wealthy guy named Raul Gardini who was one of the three wealthiest men in Italy. And he made $4 million dollars in 1989. Very few NBA players will make $4 million in 2011 if they go to Europe. And if you ask him since he’s been a general manager, the floors were hard, the medical situation wasn’t very great, the guys smoked and drank after the games, practices were four hours a day and he really hurt his knees. I’m not sure he ever became the player he could have been had he started in the NBA. And so some of these guys going over there and risking $100 million dollar contracts to make a couple of million the next several years, I’m not certain for a lot of players that that’s a very wise choice.”
On what the NBA Lockout is all about in layman’s terms:
“Well let’s first start in the broad context. I think we’re in an environment where you have the perfect storm not to have a lockout. Unemployment in the United States is higher than it’s probably been in decades, and as an Econ major in college, the way they keep Labor statistics, they say you’re not looking for a job on a Thursday afternoon wearing a blue shirt, so we’re not going to count you in the people that are unemployed. You go to Detroit or Cleveland, and I bet you the unemployment is up near 25 or 30 percent. And you go to one of those fans whose out of a job, who can’t go to a game for $20 a ticket and a Coke. And Derek Fisher is making $5.5 million and he thinks he should be making $6.5 million; or the owner of a team who’s worth $3 billion and lost $4 million last year, those guys have zero sympathy for either side. It’s the worst time to have a lockout. We had a great season, great playoffs, games are at an all time high, ratings are high, and their job is to make a deal. When I get hired as an agent, my job is not to hold a guy out. It’s easy not to make a deal — you just ask for something unreasonable, and when they say no, you walk away. Sort of like what’s going on in the budget negotiations right now between the Democrats and the Republicans.”
If he thinks David Stern is making a big mistake with this developing labor impasse by not stepping in more forcefully:
“No, no, I don’t think David’s being a hard-liner at all. I think there’s probably a lot of young owners that think David’s not being hard enough. But the truth is that there are a significant number of teams that are losing money. You can argue over how much they’re losing, you can argue accounting and say maybe you shouldn’t put depreciation of franchises which is a non-cash item in the loss, but they are losing money. But at the end of the day…and I’m a player guy, Mike…but the players in the aggregate are making $2.166 billion dollars. So let’s say you’re a player and I’m an owner, and I say ‘Mike, I’m losing money, I’ve got to change your salary, I’ve got to reduce it, I’m losing too much money.’ And you say ‘I don’t believe you’re losing money.’ I say ‘Really?’ I use my favorite David Falk expression — ‘are you bettin’ or are you talkin’? I’ll bet you $2.166 billion dollars that I’m losing money. If you’re wrong, you’re going to lose all your money, and if you’re right you’re going to get it.’”
Does he not think that existing guaranteed contracts should be grandfathered in?
“Well I think there will be guaranteed contracts. What they’re arguing about mostly is the percentage of the pie. The players are making 57 percent of the pie, the owners want to make it less. And I think there are many ways to solve it. In many ways, having done this for 37 years, and having owned a business that’s bigger than most of the teams, and having been an agent for so many years, I’d love to mediate the dispute because I think there are solutions that are acceptable to both sides. But at the end of the day, this is different than the football situation because the owners are printing money and the owners want a deal in football because they know if they start missing preseason games, for every game they miss, they’re going to be losing money. There are about 14 to 20 teams in the NBA, if they miss games they’re going to make money because the losses are going to stop.”
On what he thinks are the most broken aspects of the current NBA system:
“I think the problem in the system, in my opinion, is basketball in the post-cap era…the cap came into the league in ’82 for 6 teams and for the rest of the league in ’83. And what the cap has done in both basketball and football is it’s made it in order to win…pop quiz, how many teams won a title in the NBA since 1980 in the last 31 years? Eight. Each of those teams have a formula. If you look at the Lakers, San Antonio, Miami almost won it last year — they have three stars that make almost all the money. When the Celtics won in 2008, Ray Allen, Paul Pierce and Kevin Garnett made 75 percent of the money. The fourth highest paid guy, Kendrick Perkins, how much did he earn? $3.6 [million]. Now, when your fourth guy is earning $3.6 and you say ‘Kendrick, I want you to be a role player, play great defense, rebound…’ He doesn’t turn to you and say ‘are you stupid? I’m making $9 million, I’m a star.’ Okay, so the formula for almost every team that’s won since 1980 in the cap era is to have three stars and a bunch of role players. What’s happened by putting a maximum salary on the LeBron’s and the Kobe’s and the Iverson’s over the last ten years, we’ve taken the money that we’ve saved from the stars and we pay guys that are probably worth $3 million, $9 million. That’s the problem in the system. They’re hard to coach, some of them aren’t heavily motivated, and you brought it up earlier, in 1998 when I was in my prime, Patrick Ewing was the president of the union. Stars ran the union. Today, the rank and file is running the union, and there’s a lot more rank and file players — they are passing the rules that disadvantage the stars that the people come to see and buy their merchandise or watch their commercials. And they’re overpaying the middle guys, so you have guys that are really out of shape…I’m not going to name names….there are certain guys that I watch when I come to the games here that I wouldn’t pay a nickel to watch because they’re in worse shape at age 22 than I am at 60.”