NBA Lockout for Dummies: Explaining the Situation from Both Sides

Alec BeckmanContributor IIIJuly 6, 2011

NBA Lockout for Dummies: Explaining the Situation from Both Sides

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    The NBA and NBA Players Association have failed to reach an agreement, so for the second time in the past 4 months, a major sports league has shut down, or locked out.

    Now what does it mean to be in a lockout? Well, players and team officials, including coaches, owners, staff, are not permitted to talk to their players.  No one gets their paycheck, and every players' contract has temporarily expires until the new CBA (collective bargaining agreement) is signed.

    In this slideshow, I will do my best to help you best understand what is going on in this lockout, with the issues, and some potential solutions.

First Issue: Capital Loss

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    The NBA has lost a tremendous amount of money in the past two years, which is why the salary cap has dropped, and teams have less money for players, coaches, and other important things.  This is due to the fact that 22 out of the 30 teams are losing money.  The NBA isn't like the MLB where you can keep the money you make, the team must put it into one league fund.

    The NBA needs to operate like a business, and re-evaluate their model, to try and appeal to more people and gain money.  Every other sports market has grown, including Soccer, so they must figure out ways to make money with merchandise, ticket sales, and promotional opportunities.

Second Issue: Small Market vs. Big Market

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    The smaller market teams in the have the biggest disadvantage in the NBA, than of any other league.  Large Market Teams, such as the Los Angeles Lakers, Chicago Bulls, Miami Heat, and so on, have dominated this league, by having huge fan bases, with large markets to be able to go over the luxury tax to acquire players.  You'll find that Big Market teams that win will be able to sign or trade for the best players, based on where these players want to play.  A small market team like the Minnesota Timberwolves are constantly tempted to move, because there is no fan base, and they make no money.  

    There needs to be more of a level playing field, and a way to do that, is to condense the amount of teams in the league.  In the old days, teams always had the best talents, now a days, you can see a Brian Scalabrine able to have a contract... 

Third Issue: Trades

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    With every trade, the players salaries involved in the trade must be within 25% of each other, unless the team can afford to take the contract without going over the soft cap.  First off, who has room to get a contract and not go over the cap anymore?  Second off, this rule has made it, so almost every single trade is a salary dump.  The idea of trading is so every team involved in the deal (buyer beware) gets better.  

    Teams should be able to make the trades that make sense for them, without worrying about salaries, until a firm, hard cap is in reach.  Under the new CBA, they should change this rule, allowing teams to trade as they wish, as long as they are below the hard cap.

Fourth Issue: Contracts

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    Contracts in the NBA have a few major flaws in them.  The biggest flaw is that every contract in the NBA is guarantied.  When players sign contracts, they will receive that money, whether they earn it, get injured, never play, or are cut.  This can kill teams for years, giving out max contracts worth 5-6 years and over 100 million dollars, and the players getting injured or just not panning out.  Take for example the 76ers and Elton Brand.  Elton Brand was an NBA all star, and tore his ACL, the year before his contract was up.  The Sixers took a chance on him, and as last year he played well, he killed the Sixers for the two previous years.  Also, Michael Redd, earns over 20 million dollars per year, and has been injured the past two years.

    If you eliminated guarantied contracts, teams could get on the right track much quicker than before, with a small cap hit to the team.  

    Also, look for the NBA to reduce the number of years on contracts.

    The NBA should shift to an NFL-esque contract situation with small cap hits to cut players.

Other Smaller Issues

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    The NBA has had a few player misconducts, with the Gilbert Arenas gun incident, and other brawls (Memphis).  There was an issue of the NBA not having set rules for violations such as these with fines and suspensions, so expect the new CBA to have rules like this.

    Players have complained about the minimum draft age, but this will not likely be changed from 19 years old.

That's All Folks

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    With any questions regarding this, please comment below, I will respond to your questions as best as I can with my understanding of the situation.

    Follow me on Twitter @Beckmansports