THE FEDERAL PROSECUTION OF NCAA BASKETBALL

On Tuesday, September 26, 2017 the United States Attorney for the Southern District of New York announced the arrest of ten individuals, including four Division I coaches, in a college basketball scandal. Corporate executives from global sports company Adidas, as well as coaches from Auburn, the University of South Carolina, the University of Arizona and the University of Southern California were named as defendants.  The Criminal Complaints describe two separate corruption schemes involving wire fraud and money laundering.[1]

The first scheme involved college basketball coaches taking cash bribes from athlete advisors, including business managers and financial advisors, in exchange for using their influence to steer college players to certain Division I schools and to retain the services of bribe-paying agents (“advisors”) after they entered the NBA.

In the second scheme, a senior executive at “Company-1” (Adidas), working in connection with the corrupt advisors, funneled bribe payments to high school-aged players through their AAU program to obtain those players’ commitments to attend universities sponsored by Adidas, rather than schools sponsored by Nike or other sports apparel brands.

A criminal complaint is a written instrument accusing someone (the “defendant”) of a crime.  The complaint alleges that federal statutes have been violated; it is supported by the affidavit of an investigating law enforcement agent.  A complaint is enough to hail a defendant into court but prosecutors have to present evidence to a grand jury and obtain an indictment in order to proceed to trial.

Once indicted, under speedy trial rules, the Government has 70 days to bring a defendant to trial minus any excludable periods of time. Generally speaking, there is more flexibility prior to, rather than after, an indictment is filed.  Sometime after a defendant is arraigned on a criminal complaint, the judge sets a date by which the Government must indict or the complaint will be dismissed (See Fed.R.Crim. Pro. 48(b)). Many courts will extend the Government’s time to indict if the defendant is not in custody and the parties consent. This is especially common where there is a request for, or an attempt by, a Defendant to provide “cooperation”.  “Cooperation” refers to a process by which a Defendant is required to provide assistance to the Government (colloquially, “snitching”) in order to obtain a favorable plea bargain.

The three complaints in this case charge four coaches (Chuck Person, Lamont Evans, Emanuel Richardson, and Anthony Bland); three athlete advisors (Christian Dawkins, Munish Sood & Rashan Michel) a senior executive at Adidas(James Gatto), an employee of Adidas(Merl Code) and an AAU program director (Jonathan Brad Augustine).

Gatto is the head of global sports marketing for Adidas.  Merl Code was an employee of Adidas and prior head of Nike Elite youth basketball. Jonathan Brad Augustine, is an AAU program director and head of a Florida 501©(3) non-profit whose purpose is to benefit high school age athletes and provide mentors.

Dawkins worked at a sports management company in New Jersey but was not a registered agent.  His main duties included recruiting athletes to the firm and maintaining client relationships.  In May 2017 he was fired for misusing an athlete’s credit card to pay for ride company services.  He then tried to open his own sports management business. Sood founded an investment company in 2002 and is a registered investment advisor.  Sood was an investor in Dawkins’ new sports management business.

The non-university coach defendants (Gatto, Sood, Dawkins, Code and Augustine) are charged in Criminal Complaint #17-MAG-7120[2], pending before United States Magistrate Judge James Cott.  Those defendants are charged with one count of conspiring to commit wire fraud, two counts of actually committing wire fraud (substantive counts) and one count of money laundering.  The criminal acts are alleged to have been committed between May 2017 – September 2017.

Count One – charges a conspiracy to commit wire fraud and agreeing to a scheme to defraud by obtaining money by false pretenses. The defendants and others employed at “University 6” & “University 7” made bribe payments to high school athletes and/or their families in exchange for the player’s commitment to play basketball at those schools.  This resulted in the universities unknowingly giving scholarship money to athletes who were ineligible because they had accepted bribes (this is also the substantive wire fraud charge in count 2). The Government’s theory is that the universities were thereby deprived of control over their money and could have been subjected to financial penalties under NCAA rules. (substantive wire fraud charge under count 3).  Count Four charges money laundering; i.e. conducting financial transactions knowing the money is proceeds of illegal activity.

How the Schemes were Allegedly Carried Out

The remainder of complaint, paragraph numbers 8-47, outline the factual background of investigation.  Since 2015 the FBI and US Attorney for the Southern District of New York have been investigating the criminal influence of money on coaches and players in college basketball.

Bribes paid by athlete advisors and high level apparel companies to student athletes were facilitated by coaches at Division I universities.  The money was paid to athletes (or their families) playing at Division I schools or intending to attend a Division I college after high school in exchange for a committment to attend a particular school and then to hire the “bribe-payors” as agents or in other similar capacities once they enter the NBA.

Sometimes payments were concealed by paying the money to third party or non-profit organizations controlled by the defendants and encouraging players and their families to make false representations to these schools to conceal their violation of NCAA rules.[3] Two defendants, Gatto and Code, employees at Adidas (“company 1”) conspired to pay athletes to entice them to attend Adidas sponsored schools and then sign with Adidas once they entered the NBA.  Dawkins, Sood and Augustine facilitated the payments from Gatto and Code to the players and then got the players to commit to hiring Dawkins, as their agent/business manager,  and Sood as their financial manager, after they turned professional.

In order to gather proof against the Defendants, the Government used a cooperating witness who operated a business management firm that catered to professional athletes and provided investment related advice. In September 2017 this cooperator pled guilty to securities fraud, wire fraud, aggravated identity theft and making false statements pursuant to a cooperation agreement. The latter reference is not explained in the Complaint but most likely means the cooperator lied to his federal “handlers” during the course of the investigation.

 An FBI undercover agent posed as a potential backer for the sports management company Dawkins was trying to set up with Sood. Dawkins instructed Sood and the undercover to make a $25,000 payment to a player with a promise they would be reimbursed by virtue of their positions with the sports management company.  The FBI captured Dawkins on a wiretap and were intercepting his phone calls.

Adidas generated sham purchase orders since they couldn’t use funds to directly pay a player without risking the illegal payment being discovered.  Gatto was putting the purchase orders “on the books” and listing them as payments to an outside consulting company with which Code was affiliated.  Gatto also made payments “off the books” to Code’s working group within Adidas. Code complained in one conversation that when he tried to submit an invoice to Adidas from Code’s consulting company for the “university 6 situation” the consulting company didn’t have a vendor number in Adidas’ system. It would take Code several weeks to create a vendor number and purchase order and he couldn’t afford to wait. He was upset that  Gatto wasn’t using his position to push it through so Code asked Dawkins to have Sood and the undercover to make a $25k payment to player 10’s father.

Player 10’s father had been putting pressure on them to get paid. In return, Player 10 would then agree to sign with Dawkin’s company to represent him when he turned professional. The Government also intercepted conversations between the defendants about how other apparel companies mask similar payments to high school athletes.  Code stated that by funneling payments through a third party company like Dawkins’ he could do whatever he wanted with it because Adidas was not engaging in a monetary relationship with an amateur athlete.  Rather, he characterized it as engaging in a monetary relationship with a business manager. Dawkins expected that if the kid was “one and done” that he’d be a top 20 draft pick but if he played two years of college he’d be a top ten pick. [4]

A week and a half after the NBA Summer League[5] ended in Las Vegas, Augustine met in hotel room there with an assistant coach from Louisville, an undercover agent and a cooperating witness. They discussed certain difficulties they were having with their recruitment scheme. In addition to Player 10, they were recruiting another player to attend Louisville but the player’s mother was demanding payment immediately. Adidas had agreed to pay player 10 a certain amount but a rival apparel company (and university 4) was “coming in with a higher number”.  Dawkins discussed how once they finished paying Player 10 they had to then pay his father $2,000 / month.  He also talked about giving Augustine $5,000 per month to give to the other player’s mother so she could pay her bills. Dawkins admitted to the FBI undercover agent that some of the payments are “illegal”.

While most media commentators have welcomed the federal prosecution as helping to clean up college basketball, there have been some who have criticized it as federal “overreaching”. Others have called the public shaming of only a small number of schools a “drop in the ocean” and even a misplaced effort:

“Last month, Adidas agreed to pay $160 million over 10 years for the University of             Louisville to wear its apparel. That’s called a “deal.” But if the company then pays a high    school athlete to attend the school, that’s called a “bribe”? But that’s an issue for the             NCAA, not law enforcement. The NCAA has real power to enforce its rules, because it can destroy the careers of both players and coaches who cross it. And despite the obvious      fact that college basketball and football are multibillion-dollar businesses, with coaches        and others being paid millions of dollars, the NCAA remains adamant that no money ever touch a player’s hand. That’s really the crux of the issue here.”

See “Why is the FBI trying to enforce NCAA rules”, Joe Nocera, New York Post 2017

 

[1] The case was brought in federal court, as opposed to state court, because the scheme involved individuals and businesses acting across state lines and the universities received federal funding.

[2] In the two other complaints, Chuck Person and Lamont Evans are accused of executing another scheme where athlete advisors bribed university coaches to steer players to those athlete advisors once they entered the NBA.

[3] The NCAA Division I manual provides: “student athletes shall be amateurs in an intercollegiate sport”.  NCAA bylaws define “agent” as anyone who seeks to obtain directly or indirectly any type of financial gain or benefit from a student athlete’s potential earnings as a professional athlete”.   The definition includes “marketing advisor, financial advisor, contract advisor or brand manager”.  Athletes, coaches and staff have to certify each year that they are in compliance with NCAA rules in order to participate in NCAA sponsored sports. They also have an affirmative obligation to report any violations of NCAA rules including whether they have any knowledge of rules violations by others.

[4]  Last year’s top pick, Ben Simmons, signed a four-year contract worth up to $26.6 million with the first two years and $12.1 million guaranteed. By comparison the 16th pick in the draft received a deal worth $9.1 million with $3.9 million guaranteed.  See “Here’s how much money players lose when they fall in the NBA Draft”, Cork Gaines/Diana Yukari, June 2017, Business Insider

[5] A series of off-season competitions during which National Basketball Association teams try out different rosters of players typically consisting of a mix of rookies, second year players, and unsigned free agents.

 

CALLING ALL FANS:  HELP BRING AN NBA PRESEASON GAME TO BUFFALO IN 2018/2019

After hosting the first and second rounds of the NCAA Tournament this week, Buffalo once again showed its passion for basketball. We are the former home of the Braves (now LA Clippers), have plenty of Division I college action, and we are a potential market for five pro teams and their D-league affiliates: Toronto, Detroit, Cleveland, Boston & the New York Knicks/Nets.  MSG TV, TSN, NBA TV will all provide coverage of the upcoming playoffs with expected ratings to be among the highest across the major professional sports leagues.

buffalo braves

Always interested in developing a shrinking number of untapped markets, you would think the NBA would have come calling on Western New York long ago.  After all, the Bills draw fans from Rochester to the East, Northwest Pennsylvania and Southern Ontario. We have travel and tourism groups working to promote the area; a number of former NBA players still live in Buffalo; the hotel industry is booming thanks to the Governor’s Buffalo Billion program; and we have the kind of faithful sports fans that still pine for the glory days of Bob McAdoo, Ernie D, Bob Lanier and Adrian Dantley.

So I’ve been working for a while with Coach Jim Baron and Paul Stasiak (NFADA) to entice a couple of NBA teams to schedule a preseason game here in Buffalo. We learned from the League Office that the teams make their own preseason schedule.  We started by contacting Detroit and Toronto.

The Knicks are further away but a Buffalo ex-pat is heading up MSG TV and signed a deal with the Pegulas to broadcast Sabres games.  A Knicks game in Buffalo sure sounds like additional good content.

Detroit has the most connections to Buffalo.  Coach Stan VanGundy was an Assistant Coach at Canisius College; Lindsey Hunter played for the Pistons and is now an Assistant Coach for the UB Bulls Men’s basketball team.  Not to mention that UB Head Coach Nate Oats came to us from Romulus high school in Detroit.  Bob Lanier was a Piston first round draft choice from St. Bonaventure.  It’s a 4-1/2 hour drive through Canada to the historic Palace in Auburn Hills or next year to the new Little Caesar’s arena in downtown Detroit.

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Toronto is the closest team, about 2 hours to the north via the QEW to the Air Canada Center.  Mark Jones from ESPN is from Toronto and growing up was a big fan of the Buffalo Braves.  The voice of the Raptors, Jack Armstrong, has family in Western New York. TSN television broadcasts are handled by Leo Rautins who played basketball for Syracuse University.  The Raptors availability in the short term may be limited because in the last few years they’ve committed to playing in the NBA Canada series during the preseason.

There are a number of other challenges.  One is that the new NBA collective bargaining agreement between the players and the league reduced the number of preseason games from 8 to 6.

The next concern is financial.  One of the teams would have to be the “home” team; i.e. on the hook for expenses incurred by having the game here. Costs associated with the arena, advertising, etc. We have to find out what the “guarantee” is – how many tickets we have to “guarantee” we can sell and at what price.  That information will come from the team that considers Buffalo as a home game.

We made some very preliminary inquiries to Pistons management who expressed possible interest if they were the visiting team. We have also reached out to the Raptors management.  Obviously, they are coming down the stretch in the Eastern Conference and then looking ahead to playoffs in April and May; after which their attention will be focused on the NBA draft in June.  It will be tough to keep a discussion going with them now about a preseason game in Buffalo in the next year or two but we will try to stay on their radar.

Until we get a commitment from at least one team we can’t really go full steam ahead to solicit corporate sponsors. I’ve been doing my research and making some contacts with businesses and professionals in marketing.  The age-old problem in Buffalo is that we don’t have any Fortune 500 companies here.  But I have a few ideas about marketing the event that we can explore with local companies.  The teams also have their own personnel who have experience hosting games in different venues.  Over the next few months I’ll continue to mention the prospect of sponsorships to national companies during my networking on behalf of R1 Sports Mgnt clients.

Locally, Mayor Brown and Russ Brandon have publicly expressed support for getting the NBA to come to Buffalo.  Business leaders, the NCAA host committee and power brokers like the Pegulas and the Jacobs family will ultimately make this happen but we have to show them that there’s a demand for the event.

So if you’d like to see an NBA preseason game here this is what we need:  please forward this article to anyone you know who would be interested; “like” it on twitter, re-post it on your Facebook page or Instagram account.  Let’s create some social media buzz about this idea.

