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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.

Watch Nerlens Noel say goodbye to Joel Embiid after learning of trade

Philadelphia 76ers Media Day
Getty Images
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Nerlens Noel had a plane to catch — he is headed to Minneapolis because that is where his new team the Dallas Mavericks are right now (Dallas faces Minnesota on Friday night).

But first, Noel wanted to say goodbye to his buddy Joel Embiid.

Noel was traded to the Mavericks for Justin Anderson, Andrew Bogut (who will be traded again by the deadline or waived by Philly after), and a protected first-round pick in the 2017 draft that will almost certainly convert to two second-round picks (2017 and 2018). It’s a great landing spot for Noel, Dallas will re-sign him this summer and see him as the future of the franchise at the five.

What we as fans tend to focus on is things like that last paragraph — who “won” or who “lost” the trade, how it fits on the court — and we can forget these are human beings. They are leaving their home, their friends, and in many cases asking family to pack up and move with them. There is a human side, a human cost to these trades, which we can’t overlook.

Report: Boston finally willing to put Nets pick in Paul George trade talks, still may not be enough

Eastern Conference forward Paul George of the Indiana Pacers (13) reacts during the second half of the NBA All-Star basketball game in New Orleans, Sunday, Feb. 19, 2017. (AP Photo/Max Becherer)
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They are the two biggest pieces on the trade deadline day chess board: Boston has the rights to swap picks with Brooklyn’s first-round pick this season (and the Nets will finish with the worst record in the league), and then Boston owns the Brooklyn pick outright next season.

So far, Boston hasn’t been willing to put those pieces into play, even for an elite player such as Jimmy Butler or Paul George. The thinking in Boston has been very logical: Cleveland is in the middle of its title window, Toronto also is a win-now team (hence the Serge Ibaka trade), and Washington is in the same boat. However, with those Brooklyn picks the Celtics are not going to peak until three years or so from now, right as those other teams fade. Boston could be patient because they have next.

But that attitude seems to be shifting a little — Adrian Wojnarowski of The Vertical at Yahoo Sports reports one of the Nets picks may be in play for George.

We don’t know which pick (17 or 18) nor do we know what other pieces are involved. There’s a lot of variables and more than likely this deal doesn’t happen.

This seems to signal a shift in Boston’s thinking — they may be sliding into a win-now space. It means they see the Cavaliers as vulnerable (maybe due to the rash of injuries and the heavy minutes for LeBron James) and they want to pounce now rather than wait.

Report: Sixers trade Nerlens Noel to Mavericks for Bogut, Anderson, first-round pick

CAMDEN, NJ - SEPTEMBER 26: Nerlens Noel #4 of the Philadelphia 76ers poses for a portrait during media day on September 26, 2016 in Camden, New Jersey. 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 Mitchell Leff/Getty Images)
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Philadephia has been trying to unclog its frontcourt logjam for a while, but finding little out there in a market with a glut of big men — Brook Lopez, Tyson Chandler, Gregg Monroe, and so on. They have not found a deal they like for Jahlil Okafor despite months of trying.

However, they now have found one for Nerlens Noel.

Dallas has been looking for the big man of their future and has jumped on landing the former Kentucky star, reports Adrian Wojnarowski of The Vertical at Yahoo Sports.

Marc Stein and Zach Lowe of ESPN added these crucial details.

Those protections make it almost certain Dallas keeps its first round pick this year, so the Sixers get a couple of seconds.

I love this trade for Dallas, but they have to re-sign Noel this summer as a restricted free agent. Dallas has chased the right big man for a while (remember DeAndre Jordan?), and Noel fits what they want at the five — he can protect the rim, he has hops, and he can finish around the rim (63.4 percent of his shots come in the restricted area, and he shoots 72 percent on those). He gets most of his offense off cuts or being the roll man — get him the rock near the basket and he’ll do the rest, but he’s not going to create or step out. Noel provides rim protection in the paint on defense, but if you have a big that can pull him out of the paint it gives him trouble. He’s also young and his game can develop.

Noel can be a piece along with Harrison Barnes in the post-Dirk era coming to Dallas.

I’ve been told (as have other reporters) to expect the Sixers to buy out Bogut, which will make him a very sought after free agent by contenders in a few days (Cleveland? He is not allowed by rule to return to Warriors this season). Unless they can flip him again before the deadline.

What Philly gets out of this of value is not only the pick (eventually) but also Justin Anderson, who shows promise as a “3&D” wing. He’s still got to work on the three part of that, he’s hitting just 30.3 percent from three this season, but he’s a strong defender already able to cover twos, threes, and small fours. Good rebounder as well for his position. You could see him growing into Brett Brown’s rotation.

Reports: Minnesota working hard to trade Ricky Rubio by deadline; Knicks swap for Rose possible

DENVER, CO - DECEMBER 28: Ricky Rubio #9 of the Minnesota Timberwolves brings the ball down court against the Denver Nuggets at the Pepsi Center on December 28, 2016 in Denver, Colorado. 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 Matthew Stockman/Getty Images)
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On paper, Ricky Rubio seemed a good fit for the Tom Thibodeau’s Timberwolves: He’s a gifted passer and strong defender who knows how to run a team. In practice, his lack of shooting on a team of slashers and a big man inside — Karl-Anthony Towns — allowed teams to clog the lane.

So the Timberwolves are working hard to find a landing spot for him before the trade deadline at 3 p.m. Eastern, according to multiple reports.

This has led to talks with the Knicks of a Ricky Rubio for Derrick Rose swap, and there is more than just smoke with this. Although, if there is enough fire to get a deal done is another question entirely.

A Rose/Rubio swap is a small win for the Knicks — Rubio would find a way to get the ball to Kristaps Porzingis and Carmelo Anthony, plus he improves their defense. Also, it means they don’t have to overpay Rose or another point guard this summer as Rubio is under contract for next season.

For the Timberwolves, they get a guy who will get them some buckets on the drive but who also takes opportunities out of the hands of Towns, Andrew Wiggins and everyone else. Plus Minnesota’s defense gets worse. I’m not sure how that gets them to the playoffs.