In a major blow to the NBA players union, an arbitrator ruled yesterday that the owners will not be obligated to pay salaries during the lockout to the 226 players with guaranteed salaries.
The ruling by John Feerick is a major victory for the owners, who appear now to have the upper hand in the lockout since they won't be obligated to pay the nearly $800 million in guaranteed contracts during the course of the season.
With the cancellation last week of the first two weeks of the season -- and more games expected to be canceled next week during the league's board of governors meetings -- lost wages by players are expected to total $100 million.
"We don't take great pleasure in the current decision," NBA commissioner David Stern said during a conference call last night. "It doesn't move us any closer to making a deal."
A deal certainly can't be made if the two sides don't get together and talk. They last met a week ago today, and no new talks are expected until after the players union meets tomorrow and Thursday in Las Vegas.
"We're missing games, we're losing our season," said NBA deputy commissioner Russ Granik. "I would hope that's sufficient pressure on both sides [to return to the table]. We have told the union we're prepared to meet at any day or any time."
Feerick -- the same arbitrator who presided over the Latrell Sprewell hearings earlier this year -- used all of his allotted 30 days to make his decision.
In his ruling, Feerick wrote "the issue presented is novel and difficult.
"This arbitrator finds that the salary provisions of the player contracts are not effective or operative during a lawful lockout following the termination of the collective bargaining agreement."
Union president Billy Hunter said: "I kind of expected it. I was hoping Dean Feerick would be inclined to see things our way, but we knew it would be a giant leap for him to take, especially since he is a labor lawyer by profession."
When the two sides met last week, the union proposed a luxury tax similar to what's used in baseball.
Stern said yesterday that the proposal by players would only affect two contracts. The NBA on Friday came up with a variation of the union's proposal that would result in a higher tax, with the option of going to a hard cap in two years if the system didn't work. The union found that variation unacceptable.
Stern said the owners have proposed three systems that would reduce the growth of player salaries:
An NFL-type hard salary cap
An escrow agreement, where some percentage of player salaries would be put in escrow at the start of the season and would be paid to owners if the compensation exceeded the agreed-upon basketball-related income (players received $1 billion in such income last season).
A tax system on Larry Bird exception contracts (re-signing of a team's free agents).
But with the two sides not meeting, those issues can't even be addressed -- and the players are losing money daily. Los Angeles Lakers center Shaquille O'Neal was supposed to get all of his $15 million contract for the 1998-99 season on Oct. 1. Washington Wizards forward Juwan Howard was to receive half of his $13 million on July 1.
"They can never get the money being lost back," Stern said. "It's gone, and it's probably gone forever."
Pub Date: 10/20/98