Our friends in traditional broadcast media and the Buffalo News, like interim Buffalo News sports editor Keith McShea, will be allies and advocates.  Lisa Wilson who ran the News’ sports department for the past six years just started March 13th as sports editor of ESPN’s The Undefeated.  Somebody must have her new email address.  There are Buffalonians all over the country, like Gail Hunter who is Vice President of Public Affairs and Event Management for the Golden State Warriors, that if called upon, would help.  Not to mention our local coaches and players who all have extensive lists of basketball contacts. Build support for the game and they will come.

So Let’s Go Buffalo – let the Raptors and Pistons know that “We the North” and “The Grind” were a way of life here long before becoming team slogans. That the “Home of the Braves” is still home to the NBA.

 

 

ESPN’s Stephen A. Smith for President

Nelson Mandela famously said “I never lose. I either win or learn”. That’s an appropriate sentiment with which to begin reflection on the lessons of last week’s presidential election. With the noise and vitriol fading, now is the time to take stock of where we stand as a country in the days since my candidate lost. Lest you think my candidate was HRC, and at the risk of taking a page out of Jay Cutler’s playbook, I will tell you for whom I cast my vote. Like Inside the NBA’s Ernie Johnson, I too wrote-in my choice for President: Stephen A. Smith.

As a white, 50-year old woman living in Buffalo New York, I have been told that I am a statistical demographic whose vote could have gone either way last week. I live in an economically depressed sports and former steel town; in the once-upon-a-time tony suburbs of a traditionally left-leaning county in Western New York. Had any of the pundits or pollsters bothered to ask me, I would have told them my political views mirror my choices in sports teams—not blindly loyal to only one team, year after year; accustomed to heartbreaking losses (Bills “wide right” / Sabres “no goal”) and defining a “win”, at times, differently from the rest of the country.

Stephen A. has recognized for a while now the interrelation between sports and politics.   His commentaries have a depth of vision that make the recent well-intentioned protest efforts of some NBA players seem less like a moral and organic movement and more like an ordinary and temporary reaction. In speaking about politics and sports, Stephen A. is the voice of middle America—not “white America” or “black America”, but rather the America of the loyal but discouraged who, like himself,  still have a lot of fight left. I never feel like he is talking down to me on First Take; I feel he is talking to me, not about me. He doesn’t distinguish between college educated and non-college educated people like the professional politicos do. He knows what I know: that even though I had the privilege of going to college, while most in my family did not, they are smarter than me in a lot of ways and half of them make more money.  Smith is unique in how he gets his political message across to sports fans. He can talk about political topics in a way that makes it seem like we are sitting across the dinner table from each other with the rest of our family.

Smith, long before Trump made it a campaign slogan, has always “told it like it is”. He took heat for saying that he thought the elite media was biased toward HRC [1] But is there any doubt in hindsight that the New York Times and mainstream “news” channels could barely conceal their deep disappointment about the results last Tuesday? He called out San Francisco quarterback Colin Kaepernick: not because Kaepernick cared enough about social justice to take a knee; but rather because he didn’t care enough to take the time to exercise our most important right as citizens in a democracy. Smith passionately excoriated him for not voting, then announcing it and setting the wrong example for the kids who look up to him as a professional athlete.[2]

Stephen A. also came under fire with some groups when he said the Democratic Party took the black vote for granted, to the detriment of blacks.[3] His point was that the Democrats can be your favorite team but if they are playing poorly, raising ticket prices and disrespecting your fan loyalty, you may want to check out what others have to offer, consider your options, show them respect runs both ways.

Smith pointed out that African Americans heard something different when Trump said “Make America Great Again”. He said they heard “Make America White Again”.[4] Just as many career women heard him say “Make America a Men’s Locker Room Again”. Trump donned a baseball hat and talked about HRC’s lack of stamina. Sports metaphors have always been an effective communication device. Politics as sport and Sports infused with politics is our reality in America today.

In contrast to Kaepernick’s silent, symbolic protest, Smith joined many NBA players, as an active and vocal critic of the injustice they see in America. While stars like Carmelo Anthony[5], Lebron James, Chris Paul, and Dwayne Wade speak out on behalf of political causes and give their followers an outlet for their frustrations, Smith is their articulator-in-chief. Whitehouse press conferences would be relevant again if Stephen A. was the President, or even if he was the Whitehouse spokesperson (Mr. Trump are you listening?)

Events like Trayvon Martin’s murder, gang violence in Chicago, and racially inflammatory speech during the election all inspired NBA players and coaches[6] to DO something, to ACT[7]in the face of racism. I applaud these efforts but want to hold up a mirror for one second. Stephen A. why don’t we hear players asking why Becky Hammon (thanks Pop!) and Nancy Lieberman are the only women coaches in the NBA and demanding equality in that regard? You can hardly find a basketball blog that doesn’t have sponsored ads at the end depicting women in various states of undress. Players in recent memory have been guilty of tweeting pics of their girlfriend’s behinds. Many NBA dance teams put more emphasis on being sexually alluring than showcasing the quite obvious athleticism it takes to entertain crowds for two hours.  Thank heaven for Michelle Roberts. Like so many men, JR Smith wonders what to tell his daughters about the outcome of this election.[8] Its not what you tell her JR, its what you do to make sure she doesn’t experience prejudice the way you do. Instead of worrying about what you’re going to say to her, you should be asking yourself what you’re going to do so that she is never made to feel “less than”.

In this new politically aware age of the NBA, lets see some more white players don a hoodie. And lets not forget to protest discrimination in all its forms. While NBA Commissioner Adam Silver may be the choice of progressive liberals to run for president in 2020[9] I’m supporting a Stephen A. Smith candidacy. He’s a true independent. A man of the people; A voice for all of us out here in the heartland, united behind the NBA and our country even if it they aren’t always perfect.

[1] http://www.breitbart.com/video/2016/11/11/espns-stephen-a-media-literally-tried-to-win-election-for-hillary-sidekick-disputes/

[2] see Twitter @firsttake @stephenasmith November 10, 2016

[3] http://www.breitbart.com/video/2015/03/18/espns-stephen-a-smith-for-one-election-every-black-person-should-vote-republican/

[4] http://defendernetwork.com/videos/trending/stephen-smith-reacts-trump-winning-election/

[5] http://www.nytimes.com/2016/11/10/sports/basketball/carmelo-anthony-lebron-james-election.html?_r=0

[6] http://www.nytimes.com/2016/11/13/sports/basketball/kerr-gundy-popovich-criticize-donald-j-trump.html

[7] https://www.washingtonpost.com/news/early-lead/wp/2016/11/10/the-message-was-loud-and-clear-in-nba-and-nfl-a-struggle-to-accept-trumps-election/

[8] https://www.washingtonpost.com/news/early-lead/wp/2016/11/09/raw-emotions-surface-as-nba-player-asks-how-to-explain-trumps-election-to-his-daughter/?tid=a_inl

[9] http://paceandspacehoops.com/posts/29167112/why-nba-commissioner-adam-silver-should-run-for-president-in-2020.html

 

A Tribute to Coach Jim Baron

(by guest author Kyle Clarke; edited by Cheryl Meyers Buth)  

 Canisius College Basketball Coach Jim Baron walked away from a legendary career this past March to spend more time with his family.  He retired as he had always coached, with class; a noble warrior quietly heading home after battle.  He embodied Theodore Roosevelt’s famous description of the character of men, seemingly so rare these days, who humbly dedicate themselves to our mutual betterment:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

(Excerpt from the speech “Citizenship In A Republic” delivered at the Sorbonne, in Paris, France on 23 April, 1910).

Having coached at two Division I schools in Western New York, St. Bonaventure and Canisius (and the University of Rhode Island in between), Coach Baron earned a special place in the hearts of local college basketball fans. On the occasion of his unexpected retirement, he offered fans a glimpse into his life beyond coaching: “I have given this decision a lot of thought and I just feel like it is time for me to step aside,” Baron said in a statement at his retirement press conference. “This profession demands a lot. I recently went overseas to see my boys play basketball professionally and there I realized, I have not been able to see them or my granddaughters much at all the last few years. I want to be a dad and I want to be a grandfather.”

Before becoming the patriarch of his own family, Coach Baron enjoyed a basketball life as both a player and coach himself. He was born in Brooklyn. His personality, style of play, and coaching mentality all reflect the toughness he learned growing up. He played for St. Bonaventure in the mid-70’s where he was known for his hard-nosed, defensive play. Baron was a talented scorer but he was typically tasked with the job of shutting down the opposing team’s best players. He played a key role in leading the Bonnies to the NIT Championship in 1977 and, notably, also earned “The Ideal Bonaventure Student” award. In later days he always held up the notion of the student-athlete as a worthy and necessary ideal to be achieved.

After graduating from college, Coach Baron went on to play professionally with the Rochester Zeniths of the Continental Basketball Association and won a championship in 1979. The Zeniths played in downtown Rochester, New York at what is now known as Blue Cross Arena.

Coach Baron’s first coaching position was as an assistant at Aquinas Institute in Rochester, New York. The following year, Baron became an assistant coach at NCAA Division III Rochester University. Baron quickly rose through the college coaching ranks, becoming an assistant at Division I Loyola College in Maryland.  In 1980, Coach Baron had an opportunity to return to his alma mater as assistant coach for St. Bonaventure University. Following a short stint with his former team, Baron joined the Notre Dame coaching staff, learning under the legendary Digger Phelps as an assistant coach from 1981 to 1987. There, Baron helped Notre Dame make the NCAA Tournament in 1985, ’86 & ’87. The Irish were ranked in the top 25 in both 1986 and 1987.  In 1988, Coach Baron received his first Division I coaching job at St. Francis University in Pennsylvania.

When Coach Baron set foot on the St. Francis (PA) campus, the basketball program was in rough shape. In the five years prior to Baron’s tenure, the Red Flash accumulated a record of 54-85, a win percentage of just 38.8%. From the time that he took over to when his tenure with the team had ended, Baron’s record was 74-71 with a win percentage of 51.0%. The highlight of his time with the Red Flash was the 1991 season which saw the team clinch their first and only NCAA Tournament berth in school history. Due to the success that he was able to achieve with St. Francis (PA) he was then afforded an opportunity that very few coaches receive in their careers.

In 1992, Coach Baron took over the basketball program at his alma mater of St. Bonaventure University. He lived up to his reputation of turning around struggling basketball programs. Similar to his experience at St. Francis, Coach Baron was dealt a bad team in a tough conference and was asked to make the Bonnies competitive. Prior to his arrival the Bonnies had just a 34.3% win percentage during the tenure of its last two head coaches. During his tenure Baron was able to revive the program, accumulating a 50.2% win percentage and leading the Bonnies to three NIT and one NCAA tournament appearances. The Bonnies came into their 2000 NCAA tournament game matched as the 12th seed playing Tubby Smith’s 5th seeded Kentucky Wildcats, that included eventual NBA players Keith Bogans, Tayshaun Prince, and Jamaal Magliore.  The Bonnies were able to mount a fierce second half come back and push Kentucky to double overtime before falling to the Wildcats by a score of 85-80.

I remember going to grammar school that day in my Bonaventure jersey and our teacher allowing us to watch the game and share in that experience with the team and the rest of the community. During his time as head coach, Baron left an unforgettable impression on the residents in Olean, New York; and to this day I still enjoy the “Baron Sausage Sandwich” at the local Angee’s Italian Restaurant. Bonnies’ fans will always compare teams to Coach Baron’s squads and the exciting way winning a basketball game can unify a small town and beyond.

After a nine year stint with his alma mater, Baron was hired away by in-conference rival University of Rhode Island. Baron’s longest coaching tenure was with the Rams where he spent eleven seasons. Coach Baron took what had been a mediocre team and turned them into consistent conference contenders, finishing in the top half of the conference standings in all but four of those eleven seasons.  Coach Baron led Rhode Island to five NIT appearances, in which the best season ended with an NIT semifinals appearance. The Rams pushed eventual champion University of North Carolina to within one point of elimination in an overtime thriller. The highlight of Baron’s time in Rhode Island however was coaching his oldest son, Jim Baron Jr., for four seasons. During his playing career Jimmy was a 3-point specialist. He holds many Atlantic 10 Conference records for both single season and career marks. Jimmy is still currently the all-time leader for the Rams in 3-pt Field Goals made, 7th in 3-pt Field Goals Attempted, 4th in 3-pt Field Goal Percentage, and 3rd in True Shooting Percentage.

In 1992, Coach Baron decided to accept a job that brought him back to Western New York, as head coach of the Canisius College Golden Griffins.  Canisius College had a proud basketball tradition. The legendary John Beilein had coached the team 15 years before.  In the interim, the Golden Griffs had just one winning season. Over the course of the previous five seasons before Baron showed up, they had a win percentage of just 33.7 %. And once again, as has been the common theme throughout Baron’s career, he made an instant impact. Following a season where the Golden Griffs won a mere 5 games, Coach Baron was able to win 20 games immediately upon taking the helm. In fact, in his four years with the team Coach Baron was able to accumulate a 55.3% win percentage and a post-season berth to the College Basketball Invitational in three of his four seasons. Similar to his experience at the University of Rhode Island, Coach Baron was afforded the opportunity to coach his youngest son, Billy Baron. Billy was able to shine for his team where he averaged 20.7 ppg, 4.5 rpg, and 5.1 apg over the course of two seasons with the team. During the 2013-2014 season Billy earned MAAC Player of The Year honors behind a 24.1 ppg, 4.9 rpg, and 5.3 apg effort to accompany a 20-win season for the team.  As Coach Baron referenced in his retirement press conference, both of his sons, Jimmy and Billy, are currently playing for successful European basketball teams.

Attorney Sal Martoche, former Appellate Division Judge and United States Attorney for the Western District of New York, is also a Canisius College graduate and basketball season ticket holder. I was able to talk to Judge Martoche about what Coach Baron meant to the program over his 4 years with the school and the praise was overwhelming: “Jim brought such a fire and passion to the sidelines. We have not seen a competitor like him since John Beilein”, Judge Martoche told me. He also recalls how adaptable Coach Baron’s teams were throughout the years stating that “if a team wanted to slow down and play in the half court, Jim could do it. If they wanted to get out and run and play at a quicker pace, Jim could do it.” We spoke of the great discipline that Coach Baron brought to the game and how he was able to get so much out of the players he recruited.

