NBA commissioner David Stern emerged after a seven-hour meeting with the players' union Monday night and announced that the first two weeks of the season have been canceled.
"The fact is we remain really very, very far apart on virtually all issues,'' Stern said. "We just have a gulf that separates us.''
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Opening night had been scheduled for Nov. 1, and the cancellation includes all games scheduled to be played through Nov. 14. Affected arenas have been authorized to release those dates.
The Knicks were scheduled to open the season at home on Nov. 2 against the Miami Heat on ESPN. The move by the NBA erased the first seven games from the Knicks' schedule, including home games against the Thunder and Pacers.
The league, which claimed $300 million in losses last season, stands to lose as much as $400 million in revenue from the canceled games. The players, who at $5 million a year collectively have the highest average salary among the major U.S. sports leagues, also will miss their first paycheck of the season, which would have arrived Nov. 15.
"We probably need to miss a few games in order for [the owners] to probably be convinced that there is resolve in the players,'' union executive director Billy Hunter said. "While we don't want to be out here, our players are not going to fall apart. We spent 21/2 years getting them ready. This is the worst-case scenario.''
Union president Derek Fisher added, "This is not where we choose to be. We're not at a place where a fair deal can be reached with the NBA."
This is the second time in NBA history that games have been canceled because of a labor dispute. A lockout in 1998-99 resulted in a 50-game season.
The decision this year was announced after the league and the players' union held another marathon session of collective bargaining Monday that, for a second consecutive day, went deep into the evening. The sides met for five hours Sunday night, ending near midnight, and picked things up again Monday at 2 p.m. at an Upper East Side hotel.
After talks broke up last Tuesday, Stern pointed to Monday as the day the NBA would cancel the first two weeks of the regular season. The entire preseason already had been scrapped, and after Monday night's announcement, Stern warned that "with each passing day, I think we do face the prospect of more games lost.''
At this point the sides have no scheduled meetings with each other. Instead, the union will hold a large membership meeting in Los Angeles on Thursday and Stern will conference with the league's Board of Governors.
"The last thing we want to do is miss games,'' Hunter said, "but I'm sure the first two weeks of the season, that those games can, in fact, be made up if we are, in fact, able to get a deal in the next two weeks.''
The NBA could opt to try to fit in an 82-game schedule by reorganizing the schedule or pushing the season deeper into the spring. But first the league and the union would need to close the gap on what finally has been identified as the main bone of contention between the sides: the salary-cap system.
After the sides haggled over the revenue split during negotiations early last week (each wants 53 percent of the league revenue but they have discussed, though not agreed upon, a 50-50 compromise), the talks moved to proposed cap systems.
The league agreed weeks ago to come off a hard-cap system but instead has proposed a soft-cap system with extremely heavy restrictions on spending over the cap threshold. The league's proposal, according to Hunter, involves as much as a $4 tax for every $1 spent over the cap, plus a double-penalty for repeat offenders. The previous cap system had a $1 for $1 tax system. The union views this restrictive tax as a hard-cap mechanism.
"The hard salary cap is what's going to doom the season right now,'' union legal counsel Jeffrey Kessler said. "That's the sticking point, because the numbers were close enough that if there was a fair system, the parties would find a way to get there.''
First they'd need to bridge a 6 percent canyon at a point when both sides believe they already have conceded too much. The players have come down four percentage points from the 57 percent of league revenue (known as Basketball-Related Income) they earned in the previous CBA. The league has moved up one percentage point from the 46 percent it initially proposed. The sides also discussed a 50-50 concept, which is the model of the NFL's new agreement, that the players thus far have rejected. But both sides seem to think it won't be as great an issue as the cap system.
With the above issues well-defined, the sides attempted to find common ground on several other main topics within a new agreement, such as the mid-level exception, the rookie salary scale, Bird rights and contract lengths.
The result was even more disagreements, with the league looking to reduce maximum length for player contracts from six to four (and three if the team does not have the player's Bird rights). The players offered to reduce the length to a five-year max for players with Bird rights, and four for those without.
There even were disputes about adjustments made to the Bird rights, which is a mechanism similar to the NFL's "franchise tag'' that allows a team to re-sign its own free agents despite being at or over the salary cap, plus offer an extra year in length and higher percentage of annual raises.
The owners want to limit Bird rights to a situation in which a team that is over the cap no longer is qualified to use them, which the union says is yet another way to "harden'' the league's proposed "soft'' cap.
"My attitude is, if it quacks like a duck and looks like a duck and walks like a duck, then it's a duck,'' Hunter said.
The league has somewhat satisfied the union by coming up with a more robust revenue-sharing plan among the franchises that will be more than triple the value of the previous plan, but Hunter said he wants it in writing in the new CBA.
"Our contention is once the players have given back so many dollars, we want to make sure they don't renege on their own revenue-sharing plan and it's not coming all off the backs of the players,'' Hunter said. "And they've kind of resisted that.''
Stern, of course, pointed the finger back the other way. "From our perspective, last week we were talking with the players about a system that would have taken their average salary from $5.5 million to over $7 million in seven years,'' he said. "The owners have made, I think, concessions . . . but the issue on the competition side, in order to have 30 teams be as competitive as they can and tell our fans that our markets and our teams could compete for a championship if well managed, have separated us greatly.''
Fisher, who earlier in the day led a Twitter campaign by the players with the hashtag "Let Us Play,'' also wanted to make sure to separate the union from the owners in this labor battle by emphasizing a point that at times is misunderstood by the general public.
"I want to remind everybody that a lockout is not a strike,'' Fisher said. "I think oftentimes our fans believe that we're striking. That's not the case. A lockout is something that is imposed by team owners, by the league. And this is not where we choose to be. I think our players have been clear from the beginning that we want to play basketball . . . This is a big blow, obviously, to our fans, most importantly. They don't have a voice in this fight so far, but we hear them loud and clearly. They want basketball, we want to play basketball. And we're going to do the responsible thing and try our best to bring them basketball as soon as we possibly can.''
Knicks star Carmelo Anthony was one of several NBA players to take to Twitter on Monday to support the union's stance and also appeal to the fans. "I just wanna apologize to all the fans for this lockout,'' Anthony wrote. "Trust me, I feel y'all pain. This ----.''