NBA Commisioner David Stern (right) shakes hands with union leader Billy Hunter as the labor dispute heats up
Start making other plans for the 2011-2012 NBA season. If you thought the NFL lockout was a headache, now you're in for a migraine. The NBA labor dispute is going to make the NFL labor dispute look like child's play. As the NFL strife comes to a close, the NBA problems are looking to be epic. Unlike the NFL, every team in the NBA is not making money. In fact, more teams are losing money in the NBA than earning it. That should make wage and revenue sharing discussions all the more contentious. Next, the owners in the NBA are set on solidifying a hard cap in order to keep contract levels down. Finally, the players feel they deserve more of the revenue than the owners, the owners feel they deserve more then the players, and the amounts are not even close. These issues have the NBA squarely positioned to miss at least a couple months of the season, if not all of it.
For a long time now, there has been a debate on whether the NBA has over expanded itself and whether it would be more beneficial to cut some teams in order to broaden revenue for others. It would appear that there are a few too many teams considering the majority of teams are losing money. As Michael Wilbon points out in his July 1st article on ESPN.com, "The NBA, meanwhile, has teams losing real money. The league says 22 of 30 are operating in the negative". This is important to note because a team losing money is unlikely to be willing to give back more. That’s one of the main reasons this lockout is so scary. In a time when the NBA already plays second fiddle to a juggernaut like the NFL, there is no benefit in missing a season and alienating fans that are stretched thin as it is.
The first problem the NBA must resolve is the cap problem. There are several types of caps the league can have. A soft cap would be what the players favor. It basically means that there are many exceptions to the cap rules, and teams can use these exceptions to continue to exceed the cap. Owners want a "flex cap". It means there is a mid-level cap which has no upper or lower limits. This would provide owners with the most flexibility depending on whether they’re a high or low revenue franchise. Eventually the owners also want to add the hard cap to the top in order to prevent the big contracts of some players. The players contend that it's not the soft cap that is the problem. Ken Berger, in his July 7th article on Cbssportsline.com says, " I am with the players (and the agents) when they point out that nothing in the current system forces owners to overpay players with multiyear guarantees and the like. The problem is, the tools currently at management's disposal aren't giving low-revenue teams a chance". Berger has a point, and so that leads to the final problem of the revenue sharing.
The players and the owners are not even close in their philosophy on who deserves more of the pot. Michael Wilbon puts it simply. “Instead of the players getting 57 percent of basketball-related income, the owners want something more akin to a 60-40 split in their favor." That is a really tough number and one that I think will keep the players and owners a long way from finding anything close to common ground.
In January I posted a similar article about the NFL lockout and its various issues. As I researched that article I felt much more optimistic about the two sides coming to an eventual resolution than I do about the NBA. The commentary around the internet seems extremely grim, and that doesn't bode well for a great deal of interested parties. Bars, restaurants, advertisers and the like all lose money if the games aren't played. So keep in mind that to many these are just games, but to some people, it's their livelihood.