Are You Ready For A Year Without The NBA?

John Wall David Stern NBA Washington Wizards

Photo: Washington Post

The 2011 NBA season tips off tonight when the Miami Heat visit the Boston Celtics. It’s everyone’s first look at the biggest free agent signing of the summer. That’s right 7-foot-1, 330-pound Shaquille O’Neal plays his first game for the Celtics.But seriously, for all the things the NBA has going for it – a summer of heightened fan interest, a surplus of youthful superstars, rejuvenated franchises in New York and Chicago, and stacked teams in markets big (Los Angeles) and small (Oklahoma City) – there’s trouble waiting on the horizon.

The current collective bargaining agreement expires at the end of this season and negotiations towards a new one have already gotten ugly.

David Stern has said NBA teams lose more than $350 million annually. To compensate for the losses he has proposed player salary cuts of $750-800 million. “That’s our story and we’re sticking to it,” Stern has said.

Meanwhile, player rep Billy Hunter has countered that if the NBA does stick by that story, “it will inevitably result in a lockout and the cancellation of part or all of the 2011-2012 season.”

League Proposal 1: Cut Players Share By One Third

Stern's first order of business is to cut the players' share of revenue by $750-$800 million from their $2.3 billion intake last season.

Currently players earn 57 per cent of basketball related income. Owners split the rest.

Stern's proposal would reduce that to a shade more than 40 per cent.

The players say: We're not taking a pay cut so owners can put money in their pockets.

Aside from the obvious disdain for a pay cut, the players are probably asking this question: If Stern claims the league is losing about $350 million and he wants to cut player salaries by more than $750 million, what happens to the remaining $400 million?

Who wins?

Cue compromise for this one. The players will probably have to take a cut, but not in the neighbourhood of $800 million. Look for the two sides to settle on a 50-50 revenue split, with the players' taking a $300-$400 million pay cut, initially. As the league grows, player compensation will return to its current level.

League Proposal 2: Hard Salary Cap

The owners want a strict salary cap that teams can not surpass. It will effectively limit player salaries, and allow owners to let their expensive players walk while avoiding local fan outrage.

The current salary cap stands at $58 million. But it's a soft cap.

Teams can go over the cap under the following circumstances:

  • Re-signing its own players
  • Inking draft picks
  • Signing players to minimum contracts.
  • Special salary cap exceptions, the most notable of which is the Mid-Level Exception. The MLE permits capped out teams to use an additional allotment -- equal to the average NBA salary -- to sign free agents.

Once teams reach the luxury cap -- set at about $70 million -- they must pay a dollar-for-dollar tax on every additional dollar they spend.

The players say: A hard cap means less money and less job security for us.

Not only does a hard cap deter teams from signing players to big contracts, but players also know that a hard cap increases the likelihood they move around. Look no further than the NHL and NFL for proof. Both leagues have seen teams change drastically from year-to-year in an effort to stay under the cap. For example, the defending champion Blackhawks were forced to unload much of their Cup-winning talent this offseason.

Who wins?

The NHL moved in this direction in 2004, and we bet the NBA follows suit. Dynasties will become a thing of the past, as roster turnover from year-to-year grows rapidly. Fans should think twice before buying their favourite player's jersey.

League Proposal 3: Contraction

David Stern has suggested that the league can no longer support 30 teams. The most likely culprits to be axed? How about the Grizzlies, the Hornets, and Michael Jordan's Bobcats?

There are 30 NBA teams that must carry at least 13, and no more than 15, players.

That means there are between 390 and 450 available jobs at any time.

The players say: Fewer teams equals fewer jobs.

There's always the D-League, right?

Who wins?

This appears to be a mere negotiation tactic from Stern. The likelihood of creating bad blood with more markets seems unlikely--remember the fiasco in Seattle?--especially in the case of the Grizzlies and Bobcats, who are beginning to assemble talented rosters and improve their standing.

There are other issues that could complicate negotiations:

  • Non-guaranteed contracts: Remove guarantees from all contracts, or allow for partially-guaranteed salaries that resemble the NFL's model. This is going to be a major point of contention.
  • Shorter contract terms: Prevent owners from screwing themselves with long contracts that overpay ageing stars
  • Lower maximum salaries: Is $20+ million per year too much to pay for a basketball player?

That's the NBA's lockout situation. Now check out the NFL's...

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