Understanding the NBA lockout

UPDATE (as of 10:20pm PDT): NBA owners have informed the Players Association that there will be a lockout as of midnight July 1st. This is the fourth labor lockout in league history, the last coming during the 1998-99 season in which it took 1/3 of the season away and shortened league play to 55 games.

Don’t expect to hear of any new details for months at a time, the sad news here is currently the sides are “mammoth” sized apart on the issues and it will take months for someone to blink first. As of now, all basketball operations will stop meaning all contact between NBA players and the teams stops. No communication. No use of team facilities. No contracts signed. No free-agent shopping (I was really looking forward to this). Players who are still owed salary for the 2010-11 season will continue to receive payments but other benefits (insurance) are suspended. No team workouts. Don’t forget this effects not just players and coaches but all the employees who work for all 30 teams, the ushers at your favorite stadium, people who depend on the league for a source of income and a job are dealing with this too. You get the picture. Even NBA.com is pretty much all but shut down as it has yet to be seen if official team websites close up as well.

What can fans like you and I do in the meantime? Wait. Wait and pray for something to work out. Start worrying if nothing has come up in late August when training camps should be starting to take place. The NBA owners have stated they don’t care if the entire 2011-12 season is cancelled. Hope this mess gets resolved real soon.

The deadline for a new deal between the NBA owners and NBA players has expired tonight at midnight and nothing seems to be happening. It’s unknown if there will actually be any kind of basketball next season as with the NFL, the NBA will most likely be entering a lockout in which basketball operations will stop until a new deal is set in place between owners and players.

So what does this all mean? I’m no math expert and all this money talk makes my brain hurt, so to fully understand the situation we will be heading in this summer, Derek Thompson of The Atlantic answers all the questions that you need to know:

What’s the NBA dispute about, in a nutshell?

The players want the NBA to be more like Major League Baseball. They want huge player salaries that are guaranteed to pay out, even if the player under-performs.

The owners want the NBA to be more like the NFL. They want smaller player salaries, more “revenue sharing,” and the ability to let players go if they don’t perform.

How did we get here?

The NBA expects to lose $300 million this season after losing more than $300 million last season. Those losses aren’t concentrated in a handful of clubs. Two thirds of the NBA’s 30 teams will lose money this year, Commissioner David Stern said.

Owners currently pay players about 57 percent of their gross team revenue. If they paid closer to 50 percent of the pie, they might be in the black. That’s what this fight is about: Designing a system that allows teams to offer players competitive salaries without bankrupting smaller teams.

What’s the difference between a “hard” and “soft” salary cap?

A salary cap is a spending limit on your players. The NFL has what’s called a “hard” cap. There are very few exceptions where teams can spend above the limit on players. This makes teams more competitive. It also means that owners don’t get into a horse race to see who can pay the most money.

The NBA has what’s called a “soft” cap. The official limit is about $58 million, but teams can go over that in all sorts of ways. The most famous is the “Larry Bird Exception” that allows teams to resign players above the cap without it counting.

Most basketball teams spend above the cap. Boston, New York and the Los Angeles Lakers can spend more than $100 million, while Minnesota spends less than $50 million. Like major league baseball, teams that spend way above the cap pay a luxury tax that is redistributed throughout the league.

What do the owners want, and why?

The owners want more money. First, they are asking for a one-third reduction in player salaries. Right now, owners are required to spend nearly 60% of team revenue on players. They want to bring that down closer to 40%.

Second, they want a hard cap.

Third, they want “non-guaranteed contracts.” This will let them cut, or renegotiate with, a player who under-performs. One of the highest paid players in the league right now is Rashard Lewis. He’s guaranteed to make $21 million in the final two years of his contract. In the last two seasons he’s played only 50 games and averaged half the point total of Dwyane Wade. The owners want to be able to get out of those contracts.

Fourth, the owners — particularly owners in smaller markets — want more aggressive “revenue sharing” so that teams that spend like New York and LA do more to subsidize teams that spend like Minnesota and Charlotte.

What do the players want, and why?

The players want more money, too. They want to keep guaranteed contracts because that’s guaranteed money. They’re opposed to the hard cap because that caps their salaries. In particular, a hard cap would keep the wealthier teams from bidding competitively on players.

The players union also wants revenue sharing to be part of the collective bargaining agreement so they can force teams at the lower end to spend more on player salaries.

Will there be a 2011-2012 NBA season?

“The NBA lockout is going to be a lot more contentious and prolonged than the NFL,” said Jeffrey Standen, a professor of sports law at Willamette University and author of The Sports Law Professor blog.

“The owners in the NFL have the basic structure of the collective bargaining agreement,” he continued. “The revenue percentage. The rookie salary compensation scheme. It shouldn’t be too bad of a negotiation. In the NBA, the owners want some fundamental changes to the collective bargaining agreement.”

Why has the looming NBA lockout received less attention than the NFL lockout?

Maybe because football is the king of sports. It’s a more distinct season. It holds the fall to itself. Also, the NBA is a long, spread-out affair. If basketball misses a third of its regular season, it still has 55 games. If football misses a third of its season, you’re down to 10 games.

What might a final deal look like?

If owners can cut player salaries, as a percentage of gross team revenue, by a sixth, and then get concessions on players’ rights (perhaps by eliminating sign-and-trade deals), we might get a deal.

article courtesy of The NBA Lockout is near: Here\’s what you need to know