One thing Coach Baron was always good at is recruiting local talent. For example, at Canisius he was able to get players such as Phil Valentie (Aquinas Institue), Adam Weir (Canisius HS), and Jermaine Crumpton (Niagara Falls HS). Along with giving local players a chance to play at the Division 1 level, Coach Baron was able to help his players achieve something that can be easily forgotten in the world of collegiate sports — a college degree. “If his graduation rate isn’t at 100% than it is very, very close” said Judge Martoche.

While he had the privilege of teaching his players the invaluable lessons that all athletes learn through competition such as discipline, hard work, respect for each other, and teamwork, Coach Baron was able to give his players a chance at life after basketball. They can take off their jersey and put down the basketball, but nobody can take away the memories; intense games, road trips, the feeling of enjoying a good team win or busting your butt in practice following a loss. And most importantly, nobody can take away the education that was earned throughout the time they were fortunate enough to learn something about life from Coach Baron.

While in the coaching arena, before his eyes passed the shadows cast by other legends of the coaching world, great masters of the game; Coach Baron stood as tall as any of them in his love of the game, talent and leadership. His legacy is in the imprint he left on innumerable student-athletes for whom he was mentor, surrogate father and role model. As Theodore Roosevelt concluded his tribute to one of our greatest allies at the Sarbonne in 1910: “You have had a great past. I believe you will have a great future.”  We wish you all the best on the road ahead, Coach. You have set an example for all of us, no matter our walk of life. You have given us the gift of shared memories and taught us how to win in the face of adversity and how to lose with grace.  On behalf of a grateful community of basketball fans, we sincerely thank you.

 

Sources:

Wikipedia

St. Bonaventure“, College Basketball at Sports-Reference.com

http://www.sportsreference.com/schools/st-bonaventure/, 1 Jan. 2000. Web. 19 Sept. 2016.

 

Canisius“, College Basketball at Sports-Reference.com.

Http://www.sports reference.com/cbb/schools/canisius/, 1 Jan. 2000. Web. 19 Sept. 2016.

 

Saint Francis (PA)” College Basketball at Sports-Reference.com.

Http://www.sportsreference.com/cbb/schools/saint-francis-pa/, 1 Jan. 2000. Web. 19 Sept. 2016.

 

Player Bio: Jim Baron” Player Bio: Jim Baron. N.P., 20 Oct. 2010. Web. 20 Sept. 2016.

 


 

 

 

 

 

 

 

 

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The Underdog Narrative: A Brand Biography that fits Buffalo Businesses

In January 2016, I launched R1 Sports Mgnt, after being certified by the National Basketball Players’ Association (NBPA) as an agent. I plan to continue working in my law firm but did not expect my partners to financially back a business idea with long odds of success; and, for many reasons, one in which I would be considered an underdog. I structured the company so the success or failure of R1 Sports Mgnt would not affect the profitability of our law practice.

Since founding our law firm in January 2013 and now with R1 Sports Mgnt, developing marketing and branding strategies have obviously been a priority. Thinking about attracting clients necessarily involves thinking about who we are and the identity of the company. Would the success I’ve had practicing law translate to being successful as an Agent? If I was an underdog, how would that translate into my company’s biography and marketing plan? After a lot of thought, for me it comes down to a simple question: Are we “Nike” (inspirational, elite and exceptional) or are we “Under Armour” (no expectation for success but beating the odds through hard work)?

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Last week the Boston Celtics played the Memphis Grizzlies at TD Garden. I was lucky enough to sit in the first row behind the media. When the players made their entrance, “IT4”, Isaiah Thomas, looked even shorter than he does on television. The height differential with other players is shocking when you see him up close. How could someone at such a disadvantage because of his size have achieved all-star status? Playing in a sport where lack of height is almost an insurmountable disability, Thomas must have been considered an “underdog” his entire career. Yet he was the one we were there to watch. He got the ball for Boston’s first possession and I rooted for him, this small man among giants to succeed against such odds. And he did. In fact, he took over the game because he is so fast—he gets out on the break and even when outsized moves so quickly its hard to see everything he’s doing.

A few days after the Celtics game, the University at Buffalo Men’s and Women’s basketball teams won the MAC Championship and earned bids in the NCAA Tournament. With simultaneous victories in the MAC championship by the men’s and women’s teams, local sportscasters were proclaiming a “historic day”, “the best day in Buffalo basketball since the Braves left town”, and on ESPN Sportscenter they were referred to as “Buffalo Buzzer beaters”. For the men, it was a back-to-back conference championship and national tourney appearance. The Women had never played in the NCAA tournament.

No one had high expectations for either team at the beginning of the season. The UB basketball program had suffered a black eye in 2015 when the MAC player of the year was suspended from school, former Coach Bobby Hurley left for Arizona State with another of the standout players, and Athletic Director Danny White left for a job in Florida. First year head coach Nate Oats and newly appointed Athletic Director Allen Greene were left trying to right the ship without any big name players. By any definition, UB would have earned the title “underdogs”.

In 2010, Harvard Business School researcher Anat Keinan published the results of a study[i] of how companies intentionally communicated their humble roots to consumers as part of their underdog brand biographies[ii]. These researchers wanted to see the application of such constructs specifically in the area of consumer marketing and product branding. The question was whether consumers would identify with the disadvantaged position of the company and its passion and determination to succeed. Not that those companies were never successful or met with less success than competitors; rather they highlight humble beginnings, hopes and dreams, and struggles against adversity in terms of a disparity in resources; economic, educational or personal obstacles; or other external factors in the process of achieving success. In other words, their marketing highlights their journey toward their goal instead of the attainment of the goal itself.

We are familiar with numerous other iterations of this theme: David vs. Goliath, loser vs. winner, rags to riches. Underdogs show qualities of perserverence and resilience, determination and defying others’ expectations. Examples of underdog marketing run the gamut from Oprah Winfrey’s success after overcoming abuse, sexism and racism; to Apple, a company started by Steve Jobs in his garage; to Under Armour taking on Nike[iii].

Kevin Plank founded Under Armour in 1995 in Baltimore, Maryland (see http://www.ua.com). Less than twenty years later the company is second in market share to Nike, having displaced Adidas, and its products are sold worldwide. Plank was 23 years old and started the company in his grandmother’s basement. He maxed out his credit cards to get about $40,000 for start-up costs and had spent through nearly all of it in a year. He sold clothing out of the trunk of his car. His first team sale was for $17,000, took almost a year, and came right before his business was poised to go under.

Under Armour didn’t find success by imitating Nike, but rather by focusing on what differentiated them: “We work with athletes who most people wouldn’t or didn’t draft in the first round, or who they wouldn’t traditionally give a prima ballerina title to. We pick that athlete with a chip on their shoulder and their desire to win because it aligns with their own attitude”.[iv] For example, Steph Curry, someone who attained success by training every day to become a better shooter and keeps working at it even after a record-setting season (seemingly the incarnation of their slogan “It’s what you do in the dark that puts you I the light”).

Other examples that would fit Under Armour’s brand might be Herb Brooks and the US Olympic Hockey team. Closer to home, Randy Smith of the Buffalo Braves would seem to be an ambassador for Under Armour rather than Nike. Smith went to a Division III school, wasn’t drafted by Buffalo until the seventh round, 104th overall, and was a longshot to even make the team. Not only did he make it, he was the MVP of the 1978 All-Star game. He set the NBA iron man record playing in 906 games and it took 14 years for that record to be broken.

Nike partners with the most successful athletes and they urge consumers to “just do it” –there are no excuses for not reaching your potential. Under Armour looks at what happens after that initial effort, after “just do it” and partners with athletes who embody qualities of hard work, with a “things don’t come easy” attitude, to sustain success. Where Nike is inspirational, Under Armour is reality; its about the dirty, sweaty work that goes into actually being successful.

I think its an interesting dichotomy – why people find themselves aligned with the underdog who is expected to lose, when most people would say they want to associate themselves with winners. The Harvard team included researchers in marketing and psychology. They found that there were not many studies about the underdog narrative, especially consumer-related models. They theorized that these types of stories resonate with people more during difficult social, economic and political times, giving people hope when the outlook is otherwise bleak.

For the past thirty years, financial crises and income inequality have become mainstays in American life. People are working harder and more hours for less money and few find their jobs rewarding enough to justify the effort. Buffalo, a small city, has struggled – it has been economically depressed and faced an unequal playing field in business, leading to difficulty attracting companies and keeping younger members of the workforce from leaving. In Buffalo there is at least a perception of a lack of social mobility, blue-collar values are a strong undercurrent in the local culture. Buffalo may be particularly well situated for this type of marketing. In other words, the more a person perceives himself/herself as struggling against the odds, the more appeal for the underdog brand.

 

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Whether we are talking about a company finding the right athlete for its brand, or thinking about a marketing campaign for a university or our city, the underdog narrative is one that will continue to play well in Buffalo. One thing I’ve learned is that to be successful you have to know who you are and be authentic. I am a Buffalo gal through and through. For me, if its between “Just Do It” or “Protect this House”, I believe its not enough to “just do it”, you have to plan and prepare for how you’re going to be successful. It takes hard work and grit and determination; not just today but everyday. It takes perserverence and thick skin, your own under armor. I may be an underdog but at R1 Sports we know “opportunity doesn’t have an offseason”. You have to keep working. Just ask the members of the UB basketball team.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[i] “The Underdog Effect: The Marketing of Disadvantage and Determination through Brand Biography”, journal of Consumer Research——-

[ii] refers to the story of a brand’s origins, experiences and evolution

[iii] see “Under Armour’s underdog strategy to becoming the anti-Nike”, Mallory Schlossberg, Business Insider 9/8/15

[iv] Id.

Coming Soon to an Arena Near You…NBA Basketball back in Buffalo?

Being an NBA fan in Western New York takes dedication. If you’re lucky you can catch some basketball news when WGR 55 radio carries ESPN sports-talk programming which happens to include occasional NBA topics. The Buffalo News publishes the league standings but not much more. Even after Golden State’s record-breaking start this season, surpassing the previous best start in NBA history by the ’95-’96 Chicago Bulls’ Jordan/Pippen glory team, barely a whisper about it was heard here. ESPN and NBAtv covered the story non-stop for days leading up to the record-tying game and showed complete game re-runs for days after. T-shirts being sold on NBA.com with “16-0” appearing under the Warriors’ logo are bestsellers nationally, just in time for Christmas. Team apps, the internet, ESPN/TNT and NBA League Pass are the only lifelines for local NBA fans. This begs the question…is the lack of NBA coverage in Western New York due to the fact there are no NBA fans here? Or is it that NBA fans don’t tune in when the media exclusively focuses on the built-in markets of football and hockey? It’s a “chicken and egg” problem that depends on your perspective.

I recently sent an email to Greg Ried, General Manager of Entercom which operates WGR sports radio. I wondered why there wasn’t more (some, any) NBA coverage. I volunteered to contribute content, provided some examples of local connections to pro basketball, and suggested starting with some well-advertised podcasts to gauge interest.   He responded by saying Entercom’s research shows the Bills and Sabres are the most popular topics. Maybe so; but should they be the only topics? Especially when neither team is having a standout year? Does the media define the market for sports in Buffalo? Perhaps the “research” (and ratings information) shows few NBA fans amongst current listeners, true, because there is no basketball coverage on Buffalo’s premier sports radio station.

Everyone knows Buffalo was a former NBA city in the days of the Buffalo Braves, now Los Angeles Clippers. But Buffalo’s basketball ties are not just ancient history. Buffalo has hosted the NCAA tournament in 2000, 2004, 2007, 2010, and 2014 with great success. Buffalo will again host the tournament in 2017. The attendance at each of the soldout games was a boon to the local economy. It has given the Pegula Sports family a chance to show off Harborcenter as a worldclass entertainment venue. Buffalo’s development of the canalside district and the waterfront have also been featured. Our own Division I college basketball teams, St. Bonaventure and the University of Buffalo, have both made recent tournament appearances.

I believe Buffalo is undergoing a resurgence of sorts and reemerging as a real basketball town. There are several former NBA players who are now coaching at the college level in Western New York. For example, Donyell Marshall is an assistant to Head Coach Nate Oats at UB. Marshall was a first round, fourth overall pick and played in the NBA from 1994-2009. Current NBA player Jonas Jerebko, whose family lives in Lancaster, is a forward for the Boston Celtics. Jerebko’s father, Pete, played for Depew High School and set scoring records at Lemoyne College. He is now the Athletic Director at Erie Community College. David Hart, class of 1983, is in the Buffalo State Athletics Hall of Fame. Hart’s son Matt is a junior guard for Division I George Washington, a team that upset No. 6 ranked Virginia earlier this year. At least one NBA scout that I know of still has a house in Clarence, New York. So there are plenty local basketball ties.

Growing up, our neighbor used to take his daughter and me to Buffalo Braves games[i]. NBA games are, in my opinion, the most family friendly of all professional sports. And the most inclusive. Like many young women in WNY I played basketball in high school. I never played hockey or football. Although I enjoy both, I do not have the love or appreciation for them that I do for basketball. Off-the-court the players union is represented for the first time in their history by a woman, Michele Roberts, a lawyer by profession. On-the-court there is a woman referee, Lauren Holtkamp, and two women assistant coaches, Becky Hammon (Spurs) and Nancy Lieberman (Kings). Not to mention that women have their own professional league, the WNBA, that was founded in 1996 with the full backing of the NBA.

Inspired by these changes, after 20 years of practicing law I decided earlier this year to apply for certification from the National Basketball Players’ Association to be a player-agent.[ii] I have represented my share of athletes on both civil and criminal matters but I wanted to get more involved in the overall sports life of the client. It’s been great getting the chance to talk basketball with other agents, local college coaches, scouts and execs from several NBA teams.

Over the past month, I’ve gone to three cities to see basketball games; Cleveland, Detroit and Toronto. These Great Lakes cities are all within easy driving distance for fans from Buffalo. Cleveland and Toronto are both about 2 hr. 20 mins and Detroit is just over a 4 hour drive through Canada. The games are affordable, fast-paced, exciting and the arena entertainment adds to the overall experience for fans. All three teams are competitive this year. The Reggie Jackson-Andre Drummond pairing in Detroit is reminiscent of the legendary Buffalo Brave combination of Ernie “D”[iii]-Bob McAdoo[iv] (McAdoo was an assistant coach for the Miami Heat for 18 seasons until last year; http://www.nba.com/coachfile/bob_mcadoo). Cleveland has Lebron James and is the 2015 Eastern Conference Champion.[v] Toronto has a dynamic trio in Kyle Lowry, Demar Derozan and Demarre Carroll.

