NBA’s lockout unlikely to end as NFL’s did


Football fans everywhere rejoiced Monday when the NFL lockout officially ended with nothing more than one exhibition game missed. That outcome of what was an ugly situation may have provided basketball fans with some hope that the NBA’s labor dispute will come to an end without any lost games.

However, while both lockouts ultimately happened for the same reason — money — it does not look like the NBA will see a similar end. Facing what commissioner David Stern called a “huge philosophical divide,” the two parties appear further apart than their NFL counterparts.

In fact, Suns guard and co-union representative Josh Childress said in an interview with ESPN’s Jim Rome that the two sides are “as far (apart) as the East is from the West.” Not a good sign.

Revenue and how it is split among players and owners was a key sticking point in the NFL lockout and is similarly an issue for the NBA. The NFL owners will now get about 53 percent of revenue. Under the now-expired NBA collective bargaining agreement, owners received about 43 percent and have been insistent that the players agree to a reduced percentage, more than the 54.3 percent the players offered in negotiations.

That is the major financial similarity between the two leagues’ labor disputes, but the NBA has a much bigger problem on two fronts: player contracts and a hard salary cap.

While NFL owners did seek (and got) means of reducing wild spending on first-round draft picks, they did not seek the drastic changes sought by the NBA owners. The NBA owners are looking to cut player salary costs by roughly $750 million per season, implement a hard salary cap system and reduce the length and guarantees of contracts.

Those demands do not sit well with the players, who have seen major salary increases in recent seasons simply due to the nature of the NBA right now. This is ultimately what could force the NBA lockout to drag on much longer than the NFL’s. Players are being asked to sacrifice financial and career security, and they have expressed that they are ready to wait as long as it takes to retain adequate assurances.

The owners want to stop hemorrhaging money every season, and with the iron-fisted Stern leading that charge, they aren’t likely to give any time soon. Additionally, owners appear tired of getting stuck with long-term deals on players who only perform to expectations for part of the contract’s length.

It’s not unreasonable to say that spending on players in the NBA has gotten a bit ridiculous in recent seasons. Role players and semi-stars are getting much more money on longer contracts as teams continually try to outdo each other in free agency. For this, both players and owners are to blame. The players and their agents started demanding more money and the owners obliged.

Because of this fundamental difference at the center of the labor impasse, the NBA lockout is not likely to see the relatively swift ending the NFL saw. Additionally, the difference in the nature of the two leagues created a more dire situation for the NFL to start its season on time. With only 16 regular season games and more potential revenue loss overall (the NFL is, after all, the most profitable league in the U.S.), the NFL had more to lose.

However, the NBA and its players also have plenty on the line should their season start late or be lost entirely. For owners, the potential loss of ticket, merchandise and advertising dollars is significant while players stand to miss out on their salaries completely and also lose part of or a whole season of their NBA career.

There may be a lot on the line, but both Stern and NBA Players Association executive director Billy Hunter have made it clear that they are firm in their respective stances. While the NFL lockout saw its share of stubborn stances and pessimistic outlooks, things look much bleaker for the NBA. Sports fans can enjoy football season once again, but come November, there may be no basketball to go along with it.

Tags: Nba Lockout NFL Lockout

  • yogi

    The union can’t give in without a big fight, even though the players know that the current situation is ridiculous.

    The owners have no reason to start the season since, as they say, they are losing money.

    The only question is when do the players give up – will it take a few months , a year, or more?

    I’m guessing it will take a few missed paychecks until the players start to see the light. Negotiations will get serious around December.

    Until then, thankfully, there is football!

  • http://wagesofwins.net Dre

    Tyler,
    There is no out of control player spending. The total pool of cash is tied to basketball revenue. If the NBA doesn’t make enough money to pay Kobe $20 mill, he has to give some of it back.

    There is a disparity in player pay though. You realize Durant made less than $7 Mill last year thanks to rookie contract rules. Seniority Rules meant Arenas was allowed a bigger payday than Paul,Wade,Bron,Griffin or Howard.

    The point is that player contracts can never “tank” the league because the rule says for players to get paid the league needs to make money. The amount available for players to get paid is based on that money.

