NBA Lockout Q&A: PBT explains it all (well, almost)

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Welcome to the NBA lockout. Pull up a chair, make yourself comfortable, you’re going to be here a while. If we’re all lucky it will be for just the summer, but it could be longer. Much longer.

I understand you all have questions about how we got here, where we are at and what is next. We don’t have all the answers, but let’s try to answer those questions as best we can.

Why is the league locking out now, after a season when ratings, attendance and interest in the league are at the highest levels in decades?

July 1 is when the Collective Bargaining Agreement (CBA) between the owners and the players union runs out. It was not so much they chose right now as this was the time the old deal was up and a new one needed to be hammered out. Both sides have known for years that this would be a tough negotiations — that the owners were going to look for big changes to the system — and both sides have anticipated for a couple years a lockout would come now.

That it came on the heels of a fantastic season for the league was a coincidence, but it may be the one thing that saves next season. Both sides understand the need to get a deal done that does not cost games next season or all that newfound momentum will be lost and it will take years and years just to get back to this point.

What are the two sides disagreeing over?

Everything. Much like the negotiations at the end of the Vietnam War, I’m not sure the two sides could agree on the shape of the table they should sit down at to negotiate.

But as always the big issue is money. Specifically how to divide up the money that comes into the league. That money is called “basketball related income” (BRI). That is the money from ticket sales, national television contracts, local television deals, luxury boxes, concessions, jersey sales — basically everything tied to basketball.

Currently the players get 57 percent of the gross BRI — 57 cents on every dollar that comes into the league goes to the players in salary. The owners want to change that number dramatically, their proposal would have the players in the low 40s percent wise in a decade. The players have agreed to go down to about 54 percent in their proposals.

In that gap is hundreds of millions of dollars per season. The two sides are nowhere near close – they can’t even agree on how to define BRI (the owners want to start taking a number of expenses out of it so it is more net than gross that is divided between them).

What are the owners proposing?

The owners want a radical change in the system. They want to put in a “flex cap” of $62 million per team. For some perspective, the Dallas Mavericks payroll last season was $86.2 million (the team with the lowest payroll was Sacramento at about $44 million). Teams could not exceed that $62 million number except to sign their own free agents, and even then teams could not exceed a second figure that would not be more than a few million higher.

What David Stern will gladly tell you is that this number guarantees the players about $2 billion a year in salary, which is not much below the $2.17 billion they made last year. The difference is the owners want to lock that figure in for a decade — even as revenues rise for the league the salary cap would remain flat. All that additional revenue goes to the owners.

The owners also want to reduce the length of contracts by two years when handed out (from five to three for signing a free agent, for example), so they don’t end up stuck with terrible choices and bad deals as long. (Yes, the owners want the CBA to protect them from themselves.)

What is the owners’ sales pitch?

For fans, they are selling parity. This season the Lakers spent more than $90 million on salary, with the luxury tax they spent more than $110 million. And as a franchise they will still turn a profit. Smaller market teams have a hard time competing with teams willing to spend like that. What this harder salary cap would do is put teams on a more even playing field financially.

Now will parity work in the NBA as a practical matter or in marketing manner like it does in the NFL? That’s a harder sell. The best times for the NBA were when Michael Jordan’s Bulls dominated the league, or when Magic and Bird ran the show. Parity has never sold the same in the NBA like it has for the NFL.

What do the players say about the owners’ plan?

What would you say if your boss asked you to take a pay cut then told you they expect record growth for the company in the next decade but you’d see none of the rewards? Yes, NBA players are very well paid, but they also realize that they are the product that drives the league and they should see money from any growth in the league’s business.

What do the players propose?

The players are essentially playing goalie in these negotiations — they want to keep the system pretty much the way it is now. They like the “soft cap” which allows teams to spend well over the cap to keep their own free agents and has a host of other exceptions (a mid-level exception, a veterans exception, and more).

The players have proposed a reduction in the percent of BRI they get down to 54 percent, which would be a give back of about $100 million per season. They say that is their percentage of the losses they admit some owners are suffering. But aside that they want even more flexibility for teams to make trades (not as restricted by matching salaries) and other steps to increase player movement.

What about revenue sharing?

This is the players’ other big push — they want the owners of big market teams to share much more revenue with smaller market teams. They also point to the NFL where about 70 percent of league revenue is shared; where in the case of the NBA it’s about 25 percent. (That is primarily because the NFL has much larger national television deals.)

For example, the Lakers new local television deal that kicks in for the fall of 2012 will pay the team upwards of $150 million a year, the Sacramento Kings made about $11 million last season on their local television deal. None of that revenue is shared right now, the players say it should be and they want to know the numbers.

The owners are talking about revenue sharing amongst themselves, but they say it is not part of the CBA negotiations and the players do not have a seat at that table.

So is the NBA lockout like the NFL lockout?

No. Not at all… well, in one key way yes.

But not in the details. The bottom line is the NFL is a league that is still making gobs and gobs of money, it’s just that the owners are not making as much as they used to so they are locked out. But at the end of the day, that argument truly is about how to divide the profits.

The NBA has lost money for several years in a row, and even though the players dispute the owners figures they do not dispute the losses overall. The losses this past season as a league were around $300 million according to Stern. And that is the key difference between the two lockouts — the NBA has far more serious issues to deal with, real revenue and expenditure issues to deal with.  Because of that the two sides are farther apart than they ever were in the NFL. A few minor issues are the same but the big issues are different in the two lockouts.

So how are the NBA and NFL lockouts alike?

The arc of how the problems will be solved.

