NBA Lockout: Mediating in the Garden of Good and Evil

"Words, words, mere words, no matter from the heart." - Troilus and Cressida

With the CBA lockout now arriving on "mediation day," I harken back a bit to my memories of grammar school where words still meant something. Over the past six months, we've seen a number of instances where both the NBA and NBPA has accused the other of "negotiating in bad faith," or in the alternative, "just wanting to negotiate in good faith."  

First though, an anecdote that may or may not have happened:

Imagine if you will a conversation that I have with my wife. We discover that a benevolent benefactor has decided that, because of how much he likes us as a married couple, he wants to give us $2,000 to spend on one single item that would bring us joy. A choice has to be made. On my side of the table, I say, "I would love it if we spent that money on a Les Paul Guitar." On her side of the table, she says, "I would love to spend that money on some YSL shoes." 

I list out all the reasons why the guitar is the superior investment - the guitar retains its value, it brings me great enjoyment, and it would bring a smile to anyone for whom I played (since in my genius-scenario, my guitar technique is synthesis of Slash, Jimmy Page, and Stevie Ray Vaughan). My wife lists out all the reasons why her shoes would be the superior investment - they would make her look fabulous, her glamorous appearance by extension would bump up my own from a 2 to at least a 2.5, she'll likely not have many opportunities to acquire such a rare item of apparel, and if she's happy, everyone is happy. 

Each person wants to see the money spent for their own interest, an interest that leaves very little to the satisfaction of the other. In other words, both my wife and I are completely governed by our own self-interest. While we certainly care about the other's position and genuinely want them to be happy, the complete divergence of self-interests in my two-choice zero sum game means that one's satisfaction has to come completely at the expense of the other. We debate the potential purposes back and forth to no avail. Each accuses the other that he/she is not being "fair," and is acting "selfishly." As the negotiation becomes more passionate and each person becomes even more entrenched, a sense of moral superiority surfaces, which further justifies one purchase over the other. Eventually one of us utters this sentence:

"You never intended to listen to my argument for why we should get my guitar/shoes. You were negotiating in bad faith."

 

 

The participants in this CBA lockout throw around these "bad" terms and for good reason - they are designed to evoke an emotional and visceral response, as to say the opposition is doing something uncouth and underhanded and maybe even (wink, wink, nudge, nudge) illegal. The word choice helps sway public opinion, diminishes the opposition, and in respective minds helps with bargaining power.

To wit:

"I don't feel optimistic about the players' willingness to engage in a serious way." - David Stern

and

"The litigation tactics of the NBA today are just another example of their bad faith bargaining and we will seek the complete dismissal of the actions as they are totally without merit." - Billy Hunter

Their pain is palpable, no?

When a player says that the owners are debating in bad faith because they want to restrict the movement of the middle class, or the owners say the players are not negotiating in good faith because they won't take less than 53%, they are not engaging in a moral argument. There are no morals connected to a slice of the pie or freedom of economic movement. These are merely positions. They are self-interested positions, to be sure, but in a zero sum game, one is not superior to the other. 

To take it a step further, when the league argues to the public that they lost $300 million last season, or the union argues that under the owners' new scenario that players like Lamar Odom would see their salary get slashed by 70%, those are not two moral arguments. They are merely positions and negotiating tactics. They may be true or they may be false (or more likely, somewhere in between); the point however was to put those sentiments into the public space in order to garner an upper hand in the negotiation process. They are talking points and simple tools applied to win the debate. And if the rhetoric seems imbalanced or unnecessarily vehement from one side over the other and it doesn't seem fair, I have to ask you, what exactly do you think you're witnessing in this theater of business war?

The Art of the Messy Deal

It is not by accident that the phrase "blood issue" has taken root in the CBA lexicon. In fact, Stern has cleverly usurped the phrase from the lips of Billy Hunter, and the result is Stern's almost bemused but subtle condescension toward the NBPA, as to say, "business is business, but for these guys, it seems awfully personal. They have lost perspective." The owners might be thinking to themselves, "Is this the hill you are willing to die on? Fine, I'll lend you my sword." The owners are already ahead of the game.

In this CBA game, the imbalance between the two sides can be seen through the same cliched lens in which we have undoubtedly analyzed some basketball games: the league is playing to win while the union is playing not to lose. The owners are fighting to 'take,' while the players battle to 'not give out.'   

The owners (the players/we argue) are negotiating in "bad faith." They are trying to take something which they did not previously have while the players are simply trying to defend their bulwark. What of it then? Is the accusation of "bad faith!" going to cause owners to alter their course? Are they going to have a sudden attack of morals that drives them to capitulate? No, of course not, because there are no morals involved; just self-interest. 