  • Tony

    Tyler, do you know if there is a divide between the owners of bigger markets and those of smaller markets? It seems like the owners with less money, i.e., Sarver, are holding the league hostage. Is that an accurate statement? I mean, the way the league is set up as of now, it clearly favors bigger markets teams and hence owners with more money to spend than the smaller market teams. If it is just a small percentage of owners demanding these drastic changes, why should they be given all the power to affect how the league is run when most of the revenue comes from teams in larger media markets?

    Jared Dudley made a very salient point a couple weeks ago in a television interview when he said owners should be held responsible to how they run their team. Why should incompetent and cheap owners, such as the Suns very own Robert Sarver, be guaranteed a profit when they run the organization into the ground? I thought we lived in a capitalist economic system, where you are responsible for the quality of product you produce and not a socialist system, where the results of production do not matter.

  • Steve

    I can’t pretend I know everything about the way players get paid, but I know for a fact the owners aren’t guaranteed to turn a profit. I know you didn’t say that exactly, but Dre, you made it seem as if every player has to give back so the league comes out even. That’s not the way it works. It’s revenue sharing. This year, THE PLAYERS will be getting the escrow check. The league actually made money, it’s just that most teams didn’t. And yes, there is a difference. Here are the facts. Player contracts are generally too high. Players are getting too big of a piece of the revenue pie for owners to be profitable. The players will not make as much with the next CBA, and deservedly so.

  • GoSuns

    One of the problems I have with the stance of the owners is that they want a hard cap or some type of cap to “supposedly” give balance to the league and make all teams atleast somewhat competitive but there is already owners who state with their actions that aquring fan favorites and making profits is more important than having a competitive team. Don’t get me wrong I think some type of hard cap or hybrid should be in place, i’m just saying part of the reason we’re in this mess is because of the money first mentality (I know its their money they put on the line and nobody likes to lose money but sometimes one can’t tell with these stupid contracts that are made or taken on just to fill seats) If every team strived to be in the playoffs, I believe that it would in hand generate more profits for the NBA as a whole,it would give fans from smaller market franchizes more of a reason to support their teams

  • newsun

    as im kinda new to basketball, i have a few questions… Why do the players have to agree to be paid less, surely if the owners wanted that they have the power to do so? If its a case of big market owners wanting to but small market owners against high spending, would it not be possible to implement some form of owners agreement (which the players wouldnt have to agree to)? In my view, the players do get paid too much, but the owners only have themselves to blame, and I dont understand why they complain when they were the ones who gave those contracts.

  • Andrew Weaver

    This lockout has little to do with the players and more to do with the owners sentimental reaction of losing revenue. This has been attributed by the NBA’s decision to mirror big businesses harmful profit schemes championed by Commissioner Stern and his associates. Otherwise the NBA wouldn’t be in the financial disposition that it’s in. As such you have a commissioner ignoring players concerns by giving full control to corrupt referees who openly admit to betting on games, making wrong calls, and saying they don’t care. This behavior indicates a way to control the players and outcome of games without any oversight. That’s why commissioner Sterns actions have violated the leagues rules and guidelines. This type of behavior is disgraceful and unethical. It’s a spit in the face to players, fans and the leagues image. That’s why I’m asking NBA fans to stand behind the calling for Commissioner Sterns resignation. Because it’s fans who built the NBA’s empire and it’s fans who can change it.

  • EBJM

    What a wide range of opinions. There is a disparity between big and small market teams. The existing instruments in place simply do not compensate small-market owners fairly.

    Stan Kroenke the billionaire owner of the Nuggets gave away Marcus Camby a few years back to avoid paying the luxury tax even though his Nuggets were bona fide contenders with him.

    Bobcats owner Robert Johnson was the only Black owner and a Billionaire. His Bobcats bled money and he had enough and sold the team to Michael Jordan.

    I use those two examples to compare and contrast with Robert Sarver. He has ruined the Suns PRODUCT not the organization. He is not a billionaire and cannot afford the Suns to lose money.

    According to Forbes the Suns are still very profitable even though he is still servicing that huge debt he acquired from Jerry C. He over-paid for the Suns and is basically upside down with them.

    Cuban and the Mavericks, Boston, L.A. and even Micky Arison and the Heat paid dearly for their titles. Only the Spurs have won without paying a huge luxury tax.