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I propose that one time per year, two of the Great Lakes teams play a regular season game in Buffalo. An annual NBA game in the First Niagara Center: Cleveland-Toronto, Cleveland-Detroit, Toronto-Detroit. Alternate teams every year. A sure sellout. It is a very different experience being at a game in person than watching it on tv. Fans quickly become personally invested. Even if they only go to one game a year, they still may be consumers of NBA products; whether NBA League Pass, NBA.com clothing/gear, videogames, or other memorabilia. And the payoff may last for more than one season even if they don’t go back to another game. The easiest way to create more fans is to have them attend a game.

My husband attended games with me last month. From a marketing point of view, that meant two people spending money on tickets, food, drinks, and souvenirs at each arena (we are now the proud owners of a 3-1/2 foot

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LeBron James bobblehead).  We also went out to a couple of local establishments (Ciccarelli’s, Gretzky’s & Pannini’s) in each city. We stayed at a hotel in Cleveland and Detroit. I have tickets to several more games in 2015-16. Now multiply the amount we spent by “X” number of people, like us, who decide to adopt the Cavs, Pistons or Raptors as their “home” team. Now multiply that number for every year that the NBA plays here. Finding a new market and growing the popularity of the NBA would be a win-win prospect.

Professional sports teams playing in alternate venues is not a new concept. For example, under previous ownership, the Buffalo Bills played once a year in the Rogers Centre in Toronto. The team also began to hold training camp at St. John Fisher College in Rochester, New York, just under 2 hours from their stadium in Orchard Park. Geographically southern Ontario fans have always made up a small but steady share of ticket revenue for Bills games. This was a chance to test the demand for an NFL team in Toronto’s large sports market if the Bills were sold to a Canadian buyer when former owner Ralph Wilson died. In my opinion the main purpose wasn’t simply to increase the popularity of the sport in an untapped market; it was to entice potential buyers and drive up the purchase price of the team. But the point is, it is possible for a professional sports team and their fans to adjust to one game during the season being played at a foreign venue.

The NBA game has changed dramatically since the early ‘80s and has really exploded in popularity in the last 10 years. Playing a game in Buffalo would allow some older fans who haven’t followed the pro game in a while to re-familiarize themselves with the League’s more professional on-court product and cleaned-up image. Younger fans, or those who can’t afford to travel out of town to attend a game, would be thrilled to see players they’ve only previously had the chance to watch on tv or stream on their computer. As an NCAA host city Buffalo’s arena has proven easily converted from hockey to basketball. There are adequate media facilities, parking and other amenities. Buffalo would be showcased in other NBA cities and the event could be a talking point for officials at the Buffalo-Niagara convention and tourism bureau (www.visitbuffaloniagara.com). The NBA doesn’t need to commit to more than one year at a time. If I’m wrong and the game doesn’t generate interest or cross-marketing opportunities or have a measurable economic benefit, then they end the experiment.

I think the idea of playing a pro game in Buffalo is good for basketball fans, good for Western New York and good for the NBA. The logistics can be worked out. For example, the host committee for the NCAA tournament that has experience promoting basketball games here could be a key partner in the effort along with Pegula Sports and the Snyder Corporation. Other local businesses would surely step up to participate. President and CEO of the Buffalo Niagara Partnership, Dottie Gallagher-Cohen, could bring government resources to the table with the help of our elected officials. I would volunteer to serve on a committee to study the feasibility of hosting the event or to resolve any legal issues. Together we can bring the NBA back to Buffalo.

 

 

 

 

 

 

 

[i] Paul Snyder had purchased the team and ultimately sold it in a deal involving SanDiego and Boston. Mr. Snyder, CEO & President of Snyder Corporation went on to develop Darien Lake Amusement Park and the Hyatt Regency Hotel in downtown Buffalo. ( www.snydercorp.com)

[ii] certification by the NBPA allows me to act as agent for players in the NBA, WNBA and D-League players. As a lawyer I do not need separate certification to serve as an agent in the International League (FIBA).

[iii] On October 26,2015, Milt Northrup of the Buffalo News wrote an article about Ernie “D” DiGregorio, former Braves Rookie of the Year and third pick in the 1973 NBA draft, joining the Buffalo 716ers team of the American Basketball Association as director of community relations. The 716ers played last season in the Premier Basketball League, the same league as the Rochester Razor Sharks, whose owner also is the league chairman. Buffalo’s first home game on a 14-game league schedule will be Dec. 12 against the Northern Indiana Monarchs at the ECC Flickinger Athletics Center.

[iv] For more on McAdoo who left North Carolina before his senior year and signed with the Braves in 1972, went on to lead the League in scoring three straight years and was League MVP See Spartanburg (S.C.) Herald Journal, November 25, 1976 (news.google.com); www.nba.com/history/players/mcadoo_bio.html;

[v] Ironically, the Buffalo Braves were an expansion team in 1970 along with the Cleveland Cavaliers. They beat Cleveland in their first game and Cleveland went on to have the worst record in the League that year. The Braves were in Buffalo for a total of 8 years, making the playoffs in 1974, 1975 & 1976. The team was subsequently moved to SanDiego and became known as the Clippers. See NBA.com (official Buffalo Braves page)

What do a stingray, NBA legend Clifford Ray & the Orlando Magic have in common?

Although I usually blog about NBA legal/business topics, I’m going to veer from the normal path and write about my recent adventures in Florida.

On October 9th, while on vacation, I was swimming in the ocean at St. Pete’s Beach when I must have kicked a stingray. Its venomous bony tail snapped up and the ray punctured my left ankle. I felt a sudden sharp pain and when I looked down saw the head, of what I thought was a shark, swimming in front of me from left to right just under the surface. The stingray was a light tan color and appeared to be about 3 feet wide. I panicked and swam to shore barely able to hobble out of the water. The wound looked like someone had pounded a large nail into the side of my foot and it was bleeding profusely. My husband ran to the front desk of our hotel for help and they told him I’d have to go to the hospital. Since the hospital was only five minutes from our hotel down Gulf Blvd he told them to forget calling an ambulance. He said it would be faster not to wait. He grabbed me under the arm and more or less dragged me from the beach to the car.

The pain from the venom was excruciating. I began to shake uncontrollably and felt chilled. I later learned that the venom causes tissue damage and the necrotic tissue causes secondary infections and nerve damage. At the time, as the venom quickly spread, my foot, ankle and lower leg started to swell. The venom spread under the skin like spilled ink turning my foot gradually a mix of red and blue.

My husband ran into the hospital and came back with a wheelchair. He ran behind the wheelchair pushing me toward the emergency department. As soon as we came through the door the nurse skipped the routine questions about insurance and got up and retrieved a basin of steaming hot water. He poured in some betadine and forced my foot down into the water. It was counterintuitive, but the hot water actually helped combat the pain by breaking up the protein in the venom. Our intial instinct was to get ice to counteract the swelling, which would have been exactly the wrong thing to do. Several hours later, after x-rays to make sure no foreign objects were in my ankle and nothing was broken, I was given a prescription for antibiotics and told to keep my leg elevated.

Hospital personnel downplayed the seriousness of the injury. I’ve broken bones & not been in so much pain. For the next three days I was non-weightbearing. Gradually, as the swelling subsided and the infection healed I was able to begin limping around. It took about three weeks and another round of antibiotics before I totally healed.

In the meantime, still on vacation, we had tickets for the Magic/Heat preseason game on October 13th and there was no way I was missing it. We skipped all of our other planned activities but not this one. It took a while but I was able to limp from the parking lot, across the pedestrian bridge to the arena. Any truly dedicated basketball fan, with tickets on the floor, would have dragged a disfigured foot behind him/her and withstood the pain rather than miss an opportunity to sit right behind the players.

On the street they blasted music with a Mexican or Spanish beat and there were a lot of European fans, talking in a multitude of languages, about the professional soccer stadium that was going to be built a couple blocks away. The only bars and restaurants were two blocks over from the arena and none of them were crowded. It was definitely a family atmosphere with kids lining up with their parents to get inside the souvenir store at the arena entrance.

When we walked into the arena, this was the view from our second row seats behind the visiting Heat bench next to the water cooler. The usher told us the only thing that could get us into trouble was putting our drinks on top of the cooler. There was a hallway parallel to the baseline that led under the stands to the locker room. A rope was all that separated fans from players. Veteran players Dwayne Wade, Chris Bosch & Chris Anderson made my husband look tiny despite being 6’7” tall. The difference is how wide these guys are which is something that you can’t appreciate on television. TV also gives you no real idea how fast the game is or how much ground they cover in just two or three strides. Rookie Justice Winslow from Duke was solid muscle and already has the build of a mature man.

I was surprised how much the players on the bench were into the game. They were focused, listened to the coaches. Clearly Chris Bosch is their leader. He was vocal, helping the young Heat players recognize picks and cuts, and taunting “rook…rook….make the free throw rook….” whenever one of the Magic rookies went to the foul line. He seemed to be getting to Magic PF Aaron Gordon who, after an impressive dunk, motioned to the Heat bench in a kind of “how do you like that?” way. Bosch laughed out loud and mocked him. But then actually sat down next to Dwayne Wade and quietly said “that was impressive”. It was hilarious to watch all of this up close.

Wade and especially Bosch seemed to mentor Justice Winslow. Bosch walked up to him at many of the stoppages of play and spoke to him. Winslow would nod. After one good drive to the basket, Bosch yelled “that’s it…that’s it” and I finally saw Winslow smile.

Victor Oladpio played some minutes in the game and the Heat players talked among themselves about him. Judging by the jerseys being sold in the fan store, he is definitely a crowd favorite. Elfrid Payton’s was the only other number I saw anyone wearing.

I was hoping to get a chance to see Magic PF Andrew Nicholson who went to St. Bonaventure University south of Buffalo in Olean, New York. Ever since the Buffalo Braves left in 1978 and eventually became the LosAngeles Clippers, we have rooted for the local players who end up making it to the NBA. Christian Laettner (Duke), Damone Brown (Syracuse), Andrew Nicholson, Jonas Jerebko (Depew), Clifford Robinson (Riverside) – Buffalonians don’t have one team that we root for; rather we cheer for any team that has a player who used to be one of us.

Looking over to the right of the players bench, near the basket, there was a man sitting in the front row that had legs as big as tree trunks. I am not exaggerating. Despite simply being dressed in a mint green polo and shorts his size alone caused him to stand apart from the crowd. He made the Heat players look skinny. We learned from a security guard it was former Chicago Bulls & Golden State Warriors 6’9” center Clifford Ray. He sat alone, didn’t really talk to anyone except a couple of Heat players that went over to shake his hand. Security told us he comes to a lot of the Magic games. After his playing career he was an assistant coach in the league including for the Magic from 2005-2010. He may have been helping with some scouting or he might have just been enjoying the game.

The Heat coach, Eric Spoelstra, looked like an honor student still in college because of a combination of his smaller stature and baby-faced, clean-shaven features. Despite appearances, he clearly had control of the bench and used quick hand signals to direct the players on the floor. When he wanted to make a substitution, he would say a player’s name in a normal tone of voice – “Rich” for Josh Richardson or “you wanna get in?” while looking at a training camp invitee-all downplayed and understated. Not at all what I expected – even during the timeouts when he grabbed a chair and clipboard, he spoke articulately and quickly but did not get overly excited or raise his voice.

There were three assistant coaches sitting on the other side of our water cooler – I couldn’t figure out what their role was except that a member of the Magic arena staff would deliver printed stats to one of them at the end of each quarter. Otherwise, they had no apparent role during the game.

The rest of the assistant coaches sat on the bench between coach Spoelstra and the players. Notably, among them was Juwan Howard, one of the legendary “Fab Five” at the University of Michigan. As he walked out at halftime and my husband yelled “Fab Five” Howard reached over and gave him a fist bump. Howard was very active on the bench, during timeouts talking to the players, and clearly was enjoying himself.

My favorite moment, captured in the attached photo, was when Dwayne Wade let me take a picture of him. He didn’t play in the game but any disappointment at not seeing him play was made up for by getting to sit close enough that I pretended I was a member of the team.

So the moral of the story is… when you go through a very painful experience, keep going…it just may lead to something amazing. Think about what happened to me:  Sting…Heat…Ray…Magic!

Why the Conversation about Increasing Investment in the Developmental League has to Include Resolution of the CBA’s Minimum Age Restriction

The NBA Developmental League, known as the NBADL or “D-League”, is professional basketball’s minor league. Its inaugural season was 2001-02. It barely got a mention in the two CBA negotiations that followed its creation. Over the past 15 years it has often been neglected in favor of debate over trending topics such as the age minimum restriction of 19 which the NBA insisted on in the 2005 CBA. NBA Commissioner Adam Silver and NBPA Executive Director Michele Roberts have both identified adjusting the age minimum as a potential issue for CBA negotiations this time around. However, neither Silver or Roberts has commented to a significant degree on the interconnectedness of the age minimum and the future of the D-League. Perhaps there are strategic reasons for keeping the two subjects separate in their public discourse; beyond that there is common ground. Recognizing their mutual interests in player development, the League and the Players’ Union should approach these discussions as equal partners; both sides can demonstrate leadership in the way they choose to create opportunities for individual players that define the future structure of professional basketball.

Other professional sports leagues have a longer history of dealing with the issues of minor league systems and age restrictions. For example, both the NHL and MLB, which draw from a pool of international, NCAA and minor league players, have well established “farm systems” in the American Hockey League and Minor League Baseball. Both professional hockey and baseball allow 18 year olds to be drafted.

By contrast, the NFL relies primarily, but not exclusively, on college football to supply its player stream. The NFL has had some sort of age limit in place since 1921. The biggest change came in 1990, when the NFL made college juniors or those who had been out of high school for three years draft eligible. (see NFL Collective Bargaining Agreement Article 6 Section 2(b)). The rationale underlying this rule is that it prevents players who are not fully physically developed from being injured.  Other professional sports that are arguably at least as dangerous as football, such as hockey or boxing, allow young athletes to compete at 18, as do professional golf, tennis and baseball. The counter-argument to the NFL injury concern is that college players risk career ending injuries without receiving a salary.

