Jul 15, 2010
Two Sides Divided: Is the NBA Preparing for a Lockout?
The NBA is holding its annual owners meeting in Las Vegas, and the hot topic under discussion is not the commercial success of the "Summer of LeBron," but the fear that the league and the Players Association will not be able to come to an agreement.
Their current collective bargaining agreement (CBA) ends on June 30, 2011, and could cause the worst work stoppage since the 1998-99 lockout.
The reason for the rift is the claim from the owners that they lost a combined $370 million in revenue due to lower ticket sales and the US's economic recession.
In a recent interview with ESPN.com, NBA Players Association Executive Director Billy Hunter added more fuel to the already raging fire, stating the league's profit/loss numbers are not only false, but skewed.
"[Commissioner] David [Stern]'s numbers are unfounded," said Hunt. "It’s a severe exaggeration."
When the NBA League Office announced an estimated $370 million loss of revenue, Hunter and other Players Association reps quickly responded, giving examples of increased ticket sales in mid-level markets, such as Charlotte and New Jersey, and higher overall television ratings.
The estimated $370 million loss comes from estimated numbers of ticket sales, television revenue, and merchandising that were made by league officials last summer before the start of the season.
The league did increase overall ticket sales for the season and saw an increased television audience for their NBA Playoffs and NBA Finals.
Hunter also bolstered his claim stating that the 2010 NBA Finals saw the largest television audience in 12 years, and the fact that, on average, salaries went down around $1.7 million a player, a common trend when heading into a large free-agent class, as reasons that the estimation of $370 million was off.
Hunter also went on to claim the surprise increase of the players' salary cap to $58 million, up from an estimated $50.4 million, is a reason to dispute the claims.
David Stern did not make a public comment, but associate commissioner Adam Silver spoke to the media, stating the league did see increased ticket sales in certain markets, but it was at a high cost due to increased promotions, marketing, and resources.
Both sides seem to be at a crossroads, as the owners are looking to regulate the profit sharing and salary cap to ease the costs of running a franchise. The Players Association, as expected, is petitioning for an increased amount of revenue sharing for the players' benefit.
"What we should be doing is trying to come to some arrangement that both of us find to be mutually beneficial and acceptable," explained Hunt.
The fear of a possible work stoppage is a key factor to the grandeur of this summer's free agent market as well as the increased amount of underclassmen in the recent 2010 NBA Draft.
Many players with expiring contracts are looking to grab guaranteed money as a fallback plan, and many collegiate players entered early to guarantee money in the worst-case scenario of a lost season.
The league suffered a four-month lockout during the 1998-99 season that saw the first official games commencing in February, 1999. The owners locked out the players to gain more control over profit sharing and players' salaries when their CBA lapsed in the summer of 1998.
At this time, an agreement seems bleak, and Hunter is expecting a prolonged work stoppage.
"I'm preparing for a lockout right now, and I haven't seen anything to change that notion," stated Hunter.