NBA owners put the squeeze on LeBron & Kobe

Image by Getty Images via Daylife

UPDATED: Looks like NBA players will soon learn what the rest of American workers have discovered during the current economic crisis: their bosses will use this recession to squeeze their balls in contract talks.

No one is going feel sorry for players making millions—especially when so many Americans are out of work—and that’s just what NBA owners are counting on. That’s why the NBA put its first offer on the table last week, a full 18 months before the current players contract runs out. And that’s why the owners first proposal is a real stunner.

According to Ric Bucher at ESPN, the owners propose to cut maximum guaranteed salaries—now $60 million—by as much as two-thirds. Yes, that’s a potential $40 million pay cut for star players like LeBron, Kobe, and Dwayne Wade. And just to make sure players are paying attention, the owners also want existing contracts re-negotiated to confirm to the proposed lower levels.

It’s the most dire economic time, so they want to take advantage of that and scare the players now,” one agent told ESPN. “It is a negotiation. This is what you do.”

Yes, this is the just first round of negotiations, but the NBA owners are making it clear they are going to play hardball. (Sorry for the mixed metaphor.) ESPN also reports that owners want to limit the number of years for guaranteed contracts and eliminate all exceptions to the salary cap, effectively establishing a hard cap to drive down salaries even further. (Fixed labor costs also drives up the value of  franchises, an added bonus for owners looking to cash in soon.)

If LeBron want to realize his dream of being the first billionaire jock, looks like he’s going to need a few more endorsements.

Adonal Foyle of the Orlando Magic, the union’s vice president and a member of the negotiating committee, called the owners’ proposal “ludicrous” and “rash” in an interview with ESPN’s Chris Sheridan.”

A system like [the new proposal] would be too restrictive, and it doesn’t jibe with what we think the league is,” Foyle said . “We have been willing to negotiate a guarantee that we don’t get over a certain threshold, and no other businesses do that. We hold back 9 percent of our income so that the owners can make sure they are covered on the back end. We have given up a lot of stuff, and they have given up a lot of stuff, so I think to start off a negotiation in this rash a term, I think it’s unfair.”

Neither Commissioner David Stern nor union leader Billy Hunter have commented on the ESPN reports, saying only that they would address labor negotiations this weekend at the All-Star game in Dallas. The NBA expected a tough season given the continued recession, but so far attendance has dropped less than 2%  year over year through games of Jan. 23. Mavs owner Mark Cuban is boasting that upwards of 100,000 tickets will be sold for the All-Star Game in the Cowboys new stadium. And only the Pistons have taken a big hit, no surprise given the city’s near-Third World economy.

“The fact that we’re only down roughly 1.7 percent, I’m pleased,” says NBA  senior vice president for marketing Chris Granger. “Our teams have been very resilient thus far.” via New York Times

This kind of news hardly seems to warrant the NBA dramatic assault on player salaries, but the hoops owners aren’t the only ones looking to cut costs. Super Bowl week was laced with stories about labor problems in the NFL, with the union’s new executive director DeMaurice Smith predicting a lockout after the 2011 season. “On a scale of 1 to 10,” Smith said last week, “it’s a 14.” Bud Selig is already laying the groundwork for the 2011 baseball talks, planting stories about his sport’s “payroll disparity.”  Look for Selig to once again push for a hard cap on salaries, despite the game’s surging revenue streams.

It always amazes me when fans side with the owners in these disputes, which is already taking place on message boards everywhere. It’s like siding with Goldman Sachs. Economists have continually proven that salaries have little to do with ticket prices, no matter how many times commissioners and owners link the two. It’s all about what the market will bear. If I’m rooting for either side in a fight over billions, I’m rooting for the people I watch play the game, not the ones taking my tax money to build new stadiums—then jack up ticket prices after first charging me for the license to buy a seat. But maybe that’s just me.