NBA Lockout Resolution: Long Overdue

November 28, 2011

News, Sports

The NBA Players and Owners had been entangled in a bitter labor negotiation that threatened the 2011-2012 season. The two opposing sides were in it for the long haul, feeling strongly about their individual grievances. The owners were tired of losing money, and the players didn’t want to give back the 57 percent of BRI (Basketball Related Income) that they received annually.

The owners decided to lockout the players on July 1st; it went on 149 days with close to a month and a half of games of the 2011-2012 season already cancelled. The two sides came to an agreement on a ten-year deal early Saturday morning after a 15-hour negotiation. The deal is tentative as a majority of 430 plus players have to approve as well as more than half of the 29 owners. The New Orleans Hornets are owned by the NBA. The NBA Players Union would have to reconstitute after disbanding to file several antitrust lawsuits. It is likely to happen over the next week, and the remaining issues would then be worked out.

Once the deal is agreed upon, training camps will likely start on December 9th; Free Agency would subsequently start at the same time. The aim is for the NBA season to start on Christmas Day with a triple-header. The NBA season would then consist of 66 games with the regular season end pushed back to late April.

The A-list issues that were agreed upon were a mostly 50-50 split BRI, a soft Salary Cap, contract lengths, and the elimination of sign-and-trade deals after the first two years.

The BRI was the major issue in the negotiation and was the main reason the owners locked the players out. The players essentially ended up giving back six to eight percent of their money, depending upon the league’s accomplishments with respects to their financial projections in a given year. The owners get around an additional 300 million dollars a year and three billion over the life of the deal.

The second major issue was salary.  The owners, mainly the small-market teams, wanted a Hard Cap. It would have basically eliminated teams being able to go over the cap and the end result would have been a rollback of current player salaries. The owners caved on this issue and kept the soft salary cap with harsher penalties for teams that exceed the cap. The aim by doling out harsher luxury tax penalties is to create a more competitive balance. It should accomplish that, but the new rules won’t go into effect until the third year of the deal.

The owners wanted a reduction of the maximum contract lengths players can get, and they won on this issue. Players now can only sign for a maximum of five years with their original team and four years with a new team. Another interesting wrinkle to this is that players can only sign a true max deal after their rookie contracts if they meet certain criteria. They would have to get named to the first, second, or third-team NBA twice, win the MVP or get named to an All-Star game.

The last major issue was the elimination of sign-and-trade deals. This won’t take effect until the third year of the negotiation, but the aim is to prevent larger-market teams from signing big time free agents while they are over the Luxury Tax.

There were minor issues that need to be ironed out, but were not publicized as much. They are the age limit of draft-eligible players, HGH (Human Growth Hormone) testing, and an additional round in the NBA Draft.

The age limit issue is a source of contention on both sides, but it is expected to be tabled until after the 2012 draft. The owners would like to raise the age limit to 20 years old, and the players want it eliminated altogether. I’m intrigued to see who wins on this, because the ramifications could be huge for college basketball. If the owners win, then talented high school players will have to stay in college for two full years.  If the players win, college coaches will again have headaches trying to recruit top-rated, blue chip recruits. This is an issue in which I’m actually siding with the owners.  Players having to stay in college two years would help them develop their skills before they turned professional. It would also make the college game more exciting on a year-by-year basis.

Another minor issue is whether players will allow their blood to be tested for HGH. It will be intriguing to see how this turns out; I don’t think basketball players have ever been as stringently tested the way they have in other sports when it comes to the issue of performance enhancers.

The last minor or B-list issue that has been discussed is the addition of a third round in the NBA draft. The players likely won’t mind this, but it’s up to the owners if they will add the extra round. It could provide an opportunity for more foreign players to get drafted and more developmental players that could be put in the NBA Developmental League.  The talent has been very saturated in recent drafts with only two rounds, and many very talented players have been looked over in the past and seek post-college professional basketball overseas.

There are other issues that have been tentatively agreed upon, but these were the main issues discussed.

The true saving grace of this deal coming together is the jobs it will save, the boost to local economies, and the avoidance of a massive public relations hit the NBA would have taken behind a fully cancelled season. I think it is important to note what was being lost in the heat of the negotiations — the lesser-known people it affected.  From local bar owners to teams’ human resources employees to the game day workers, there was a major trickle-down effect that this would have had on the surrounding communities that thrive on the revenues generated by local businesses in the same area as an NBA franchise.

The intense labor negotiation pitted billionaire owners and millionaire players against each other. The resolution meant more to the hard-working people who as a whole positively contribute to the overall success of the surrounding environment. These people are an important factor in a very large NBA revenue stream who would have been negatively affected; however, the money was battled over with no mention of the average working man, who would have taken the hardest impact overall on their own dependent businesses and/or job security.

This is why I felt that the NBA Lockout Resolution was long overdue.


If you would like to read the entire summary of the deal, you may view the 8-page report here.

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