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Lockout Woes

Unless you have been living under a rock, you have probably heard more than you ever wanted to know about the NFL Lockout, which is now entering day 112.

And now, to add insult to injury, the NBA is locked out, too.

Commissioner David Stern has a tough labor battle ahead of himAnd now, to add insult to injury, the NBA is locked out, too.

I hope you like baseball, because right now that is all you’ve got.

Friday morning, day one of the NBA lockout, I read this little tidbit from USA Today:

Shortly after the lockout went into effect at 12:01 a.m. ET Friday, NBA.com and team affiliated websites began scrubbing players’ images, video involving current players, 2010-11 box scores and any relevant summary of the Dallas Mavericks’ Finals victory against the Miami Heat.  Even the NBA’s touted Stats Cube statistical analysis database has been disabled.

All links to recent game news and video re-direct users to NBA.com, which is now a depository for labor news and video, minor team news and historical features and information.

As similar as the two situations may appear, they are not.  There are some elements of these labor situations that are similar but on the whole they are fundamentally different.

Here are a few bullet points on the NBA lockout, to help you understand what is going on.

  • Teams cannot negotiate with, communicate with, sign or trade players.  Players are not permitted to enter team facilities and their insurance has been suspended.  Basically, no contact of any kind is permitted between the league and its players.
  • The current collective bargaining agreement did not expire.  Instead, the owners opted out of the former agreement in favor of a new one.  This is an extremely important distinction in that the players ARE NOT going on “strike”  as so many people have stated.  It should also be noted that, as of this moment, the NBA Players Association has NOT decertified, as the NFLPA did, but that does not mean it will not happen.
  • The owners want more money.  (The biggest issue is always money)

Here is the situation:  As it stands, NBA players make well over 50% of  the “basketball related income”, or BRI.  BRI includes tickets, parking and concessions (revenue sharing and expansion is included as well) and is based on gross revenue.  Here is how the BRI comes into play: NBA owners state that when they spend part of that gross to expand the league-on promotions or advertisements-the owners take the hit and the players do not.

The league is reporting a total of $300 million in losses last year and claiming that 22 teams lost money. In this regard, the NBA dispute is much like the NFL labor situation; the owners are claiming that the cost of operations exceed the revenue.  Sound familiar? Then this will too: The NBA players believe that the losses the owners are reporting are not accurate.

But here is the difference between the two leagues when it comes to the finances: The NFL owners are not claiming that the former model didn’t work, they simply just want more money under the current system.  The NBA owners, on the other hand, are claiming that the current model does not work.  They claim this is not only because owners are reporting losses, but also because it’s a big market vs. small market issue (take a look at the last 4 teams to win the NBA Championship: Dallas, Los Angeles (2X) and Boston.  ALL big market teams).

In the simplest of terms we are looking at 2 parts of the “we are losing money as a whole” argument: 1) The smaller and mid-market teams cannot afford to own a team because they are losing too much money and 2) The system does not allow for competitive balance

Which brings us to our next point…

What now?

Owners will push hard for a salary cap, a reduction in length and size of contracts, and league revenue sharing. This means that owners and players will fight over pay cuts, hard caps, BRI percentages and-the toughest point of all -hopeful resolution between the big and small market teams.  This is a really tall order.

Players will obviously fight hard to avoid taking a pay cut and the right to determine where they will play and for how long.  A report from CBSSports (from someone who knows a lot more about the situation than I do) states that the player have already agreed to reduce their BRI from 57 to 54-a pretty big concession-but that it is not enough for the owners.  It’s not going to be easy to get the players to give up what they have got when, in their eyes, the system is working.  Ratings for the 2011 season were at an all-time high.  However, it is hard to sit here and say that the players do not make too much money.  Compared to the NFL, the NBA contracts are ABSURD and the 7 year guarantee deals that currently exist need to be tossed out.

As for the revenue sharing? As it stands right now all NBA teams share the revenue from national TV rights fees but individual teams keep 100% of the local TV rights fees. Under a new agreements, teams like LA, Boston, Miami etc will have to share some of their local TV revenue with smaller market teams like Indianapolis, Milwaukee and Minneapolis.  This might sound familiar, as it the model that currently exists in Major League Baseball.  It is my hope that the NBA adopts a similar model (30% of local revenue is shared by league).

Phew. Okay..my head hurts.  Basically..we have a lot going on and we have two separate arguments in which both sides are VERY far apart.

Based on most everything I have read and heard, unless the players can back down, games WILL be lost.  As one writer from Nola.com put it,

“The NBA owners will be worse off if they play games than miss games under the current deal. The NBA owners will lose less money by canceling games than if they play the games. And that’s why the NBA owners are willing to hold out for a longer period of time, why they’re willing to lock out and miss regular-season games. They’re convinced they cannot exist without that fundamental shift.”

Doesn’t sound very promising.

Enjoy the baseball.


About gridirongirlnextdoor

Kristine Reese is a sports fan living in New York City.

2 Responses to “Lockout Woes”

  1. Kristine,
    You hit the nail right on the head. The NBA owners on a whole probably won’t feel pressure to start playing games because they believe ( claim ) that not playing saves them money. Player salaries do need to be lessened, but the owners do need to be fair. Great article. It sure taught me somethings. Be well.

    Kyle Greene

  2. Thanks, Kyle. I realized at the end I didnt take a “stance” and the reason for that is because I sort of agree with both sides?? I usually tend to favor players in these matters (have with NFL) but I do think they could stand to take a slight cut, as SO many people in this county have. That being said, most these owners are being greedy.

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