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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.

Kareem Abdul-Jabbar speaks at Democratic National Convention (VIDEO)

LOS ANGELES, CA - JUNE 06: Kareem Abdul-Jabbar speaks at the South Los Angeles Get Out The Vote Rally for Democratic presidential candidate Hillary Clinton at Leimert Park Village Plaza on June 6, 2016 in Los Angeles, California. The presidential hopeful is attending a series of campaign stops on the eve of the California presidential primary election, where polls indicate a close divide between Clinton supporters and those of Democratic rival Senator Bernie Sanders.   (Photo by David McNew/Getty Images)
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With so much focus in recent weeks being on NBA players speaking out on social issues, it’s worth remembering that Kareem Abdul-Jabbar has been one of the most vocal athletes in America on these things for decades. The Hall of Fame and all-time leading scorer in NBA history addressed the Democratic National Convention on Thursday evening, urging voters to vote for Hillary Clinton in November, and opened his remarks by introducing himself as Michael Jordan, because “Donald Trump couldn’t tell the difference.”

You can watch the video of his speech below:

Kevin Durant denies report he told Russell Westbrook he was returning to Oklahoma City

LOS ANGELES, CA - DECEMBER 21:  Russell Westbrook #0 of the Oklahoma City Thunder and Kevin Durant #35 discuss play during the first half against the Los Angeles ClipperLos Angeles Kingsat Staples Center on December 21, 2015 in Los Angeles, California.  NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this Photograph, user is consenting to the terms and condition of the Getty Images License Agreement.  (Photo by Harry How/Getty Images)
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In the weeks since Kevin Durant announced he was signing with the Golden State Warriors, we have yet to hear Russell Westbrook speak on his former teammate’s decision. This week, ESPN.com’s Royce Young indicated in a podcast interview that Durant was telling Westbrook and others in the days leading up to his decision that he was coming back to Oklahoma City. He later walked back his report, saying he misspoke. On Thursday, Durant himself told The Vertical‘s Shams Charania that he never said any such thing, or misled Westbrook or anyone else about his intentions.

“It’s false,” Durant told The Vertical on Thursday. “I didn’t say that – words about me telling Russell or Nick that I would stay or leave never came out of my mouth. We met as teammates, but no promises came out of it. In this day and age, I can’t control anything people claim out there. Someone can go out and say something random right now, and people will believe it.

“I never told Russell or Nick [Collison], ‘All right, guys, I’m coming back to the Thunder’ – and then a week later, I decide not to. Never happened. I don’t operate like that. I heard people say that story, but it’s not the truth.”

So that settles that.

Report: Spurs agree to two-year deal with free agent forward David Lee

DALLAS, TX - MARCH 01:  David Lee #42 of the Dallas Mavericks during the first half at American Airlines Center on March 1, 2016 in Dallas, Texas.   NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Ronald Martinez/Getty Images)
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Lee will have a player option in the second year of his deal, which will be worth the veteran’s minimum.

Lee, 33, considered more lucrative deals elsewhere, but committed to the Spurs’ opportunity to win a championship and play a backup role to LaMarcus Aldridge andPau Gasol.

General manager “R.C [Buford] and coach [Gregg] Popovich put a lot of time and energy to give David a visual of how much they wanted him and would use him,” Bartelstein told The Vertical. “A lot of people talk about taking less money, and not many people do it, so the Spurs get a lot of credit for selling David on joining their organization.”

After winning a championship with the Warriors in 2015, Lee was dealt to Boston last offseason, where he fell out of the rotation quickly. He was bought out midseason and signed with the Mavericks. He was solid in Dallas, but at his age and with almost no defensive ability, he didn’t draw much interest on the market. In San Antonio, he likely won’t have a big role, but he’s a solid veteran scorer in the frontcourt off the bench in limited minutes.

Bulls sign guard Spencer Dinwiddie

CLEVELAND, OHIO - APRIL 13: Spencer Dinwiddie #8 of the Detroit Pistons in action against the Cleveland Cavaliers at Quicken Loans Arena on April 13, 2016 in Cleveland, Ohio. The Pistons defeated Cleveland 112-110 in overtime.  NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by David Maxwell/Getty Images)
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CHICAGO (AP) The Chicago Bulls have signed guard Spencer Dinwiddie.

The Bulls acquired Dinwiddie in a trade with Detroit last month and waived him three weeks ago. He spent two years with the Pistons and appeared in 12 games last season, averaging 4.8 points and 13.3 minutes.

The Bulls announced the move Thursday.