    The players want to keep a bigger % of revenue without any risk whatsoever. All of these one and done college players who take years to develop if they turn into players at all.

    The players also refuse to go to a hard cap that would eliminate any and all instruments that currently allow teams to pay more than another team simply by paying a luxury tax for using all of those soft-cap exceptions.

    With a hard-cap good luck to the Heat in playing 3 on 12. They wouldn’t be allowed to pay three max contracts and then be allowed exceptions to fill out their roster.

    Good luck to the Lakers with paying Kobe $25 million, Pau $18 million and Bynum $15 million and Odom, Artest et al. and then filling out their roster.

    Owners are business men and negotiate the Arena deals that make or break teams. Why do you think the Maloofs want to move out of Sacramento? Antiquated arenas leads to a poor product which leads to fewer and less lucrative sponsorships.

    That leaves revenue sharing to make up for it and big-market teams don’t seem to be too keen on that. So some kid quiting school after one year is going to step in and earn millions without even guaranteeing he will be a profitable product?

    I like Robert Johnson as a good example of whether teams are really losing money because he is Black. Between his divorce and ownership of the Bobcats he dropped from a billionaire to a millionaire.

    He worked hard for his money and sold the Bobcats at a loss.

    The Great Recession officially ended in 2009 but we all know the country is still in very bad shape. The government is arguing about raising the deficit by TRILLIONS while cutting Social Security, Medicaid and Medicare.

    I say the hell with all of them, soccer is just as exciting and a lot less expensive!

  • Daniel

    I have a couple of ideas on cap issues and overpaid players that I think are worth discussing. I’d love some critiquing if there are any problems with them. Sorry for the long post.

    First, there is a middle ground between the luxury tax soft cap in place now and a hard cap. Right now, as far as I know, there is a salary cap at some number that is adjusted each year, and if your total payroll is over that, you pay an extra $1 for each $1 you are over the cap.

    This could easily be adjusted by adding a 2nd “cap” at a higher number, where you pay $2 for every $1 you are over that cap. Or you could make it some simple function like paying the amount over the cap you are squared. (Might grow too quickly, but that can be adjusted for.)

    Another possiblity, or an adjustment if something like that is already the case, is just to increase the rate of payment, just start the cap at $2 for every $1 over, or $3, or whatever can be worked out.

    The other thing is that I’ve heard some talk about a sort of “contract amnesty” if they implement a hard cap, where some player of each team’s choosing gets to not count against their cap for that year. That seems incredibly cheap, like a get out of jail free card for too many teams’ stupid GMs. But there are players who are drastically overpaid, so I’d suggest a sort of different “contract waiver” system.

    This would work by a team like the Magic declaring, “Alright, nobody in the NBA would be willing to pay Gilbert Arenas’ contract this year, so I’d like to pay him less.” The Magic would determine a percentage of his current amount due that year that they would like to pay him, say 80%. At that point, each team in the league, in reverse order of standings, gets to say whether they would take him at that percentage.

    If no team says yes, Arenas’ contract drops to 80% of its original value for that year. However, if some team says they would take him at that percentage, the Magic have a chance to pull him back, but they have to pay him the full amount for the year.

    This works similar to the MLB’s waiver system, and there would have to be some point part way into the season where the reverse order of standings would have to switch from last season’s to the current season’s. Also, there could be some percentage difference between what a player is offered to other teams at and what the offering team is able to pay him so that the offering team has some extra incentive to offer.

    Let me know what you think about both or either.

  • Lloyd I. Cadle

    Gosh, how wonderful the NFL CBA is……A hard salary cap and a minimum that each team must spend.

    There is no advantage for teams in large markets like New York. Free agents are just as happy signing with the Cards, Seahawks, Falcons and the like.

    Teams like the Cards, that were well prepared for the free agent frenzy, benefit because they had good plans in place. Teams like the 49ers and Bengals were ill prepared and they will have poor seasons because of it.

    There are no teams like the Lakers in the NFL, that are allowed to go over 21 million over the cap because they are “big market” and can afford it. In the NFL system it is not allowed. They know what in the hell they are doing, and they run a sports league the right way!

    What a golden opportunity for the NBA owners to hold out and get it right…….like the NFL!

    If the NBA owners have to close the doors for two years to get an NFL system in place, so be it. The fans will come back for a system that good!