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NY Times: NBA Torn By Its Fight For Control
January 10, 1999
NBA, Once a Dream Team, Is Torn by Fight for Control
By MIKE WISE with SELENA ROBERTS
During the National Basketball Association's long
labor dispute, Steve Jacobs of Timeout Magazine
would listen in on news media conference calls as
league officials gave their latest updates on
negotiations. Brad Jones of Basketball Today listened
in when the union and its players had their telephone
talks with reporters.
There was only one catch: the names and affiliations
were fakes, and the people listening in were actually
spies for each side monitoring the other side's public
posturing.
But the mutual
exercise in
suspicion and
duplicity was, in
fact, only one
remarkable, if
slightly comic,
measure of how
relations between
the NBA's players
and owners had
deteriorated over
the six months of
the owners' lockout,
a standoff that
ended only last
Wednesday with an
11th-hour deal that
narrowly averted the
first cancellation
of an entire
professional sports
season.
The level of
mistrust and
animosity that
colored the ugly
fight over how to
split $2 billion in
annual revenues left
many people, from
fans to labor
experts to marketing
executives, deeply
puzzled: how could
the NBA, the league
that fused pop
culture,
entertainment and
sports into an
enormously popular
commercial product,
allow itself to come
apart so
destructively?
But in truth, say
players, agents and
league officials,
the nastiness of the
contract battle was
not all that
surprising. The
league and its
players had for
years harbored an
expanding set of
resentments: there
were differences
over the power of
player agents and
the enormous
contracts they were
extracting from
owners; there was a
hardening of
feelings over player
misconduct off the
court; and players
sensed that however
highly they were
paid, the owners had
abused them in past
labor negotiations.
"We prided ourselves
on being the best,"
said Isiah Thomas,
the former star for
the Detroit Pistons,
who was once the
president of the
players union and
who is now a
television analyst
for NBC. "That's
what this league has
been about. That's
what they fell in
love with. There was
a family atmosphere,
a real partnership.
But then somewhere
along the way, teams
and players stopped
policing themselves.
It became a
leaderless league.
That's why we are
where we are today."
And so, in the
aftermath of last
week's settlement,
and with the start
of an abbreviated
season less than
four weeks off, the
league and its
players have been
left to calculate
the lockout's damage
-- to their own
relationships and to
the league's
relationship with
its fans.
"The level of ill
will that these
negotiations have
produced will take a
long time to heal,"
said David Falk, the
agent for Michael
Jordan and many of
the league's biggest
stars. "They've
devalued their own
product."
Keith Glass, another
agent, said early last week: "The NBA is no longer
fantastic. The animosity that the players and owners
feel for each other right now insures that. They
probably haven't lost the fans as much as they've
killed their own relationship. They'll never work
together again like they once did. The residue of the
last six months will be there for a long time."
David Stern, the NBA commissioner and lead negotiator
for the owners, conceded shortly before the settlement
that there was major repair work to be done.
"We enjoyed our relationship with the players; we
understood the partnership," Stern said. "Somewhere
along the way, I guess we've lost it."
How the two sides, once partners, became antagonists is
a story that extends well back beyond the last six
months of hard bargaining, angry rhetoric and public
posturing.
The story involves the league's evolution from a
troubled sports enterprise into a superstar-driven,
relentlessly marketed entertainment product, one in
which players, promoted by the league and signed to
lucrative endorsement deals, came to have great
individual power. It involves the changing roster of
owners, a shift that saw family-owned teams taken over
by maverick businessmen and giant corporations. It
involves the signing of several calamitous contracts
and a range of episodes, minor and major, in which
players and owners each felt betrayed or powerless.
But players and agents and owners, however happy they
are to be playing games again, recognize that the root
causes of the dispute may not go away, and may, in
fact, have been exacerbated by the lockout and the
shared loss of hundreds of millions of dollars over the
past six months.
BETRAYAL, ROLLOVERS AND A HIRED GUN
wo events in recent years did much to strain the
sense of trust between players and owners, events
that prompted the union to hire a tough leader for this
latest set of negotiations and that poisoned the
atmosphere of those negotiations.
The first was the botched contract negotiation in 1995
when Simon Gourdine, the union's leader, who was
himself a former league official, negotiated a deal
with the owners that the players came to regard as so
bad it was an act of betrayal. The second happened in
1991, when the players came to believe that the owners
had in effect been hiding some of their income during
discussions about sharing revenues with players.
"If you and I have a business, and I don't show you the
paperwork, and I just tell you the money is where it
should be, what would you say?" Dikembe Mutombo, a
player on the union's negotiating committee, said in
recalling the 1991 incident. "You don't show money,
that's some deep stuff."
Even in subsequent years, with the players using the
same accounting firm to check on owners' total
earnings, many players believed that the owners had a
way of concealing ancillary income that would not be
included in the pot to be divided with the players.
