This past week, Commissioner David Stern announced that the first two weeks of the NBA’s regular season would be canceled. It is only the second time in the professional sport’s history that teams will not be participating in all 82 games.
The last time this happened was back in 1998, when the players were locked out for almost half of the season.
For anyone who hasn’t been following all the lockout drama that started over the summer, the basic rift between team owners and their players is this: owners want to reduce the players’ cut of the (less-than-impressive) annual revenue in an effort to salvage the game’s economic health.
The league suffered around $300 million in losses last year as 22 of its 30 teams operated in the red. Unfortunately, not every NBA franchise can be as successful as the LA Lakers, the Miami Heat, or the Boston Celtics. There are many more lesser-known teams that suffer – and have been suffering – horribly disappointing seasons and even more depressing revenue drops.
There are only 10 teams that generate more than $1 million in gate receipts per game on average. One of those teams is the Toronto Raptors, whose bad performances on the court are redeemed by the strength of the Canadian dollar and the success of their arena (thanks to other, non-basketball related events.)
The fact of the matter is that the NBA simply doesn’t generate very much money. Last year, it brought in $4.3 billion in revenue. This is nothing compared to Major League Baseball (a little over $7 billion) or the National Football League (around $9 billion.)
NBA players split 57% (negotiated during the last lockout) of that $4.3 billion with owners, who are now calling for a 50-50 split. The league is also asking for reduced mid-level salary caps and to limit the maximum length of contracts.
There had also been talk of establishing a hard salary cap (like what the NFL uses), but Stern has since backed away from this. Still, players are arguing that the league’s proposed alternative – an increased luxury tax – would produce a similarly undesirable effect.
While I agree with the players’ argument that much of the NBA’s economic failure has to do with the owners’ poor management skills and not necessarily the players themselves, I do think that some changes should be made.
In any case, the players are hardly in a position to be playing hardball. They won’t have to worry about making any money if there aren’t even any games to play this season. Billy Hunter, of the NBA Players Association, predicts that they will lose more than $350 million for every month that they lose games.
Even though the NBA’s current predicament isn’t necessarily their fault, the lockout probably could have ended a while ago if it weren’t for player greed. As many Americans struggle to find jobs during these tough economic times, basketball stars are essentially quibbling over a few million dollars.
NBA players are still (man-for-man) the highest paid in the world. In the end, 57% of $4.3 billion dollars is quite a lot of money when you consider how many basketball players need to be paid in comparison to the number of players in football or baseball.
The lockout isn’t doing the players any good, since they could end up losing more money than they would have if they had just taken the league’s 50-50 deal. And while fans with season tickets are really only missing out on the entertainment (refunds with interest are being provided) think about all of the arena employees who are losing work because there are no concessions to sell or aisles to sweep.
Even Dennis Rodman agrees that the players need to concede and move on with the season. He was present during the last NBA lockout and provides some interesting insight into a player’s mindset.
“Most players don’t give a [expletive] about the game,” he said. “They want the money and all of a sudden they want unity.” In all honesty, you should know it’s bad when Dennis Rodman calls you out.
And if it were me, I would heed his advice.
