Thursday, May 5, 2011


The 2011 NBA playoffs have been awesome...Underdogs gettin' it done...It is not all fun and games these days though...The business of sports is in discussion for all of us as NBA fans...The looming lock-out is worrisome...The current Collective Bargaining Agreement expires in just over 1 month, sadly the NBA and the National Basketball Players Association are at odds with each other...

NBA Commissioner David Stern has been clear that the owners will lock-out the players if a new CBA cannot be agreed on, one that provides the financial swing Owners are seeking...That swing is in the $800 million per year range...NBA is projecting $300 mill in losses for this season and already put a proposal before the NBPA which called for a Hard-Cap, and a $750-$800 million swing in Owners favor...The NBPA rejected that offer taking major issue to the idea of a Hard-Cap, and with having their share of Basketball Related Income plummet from 57% currently to a proposed 41%

Also at issue is the whole idea of what gets included in Basketball Related Income...Currently broadcast rights, gate receipts, sponsorships, % of arena naming rights, proceeds from NBA properties, suites, concessions, and merchandise all add up to give a big ol' pot of $$$ called Basketball Related Income...The clash here is the NBPA wants their % of B.R.I. to remain in 57% area, and wants more revenue streams included in what makes up Basketball Related Income...The NBA wants their percentage of B.R.I. to jump to 59%, and they want a reduction in what revenue streams get included in the B.R.I. pot...

Forbes reports that 17 of the 30 NBA teams lost money...The NBA itself had to buy the New Orleans Hornets...The Sacramento Kings are very possibly, if not probably, entering their final season in SacTown...Charlotte, Indiana, New Jersey, Sac, and even a team like Orlando struggle mightily to survive under the current system, losing millions annually...From NBA deputy commissioner Adam Silver "We need a system that provides all 30 teams, regardless of market size, an opportunity to compete for a championship and be profitable,"

The NBPA will point to the $100 million in increased Season Ticket sales this past year...Also the fact that ESPN, TNT and their Network partners have seen huge tv #'s, while major markets like LA, Boston, ChiTown, and Miami are all booming...They warn that a Lock-out will thwart all of that great momentum...Problem is David Stern answers with a warning of his own that the deal the NBPA rejected will be way better than the deal they come back to after a Lock-out

In the NHL vs NHLPA a few years ago we saw the NHL achieve a 24% salary roll-back when the NHLPA insisted there would be zero roll-back...In this labour dispute we see the NBA looking for around a 40% roll-back...We know this will be a major, drawn out, issue

Another major issue is the Hard Cap...Currently the NBA has a Salary-Cap, but with several Exceptions...Bi-Annual, Mid-Level Salary, and Bird Rights (amongst others) are all current examples of Exceptions, and are used frequently to help NBPA members get more $$$, and get contracts on teams that were already at the max of the Salary Cap...The NBA wants a Hard-Cap meaning once a team has spent to the Cap max then you are done in the FA market, and cannot add salary in a potential trade...This will affect so many veteran members of the NBPA that it will surely prove to be a major bone of contention

Other issues are in play too...NBA wants to eliminate Guaranteed Contracts as a way to help teams get out from under bad contracts...Of course the NBPA is screaming bloody murder on this one...Certain things like Revenue Sharing will muddy up things too...Even though it pertains to how Owners divvy up their Revenue, it still has to be approved in Collective Bargaining with the NBPA...Likely not earth-shattering, but with so many issues that will take a long time (potentially) to resolve we do not need extra things like this (and Rookie Salary Cap etc) adding to an already lengthy process...

Check the words from Billy Hunter (NBPA Executive Director) as he feels the NBA is aggressively seeking "a hard cap, a 40 percent rollback in player salaries, unlimited expense deductions and the elimination of guaranteed contracts" which Hunter says would "inevitably result in a lockout and the cancellation of part or all of the 2011-2012 season."... Hunter and the NBPA have disputed the NBA's accounting methods, and figures...The kind of rhetoric common from Union Execs in sports labor disputes 

Contraction is likely an issue owners can give in on...Stern has referenced a few times that Contraction is on the table as an option  to strengthen the on-court product, plus a reduction in teams would help with the bottom-line for the Association...The Owners though could find viable relocation options to revive certain Franchises, rather than cut them (we could see a 3rd team in LA after next season)

A side-storyline I will be watching is how will the prominent NBPA members view a work-stoppage?!?!  Guys like Kobe Bryant, KG, Jesus Shuttleworth aka Ray Allen, Steve Nash, Paul Pierce, Tim Duncan, and Manu Ginobli are already on the other side of 30 years old and cannot afford to just have 1 season taken away at this point...How about the guys that are on fire, the current IT-guys like Zach Randolph, Derrick Rose, Blake Griffin, Kevin Durant etc...How will they react to having a season stripped from them when they are so hot?  I could see a guy like Dwight Howard, perhaps even a Deron Williams not being overly-concerned as they are likely looking to bolt their current teams after next season anyway...If the Big 3 in Miami cannot produce a Title this season then they will be on pins and needles watching the bargaining play out (if they do not win  a Title this year then worst-case-scenario is Owners get a major W in the new CBA which could include Hard-Cap which would make any upgrades to their supporting cast extremely difficult)

If there was a sign (IMO) that points to players/agents being scared shitless of how the new CBA will finally look it was the Melo trade...Melo wanted to play for the Knicks, and he wanted the 3 year, $60 million Extension on the table...Melo knows for a player to make $60 mill in new CBA it will take 5+ years, and he knows new CBA may have a Franchise Tag (similar to that of NFL) which would allow the Nuggets to keep him in Denver...Why else get the Knicks to trade several potential teammates as you could just sign with the Knicks in the off-season, and why depart the West to go to the top-heavy East now?!?!  Melo knew this was his only way to guarantee he could be a Knick

For me, the rhetoric and the issues are consistent with that of a Lock-out, so I (sadly) think we are in for a work-stoppage...

As per usual it is us, the fans, that will truly suffer through this labour dispute...Multi-billionaires arguing with Multi-millionaires over how to divvy the spoils of an industry that brings in billions annually...Good luck to us all

craig.ballard@hotmail.com follow me on twitter @craigballard77