Why both sides are to blame for basketball's lockout
Something is amiss here.
If we are to believe that 22 of 30 NBA teams lost money last season — it is and has been commissioner David Stern’s mantra since the end of the regular season — can we really believe that the last time the league endured a labor stoppage 13 years ago that the annihilation of the players union at the hands of the owners was as compete as we were led to believe?
If you asked Stern before owners locked out players at 12:01 a.m. Friday morning he would tell you that the work stoppage that resulted in a three-month lockout, reduced the season to 50 games and cost players tens of millions of dollars and owners hundreds of millions produced the perfect working model for the league.
So then, why are we here?
The recently completed playoffs were as exciting as they have been in years, and the NBA has the all-important television numbers to back that up. According to the Nielson data available for the last three months and ending on June 26, TNT, which carries the bulk of the playoff, averaged 1.35 million adults in the desired 18-49 market in prime time, an increase of 12 percent over the same period last year. Viewership was also up in the 25-54 demographic. Here Turner saw a jump of eight percent in its viewership from the previous year.
From beginning to end the NBA season played out in perfect fashion, beginning with the formation of the antagonistic Big Three in Miami and climaxing with protagonist Dirk Nowitzki becoming the first European player to lead his team to a championship and be named Finals MVP in the process. Jerseys and other paraphernalia are once again flying off store counters and Internet sites and business, at least on the outside, appeared good.
But the NBA’s biggest problem is that it has never, ever stopped handing out monstrous guaranteed contracts, a dilemma that has cost the league incredible revenue over the years. Last year the New York Knicks paid Eddy Curry more than $11 million and he didn’t appear in a single game. And for years the league has been forced to pay players that haven’t produced anywhere near their salary because the contracts are guaranteed. In the real world, many of them would receive pink slips.
It is salaries, in fact, that have created the biggest stumbling block in the tepid negotiations that have positioned the league at this impasse. The players take home 57 percent of the revenues; owners bring home 43 percent. And the players, allegedly taken to the woodshed during the last work stoppage, are fine with this formula.
Owners, struggling to produce revenue, know that there is a logical solution to this mess — cutting salaries and the length of contracts — and this is why this lockout could very possibly cost the league an entire season. Conversely, players, who are willing to make concessions, don’t want to hear any talk coming from owners about shortening contracts and removing guarantees.
Can you say dead end?
It is also the owners’ position that they collectively lost $300 million last season, and they are pointing at the spiraling contracts of players as the culprit here. The players union counters this by asking owners to open their books for fair disclosure, something that we know from the NFL lockout is the last thing they will consider doing.
Over the next few months you are going to hear a lot of talk about “hard” and “soft “salary’ caps. The NBA currently has a soft cap that allows owners all sorts of exceptions to re-sign their best players to extensions and exceed the cap, an option a hard cap will do away with. The soft cap allows teams to put a better product on the floor, something that’s hard to believe in a league that so often fields disgustingly wretched teams.
A hard cap will prevent teams from loading up on talent. And if instituted, a hard cap could ultimately force a team like Miami to trade away one of its Big Three (Chris Bosh most likely) because the Heat simply won’t be able to fill their roster with enough legitimate NBA players
I don’t know where all this is heading. I do know, however, that the two sides are separated by light years on how to split approximately $4 billion in revenue. Owners are asking for players to give up their sacred cow (guaranteed contracts); players have a proposal on the table that seeks to raise the average salary from $5 million to $7 million over the next few years.
And that’s just for starters.
But the bigger question is where will the consumer stand after the dust settles? Americans are struggling though the worst economy we’ve seen in decades. With each passing day choices are more difficult to make on what we do with dwindling discretionary dollars, and the term double-dip recession is spoken more and more each day.
The NBA used to be fantastic; those days are now gone. In fact, after this troubling stretch of labor turmoil, fans might just forget it.