The NFL has been locked out for more than 100 days but only now are we starting to see some real progress towards a deal, in time to save this season. (How much progress depends on who you ask.) The bottom line is this — in any negotiations, from teachers unions to longshoremen to sports leagues, nothing actually gets done until there is pressure on one or both sides to compromise. In the NFL, with the owners seeing the threat of lost games and the players fearing lost paychecks, the negotiations are getting serious.

It will be the same with the NBA. With the start of the lockout, the two sides will move farther apart. They have both known this lockout is coming for years — there have been proposals on the table since the 2010 All-Star Game in Dallas — and they have dug in their heels. Don’t be shocked if the owners start talking about going back to their original proposal of a $45 million hard salary cap.

But as we move into the second half of August and September, when the threat of lost games starts to become more real, then we will see movement and the two sides start to negotiate in earnest.

Then we will see the resolve of the two sides.

How and when does this end?

The when is unpredictable. I want to believe there will be a full season next year. But there are hardline owners — smaller market owners who leveraged themselves in recent years to buy these teams and who need a change in the business model — who are willing to lose some or all of a season to reshape the financial landscape of the NBA.

The players are going to come out of these negotiations with less money then when they went in (even under their own plans), the question is how far back will they go and how hard are the owners as a group willing to push for a deal they want? We’ll start to get a feel for that in August and September.

If we get to mid to late September and the two sides are nowhere near a deal like they are now, then my friends we may not see the NBA for a long while.

Watch the top 60 clutch shots from last NBA season

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It’s that time of the year when there is no basketball, so we fill the time with idle Kyrie Irving speculation and video highlights of last season.

Along those lines, above you can out the top 60 clutch shots from last season, as determined by the folks at NBA.com.

The great thing about the clutch shot list is the ball is in the hands of stars at the ends of games, so there is plenty of Russell Westbrook, John Wall, LeBron James, Devin Booker, Kevin Durant and more. Personally, I would have switch No. 1 and No. 2 on the list, but it’s all fun to relive.

Cavaliers owner Dan Gilbert: Pacers ‘could have done better’ on Paul George trade

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Kyrie Irving has requested a trade. LeBron James could leave next summer. The Cavaliers keep churning through general managers, the newest – Koby Altman – the reason for today’s press conference.

But Cavs owner Dan Gilbert looked past his own team’s turmoil and potential turmoil to take a shot at the Pacers, who traded Paul George to the Thunder for Victor Oladipo and Domantas Sabonis.

“I will say Indiana could have done better than they did,” Gilbert said after Altman refused to directly address a question about George trade talks and shifted the discussion elsewhere.

This didn’t strike me as Gilbert trying to distract from Cleveland’s troubles. He just seemed to want to take a shot at a foe, something he’s no stranger to doing. The Cavaliers are particularly salty about their trade offer for George, which included Kevin Love, not being accepted.

For what it’s worth, Gilbert is right. The Pacers should have done better. Oladipo is now on a lucrative contract extension, and Sabonis spent his rookie season showcasing the reasons people doubted him the draft. That’s a piddling return for a star, even one on an expiring contract with dreams of joining the Lakers.

Report: Kings meet with former Magic GM Otis Smith about front-office job

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The Kings lost Scott Perry to the Knicks, so Sacramento is seeking someone else to aid Vlade Divac in the front office.

Adrian Wojnarowski of ESPN:

Former Orlando Magic general manager Otis Smith has met with Sacramento Kings officials about the franchise’s vacant vice president of basketball operations job, league sources told ESPN.

Smith has plenty of experience, which Divac lacks. But it’s not all good experience.

Running the Magic, Smith made numerous errors – including drafting Fran Vazquez (who has never played in the NBA) No. 11, overpaying Rashard Lewis and then trading Lewis for Gilbert Arenas’ even worse contract. If Smith’s Orlando tenure is predictive, he’ll indulge the Kings’ worst tendencies to mortgage the future for the present.

That said, Smith might have learned from his time with the Magic (though working under Stan Van Gundy with the Pistons the few couple years isn’t exactly the best place to hone long-term-planning skills). What amounts to an assistant general-manager role might be a better fit for him, too.

Usually, this opening wouldn’t garner so much attention. But Perry was lavished with praise for Sacramento’s offseason, raising the profile of this job – which already carried relative prominence. The No. 2 in the Kings’ front office is now perceived, somewhat fairly, as more important than the typical assistant general manager.

Lakers sign Tyler Ennis to minimum contract

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Jut before the trade deadline, the Lakers took a flier on Tyler Ennis, who had struggled in two-plus seasons with the Suns, Bucks and Rockets.

The former No. 18 pick finally looked like an NBA player in Los Angeles, so he’s returning.

Lakers release:

The Los Angeles Lakers have signed guard Tyler Ennis, it was announced today by General Manager Rob Pelinka.

Ramona Shelburne of ESPN:

This is fantastic value for the Lakers. Ennis is probably worth a minimum salary, and if he is, they have him for two years at that price. If not, they can drop him for no cost next summer, when their cap room will be at a premium. This is the type of bet smart teams make, which bodes well for the Magic Johnson regime.

Ennis’ productivity in Los Angeles might not be sustainable. He shot well above his career marks on 3-pointers and free throws in a small sample. But he looked more comfortable on the court, showing some of the savvy he was expected to bring from Syracuse. He’s also just 22, and point guards tend to develop later than other positions.

The Lakers still have their room exception, which they could use on another point guard. So, it’s uncertain whether Ennis will back up Lonzo Ball or fall to third string. I’m not sure any remaining free-agent point guards – Ty Lawson, Deron Williams, Brandon Jennings, Ramon Sessions – will command more than the minimum or playing time over Ennis, though.