NBA Lockout 2011 Update: Time To Worry

NEW YORK, NY - JUNE 30: Commissioner of the NBA, David Stern announces that a lockout will go ahead as NBA labor negotiations break down at Omni Hotel on June 30, 2011 in New York City. The NBA has locked out the players after they were unable to reach a new collective bargaining agreement (CBA). The current CBA is due to expire tonight at midnight. (Photo by Neilson Barnard/Getty Images)

The NBA lockout gives us plenty to worry about. Hope you have some games recorded for the long winter.

Editor's note: I'm pleased to introduce a new writer to the site. Brian McDonald will be writing about the Houston Rockets for SB Nation Houston and will be working on a special project we should be unveiling next week. Blame me for not being very good at my job for not getting his author profile set up by now, but hopefully, we should have that fixed soon.

by Brian McDonald
@sacked_by_bmac

While NFL fans, including myself, are starting to rejoice because their lockout is reaching an end, a new battle of wills is set to begin today in the NBA. It's easy for fans to assume that just like in the NFL, the NBA is making too much money and has too much to lose, to lockout for an extended period of time and miss games. As the saying goes, learn from history or you're doomed to repeat it. Just like in 1998-1999, the owners have the determination and financial ability to wait out the players until they get the deal they need to be profitable.

Profit is the key word because unlike in the NFL, some NBA teams are hemorrhaging money. To put it simply, the NFL lockout is about splitting up profit, the NBA lockout is about creating profit. According to NBA Deputy Commissioner Adam Silver, 22 teams lost money last year for a combined total of 300 million dollars in lost revenue. NBA teams losing money isn't a new thing either as teams lost 340 million last year and 370 million the season before that. To that issue, the owners would like to cut the players share from it's current 57% of basketball revenue to the low 40's. The players counter offer thus far has been 54%; they're worlds apart. Like the NFL, this is the main issue. Smaller issues like lowering rookie contracts and shorter contract lengths should be resolved easily since they decide how revenue is spent and not how much revenue is taken in.

The other sticking points seem to revolve around protecting the owners from themselves. Since the owners don't have the intelligence or self-control not to overpay guys like Larry Hughes, Erick Dampier, and Marko Jaric; they now need to put rules in place to prevent them from doing so. Some of those proposed rule changes include shorter contract lengths, removal of sign-and-trades that allow owners to go over the cap, and inserting a hard cap below the current cap of $58 million. The hard cap in particular would also bring in a new age of parity that the NBA hasn't seen in a long time if ever. Under the old CBA, teams operated under a "soft cap". It was structured with exceptions that allowed teams to spend past it to pay their own players, make sign-and-trades, and give out the ever popular mid-level-exception. Perhaps a compromise can be made that eliminates sign-and-trades but still gives teams the advantage when resigning their own players. Either way, they have to close the gap between teams like the Lakers and Mavericks who spent upwards of 90 million and teams like the Kings who only spent 44 million last season. On the players side, they would like to see increased revenue sharing on TV contracts where the difference between the Lakers deal compared to the Kings deal is quite large. If the NBA wants parity, NFL style revenue sharing should achieve that goal.

Big picture, the two sides are currently far apart on nearly every issue and it'll take a lot of work and compromise to get a new deal done. Ultimately the players will lose money, the only question is how much are they willing to lose and how long are they willing and able to hold out to protect what they have. Just like in the NFL, I believe the hard work and compromise won't happen till both sides are pressured by the threat of losing games and money. The owners and players have known this day was coming for over 2 years, they obviously haven't felt a sense of urgency yet. When will that urge kick in? My guess is September. Expect to hear a lot of bickering and no reports of progress throughout July and August. If they then increase the intensity of talks by September 1st, there's hope for a full season. More likely, we're going to miss some games. My best guess, we miss between 10-20 games and tip-off the season on Christmas Day. Hopefully you still have some playoff games saved on the DVR.

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