As a matter of example, I had this brief exchange with SBN's Tom Ziller a while back: 

Me: Here is a cynical point of view: do you think the league would think about using the lockout solely as leverage to break their unfavorable TV deal? There is a doctrine in contract law called "impossibility" that could applied. The fact that the lockout was premeditated probably cuts the legs out from underneath, but it's a wicked theory all the same.

Ziller: Good god that's evil.

Me: Indeed. It's also some pretty tactical bad-a$$ hardball. If you don't have negotiating leverage, then you manufacture some. I have to go high-five my Gordon Gekko wall poster just for thinking of it.

Ziller: If you get hired by the league, I'm going to weep.

---

Here is my question though - is this tactic truly evil? Or is it simply a negotiating measure that has an identifiable cost (breach of contract) which could be outweighed by the potential upside (to get a more profitable TV deal)? My point in suggesting the scenario is not to say that the league is merely using the lockout as a diversionary tactic, but to get to the point that if I'm in the NBA offices and working on this negotiation, something like this has to at least be on the table, because the goal is to win the deal. 

Here is veteran NBA analyst Jan Hubbard:

As the percentages each side said were required for a deal haven gotten closer and closer, writers covering negotiations have been more and more dumbfounded that a middle point could not be found. By not playing basketball games in the preseason and now cancelling the first two weeks of the regular season, each side has sacrificed more than it would lose with the other side's deal. So why not compromise?

And therein lies the problem - the assumption that logic applies; the belief that it is common sense to believe both sides to have common sense.

That has been incorrect, which leads to an obvious conclusion. This financial contest is not about dividing revenues fairly.

It's about winning.

It's about owners - who, by the way, include Michael Jordan - pulling a Michael Jordan and imposing their will on the opponents.

The owners' team is comprised of private equity millionaires, billionaire risk-hunting entrepreneurs, and as Hubbard mentions above, the single fiercest hoops competitor the NBA game has ever known. New Nets owner Mikhael Prokhorov started on his ascent to billionaire status by taking advantage of an entire country's economic and political collapse and then, in Bill Simmons words, seizing the day in the wild wild west in Russia. "Bad faith" to this guy is just two beginning letters shy of what he really is

Meanwhile, on the other side of the table:

During one of the single biggest meetings (last week, on Tuesday), Hunter had Kobe Bryant, Paul Pierce and Garnett (combined years spent in college: three) negotiate directly with Stern in some sort of misguided "Look how resolved we are, you're not gonna intimidate us!" ploy that backfired so badly that one of their teams' owners was summoned into the meeting specifically to calm his player down and undo some of the damage.

On one side of the table, you have a Russian billionaire whose background check involved the Russian KGB, and on the other side of the table you have one half of the "all-nude team." Kobe, KG, and PP may possess the highest hoops IQ in the world and have legitimate business skills in the market place, but their area of expertise doesn't scrape the surface of the panzer that they're negotiating with. Hunter made a tragicomically bad tactical decision in thinking that player reps could make any sort of dent in the owners' armor. If it seems like there is an unfair imbalance in the negotiations, it is because there is an unfair imbalance. Owners have more business experience, more money, more leverage, and more time to wait. An accusation of "bad faith" is merely an admission of all of those advantages that the owners will freely use to win.

A More Familiar Illustration

If you watched the Thunder last year, you probably saw this Kevin Durant move numerous times:

If you're a Thunder fan, you probably watched that play and smirked to yourself as KD once again got away with his "rip move." If you were rooting against the Thunder, you probably threw something at the wall.

Is the move a legal basketball play? Should it be called in Durant's favor? Is it poor sportsmanship, as many of his detractors have implied? Does it even matter?

"If it's legal and all that, then it's fair game. You can't blame him for doing it." - Rick Carlisle

To use familiar lockout language, Durant's rip move might be called "playing the game in bad faith." He is taking advantage of one big thing - the knowledge that he is often the recipient of favorable foul calls, and the move is an easy/cheap way to score points. Durant modified his game to exploit that reality to its fullest. Durant knows this. Everybody knows this. He does the exact same thing that the likes of Kobe Bryant, Dwight Howard, and Dwyane Wade do; they use their knowledge of the game and how it is governed in order to gain an advantage.  

That is "bad faith," right?

