How the Fear of an NBA Lockout Became Real

Eric Pincus@@EricPincusLA Lakers Lead WriterOctober 31, 2020

Los Angeles Lakers forward LeBron James, left, talks with Oklahoma City Thunder guard Chris Paul (3) during a timeout in the second half of an NBA basketball game Saturday, Jan. 11, 2020, in Oklahoma City. (AP Photo/Sue Ogrocki)
Sue Ogrocki/Associated Press

The NBA and National Basketball Players Association (NBPA) released an ominous statement Friday evening, announcing "they have agreed to push back to November 6 the date by which either party may notify the other of an intention to terminate the current Collective Bargaining Agreement. ... If either party provides notice by November 6, the CBA will terminate by December 14, unless the parties agree otherwise."

Yikes.

The key issue is a return date for the 2020-21 season. The league wants to come back before the Christmas holiday, the players favor restarting around Martin Luther King Jr. Day on January 18.

It's not just the players; several club executives across the league are not fans of the NBA's plan, which would force teams to go quickly from the Nov. 18 draft to free agency to training camps to games.

"It's all bizarre," an Eastern Conference executive said. "I'd bet against a December start date."

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"It's super aggressive," a Western Conference executive agreed. "We really didn't have a break."

The possibility of a lockout emerged March 11, when Rudy Gobert tested positive for COVID-19. The NBA shut down for several months before finally resuming in late July, with the Los Angeles Lakers clinching the title in October.

The league and the players union worked together successfully without a single player infected in the bubble near Orlando, but the simple fact that games were lost officially started the doomsday clock—giving the NBA the right to terminate the CBA within 60 days. That date has since been pushed back multiple times, previously until October 30. 

The CBA itself only grants the NBA the power to break the deal, but by Friday's statement, the NBPA also has the authority to rip it up. 

Without a collectively bargained deal, the players would enter into a lockout that could only be resolved by a newly negotiated agreement. It could be a death knell for the 2020-21 season.

If there were ever a time to void the CBA and rewrite the rules, now would be it. If 40 percent of league income will be lost in a season without fans, the NBA simply doesn't have as much to lose in locking out.

In pushing for a December return, the NBA is working to be on the air for one of its biggest broadcast days: Christmas. From the NBPA's point of view, that's not enough time for players to rest. A usual playoff would wrap in mid-June with a restart in late October.

"This summer, up through just two short weeks ago, our players accepted the challenges posed by and risks to their personal health and safety in order to save our season," NBPA executive director Michele Roberts told Shams Charania of The Athletic before Friday's deadline was pushed back. "... It has been reported that those efforts generated an additional $1.5 billion of revenue to be enjoyed by the players—and the team owners."

"Given all that has to be resolved between now and a Dec. 22 date, factoring that there will be financial risks by a later start date, it defies common sense that it can all be done in time. Our players deserve the right to have some runway so that they can plan for a start that soon. The overwhelming response from the players that I have received to this proposal has been negative."

Beyond the burden that might put on the players and front offices, the NBA and NBPA also need to agree on a safe, acceptable format.

So, what's the rush?

Naturally, it comes down to money.

The Christmas holiday is traditionally a big TV day for the NBA, which is proposing a 72-game schedule to honor national and local television contracts. The 10 games initially lopped off the top are likely too expensive to produce without crowds.

Per Adrian Wojnarowski of ESPN, "The NBA fears delaying the start of the 2020-21 season until January could cost the league an additional $500 million to $1 billion in revenue next season and beyond."

Part of the issue is finishing in time for the Olympics in July. The worry is less about providing Team USA and international teams with NBA players and more about the competion for ratings. Getting the league back to a typical October-to-June schedule, in part, to avoid overlapping with the NFL makes a lot of sense.

But does the NBPA agree with the league's economic conclusions? In its partnership with the NBA, it too is partnered with the networks.

Is there any hope another week will lead to a different conclusion, or is a lockout inevitable?

Charania tweeted out some cause for hope, at least from the NBPA: "We are confident we will get there."

Whatever the answer, the NBA won't near the $8 billion range initially projected for the 2020-21 season. The league roughly splits basketball-related income in half, so if its revenue drops to, say, $4 billion, the players' share would drop from $4 billion to $2 billion.

The NBA's salary cap is tied to projected income, with a pre-pandemic projection of $115 million for 2020-21. The league and union have discussed keeping the cap flat at $109.14 million with a luxury-tax threshold of $132.6 million, with the players required to take a significant pay cut.

Under normal circumstances, the league withholds 10 percent of player salaries until the NBA's audit is complete in late June. This past year, that was increased to 25 percent. The higher the league props up the salary cap, the more the players will need to give back from their checks.

For a high-paid star like LeBron James, that could amount to giving up roughly $11.8-15.7 million of his $39.2 million salary (30-40 percent) for next season.

Whatever money the league loses, it has to come out of the players' share one way or another. In addition to the rushed schedule, the NBA and NBPA have a lot to sort out to avoid a meltdown.

They've given themselves another week, but they can only kick that can so far before a December 22 start becomes impossible. If so, the league may decide it's worth blowing up the system entirely.

That's the worst-case scenario, at least in the short term, and hopefully an unlikely one, but there's a possibility the 2020-21 season and the collective bargaining agreement itself are in real danger.

                        

Email Eric Pincus at eric.pincus@gmail.com and follow him on Twitter, @EricPincus.