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Blog Entry

The lockout discount

Posted on: August 5, 2010 4:31 pm
 
Posted by Matt Moore

Ken Berger's report on the upcoming meeting of the players' union and ownership is probably only going to go as well as the last meeting did. Here's a little dramatic re-enactment of that exchange:

Players' union: "Psshaw!"

Owners: (GUFFAW!)

Players' union: "As if!"

Owners: (Rabble rabble!)

Etc.

But among the information KB passed along , there is the one that keeps coming to life:

Like partygoers ordering the last few rounds of drinks on the Titanic, owners doled out more than $1 billion in salary commitments during free agency. Five-year deals north of $30 million for the likes of Channing Frye, Drew Gooden, Amir Johnson and Travis Outlaw were among the head-scratchers -- or, as one person on the players' side of the debate called it, "the height of stupidity" for owners heading into a labor fight.

In politics, I'm told there is a drive to create easy-to-digest slogans. And "You gave Darko Milicic $20 million" is the union's new rallying cry. And it's certainly a valid one. But wrapped up in all this two-faced jesterdom is a question that started bugging me. KB notes that teams gave out up to a billion dollars in free agent money this summer. But then later, there's this sobering, theoretically unrelated note, again, something we know but that bears repeating:


"There's a concept known as the self-fulfilling prophecy," one of the people involved in bargaining said. "When you have both parties saying there's going to be a lockout, the likelihood of it happening is very high. ... My interpretation is, I don't think either one of these guys is ready to move."

So just to go over this once more. The ownership group lays out $1 billion dollars the summer of free agency and takes on water for it. At the same time, the ownership group is steadfastly moving towards a lockout with seemingly no concern over how long it will go on. Anyone else picking up a paradigm here? The owners gave out a considerable amount of money over a given number of years... but are almost positive they will not be giving the full amount.

A lockout season prorates the players' pay. With players paid twice a month, if the lockout lasts into half the season, that scrapes off half that first year's salary. Take a swing at how much less those salaries become depending on how long the lockout lasts? Meanwhile, the ownership group negotiates for a tougher deal which will curtail spending in the future. So we've got a primary element of the union's case that probably won't be true. It won't stop the union from being able to use it as an argument, but then, the more the union uses it, the more likely a lockout becomes, which of course, drops the price off the contracts.

Even if the lockout only lasts a month into the season, that could drop millions off a team's payroll. Combine that with whatever revisions the owners force the players to concede, particularly those top-end players, since they aren't making their presence felt at the meetings, and there's a pattern forming here. The owners seem like they're a step behind. But it's possible that Berger's source was right:


"[The owners] are not remotely worried. They're fully prepared to shut the thing down."



The union's campaign slogan may ring true in theory, but it's possible the owners are a step ahead, regardless of how these talks develop.
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