That suspicion was even deeper when the players, in the
course of the latest negotiations, were told by the
owners that many clubs were losing money.
"It took a number of months, maybe still even now, for
the players to believe we weren't hiding money, and
that the owners were losing money," one Eastern
Conference team executive, speaking on condition of
anonymity, said just before the settlement. "Most of
the players who will vote still believe the owners are
cooking the books, that the teams are not having the
kind of losses that they have reported.
"The players have looked at our books and they don't
believe our numbers. There's been an air of mistrust
from the beginning regarding the numbers."
But while the dispute over hiding income generated
mistrust, the contract negotiations in 1995 prompted
outright fury. Then, Gourdine held secret negotiations
with Stern on a new deal, and the proposal that came
out included items that were anathema to the players
and their agents, chiefly a luxury tax on contracts
that free agents could sign to stay with their own
team.
The players revolted, and certain agents led a movement
to disband the union and then re-create it with
different leadership. Ultimately, Gourdine was ousted,
and a much more militant group of players, including
Patrick Ewing and Alonzo Mourning, took positions of
leadership in the union.
The union, determined to assume a far more aggressive
and confrontational approach against owners they felt
had both misled them and then all but tricked them in a
contract negotiation, hired Billy Hunter as its
executive director.
When they interviewed Hunter in a San Antonio hotel
conference room in February 1996, few players on the
executive committee knew much about him. They saw on
his resume that he was a former U.S. attorney and knew
that he had played two years in the National Football
League as a defensive back and kick returner.
He was a former player. He could relate, they thought.
Yet with no experience as a labor negotiator and
approaching his mid-50s, some skeptical players wanted
to know what his objective would be when he sat across
from the powerful commissioner at the bargaining table.
Hunter vowed that he would try to defeat Stern. "Just
like he would try to do to me," Hunter said. "I'm not
going to be intimidated, I can tell you that."
Hunter, in contrast to his predecessor, welcomed the
assistance of prominent player agents, quickly forming
an agents advisory committee. And Hunter was often at
Madison Square Garden, working the locker rooms before
the games, spending as much time as he could talking
with players.
Asked often what the players' strategy would be in
negotiations, Hunter would reply, "We're going to take
back what they didn't give us in 1995." He would then
conclude, "I'm relishing the opportunity."
ENTERTAINMENT MORE THAN SPORT
savvy 22-year-old named Michael Jordan stood before
a crowd of reporters in 1985 to announce that he
had signed an endorsement deal with Coca-Cola. It was a
time when the soft-drink company was tinkering with
tradition by introducing New Coke.
And so the tricky question was asked: "Michael, do you
prefer New Coke or regular Coke?" Jordan could either
insult tradition or snub change. He did neither, and
told the reporter: "Coke is Coke. Both taste great."
The ultimate pitchman was born. And from that moment
on, Jordan, with his soft baritone voice and his
spellbinding skills on the court, ignited a marketing
phenomenon that would serve the NBA's strategy to sell
its stars.
But in time, the very success of the league's marketing
effort -- selling stars more than teams -- created an
imbalance of power, with players able to demand huge
salaries and dictate a club's financial strategy. It
also backfired when advertisers, sponsors and fans came
to realize that Jordan and his formidable marketability
were the exception, not the rule.
After the league nearly collapsed during the 1970s and
early '80s, ridden by drug use and by the perception
that a predominantly black league could not sell
tickets, Stern was determined to develop a marketing
strategy behind the idea of multimedia stars. It
started with Larry Bird and Magic Johnson -- two
likable players who had ability to match their
personality -- and was carried to a new level by
Jordan, a crossover marketing phenomenon able to sign
deals with McDonald's, Nike, Coca-Cola and Gatorade.
Jordan's popularity trickled down to the rest of the
league. Suddenly, every team seemed to have a
commercially identifiable face -- Shaquille O'Neal, for
instance -- and players rose to something more closely
approximating rock star status. The NBA became a
fixture in a kind of global pop culture.
The 1992 Olympic Dream Team, festooned with Jordan,
Bird and Johnson, was an international hit. The NBA
superstars in Barcelona, Spain, stopped to take
pictures with opposing players and mugged with the
fans.
"The NBA is much more of a celebrity-driven league than
the NFL or baseball or the NHL," said Dean Bonham of
the Bonham Group, a sports marketing firm. "The word
celebrity is used because the NBA is as much
entertainment as it is sport. The NBA has helped
facilitate that exposure through corporations over the
years and have helped foster the image of celebrity."
Not surprisingly, players, armed with wealth gained
outside their contracts for playing basketball and
positioned as the league's source of identity and
appeal, brought enormous strength to the negotiating
table when contract talks came up. Deals for $60
million, then $100 million resulted.