Generally speaking at 21, the NFL has the highest age minimum of all professional sports leagues in America, but it does not have the only one.  The National Basketball Association requires that players be at least 19 years old and 1 year removed from high school.  While Major League Baseball allows players to be drafted right out of high school it does require players attending 4-year colleges to complete their junior year or be 21 years old, while allowing Junior College players to enter the draft without restriction.

The NFL age restriction was challenged in the highly publicized case of Clarett v. National Football League. In 2003, Ohio State University running back, Maurice Clarett, was suspended for the season after a string of off field incidences.  Clarett was only a sophomore but decided to attempt to enter the NFL Draft.  Clarett filed suit in federal court in the Southern District of New York, claiming that the NFL’s age restriction was a violation of antitrust laws.  Clarett was initially successful forcing the NFL to appeal to the United States Court of Appeals for the Second Circuit. The Second Circuit reversed the district court’s decision and determined that the NFL’s age minimum was enforceable. The Court held that since the provision had been the subject of collective bargaining between a union and employer it was beyond the reach of antitrust legislation. Further, the Court rejected Clarett’s argument that the restriction places a hardship on prospective employees who were not part of the collective bargaining process. See “Why the NFL Age Minimum is Likely Here to Stay, Chuck Haven, February 24, 2013 (http://lawweb2009.law.villanova.edu/sportslaw/)

Based on legal precedents, as long as age restrictions are the product of collective bargaining they will likely continue to be upheld.

NBA Commissioner Adam Silver has gone on-the-record as favoring three related but potentially conflicting goals of (1) raising the NBA age minimum from 19 to 20 years old, (2) expanding the D-League, and (3) working with the NCAA on draft eligibility issues.

Right now expanding the D-League doesn’t cost the owners much at all so there is little reason Commissioner Silver would not be in favor of it. The D-League provides the benefit of being able to test some younger players without having to make any real financial commitment to them. Some D-League teams are owned directly by the parent club. Some are hybrids with the D-League team being owned separately but the affiliated parent team paying for basketball expenses. The salary cap is $173,000 per D-League team compared to the NBA salary cap of $70 million dollars for the 2015-16 season and almost $90 million dollars in 2016-17.

Commissioner Silver has also been vocal about his desire to see the age minimum restriction increased to 20 years of age. Currently, the age minimum for the NBA draft is 19 but the age minimum for the NBADL is only 18. So for those players who forego college they are eligible for the D-League draft right out of high school. It doesn’t make any sense that a player can be drafted by a league with teams affiliated with NBA teams but the same player cannot play in the NBA. One explanation for Silver’s position is that at 19 the owners have the benefit of seeing how a prospect performs for a year in college before making a decision about whether to draft him.

The rationale for the NFL’s minimum age restriction is at least colorable in light of the serious life-threatening injuries, including head injuries, that have been the subject of intense scrutiny of late. The NBA’s minimum age rule and the rationale for it are a little less clear. At the time of the 2005 NBA CBA negotiation, the popularity of professional basketball was declining. As discussed in my post comparing player discipline provisions in the NBA and NFL CBA’s (www.courtsidelawyer.com, Sept.2015) on November 19, 2004 the Detroit Pistons played the Indiana Pacers and the game ended in a melee where players on the Indiana Pacers (notably Ron Artest) rushed into the stands of the arena to fight fans. The NBA handed out some of the harshest penalties in league history.

In further response to this incident, the NBA adopted Article X into the 2005 Collective Bargaining Agreement. That section addressed the issue of high school graduates foregoing college by restricting eligible NBA draftees to those at least nineteen years of age during the calendar year in which the Draft is held [Section 1(b)(i)] and any player who is not an “international player”, as defined in the CBA, must be at least one year removed from the graduation of his high school class [Section 1(b)(ii)]. See “Article X of 2005 NBA CBA”, Kyle Shneider April 21, 2011 (http://prezi.com/user/yjqrdb5hptpu/) It was widely reported at the time that then-Commissioner David Stern insisted on the inclusion of this provision or threatened to walk away from negotiations.

The apparent rationale for Article X was the League’s belief that these incidents hurt the League’s image and were directly related to the players’ lack of maturity and college experience.  However, since the formation of the NBA in 1949 and prior to the 2005 CBA effective date, there were 45 players that skipped college and entered the NBA draft right out of high school; some have failed, but notable success stories include Moses Malone , Kevin Garnett, Kobe Bryant, Tracy McGrady, Amare Stoudemire, LeBron James, and Dwight Howard.

“LeBron James could have gone to Ohio State for one season. He could have brought in millions of dollars in revenue for The Ohio State University (OSU) Athletic Department, the National Collegiate Athletic Association (NCAA), television networks, and OSU sponsors. However, LeBron presumably would not have seen a single penny of the profits he produced. After one year as a Buckeye, having grown from an immature eighteen-year-old child to a nineteen-year-old man, equipped with one year of college education under his belt, he would have been allowed to enter the National Basketball Association (NBA) Draft. This, of course, was not the fate of LeBron James. Instead, in 2003, he went straight from high school to the NBA, where he signed a lucrative contract with the Cleveland Cavaliers at the youthful age of eighteen. In 2005, the NBA began barring high school players from participating in its draft. Had LeBron been born just two years later, he likely would have spent his first year after high school in a dorm room in Columbus rather than a mansion in Cleveland”. “CAN I SEE SOME ID?: AN ANTITRUST ANALYSIS OF NBA AND NFL DRAFT ELIGIBILITY RULES”, Steve E. Cavezza, 2009 University of Denver Sports and Entertainment Law Journal (https://www.law.du.edu/documents/sports-and-entertainment-law-journal/issues/09/Article2.pdf)

With very few alternatives available other than attending college, Article X has essentially forced many players to continue their education for at least a year. Many of the players who choose to go to college view it as an unnecessary step needed to gain access into the NBA. Some are not academically inclined. Poor classroom performance may discourage or disqualify them from ever obtaining a degree. Some may engage in conduct that hurts their university’s basketball program or jeopardizes its funding or future with the NCAA (for example, by committing recruiting violations or engaging in serious criminal conduct). Some may want to maximize the economic opportunities presented by the NBA draft at a young age. Some may not want to risk injury before they can start their pro careers. A “one-and-done” (one year in college until the player turns 19 and then entry into the NBA draft) player may scare away other valuable prospects at the same position that intend to spend more than one year in school.

By advocating raising the age minimum for the NBA draft, the Commissioner is trying to address “one and done” by forcing players to spend two years in college before they are eligible to play in the NBA. However, there is an inherent bias in Commissioner Silver’s paternalistic plan to raise the age minimum in favor of forcing players to attend college. A belief that the players are an interchangeable product that will all benefit from the seasoning college offers; that the League will be strengthened by a more mature and wholesome family image (one need only recall how the NBA media fell over itself during the 2015 playoffs to catch the ever-cuter chronicles of Riley Curry); not to mention the financial benefit to the owners by starting older players at base level compensation and, presumably, paying them for shorter periods of time (by at least two years).

Since the adoption of Article X in the 2005 CBA the NBA has enacted other regulations governing player conduct. These efforts to improve the League’s image have helped to increase the popularity of professional basketball. For example, the League imposed a Dress Code at the start of the 2005-06 season. The incorporation of tighter technical foul rules have caused the players to cut down on demonstrative, offensive and immature behavior on the court helping to clean-up the NBA’s image. [i]

The relationship between the D-League and the age minimum was summed up in an article penned by famous NBA player agent Arn Tellem. Tellem, who recently took a job as Vice Chairman of Palace Sports and Entertainment which owns the Detroit Pistons, wrote “D-League Deconstruction: The Necessary Plan to Fix the NBA’s Farm System” (http://grantland.com/the-triangle/d-league-deconstruction-the-necessary-plan-to-fix-the-nbas-farm-system/) In the March 2015 article, Tellem identified the problem and interrelationship of D-League neglect and the League age minimum as follows:

“The D-League rebranded itself and made its first major expansion in 2005, the same year the NBA and the players’ union agreed upon an age minimum of 19 years and one year removed from high school graduation. Any player who skips college is eligible to sign wih a D-League team. But the league’s salaries range from $13,000 to $25,500 – barely a liveable wage – which partly explains why no prospect would ever voluntarily choose the D-League over college.”

Commissioner Silver has stated one of his goals is to strengthen college basketball. He has been quoted as saying that the NBA bears some responsibility for the continued health of college basketball.[ii] By raising the age minimum he presumes players will stay in college. But it could also mean playing in the D-League or Europe for 2 years. He presumes by staying in college both the player and the college team will benefit. As discussed above, forcing players to stay in college along with the pressures of meeting eligibility requirements might actually hurt college basketball as a whole.[iii] The other option is to send these presumably “too immature for prime time” players across the ocean to play in foreign countries without family or other support. Or they can stay at home and play for the D-League[iv] at unreasonably low wages, assuming players could afford to do so and still be around for the NBA draft when they turn 20.

As one author has interpreted both Commissioner Silver’s remarks and those of his predecessor David Stern

“The true motivation behind the age rule is likely the use of the NCAA as a free farm system. The NBA does not have a minor league system like Major League Baseball because the NCAA acts as the NBA’s minor league. Best of all for the NBA, this farm system comes at no cost to the league. The NBA tries to hide this under the guise of “enhancing college basketball.”The NFL made a similar argument in Clarett when it argued that, by excluding the most talented college players from the NFL, it was sustaining “the NCAA’s ability to compete in the entertainment market.” This justification did not succeed because it was simply sacrificing competition in one market, the NFL, for the sake of increased competition in another market, the NCAA. The current NBA age restriction merely allows the league’s teams to watch a player and see how he competes at the college level and develops over his freshman season. This is to the detriment of the player who is not eligible to make a living and is essentially forced to work for nothing, all while risking injury and a drop in draft stock”. “CAN I SEE SOME ID?: AN ANTITRUST ANALYSIS OF NBA AND NFL DRAFT ELIGIBILITY RULES”, Steve E. Cavezza, 2009 University of Denver Sports and Entertainment Law Journal (https://www.law.du.edu/documents/sports-and-entertainment-law-journal/issues/09/Article2.pdf)

Michele Roberts, Executive Director of the NBPA, and the union’s chief CBA negotiator have both spoken out against raising the age minimum. In the next round of CBA negotiations they may advocate in favor of lowering the age minimum to 18. “It offends me that there should be some artificial limits set on seomeone’s ability to make a living. It doesn’t make sense to me that you’re suddenly eligible and ready to make money when you’re 20, but not when you’re 19, not when you’re 18. In my opinion—and we have yet to get official word from the players association—but I suspect that the association will agree that this is not going to be one that they will agree to easily.” See “The Woman who will Change Sports”, Pablo Torre, 11/16/14 (http://espn.go.com/nba/story/_/id/11874609/woman-change-sports)

Beyond the age minimum rule the parties to the CBA have to define the purpose of the D-League. If the age restriction continues and prevents players from being drafted into the NBA until age 19 or 20, but they can be drafted by the NBADL at age 18, in theory this could present a viable option for players who want to forego college. Except that the maximum D-League salary is $25,500 (plus room and food allowance during the season) so it is in effect financially preclusive.

The D-League began as a place where NBA caliber players who were too green to see regular play could grow and develop. Many would say it has evolved into a league of last resort for aspiring NBA players. If it is truly a system to develop future NBA players then the NBA would presumably want to exercise more control over the players they are investing in. Right now the NBA teams don’t make a big investment in the D-League but that situation is changing.

NBADL President Malcolm Turner and some D-League team owners have predicted D-League expansion in 2016-17. Charlotte and New Jersey are two teams who are actively searching for a D-League team. The League’s new television deal with ESPN and Turner Broadcasting will accelerate growth. Previously, direct streaming on youtube or special tv coverage of some games was the primary way of watching D-League teams. Some commentators have predicted that the 11 NBA teams without an affiliated D-League squad would create demand for new D-League teams so that in the next 7-8 years there would be a one-to-one affiliation between each NBA team and its D-League counterpart.[v]

Once investment in the D-League increases, the teams will want control over how players are developed. The NBA does not have control over college players, or the systems they play in, or their workout regimens, on-court playing habits, diet, etc. Playing against sub-par competition for too long may also hurt a prospect’s chances. The NBA likewise does not control development of a player who is shipped off to Europe. “Over the last two years, 40 percent of the NBA’s second round draft picks never actually signed NBA rookie contracts. Thirty-eight percent of those 60 players went overseas; only 8 percent wound up in the D-League. [vi]

In an excellent article recently published by NBA expert Chris Reichert, he offers a statistical study to show the correlation between a team’s success and its use of player assignments to its D-League affiliate. (See “Does D-League usage translate into more wins for NBA teams”, Reichert, July 28, 2015, http://upsidemotor.com/2015/07/28/d-league-assignments-call-ups-translate-success-nba/) Reichert’s findings are significant in two areas: First, for teams that rarely use the D-League there is no provable relation to on-court success; however, for teams that make frequent assignments, there is a real correlation between assignments and wins.[vii] Second, teams that frequently use their D-League affiliate are more successful on average than those teams that do not use the D-League. Based on these numbers, Reichert forecasts that there will be an accelerated trend toward evolving the D-League into a true minor league system where each parent club has a farm team.

If its purpose is truly developmental, keep the players home and pay them on a more fair scale, something more commensurate with what they could expect in the NBA. NBA team owners might not like the increased costs associated with higher salaries but the return on investment would, in theory, make it worthwhile. Make up for higher salaries with better basketball product, higher ticket sales and joint marketing efforts. Fans could see future NBA stars at the beginning of their careers, or those already established stars who need rehab time. Either way there is a potential to expand the pro basketball market. With the farm teams adopting the names of the parent team, there is a merchandising opportunity; by re-locating minor league teams closer to the parent the geographic market drives interest in both the parent and farm club and makes travel between the two easier for fans and players. Strengthening the D-League could help develop players, create or increase basketball markets in smaller cities where the D-League clubs play and ultimately strengthen interest in the NBA.

