Since July 1, the NBA has locked out its players as the league waits for them to come to an agreement with owners over salaries.
The only other time the NBA had a lockout was during the 1998-1999 season, which was resolved in time to still have a condensed 50-game season. As we approach October and November (the normal time for training camps and regular season games to begin), an ongoing NBA lockout is surely going to make many fans nervous.
In considering the owners’ perspective, they are trying to accomplish a few goals. First, the NBA claimed that 22 out of the 30 teams lost money last season. Part of this may be due to the down economy (although NBA popularity was at one of its highest points ever last season). More likely and what the owners believe, player salaries have ballooned to a point that is impossible to sustain consistent profitability. The owners have proposed to cut player salaries by 40 percent.
A second concern by many NBA owners is the disparity of team success. The perception is that teams from big markets tend to win more often because they can spend more money.
While it is true that teams like the Orlando Magic, Los Angeles Lakers, Boston Celtics, Dallas Mavericks and New York Knicks tend to have higher payrolls, the league was also set up that money over the salary cap would be split among the remaining teams. In essence, this revenue sharing helped equalize other teams to a degree.
The owners have responded to this concern by proposing a hard salary cap of $45 million—significantly lower than the current $58 million soft cap.
To promote more parity among the league could be good for fans, but as the example of the San Antonio Spurs shows, small market teams have the potential to succeed with good management.
Profitability, however, is another matter. In the end, the NBA is a business. If franchises aren’t profitable, the NBA will not survive as no one will want to invest in teams any more. Although one may say that the owners are being greedy in trying to maximize profits, successful franchises are better for everyone including fans, players, employees and other businesses that rely on the NBA for their own revenues.
Third, the owners want to move away from guaranteed contracts so teams don’t end up overpaying for players (examples like Eddy Curry and Gilbert Arenas come to mind).
Regarding the players’ side, they want the NBA to continue with a flex cap. Naturally, the players want to keep their salaries as high as possible. This is why it is hardly surprising that the National Basketball Players Association (NBPA) has proposed to decrease players’ share of revenues from the current 57 percent to 54 percent.
Another concern is that the non-guaranteed contracts that the owners are proposing put at risk those players who get injured in the middle of their contracts. Obviously, the players want some protection that their hard work will not lead them to possibly being left out of the league with a cancelled contract and little money to support them.
While the guaranteed contracts is a legitimate concern due to injuries, the players have to understand that there will probably have to be some compromise with owners on this issue. If players want protection against injuries, they will probably have to give on the owners’ desire to limit pay to severely underperforming players.
Are NBA player salaries too high?
In other words, it may be possible that a final negotiation may lead to contracts that have certain performance measures that must be met to get paid a contract in full. This is very similar to private sector contracts.
People have differing opinions on the sides. While both sides are trying to work off selfish motives, I cannot get over the salary issue. The players need to agree to a reduction in their salaries because without profitable owners, they will not have the opportunity to make millions in the NBA.
We are in the middle of one of the longest economic recessions in history, and a lot of folks are unemployed. Salaries have risen slowly over the past few years, and some measures of true unemployment (including the underemployed and those who have given up looking for jobs) is close to 20 percent.
In short, I have little sympathy for the concern players have over their salaries when they are paid on average close to $5 million per season, the highest among any professional sports league in the world.
To think that players might allow a season to be cancelled because they insist on making on average $5 million versus $3 million is irresponsible and shameful. In addition, higher average salaries only leads to higher ticket prices, which has made it more difficult each year for families and less-affluent people to attend games.
Of course, it doesn’t help that the players seem to be full of themselves. Just recently, NBPA President Derek Fisher said, “As players, we view what we bring to the brand of NBA basketball as the league’s most valuable and important asset.” (LA Times)
The NBA is not quite as popular as the NFL and probably not as well set up to overcome a canceled season. Most fans just want a deal to be made between the sides so this upcoming season is not cancelled. While both sides will have to compromise, I believe that the players should be willing to give more.
After all, isn’t $3 million per year still an immense amount of money?