Tired of NFL Lockout? Here Comes the NBA’s Version

Tired of NFL Lockout? Here Comes the NBA’s Version

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The NFL lockout is entering its third month, but there is a reason for optimism.  After negotiations broke off in March, the players union decertified and filed a lawsuit against the owners hoping to block a lockout.

After several hearings, court appearances, and appeals, the two sides have been meeting in secret locations, trying to come to an agreement without the court’s intervening.

Meanwhile, on the NBA front, we may be getting ready for Lockout, The Sequel.

The NBA owners and players have been meeting periodically in an attempt to avoid the same fate as their NFL counterparts.  Meetings in Los Angeles, Miami, and Dallas have been productive, but there is no evidence the two sides are getting close to a new agreement.

Commissioner David Stern told reporters while exiting this week’s meeting that the NBA owners are players are “very far apart” on a labor deal.  The current collective bargaining agreement expires June 30.

The owners and players have exchanged proposals over the months, but wide differences remain.  The NBA claims league-wide losses of more than $300 million and would like to put in place mechanisms to ensure losses don’t continue.

Stern and the owners have proposed setting a hard salary cap of $45 million (as opposed to the current soft cap, which allows team to go above the limit to sign their own players), shortening the length of contracts from the current five to six years, and having few if no guaranteed contracts.

The players union, however, is unwilling to agree to these conditions — and that sets the stage for a lockout.

The union feels the financial problems can best be addressed through more revenue-sharing, not through drastic reductions in salaries.  The players currently receive 57 percent of basketball-related income, which consists of money from ticket sales, luxury boxes, and local and national television contracts.

NBA.com’s David Aldridge reported that the players made an offer last week, hoping to address owner concerns.  “One possible way would be to split any future monies above and beyond the current $4.3 billion in annual revenues at something approaching the current 57-43 take in the players’ favor,” Aldridge wrote. “For example, if revenues grew over the course of a new five-year CBA to, say, $5 billion, the union would get 57 percent of the new $700 million created. Such a system would incentivize both sides to grow the pot and create more cheddar for everyone.”

This is an interesting offer, but since the two sides don’t seem any closer to a deal, it was probably not well received by the owners.  However, it’s certainly an offer that may get the ball moving toward a new deal.

The owners are essentially looking for a deal that protects them from themselves.  If owning an NBA team is such a bad investment, why do top businessmen from around the world line up yearly to buy teams?  The Golden State Warriors sold for a record $450 million in July.  That’s $450 million for a team that hasn’t made the playoffs since 2007.

The fortunes of the last five men to buy NBA franchises (New Jersey Nets, Golden State Warriors, Washington Wizards, Detroit Pistons, and Philadelphia 76ers) total $25 billion.  But somehow the current NBA model is broken.

The model is broken because the owners hand out million-dollar contracts to unworthy players. A quick look at the signings from the last offseason reveals guys no ones has ever heard of making millions of dollars for pedestrian production.  On the other hand, the max contracts and rookie wage scale allow owners to pay superior players far less than true market value.

Kobe Bryant of the Los Angeles Lakers made close to $25 million dollars on a maximum salary deal this season.  However, in a truly free market, he and the other top players in the league could command salaries upwards of $30-40 million.

Rookie of the Year Blake Griffin of the Los Angeles Clippers made a little over $5 million, but his true value is closer to three to four times as much.

The NBA Finals between the Dirk Nowitzki-led Dallas Mavericks and the Miami Heat triumvirate of Dwyane Wade, LeBron James, and Chris Bosh are enjoying their highest ratings since the 2004 matchup between the Los Angeles Lakers and Detroit Pistons.  It would be foolish and unproductive to let egos and money get in the way of getting a deal done.

The blueprint the NFL has laid out should be more than enough incentive to have the two sides reach a deal that adequately pacifies both sides.

Enjoy these last couple of games of the Finals games — they may be the last pro basketball for a long while.

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