In his article, Tellem advocates for what he calls a “reorganization” of the D-League ; others might say all that is needed is a re-prioritization and re-commitment to the D-League. He suggests six main changes to the current system: (1) roll back the age minimum to 18 with prospects being “asked to sign a ‘memorandum of understanding’ as a condition for consideration, whereby they would agree to forgo college if drafted. If they declined to sign, they would effectively be choosing college over pro ball and could not be drafted for two more years. If they declare but never get drafted, they should be allowed to retain their elgibility and attend school.”; (2) All early entry players, both American and foreign prospects, should have the same declaration date instead of giving foreign players two extra months as is the case under the current system; (3) All first round picks should get rookie scale regardless of whether they play for the parent or farm team. The parent team should get 1 year of cap relief if they assign the player to the farm team (rather than having the player sign a D-League contract with the current lower pay scale); (4) Currently NBA teams are only required to offer minimum non-guaranteed contracts. Teams can decline to sign second round picks but still retain their draft rights so they are not guaranteed a salary. There should be a requirement that the parent team offer second round picks a guaranteed split contract ($253,500) or forfeit the player’s draft rights. Teams could send a player to the minors without the salary counting against the cap for two years. The theory being teams would pick the best available players in round 2 and have a real incentive to develop them in the U.S. ; (5) For players who have been released or for free agents the minimum salary in the D-League should be raised to a more respectable $50,000. (6) cap management should be treated separately from player development. The salary cap for D-League teams should be increased to $2 million (not counting salary for first rounders) but not count against the cap so that teams are more likely to take a chance on player development.

These seem like common sense changes. Perhaps this “reorganization” scheme will seem less radical now that Tellem is on the management side of things. Nevertheless, the NBA and NBPA should both acknowledge the importance of making the D-League the subject of negotiation in the next round of CBA talks. This is an issue that potentially benefits both the owners and players. Its not just an expansion issue, or an age restriction issue or a question of whether to give priority to the NCAA as a recruitment vehicle over the D-League; rather, it is an issue of how to structurally support the NBA and give players the best opportunity to succeed in the long run.

ENDNOTES

  [i] “According to a 2005 study, of the eighty-four total NBA players who had ever been arrested, forty-eight had gone to college for four years, while only four of those arrests were of players who had not gone to college. In other words, over forty- one percent of NBA players went to college for four years, and over fifty-seven percent of those players were arrested.”See Michael McCann, NBA Players That Get In Trouble With the Law: Do Age and Education Level Matter?, SPORTS LAW BLOG (July, 20, 2005), http://sports-law.blogspot.com/2005/07/nba-players-that-get- in-trouble-with_20.html.

[ii] See “Ball Don’t Lie”, Dan Devine, 3/1/14

[iii] Associated Press, Knight rips NBA’s minimum-age rule, NBC SPORTS (Feb. 19, 2007), http://nbcsports. msnbc.com /id/17231772/. Indiana Coach Bob Knight opines that the minimum age rule is the “worst thing that’s ever happened to college basketball” in that a player can remain eligible for a full year of basketball without attending a single class in his second semester.

[iv] D-League salaries are in 3 tiers. $25,500, $19,000 and $13,000. Team salary cap is $173,000. Although they get room and board paid for by the team as well as a $40/day travel per diem.

[v] See “Where will NBA D-League expansion Head Next?”, Adam Johnson 5/4/2015 http://dleaguedigest.com/2015/05/04/where-will-nba-d-league-expansion-head-next/ Cf. The American Hockey League (AHL) has been in existence in one form or another since the 1930’s. It is a 30-team professional hockey league based in the United States and Canada that serves as the primary developmental league for the NHL. Since the 2010–11 season, every team in the AHL has an affiliation agreement with an NHL team; before then, one or two NHL teams would not have an AHL affiliate and so assigned players to AHL teams affiliated with other NHL teams. In 2015 there was a relocation of several AHL teams so they were closer to their NHL affiliate to facilitate bringing players up from the minor leagues. www.wikipedia.com

[vi] Since 2005, only four players have spent time in the D-League before their draft class became eligible: Mike Taylor, PJ Hairston, Latavious Williams, and Glenn Rice Jr – all of whom were either stripped of their NCAA eligibility or kicked off their college teams.” [tellem supra] In 2008, Mike Taylor of the Idaho Stampede became the first player to be drafted by an NBA team (Portland Trailblazers). Taylor had attended junior college and one year at Iowa State before entering the DLeague. [check 6/26/08 nbadl.com]

[vii] 2014-15 saw a record number of assignments with 195 assignments made in a single season. Each team can have 3 NBA players assigned at one time under the current rules.

The Discretionary Opt-out Provision and Other Grounds to Terminate the NBA CBA

Article XXXIX (39) of the NBA Collective Bargaining Agreement governs the term, or period of time, the contract is legally enforceable. It was signed on December 8, 2011 and remains in effect through June 30, 2021. Although Article 39 determines a significant issue, that being the beginning and possible end dates of the Agreement, it is a mere 3 pages long (pp. 377-380). In those 3 pages there are 6 separate provisions that allow one or both parties to terminate the agreement before its stated expiration date. As short as it is, it is longer than similar provisions governing termination of CBA’s in Major League Baseball, the National Football League or the National Hockey League. Article 39 is sub-divided into the following sections:

ARTICLE XXXIX TERM OF AGREEMENT ……………………………. 377

Section 1. Expiration Date ……………………………………………… 377

Section 2. Mutual Options to Terminate Following Sixth Season ……………..377

Section 3. Termination by Players Association/Anti-Collusion ………………….377

Section 4. Termination by NBA/National TV Revenues ……………………….377

Section 5. Termination by NBA/Force Majeure …………….. 378

Section 6. Mutual Right of Termination ………………………….. 380

Section 7. No Obligation to Terminate; No Waiver ……….. 380

Section 1: Expiration Date

Article 39, Section 1 provides that the 10-year agreement is effective from December 8, 2011 through June 30, 2021 unless terminated under another section of this Article:

Section 1 (Expiration Date)

This Agreement shall be effective from December 8, 2011 and, unless terminated pursuant to the provisions of this Article XXXIX, shall continue in full force and effect through June 30, 2021.

By comparison, the 2005 CBA was a 6 year deal with an owners’ option to extend it for an additional 7th year. Considering the opt-out provision in the current CBA, it is guaranteed to be in effect for just under 6 years.

Opting Out at the Discretion of the Parties

 

Section 2: Mutual Options to Terminate Following 6th Season

The intent of the parties was to allow either side to unilaterally terminate the agreement after the 6th season, 2016-17. That is why the opt out is keyed to June 30, 2017 instead of 6 years from December 8, 2011 (December 8, 2017).

Section 2 (Mutual Options to Terminate Following Sixth Season)

The NBA and the Players Association shall each have the option to terminate this Agreement on June 30, 2017 by serving written notice of its exercise of such option on the other party on or before December 15, 2016.

This mutual termination clause is what most reports about collective bargaining in the NBA are referring to without being specific, even though there are other termination provisions contained in the Agreement.

The title, “Section 2”, is a bit of a misnomer; rather than a “section” of the article, it is merely one sentence. It is open-ended in that there are no pre-conditions which have to be met in order to give rise to the parties’ right to exercise the option. No penalties are attached to the early termination of the Agreement or the service of notice of intent to opt-out. There is no provision for liquidated damages if the termination results in the cancellation of games or other negative economic consequences to the non-terminating party.

One effect of the totally discretionary early termination provision, one that doesn’t hinge on any pre-conditions, has been to engender speculation now, two seasons ahead of the effective date. Teams and players are betting on whether one side or the other will exercise the option. Agents and owners are left to consider whether a deal made now for a period of years ending prior to June 2017, or extending past that date, will pay/cost more or less under the current salary cap when compared with the anticipated increases in the salary cap. Can players lock in a longer term deal now for higher money under the current cap? Or would a shorter contract that allows them to demand money over the current cap at its expiration be better?

Of course, the uncertainty is one of the downsides of structuring the Agreement this way. One upside would be the chance to make early adjustments to the Agreement for issues that arise which were not anticipated by the parties at the effective date or for which the parties lacked sufficient information.

By comparison, Major League Baseball removes any uncertainty about the timeframe of its CBA. It is effective from dates certain 2012 through 2016.

Article 69 of the NFL CBA governs the duration of agreement which is effective from August 4, 2011 until the last day of the 2020 league year. The only permissible ground for early termination would be due to collusion under Articles 16 and 17 and only after a System Arbitrator’s decision finding the requisite conditions have been met. (comparable to Article 39, section 3 of the NBA CBA).

The NHL CBA most closely resembles the NBA CBA. In Article 3, the NHL Agreement is stated to be effective September 16, 2012 through September 15, 2022. The parties may serve notice of termination of the Agreement at least 120 days (May 15, 2022) prior to September 15, 2022 or not less than a like period in any year thereafter otherwise it will remain in effect. There is an early termination provision which allows each side to terminate the Agreement two years prior to the expiration date of September 15, 2022. To exercise this option, the NHL must deliver written notice to the NHLPA of its election to do so on or before September 1, 2019. If the NHL has not already done so, the NHLPA may exercise its option for early termination by delivery of written notification to the NHL of its election to do so on or before September 15, 2019.

The NHL CBA is in effect for at least 8 years with notice of early termination a full year ahead in contract year 7. The NBA CBA is in effect for 6 seasons before the early termination option kicks in. The NHL CBA also provides for a longer run-up, double the time the NBA requires, for notice prior to the actual termination date. The NHL requires 1 year notice and the NBA just 6 months notice. Under the NBA CBA in order to trigger the early termination effective June 30, 2017, the terminating party has to give written notice of their intent to do so by December 15, 2016.

Neither the NHL nor NBA CBA demands specific compliance with any preconditions to severe the agreement. Whether to opt out of the agreement is at the discretion of either party.

Further, the NBA CBA does not require the parties to engage in negotiations to reach a new CBA within a specified time. There is no requirement that a (federal) mediator meet with the parties to facilitate negotiations. Unlike other sections of the CBA that require disputes to be submitted to arbitration, when negotiating a new Agreement, the parties are not required to submit their disagreements to binding arbitration. The parties must simply negotiate in good faith.

Terminating the Agreement Under Certain Specified Conditions

Other provisions of Article XXXIX address the termination of the CBA by one party or the other only if certain events occur or under defined conditions. Sections 3, 4, 5, 6 and 7, respectively, allow termination if:

  • Article XIV, Section 15 is satisfied the players may terminate;
  • “national television revenues” and “other media income” fall below a certain threshold according to a mathematical formula spelled out in the CBA then the owners may terminate;
  • an act of war, terrorism, natural disaster or similar event makes it impossible to carry out obligations under the agreement the owners may terminate;
  • Articles VII, X, XI and XIV are vacated, enjoined or declared unenforceable, either party may terminate; and lastly,
  • the right to exercise an option to terminate the Agreement with respect to any season does not waive either party’s right, if any, to terminate the Agreement in any succeeding season.

Section 3: Termination by players in event of anti-collusion.

The prohibition on collusion, in its simplest terms, means that NBA Teams won’t act collectively with the league or any other NBA Team by agreeing: (a) to negotiate or not to negotiate with any Veteran or Rookie;(b) to submit or not to submit an Offer Sheet to any Restricted Free Agent;(c) to offer or not to offer a Player Contract to any Free Agent; (d) to exercise or not to exercise a Right of First Refusal; or (e) concerning the terms or conditions of employment offered to any Veteran or Rookie.

Section 3 (Termination by Players Association/Anti-Collusion)

(a)In the event the conditions of Article XIV, Section 15 are satisfied, the Players Association shall have the right to terminate this Agreement by serving written notice of its exercise of such right within thirty (30) days after the System Arbitrator’s report finding the requisite conditions (pursuant to Article XIV, Section 15) becomes final and any appeals therefrom have been exhausted or, in the absence of a System Arbitrator, by serving such written notice upon the NBA within thirty (30) days after any decision by a court finding the requisite conditions (pursuant to Article XIV, Section 15). In the latter situation, if the finding of the court is reversed on appeal, the Agreement shall be immediately reinstated and both parties reserve their rights with respect to any conduct by the other party during the period from the date of service of the termination notice to the date upon which the Agreement was reinstated.

(b)If the Players Association exercises the right accorded it by Section 3(a) above, this Agreement shall terminate as of the June 30 immediately following the service of the termination notice.

Section 4: Termination by NBA/National TV Revenues

There are two parts to Section 4: subdivision (a) defines the term “National TV Revenues” as the net income received by the NBA from television and other media broadcast agreements. Subdivision (b) gives the NBA the right to terminate the agreement if television revenue ($897 million was the annual revenue under the 2007 ABC and TBS contracts) plus 104.5% of other media income in the 2010-11 salary cap year becomes reduced by at least 35%.   “Successor agreement” refers to an agreement that comes after the term of the 2007 ABC and TBS television contracts. The NBA can terminate effective June 30th before the first season which would be covered by a “successor agreement” by providing notice by at least April 30th. Upon providing such notice of termination, both the NBA and NBPA are obligated to negotiate in good faith to enter into a Successor Agreement (See CBA Article VII(1)(c)(2)).

Section 4 (Termination by NBA/National TV Revenues)

(a)For the purposes of this provision: (i) “National TV Revenues” shall mean the rights fees or other non-contingent payments stated in the NBA’s third-party national broadcast network ( e.g.ABC) and cable network ( e.g.TNT or ESPN) television agreements (each, a “National TV  Agreement”); and (ii) “Other Media Income” shall mean the aggregate net income earned by any League-related entity (as defined in Article VII, Section 1(a)(1)) (but excluding net income attributable to ownership interests in any such League-related entity that is not owned by the NBA, NBA Properties, Inc., NBA Media Ventures, LLC and/or a group of NBA Teams) or by the NBA on behalf of the Teams from agreements that provide for the transmission of live (or delayed) NBA games, on a domestic or international basis, by means of television, radio, internet andany other mode of delivery referenced in Article VII, Section 1(a)(1)(ii), net of reasonable and customary expenses related thereto.

(b) If, during the term of this Agreement, (i) the sum of the average annual National TV Revenues provided for under the Successor Agreements (as defined in Article VII, Section 1(c)(2)), plus 104.5% of Other Media Income for the most recent Salary Cap Year, will be at least 35% less than (ii) the sum of the average annual National TV Revenues provided for under the NBA/ABC and NBA/TBS Agreements (which,for purposes of this provision only, the parties agree is $897 million), plus Other Media Income for the 2010-11 Salary Cap Year, the NBA shall have the right to terminate this Agreement effective as of the June 30 immediately preceding the first Season covered by the Successor Agreements, by providing written notice of such termination to the PlayersAssociation at least sixty (60) days prior to such June 30. During the period following delivery of such written notice of termination, the NBA and the Players Association shall engage in good faith negotiations for the purpose of entering into a successor agreement and the provisions of Article XXX shall remain in full force and effect.

