Quantcast 2011 NBA Lockout: NBA Lockout update

 

What’s so unfair about 50/50?

 

Late on Oct. 10 outside a hotel in New York, NBA commissioner David Stern announced that the NBA would be cancelling the first two weeks of the regular season, stating that after two last-ditch bargaining sessions, the gulf between the NBA and Players Association is far too wide to be crossed in time to save the full 82-game schedule.

But it didn’t have to come to this.

Unfortunately, neither side is bargaining in good faith, and ultimately, both sides are to blame for the current predicament. A 50/50 split of basketball-related income would have solved many issues and would have been the fairest way of splitting BRI. And according to reports, a 50/50 split was proposed, but apparently neither side did well in math class since a true 50/50 split never even reached the bargaining table.

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The problem with getting both sides to agree to a true 50/50 split of BRI is rooted in greed. For starters, the players are coming off a collective bargaining agreement that guaranteed them 57 percent of BRI annually, so to drop to 50 percent would see them give back approximately $280 million per season over the life of the new CBA. That is hardly palatable for players, as a mid-level player making $5 million per season would see his annual salary drop to around $4.39 million and a star player making $20 million annually would see his contract cut to around $17.5 million per season. The owners, on the other hand, are looking to institute a system that not only mitigates their losses but actually guarantees each team makes a profit, and they are doing so by trying to squeeze every last dollar out of the Players Association in negotiations.

However, a 50/50 split is a fair deal for a number of reasons — the most important of which is that the NBA owners and players are essentially partners in making the league a success. The owners need the players to put a quality product on the floor 82 games a year; the players need the owners to run all the behind-the-scenes issues that go along with running the league, such as scheduling games, handling travel, and obtaining corporate sponsors just to name a few. And for those who argue the players should just start their own league and forget about the owners, good luck with that. The players tried to create a team to play barnstorming games overseas this summer, but they could not even find enough corporate sponsors to make that happen. No, the players need the infrastructure the NBA offers just as badly as the NBA needs the talent the players provide.

So there is no reason why one side should have a larger piece of the pie than the other, especially when the pie is, in actuality, a $4 billion-dollar pile of money. If either side thinks it is going to win a PR battle when quibbling over how many billions each side should get, then it is delusional. And while it may be true from the players’ point of view that after taxes and escrow and other deductions they only clear half their salary, that’s still a tidy sum for playing a game, so crying poor over a lost million dollars is not the wisest strategy to gain the public’s favor.

The other issue between owners and players has been on systemic changes to the league, including salary cap and exception issues. The proposal the owners put forth most recently called for a more-punitive luxury tax in place of a hard cap and a ban on teams over the luxury tax from using mid-level exceptions, Bird rights, and other mechanisms to otherwise circumvent the salary cap and pile on contracts. The NBA-proposed tax is the major sticking point for the players, since they claim it would essentially work as a hard cap, and they would be right. The NBA’s proposed tax system would penalize a team over the tax $1.75 for every dollar over the tax threshold for the first $5 million and by another $0.50 for each subsequent $5 million a team exceeds the threshold. That would result in a team that currently pays $20 million in luxury tax paying upwards of $54 million per season. And that’s not all. The NBA also wants there to be penalties for a team that exceeds the luxury tax in multiple seasons. For example, if a team exceeds the luxury tax three times in any five-year period, the luxury tax rate for that team at each tax level would triple, resulting in a team that is currently paying $20 million in luxury taxes under the previous system now paying nearly $150 million per season in luxury tax alone. That surely would rein in the free-spending teams.

 

 

The players oppose such a system since it greatly reduces their leverage when negotiating contracts with teams during free agency. However, the luxury tax is being implemented in an attempt to level the playing field between the big-market teams and small-market teams (and cheap owners). Creating a system that creates parity in the league will be beneficial to all involved. While fan turnout may have been low in many NBA cities, oftentimes it was in cities with losing teams. Fans, especially in the current down economy, have better ways to spend their money than dropping $50 (and up) for tickets to see the Minnesota Timberwolves take on the Toronto Raptors in a battle to avoid being the NBA’s worst team.

Yet if the playing field is leveled and each team now has a legitimate star player as an attraction and a legitimate shot at winning a championship, then fans will start coming out to NBA arenas to support their teams. People love winners, and the more potential winners the league can have, the more fans will spend money on the NBA and NBA products. As for the players’ concerns over the luxury tax being a hard cap, if the tax threshold is based on league BRI, then the more the NBA makes, the higher the tax threshold can go, and the more each team can spend on players without fear of being penalized.

Again, this labor dispute could be settled quickly with a little common sense and compromise, but the astounding greed being demonstrated on both sides has gummed up the reasoning sectors of everyone’s brains. As a result, the season has been cut down by two weeks already, with more games set to be slashed soon. And those suffering most from this massive exercise in greed at its purest are not the owners nor the players nor even the fans. Those suffering most are those who sell tickets, work concessions, run parking lots, own arena-adjacent restaurants, or otherwise rely on the business of basketball to make a living and pay the bills. These are the real victims of this lockout. So while the players and owners may publicly apologize for the current situation and express sympathy to those who have lost jobs due to the work stoppage, it all rings hollow until one side puts forward a fair, equitable proposal in a true effort to end this ridiculous and unnecessary melodrama once and for all.

 

 

By: Eric Lorenz
ProBasketball-fans.com Staff Writer


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