But two contract negotiations changed the economic
landscape, and the mood of the league, more than any
others: O'Neal's deal with the Los Angeles Lakers and
Kevin Garnett's with the Minnesota Timberwolves.
The Orlando Magic never imagined it could go from the
team of the next decade as an NBA finalist in 1995 to a
team that failed to make the playoffs last year. But
that can happen to a team that cannot retain its
franchise player.
As free agency approached in 1996, the Magic
underestimated O'Neal's market value and insulted him
with a $69 million offer. Rich DeVos, Orlando's owner,
vowed he would not break the bank for O'Neal. The
Lakers did, for $121 million. The Magic has not
recovered since, and the leverage of a star player was
made manifest.
Other owners took note. A year later, the new owner of
the Timberwolves, Glen Taylor, watched as his youthful
team began to take form. They were not yet championship
material, but with Garnett, a second-year star, and the
rookie Stephon Marbury, the potential of this
previously slumping expansion franchise had the city
and the league buzzing. But when soon faced with losing
Garnett, unproven and just 20 at the time, the
Timberwolves signed him for $126 million.
"I think the Garnett deal certainly opened the eyes of
a lot of owners," Tom Gugliotta, Garnett's Minnesota
teammate, said recently. "If there was any doubt, that
was probably the end of it. The owners felt the guys
were abusing the system. Frankly, they probably were."
Things may change now.
One team executive said: "A reasonable person could
believe that the league -- which has made a good deal
of money out of marketing itself through the stars --
might not be so interested in doing that in the future.
We've never marketed a team or league. We've spent a
lot of time marketing our players as role models. It's
not unreasonable to assume that there would be a change
in that position now."
NEWER, BOLDER TEAM OWNERS
his lockout is about control," Karl Malone, the
star forward for the Utah Jazz, said early in the
negotiations last summer. "It's like the owners are
saying, 'We're going to show you who's boss."'
It used to be clear who was in charge. Owners used to
be individuals with a love for the game, like Abe
Pollin, who bought the Washington Wizards 34 years ago
and is part of a vanishing breed of old-line owners.
"It was more personal in the past," said Buck Williams,
a 17-year veteran in the league. "I remember Joe Taub
when I was with the Nets. I think he has just a very
small share of that team now," since it was sold to a
consortium of real estate developers last summer, "but
he was someone who was hands on and very personable. I
could always call Joe up and he'd be open and honest
and candid. You could just talk to the guy whenever
something was on your mind. He was a throwback."
Rarely, if ever, has Charles Dolan, chairman of
Cablevision, which owns the Knicks, stepped inside the
locker room at Madison Square Garden. In what was more
of a family atmosphere in the '60s and '70s, owners
would invite players on vacations with them. Now there
are players who have never met the owners of their
teams.
Stern, then, had to represent a tougher, less
sentimental collection of owners, owners who, if they
admitted they might have made mistakes in signing some
of the more outrageous contracts with players, were
clearly weary of feeling pushed around. The owners --
Cleveland's Gordon Gund and Ross Perot Jr. of Dallas,
for example -- were prepared to fight long and hard for
reform of the league's economics and for regaining what
they described as control of their teams.
For these owners had watched as Anfernee Hardaway in
Orlando and Grant Hill in Detroit played roles in
ousting their coaches in an exercise of power.
And the owners, if they were eager to assert greater
control, were this year uniquely equipped to do so, for
14 months ago the league had signed four-year
television deals that would bring them a combined $2.64
billion through the 2001-2 season -- more than double
the value of their previous contracts. And the league,
through a fortunate bit of dealing, was assured of
being paid even in the event of a lockout.
"This is must-have TV," Harvey Schiller, president of
Turner Sports, said at the time the deals were
announced.
The lucrative deal made sense for NBC and for TNT and
TBS, the Turner stations. They shared nearly $400
million in profits with the league in the deals that
ended last season and expected to split more in the new
contracts.
So it was not surprising that their top executives
hardly seemed pained at the prospect of paying this
season's rights fees in full -- $465 million -- for a
truncated or canceled season in exchange for NBC paying
less in the next three seasons and Turner carrying more
future games.
The hundreds of millions of guaranteed dollars, then,
emboldened the owners and insulated them, at least in
part, from catastrophic losses if a season were lost in
an effort to extract the deal they wanted from the
players.
"I think it's all about control," Falk, the agent many
owners accused of holding teams hostage during contract
negotiations, said near the end of the standoff. "I
don't think this labor dispute is about economics. I
think the owners are sick and tired of young and
basically uneducated men, many of whom haven't finished
college, in a position to demand large sums of money.
But I see the frustration. And yet, at the same time,
remember that Stern is the man who has been saying for
the last 20 years that these are the 300 greatest
athletes in the world."
Copyright 1999 The New York Times Company