In other words, if “national television revenues” and “other media income” fall below a certain threshold according to this mathematical formula spelled out in the 2011 CBA then the owners may terminate. In fact, since the 2011 CBA the overall league basketball-related income was much higher than the parties had modeled. The owners have signed a 9-year, $24 billion television deal which goes into effect in the 2016-2017 season. [1] That this type of increase was not predicted explains why there is no counterpart to Section 4 in which the NBPA is given an option for early termination in the event television and other media revenues increase by a certain percentage over the 2011 calculation.

Section 5: “Force Majeure”

Force Majeure termination clauses are not unique to sports. Such provisions are commonly found, for example, in leases, contracts or other agreements. The are intended to address each party’s legal rights and obligations in the event performance is impossible because of a crisis (natural disaster, war, act of terrorism, etc.). One example of a circumstance that this section anticipates is how to handle the issue of payment to players if one or more games cannot be played.

Section 5 (Termination by NBA/Force Majeure)

(a)“Force Majeure Event” shall mean the occurrence of any of the following events or conditions, provided that such event or condition either (i) makes it impossible for the NBA to perform its obligations under this Agreement, or (ii) frustrates the underlying purpose of this Agreement, or (iii) makes it economically impracticable for the NBA to perform its obligations under this Agreement: wars or war-like action (whether actual or threatened and whether conventional or other, including, but not limited to, chemical or biological wars or war-like action); sabotage terrorism or threats of sabotage or terrorism; explosions; epidemics; weather or natural disasters, including, but not limited to, fires, floods, droughts, hurricanes, tornados, storms or earthquakes; and any governmental order or action (civil or military); provided, however, that none of the foregoing enumerated events or conditions is within the reasonable control of the NBA or an NBA Team.

(b) In addition to any other rights a Team or the NBA may have by contract or by law, if a Force Majeure Event occurs and, as a result, one or more Teams are unable to play one or more games (whether Exhibition, Regular Season, or Playoff games), then, for each missed Exhibition, Regular Season, or Playoff game during such period (the “Force Majeure Period”) that was not rescheduled and replayed, the Compensation payable to each player who was on the roster of a Team that was unable to play one or more games during the Force Majeure Period shall be reduced by 1/94.6th of the player’s Compensation for the Season(s) covering theForce Majeure Period. For purposes of the foregoing calculation, and notwithstanding the actual number of games that any Team played, was scheduled to play, or could have played during the Seasons(s) affected by the Force Majeure Event, each Team shall be deemed to play seven (7) Exhibition games, eighty-two (82) Regular Season games, and 5.6 Playoff games during each such Season.

(c)In the event that Section 5(b) above applies, the applicable Compensation reduction from each player shall be withheld by the player’s Team from the first Compensation payment (or payments, if the first such payment is insufficient to satisfy the reduction) that is (or are) due or to become due to such player following the commencement of the Force Majeure Period (whether under the Player Contract that was in existence at the commencement of the Force Majeure Period or any subsequent Player Contract between the player and the Team). If such Compensation payment (or payments) is (or are) insufficient to cover the Compensation reduction required by Section 5(b) above, then either (i) the player shall promptly pay the difference directly to the Team (“old Team”), or (ii) if he subsequently enters into a Player Contract with, or is traded to, another NBA Team (“new Team”), such difference shall be withheld from the first available Compensation payment (or payments, if the first such payment is insufficient to satisfy the remaining reduction) that is (or are) due to the player from the new Team and shall be remitted by the new Team to the old Team.

(d)Upon the occurrence of a Force Majeure Event satisfying the terms of Section 5(a) above, the NBA shall have the right to terminate this Agreement as of the sixtieth (60th) day following delivery to the Players Association of a written notice of termination, which must be delivered to the Players Association within sixty (60) days of the Force Majeure Event. During the sixty-day period following delivery of such written notice of termination, the NBA and the Players Association shall engage in good faith negotiations for the purpose of entering into a successor agreement, and during such period the provisions of Article XXX shall remain in full force and effect.

Section 6: Mutual Right of Termination

Ironically, the shortest section in Article 39 is the mutual discretionary opt out in Section 2 which is the most likely ground the parties will cite for early termination. The other mutual right of termination exists in Section 6 but the exercise of the option is not wholly discretionary like Section 2; rather, Section 6 provides that if certain key provisions (“BRI”, salary cap, free agency, draft, anti-collusion) are held to be unenforceable or void either party may terminate the entire CBA.

Section 6 (Mutual Right of Termination)

If at any time during the term of this Agreement any provision contained in Article VII, X, XI and XIV of this Agreement is enjoined, vacated, declared null and void or is rendered unenforceable by any court of competent jurisdiction, then either the NBA or the Players Association shall have the right to terminate this Agreement by serving upon the other party written notice of termination at least sixty (60) days prior to the effective date of such termination.

Section 7: No obligation to terminate

Section 7 holds that there is no obligation to terminate and the parties do not waive their right to terminate in successive years if they forgo doing so initially.

Section 7 (No Obligation to Terminate; No Waiver)

The grant to either party of a right or option to terminate pursuant to the provisions of this Article XXXIX shall not carry with it the obligation to exercise that right or option; and the failure of the NBA or the Players Association to exercise any right or option to terminate this Agreement with respect to any playing Season in accordance with this Article XXXIX shall not be deemed a waiver of or in any way impair or prejudice the NBA or the Players Association’s right or option, if any, to terminate this Agreement in accordance with this Article with respect to any succeeding Season.

CONCLUSION

The two provisions of Article XXXIX (39) that have the greatest potential for modification in the next round of CBA negotiations are Section 2 and Section 4. The formula contained in Section 4 is outdated. Financial projections will dictate a more appropriate calculation. The NBPA may consider whether to advocate for an option to terminate the CBA early if the revenue projections increase along the lines of what occurred after 2011. This will depend on the term of the new CBA and how that term coincides with the term of the new television deal starting in the 2016-17 season.

Section 2 of the NBA CBA was contrasted above with the MLB, NFL and NHL Agreements.  Professional Baseball and Football do not have comparable discretionary early termination provisions; the NHL CBA does have a clause similar to that in the NBA CBA.

A middle ground between the different approaches could involve, as suggested above, mandatory mediation within a stated timeframe to try to resolve developing issues between the parties to give more clarity to the process than exists under the current agreement. The party with the disadvantaged position might also elect to receive liquidated damages under a formula analogous to the television and media revenue calculation in the current CBA Article VII(1)(c)(2) and Article XXXIX section 4. Such a formula could take effect after a defined period and thereby function to ensure timely and good faith bargaining if the party wished to avoid a monetary penalty.

Ultimately, negotiations pertaining to Article XXXIX will take place within the context of macro-level concerns about ensuring a financially stable business model; in addition to micro-level issues of revenue sharing and maximizing individual player and team profitability.

ENDNOTES

[1] See “Summer League Buzz: Owners the ones to watch in CBA negotiations”, Ken Berger, July 14, 2015 (www.cbssports.com/nba/writer/ken-berger/25242544/summer-league-buzz-owners-may-opt-out-of-collective-bargaining )

14 Months and Counting…Negotiating a Deal Before the CBA Opt-Out Notice Deadline

The NBA has faced interruptions in its playing schedule due to labor disagreements four times in its history. The upcoming 2015-2016 season is safe. The current NBA Collective Bargaining Agreement became effective on December 8, 2011. It is effective through June 30, 2021 if the parties do nothing. However, there is an “opt out” provision contained in Article XXXIX, Section 2. The opt-out allows either side to terminate the agreement after the 2016-2017 season.[1]

The earliest either party may terminate the agreement is June 30, 2017. So why discuss the CBA now? Because in order to opt out, written notice must be served on the other party by December 15, 2016. If notice is served, contractual relationships and future investments become uncertain and uncertainty is bad for business.

Part One of this article will look at the timeframe relevant to CBA negotiations; Part Two will examine the specific CBA language governing the termination of the current agreement.

The players’ union (NBPA) Executive Director Michele Roberts has publicly said she would like to avoid a work stoppage by completing CBA negotiations by the end of this season (by Spring 2016). See www.RealGM.comMichele Roberts Describes New CBA Deal Timeline As ‘Aspiration’” (September 5, 2015). Two of the main issues are expected to be the split of “basketball related income” (BRI) and making up for the 6 years between 2008-2014 that the salary cap hovered around $58 million.

Likewise, team owners were concerned in the 2011 CBA with achieving a sustainable business model and competitive balance. Owners have already tried to deal with the salary cap that will increase to approximately $89 million in 2016-17 and $108 million in 2017-18. This past March owners made an offer to the NBPA to “smooth over” the salary cap issue. The union rejected the proposal to breakup the cap increase over several seasons choosing instead to allow the increase to come in all at once after the upcoming season. This was an early attempt by owners to anticipate the effect of the league’s new 9-year, $24 billion dollar television/media deal that takes effect in the 2016-17 season. See Jeffrey Zillgitt, “NBA, union have too much to lose to op out of CBA” USA Today (August 5, 2015) (www.usatoday.com/story/sports/nba/2015/08/05/nba-nbpa-collective-bargaining-cba-lucrative-tv-deal-big-player-contracts/31125779); Will Green “NBA and NBPA to start 2017 CBA negotiations in August” SI Wire (June 10, 2015) (www.si.com/nba/2015/06/10/nba-nbpa-collective-bargaining-agreement-negotiations-august).

The parties will have 7 more months after this season ends before the written notice of termination must be served. In other words, to resolve issues arising under the CBA and to avoid the possibility of a work stoppage, the parties have a window presently of 14 months. In my experience over the last 20 years negotiating contracts (albeit not NBA CBA’s), and as a review of the history of CBA negotiations in the NBA demonstrates, 14 months is not a long time to resolve issues as complicated as those that will be presented in this round of talks. Roberts would like to see it done in half that time, in the next 7 months. How ambitious is that timeline?

Let’s compare the chronology of events that occurred under the 2005 CBA. That Agreement was a 6-year deal with an option that the owners could exercise to extend it through the 2011-12 season. The owners announced in 2009 they would not exercise their right under the contract option to extend the CBA into the 2011-12 season. This meant the CBA would expire at the end of June 2011. Since the parties had not agreed on a new CBA by then there was a delay in starting the 2011-12 season while the parties tried to agree on a new deal. Current NBA Commissioner Adam Silver was Deputy Commissioner and Chief Operating Officer under then-Commissioner David Stern. Silver was one of the main negotiators on behalf of the League and team owners the last time around and the actual signatory on the CBA.

Team owners imposed a “lock-out”[2] beginning on July 1, 2011 which lasted until December 8, 2011. A succinct summary of those events can be found at NBA.com Labor Central “NBA lockout timeline” (September 9, 2011). Prior to that time the NBA had not had a protracted labor dispute since the summer of 1998, when a lockout extended into February of 1999 and forced the league to play a 50-game season. See “Players union files claim against owners” http//sports.espn.go.com/nba/news/story?id=6584220 (May 24, 2011).

The time from the beginning of CBA negotiations until the lockout was August 2009-June 2011. The time for the current negotiations between the NBA and NBPA would be August 2015-June 2017. To understand how the 2011 CBA was reached, and the relevance that process might have to the upcoming CBA discussions, it is useful to look at the history of those negotiations.

 The following quotes are selected from excerpts of “NBA lockout timeline” cited above:

 June 21, 2005: The NBA and players union agree on a new six-year collective bargaining agreement. Some of the elements of the deal include:

  • An age minimum of 19, with the stipulation that American players be one year removed from high school. International players are eligible for the draft if they are at least 19 in the calendar year of the draft. Contracts for first-round draft picks are also revamped, shifting from three years guaranteed with a team option for a fourth year to two years guaranteed with a team option on the third and fourth years.
  • The luxury tax in effect every season. Previously, the luxury tax was in effect only in seasons where league-wide salaries exceed 61.1 percent of basketball-related income (“BRI”).
  • Maximum contracts are reduced — from seven years for free agents re-signing with their current team and six years for signing with a new team — to six and five years, respectively.
  • Formation of the NBA D-League

February 27, 2009: The AP reports the NBA lines up $200 million to be distributed in loans to 12 teams that have expressed interest in the funds as they face financial hardship during tough economic times.

March 20, 2009: 
After rumblings that the players and owners will reopen talks on reaching a new CBA, [NBA Commissioner] David Stern reveals that he and [NBPA Executive Director] G. William “Billy” Hunter have agreed to begin “substantive discussions.”

August 5, 2009: In New York, the NBA officially notifies the players union during a 3 ½-hour meeting between a group of 10 owners and reps from the players union that it will not exercise an option to extend the CBA into the 2011-12 season. It is categorized as an introductory meeting. No proposals for a new CBA are made.

January 29, 2010: 
The union receives a proposal from the NBA and its owners that calls for drastic financial change, including a “hard” salary cap which would eliminate some exceptions that teams over the cap can use to sign players if they are willing to pay a luxury tax. The proposal suggests cutting player contracts to a maximum of four years and decreasing the players’ share of basketball-related income from 57 percent to under 50 percent.

February 12-14, 2010: The NBA’s proposal is rejected by the union.Stern asserts that the NBA is projecting league-wide losses of about $400 million for the season and that a new financial model is needed.

July 2, 2010: The players union submits its first counter-proposal to the owners. The proposal includes leaving the current soft cap with exceptions and the luxury tax in place in addition to pushing for a better revenue-sharing model among the teams.

August 12, 2010: Big name players like Carmelo Anthony, LeBron James and Dwyane Wade are in attendance when the players’ union meets with owners in New York.

October 21, 2010: Stern reveals that the NBA wants to drastically slash players’ salaries as the league anticipates roughly $350 million in losses for the season with the league looking for a swing of $750 to $800 million in its favor. Commissioner also says that eliminating teams could be up for discussion as the league tries to stabilize its financial situation.

May 24, 2011: 
The players union files a lawsuit with the National Labor Relations Board to try to prevent a lockout. The union claimed the league was engaging in unfair practices including not bargaining in good faith, demanding huge financial takeaways from prior contracts without offering concessions in return, bypassing the Union to deal directly with players and threatening an unlawful lockout.

June 30, 2011 (midnight):

The league announces that it will lock out the players when the CBA expires at midnight. Lockout begins at 12:01 a.m. on July 1st.