"Personally, I think they should take it out of basketball. I don't think that's playing basketball, but it's part of the game. You've got to abide by it and you've got to know who you're playing. I think (Durant) does an excellent job, no matter where your hand is. He's so long. No matter if you have your hand back or not, he finds a way to do it." - Kenyon Martin

The answer is, yes, the rip move is a "bad faith" move. Yet even Durant's detractors agree that he should keep doing it. When the refs stop calling the move in Durant's favor, he will stop doing it.

"I guess it's not going to get called anymore so I guess I'm going to have to throw it away." - Kevin Durant, 5/25/11

Durant used his professional stature and his knowledge of referee tendencies to help his team win. Fairness, morals, and integrity were irrelevant; the move was not a "bad faith" move, it was just a move. When the move stopped working, Durant stopped doing it.

Example of Real Bad Faith

If we are to conclude that each side is no more morally superior to the other, then what can we say of this concept of "bad faith?" Is it not merely a point of orientation that would change as easily as if David Stern and Billy Hunter switched roles? Not exactly. 

There is a legal definition of bad faith, and it goes like this:

Bad Faith: The fraudulent deception of another person; the intentional or malicious refusal to perform some duty or contractual obligation. 

In order for a "bad faith" act to rise to the level where it becomes adjudicative, generally speaking it must be a fraudulent deception or a malicious breach of contract. As far as we know, the NBA has done neither of those things. They instituted the lockout legally and they have offered financials that the NBPA has begrudgingly accepted. The demands the league has made in the new CBA may be heavy-handed, but to the best of my knowledge have not ventured into any of the territories listed above.

As a matter of comparison, let us briefly look back to March of this year when the NFLPA won a big victory in the federal courts, one in which the issue of "bad faith" also played a part:

Federal Judge Rules NFL Violated Deal | ESPN

The NFLPA treated this court victory as a stepping stone for better CBA negotiations and we all seemed to move on from that point, but it is important not to gloss over exactly why  the NFL lost. In brief:

  • The NFL negotiated a TV deal on behalf of the players. In essence, the league was acting as the agent of the NFLPA.
  • As the agent, the NFL had a legal obligation to procure the best TV deal possible for the players, a deal which maximized revenues.
  • The judge found that the NFL actually negotiated for a clause in the TV contracts that would necessitate that the networks continue to pay the league even if a lockout occurred. 
  • The point above was not the bad faith act; this one is - the NFL actually took less money from the networks in order to guarantee that lockout payments would occur. In other words, the NFL violated its legal obligation to secure the best TV contract possible on behalf of the players in order to protect the owners from the inevitable lockout. This breach of fiduciary duty is what is known as "self-dealing."
  • "The record shows that the NFL undertook contract renegotiations to advance its own interests and harm the interests of the players." - Judge Doty 

This is what negotiating in bad faith really looks like. It is when one party violates its legal obligation to the other in order to secure a favorable position. The NFL's lockout was not the problem; it was the way in which the NFL sold out the NFLPA in order to protect themselves that was the "bad faith" act.

***

If we jump back to my anecdote at the top, we can begin to see the difference between this legal definition of "bad faith" and the familiar colloquial version. In my scenario, each side was acting in his or her own self-interest to gain the right to purchase an item for enjoyment. The fact that each person was solely invested in their own stake should not be surprising nor should it invoke any sort of moral standing. Neither a guitar nor a pair of shoes is morally superior to the other; each one is morally neutral. Ergo, the justifications attached to an amoral object also lack any sort of moral standing; they are simply statements that are a reflection of self-interest: "This is what I want." 

The Mediation/Intervention

All this to say, today's mediation outcome is going to be very interesting. Each side is going to face an impartial mediator who has some solid credentials. Each side is going to be told that they are not going to get what they want. The owners are not going to get their hard cap or hard cap proxy, and the players are not going to get their 53%. Each party then will have to decide whether they are OK with such a concession. 

And what if neither side is OK with their slice of humble pie?

To quote Tim Donahue:

It is a battle of wills. Always has been, always will be. There is no "right." There’s just what is agreed upon.

Even so, Maurice Evans believes he is "By God Right," as do his compatriots.  Meanwhile, Stern and the largely silent owners hold the same measure of faith that they are "By God Right."  What both should know, and are about to demonstrate, is that justice tends to favor the hand that is swifter with the sword.

What Donahue does not need to say is this - the swiftest sword-wielding hand is not the NBA or NBPA, but time itself, measuring each second faster than the one previous in a gravitational acceleration. The passage of time will win and cut everyone deeply.

Fortunately for us, the viewers, the initial pain will subside when we realize that it is only a flesh wound and our tastes in amusement are far more elastic than we had cared to admit. We move on. There are other, better, words out there worth reading rather than the ones that have "bad" endings.

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