07-16-2011, 10:28 AM
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Union lawyer talks NBA’s missing records
The Point Forward Posts Union lawyer talks NBA’s missing records
In other words: Stuff is missing, according to the union. But what stuff?
Lawrence Katz, the union’s lead attorney in the NLRB case and a partner at the law firm Steptoe & Johnson, described the allegedly missing material in an interview with SI.com. Katz said the union has asked for three sorts of documents, and that the NBA has either ignored those requests or responded with information the union claims does not fulfill the original requests. The categories, per Katz and another source familiar with the issue:
• Franchise valuation information. The union wants more data on how much teams are worth and how the teams determined those figures. The idea that franchise values generally increase in the long term regardless of short-term financial problems is an important issue for the union, because it could show the sport is healthy. The sale of the Warriors for a record $450 million last season — well above the team’s perceived value — is held up as proof of this, but other recent sales (the Bobcats, Nets and perhaps the Sixers) haven’t yielded those kind of above-value prices.
• Sales prospectuses. These are documents teams on the block prepare for potential buyers, according to Katz. The union would like to get its hands on these.
• Financial information on related-party entities. These are businesses owners control that are either directly or indirectly linked to NBA operations, according to Katz — things like restaurants and parking facilities. What actually constitutes a related business can be a contentious question as you get further away from the on-court product.
In addition, Katz said the union has made about 20 requests for various financial tidbits, and that the league has failed to respond adequately to those requests. He would not get into the details of those requests.
The league, for its part, continues to say it has disclosed more than enough. In a statement provided to SI.com, Tim Frank, a league spokesman, said: “We have provided the union with more financial information in collective bargaining and otherwise than probably any employer has in any industry –including audited financial statements for the teams and the league — and there is no evidence that the union has been impeded in any way in the bargaining by any supposed lack of information.”
The league added this: “We have responded to Mr. Katz’s baseless claims directly with the NLRB.”
The NLRB case is in its early stages and is in front on an official in the NLRB’s Region 2, which is based in New York. The board has interviewed several union officials so far, including executive director Billy Hunter, and it will ultimately receive paperwork from both sides. A high-level NLRB attorney will eventually sift through all the evidence and issue a recommendation about how to move ahead with the union’s case, Katz said. If that person recommends the board issue a complaint — the union’s goal here — the NLRB can essentially take over the case and file a suit against the NBA in federal court. At that point, the board can ask a judge to issue an injunction to halt the lockout.
That is all very far down the road, and the NLRB process will proceed concurrently with the broader negotiations — talks that could render the NLRB case moot if they go well.