July 12, 2011: 
NBA.com reports that, because the players were paid less than 57 percent of basketball-related income that was called for in the CBA, $160 million from escrow funds will be returned to the players.[3]

July 13, 2011: The players union sends a memo to the players supporting their plans to play basketball overseas.

July 29, 2011: With the NBA’s foreseeable future in jeopardy, FIBA grants players the option to play overseas.

August 1, 2011: The NBA also files unfair labor charges against the players union.

 August 31, 2011: 
Sides meet for six hours in New York in the second joint meeting since the lockout began.

September 7, 2011: Meetings continue with another six-hour session.

September 8, 2011: Sides meet for a second consecutive day

September 12, 2011: 
Charlotte Bobcats owner Michael Jordan is fined $100,000 for public comments made about the labor dispute.

September 13, 2011: 
Talks resume for the third time in two weeks with the additional attendance of the owners’ labor relations committee and the union’s executive committee. Both sides continue to disagree on changes to the salary cap structure.

September 21, 2011: 
Small groups from both sides meet in New York for a few hours and plan to continue talks the next day.

September 22, 2011: 
After another unsuccessful meeting between the heads of the NBA and players union, the threat of training camps and some exhibition games being cancelled becomes more of a reality.

September 23, 2011:
The league announces that training camps are being postponed indefinitely and all preseason games scheduled for Oct. 9-15 will be cancelled.

September 27, 2011: 
Sides take part in another small-groups meeting

 September 28, 2011: The NBA and players union hold another meeting and the calendar is again a looming counterpart in the labor negotiations. According to a report, if little to no progress is made during talks planned for the weekend, Stern says the 2011-12 season is in serious jeopardy. On the players’ side, the union is requesting a collective of star players including LeBron James, Kobe Bryant and Kevin Durant to attend the Friday meeting.

 September 30, 2011: With star players such as Dwyane Wade, LeBron James, Carmelo Anthony and Paul Pierce on hand, the union and owners resume labor discussions.  According to reports, a tense exchange occurred between Wade and Stern after Wade, frustrated with the proceedings, felt he was disrespected by the Commissioner. In one bit of progress, the league says it is committed to quadruple revenue sharing that would go to smaller-market teams in the third year of a new revenue sharing plan the league is working on.

October 1, 2011: The longest meeting between both sides since the lockout began July 1 takes place as the NBA and union talk for seven hours. The majority of the session is devoted to the salary cap structure, which the players insist on keeping the same while owners push for a number of changes. The players voiced their wishes for the next cap, including the midlevel and Larry Bird exceptions remaining in the deal.

October 3, 2011: On the day training camps were to have officially opened, Silver stressed that compromise would be needed on both sides to get a deal done.

October 4, 2011:
 The sides meet for about four hours and fail to reach agreement on the split of basketball-related revenue. The NBA announces the cancellation of the entire 114-game preseason schedule. Stern says that if a deal on a new collective bargaining agreement, at least in principle, is not reached by Oct. 10 (Monday), then the first two weeks of the season will be lost. The regular season is scheduled to begin Nov. 1.  Stern and Silver said owners offered players a 50-50 split of basketball-related income. That’s below the 57 percent that players were guaranteed under the previous collective bargaining agreement, but more than the 47 percent union officials said the owners previously proposed to them.

October 10, 2011: 
Both sides reconvened for a little over seven hours but were unable to come to terms, resulting in the first two weeks of the NBA season being canceled. Stern said . . .the longer it takes to come to an agreement, the more owners will try to recoup monetary losses incurred through canceled games.

October 12, 2011:
 The players union and NBA agree to meet early next week with a federal mediator as the sides continue to try to hammer out a new collective bargaining agreement. Similar mediations were successful in helping both the NFL and Major League Soccer reach deals on their own CBA’s.

October 17, 2011: Federal mediator George Cohen meets individually with both sides in preparation for a joint session scheduled for the following day.

October 18, 2011:
 NBA players and owners spend 16 hours meeting with Cohen and plan to return the next day at 10 a.m. to continue the talks. They didn’t emerge with the deal Stern wanted, but things went well enough that the owners decide to alter their plans of proceeding with their Board of Governors meeting the following day after previously saying they weren’t available. Following recommendation from Cohen, both sides left the meeting without commenting.

October 19, 2011:
 After a 16-hour marathon meeting, the sides meet for more than eight hours and agreed to continue talks on the next day.

October 20, 2011:
 NBA labor talks turned nasty and broke off when three days of meetings failed to yield a deal to end a 112-day lockout, raising the likelihood that even more games will be canceled. After 30 hours of negotiations before a federal mediator, the sides remained divided over two main issues — the division of revenues and the structure of the salary cap system. (emphasis added)

October 26-27, 2011:
 Sides negotiate for more than 15 hours making incremental progress on the “system” issues.

October 27, 2011:
 After negotiating for more than seven hours, sides agree to reconvene the next day.

October 28, 2011:
 After seemingly making progress the day before, talks crashed, with BRI the main culprit. With talks stalled, Stern canceled all games through Nov. 30th.

November 5, 2011:
 After meeting separately during the morning, the two sides met for 8-1/2 hours, with federal mediator George Cohen returning to help find a compromise. The NBA proposed a new offer to the players, and set a deadline of Nov. 9 at the close of business for the players to accept.

November 8, 2011:
 43 players, including Carmelo Anthony and Blake Griffin and representatives from 29 teams and, met for about three hours Tuesday afternoon to discuss the owners’ latest proposal. In a post-meeting news conference, they rejected the proposal and said the union wanted more negotiations before the 5 p.m. Wednesday (Nov. 9) deadline imposed by Stern. The union indicated there were system issues that needed to be modified if players were going to accept a split in a so-called “band” of from 49 to 51 percent of basketball-related revenue (BRI), which is the “50-50” deal offered by owners. At this point, the union and NBA have spent 22 sessions and 148 hours trying to agree on a new collective bargaining agreement.

November 10, 2011:
 A 72-game season starting Dec. 15 is proposed for NBA players.

November 14, 2011:
 After spending the weekend mulling the NBA’s offer, players arrived in New York City and delivered a [response] to one more ultimatum from NBA Commissioner David Stern: See you in court. The players’ association rejected the league’s latest proposal for a new labor deal and began disbanding, paving the way for a lawsuit that throws the season in jeopardy. By filing a disclaimer of interest, the union ended its role as a collective-bargaining agent and the NBPA executive director became the executive director of a “trade association”. Outside counsel Jeffrey Kessler and David Boies[4] — who, ironically, represented NFL owners when they thwarted the football players’ de-certification push last spring — will become the key figures from the players’ side, taking over for Hunter and NBPA president Derek Fisher. (emphasis added)

November 15, 2011:
 The locked-out players, including Carmelo Anthony and Kevin Durant, file class-action antitrust lawsuits against the league in northern California and in Minneapolis. Boies said the NBA lockout violates antitrust laws by refusing to allow players to work. NBA.com’s Labor Central Players file pair of antitrust lawsuits against NBA” (November 15, 2011)

November 17, 2011:
 Stern and the team owners conduct a conference call to discuss and update each other on the failed negotiations and resulting upcoming litigation being pursued now by the players.

November 21, 2011: 
Boies and the players withdraw the California lawsuit to focus on the complaint filed in Minnesota[5] [where things probably would move faster because the docket is less congested].

November 23, 2011:
 Talks aimed at ending the NBA lockout resumed.

November 25-26, 2011:
 NBA owners and players reached a tentative agreement early Saturday to end the 149-day lockout. After a secret meeting earlier this week, the sides met for more than 15 hours Friday, working to try to save the season. This handshake deal, however, still must be ratified by both owners and players. Thirty more days are needed from the handshake agreement to tipoff, and before players can vote to approve a deal, they must drop their lawsuit against the league and recertify as a union. A simple majority vote of the 430-plus union membership is needed to approve — or disapprove — the settlement. At least 15 of 29 owners are needed to ratify. The league plans a 66-game season and aims to open camps Dec. 9.

December 8, 2011:
 Both the owners and players ratified a new 10-year collective bargaining agreement, enabling training camps and the free agency period for the 2011-12 season to begin on Fri., Dec. 9 at 2 p.m. ET. The agreement includes a 50-50 split of basketball-related income, a higher luxury tax with progressive tax rates and the retention of a soft salary cap system. The maximum length of player contracts will be five years (previously six) and maximum annual increases in salaries will be 7.5% for teams re-signing their own players and 4.5% for teams signing other teams’ free agents. Eligibility for the NBA draft remains at age 19 as it was under previous CBA.

  *   *   *   *   *

It was almost 23 months from the owners’ formal announcement on August 5, 2009 that they would not exercise the contract option to extend the CBA until the lock-out at midnight on June 30, 2011. Another 161 days (or just over 5 months) passed after the lock-out until the start of games in a shortened season. Therefore, from the formal announcement and start of CBA negotiations, through the work stoppage, and to the start of play, over 28 months passed. Considering that timeframe, August 2015 was not too early for the NBA and NBPA to begin the current CBA negotiations.

The timeline from the initiation of meetings in August 2015 to the deadline to serve notice that one party or the other will opt-out (December 15, 2016) is, as of this writing, a little over 14 months. From service of notice to the actual termination of the Agreement (June 30, 2017) is another 6-1/2 months. The total timeframe until a potential work stoppage is 20+ months with the clock ticking; This is 3 months less than the negotiation period that preceded the 2011 lock-out.

The NBA and NBPA are entering negotiations better positioned to strike a deal since the League is financially much stronger than it was in 2009. [6] It is unlikely the owners are going to want to see the stability attained as a result of the last CBA eroded. Dividing the monetary rights of the parties given the influx of new money is extremely complex. The audit provisions of the CBA will ensure that both sides are working with the same numbers. There will agreement about assuring the overall future profitability and financial security of the NBA business model. The disagreement will be over the details and the best way to achieve that goal.

ENDNOTES:

[1] Other grounds for terminating the CBA will be reviewed in Part Two of this article

[2] Technically, since the owners did not exercise the option to extend the 2005 CBA, there was a “lock-out” since no valid CBA was in place at the end of June 2011 . The posture of the parties under the 2011 agreement is different in that rather than allowing the parties to extend the CBA, it does not terminate until 2021 unless one party or the other opts out effective June 2017. If the players opt out, there could be a “walk-out” in June 2017; if the owners opt out, there could be another “lock-out”.

[3] July 12, 2011:  “Escrow money withheld from all NBA players’ paychecks each season will be returned to them this offseason for the first time, providing a $160 million infusion of cash in the midst of the league’s labor lockout. The escrow funds — representing eight percent of each NBA player’s salary — are held back each season to ensure that the players’ share of basketball-related income does not exceed the contractually agreed-upon percentage, currently 57 percent. This year, for the first time since the system was introduced in the collective bargaining agreement that came out of the 1998-99 lockout, the cut to players will fall short, sources with the NBA and the National Basketball Players Association confirmed. When a final audit is completed later this month, the players will have been paid less than 57 percent of BRI and will be due the entire $160 million. It’s the first time the players will have the full escrow returned, a union spokesman said. That cash could ease or delay the point at which some players begin to feel financial hardship from the lockout. Based on the “average” NBA salary of $5.7 million, the escrow rebate would be worth $456,000. A minimum-salaried player ($473,604) would be due $37,888 while a $16 million superstar could expect $1.28 million coming back. A majority of NBA players are paid from November through April, while those on a 12-month payment plan receive checks through the summer for the just-completed season. A check for 8 percent of their annual salary could put off any money pinch they eventually feel. Traditionally, the annual July audit is the time when BRI is defined, along with the salary-cap and minimum payroll figures. The NBA imposed the fourth lockout in its history on July 1 after negotiations of a new collective bargaining agreement failed and the old deal expired June 30. Only one of the previous three — in 1998-99 — caused the league to cancel games; that 204-day lockout resulted in a shortened 50-game season. This time, the league’s owners — estimating losses by 22 of its 30 teams in 2010-11 for a combined $300 million — have been seeking a reduction in the 57(players)/43 (owners) split of BRI, along with changes in the definition of BRI. Also, the owners have proposed a hard salary cap — or, in a recent revision, “flex” salary cap — as opposed to the “soft” salary cap previously in use. The soft cap led to a disparity in payrolls from the Los Angeles Lakers’ $110 million in salary and luxury-tax obligations to the Sacramento Kings’ $45 million. The owners cite competitive balance, along with profitability across all 30 teams, as reasons for their targeted changes. The players have shifted the onus for profitability onto the owners, urging more aggressive sharing of revenues among the teams. They rejected a proposal from the owners that would have guaranteed them at least $2 billion in annual compensation over a 10-year deal — the 2010-11 figure is $2.17 billion — because it would have represented both a pay cut and an exclusion from much of the league’s anticipated growth over that time. Instead the players have offered a reduction in their cut of BRI to 54.3 percent, which they contend would reduce salaries by a total of $500 million over a five-year CBA. . .In the last lockout, the owners and players went 45 days — from June 22 to Aug. 6 — between negotiating sessions. That time frame is believed to have led to the eventual cancellation of 464 regular-season games, the 50-game schedule and the loss of the 1999 All-Star Game.” www.nba.com “$160 Million in Escrow Money to be Returned to Players” Steve Aschburner (July 12, 2011).

[4] Kessler recently represented Tom Brady/NFLPA in the “Deflate”gate case. Boies is probably best-known to the general public for representing democratic presidential candidate Al Gore in the “hanging chad” re-count case in 2000 Bush v. Gore. Both Kessler and Boies had represented professional athletes/unions and team owners in the past.

[5] The NFLPA had also filed a lawsuit in federal court in Minnesota to vacate Commissioner Goodell’s arbitration award in “Deflate”gate. State and Federal Courts in Minnesota (8th Circuit) have been forums friendly to professional athletic unions in past disputes along with courts in the 9th Circuit (California).

[6] But compare comments of Commissioner Silver that “a significant number of teams are continuing to lose money despite fairly robust revenue sharing when some teams are receiving $20 million checks from their partners”. Ken Berger “Summer League Buzz: Owners the ones to watch in CBA negotiations”, CBSSports.com (July 14, 2015) (www.cbssports.com/nba/writer/ken-berger/25241544/summer-league-buzz-owners-may-opt-out-of-collective-bargaining-agreement)