By Dan Rubin
I used to say greed is good. Now it seems as if it’s legal. – Gordon Gekko
If I say the words “NFL Lockout” to you, I guarantee you’ll have an opinion.
If I say the words “NBA Lockout” to you, you’ll probably do a double take and look at me funny. Well – believe it, because it’s not a question of if, it’s a question of when.
In two weeks, unless something drastic happens, owners in the NBA will lock out players in the same fashion that football owners did to their own. Facilities will be shut off to players and the landscape of professional basketball, as well as professional sports will change the way it looks once again.
It’s somewhat ironic at how this labor situation is taking place since it’s a complete 180-degree turn from the way the NFL unfolded. Throughout its recent labor dispute, the NFL operated very much in the public eye. The owners opted out of a bad labor agreement, leading to last season with no salary cap, followed by the labor talks throughout the whole year and into the playoffs. As the season ended, the owners eventually did put the locks on their stadiums, and the backlash became evident as the days bore on. The NFL Draft was littered with chants of “We want football,” which helped league commissioner Roger Goodell, the owners and players know how badly the NFL needs to come back.
The NBA has been completely different. There haven’t been too many articles regarding the labor woes found in basketball. When the Dallas Mavericks polished off the Miami Heat in Game 6 of the NBA Finals, the league had higher ratings than before and storylines all over the place. Even with the NHL recording its highest ratings in years, the NBA still demolished it in its championship round television viewership.
And, yet, simmering in the background, was the prospect of no 2011-2012 NBA season.
The owners and players are roughly $8 billion apart in proposals. They’re also asking the players union to give back $160 million of a so-called “escrow tax” that ensured players made no more than 57% of league revenue. They’re trying to implement a “flex cap” system similar to the NHL, a system that players are balking at and with the NBA Draft on Thursday, prospects are already making contingency plans for what to do when teams select their negotiating rights, but then can’t negotiate.
The expired Collective Bargaining Agreement or CBA, limits the amount of money one team can pay for a player with a certain amount of years. It states that a player with less than six years’ experience can make no more than either $9 million or 25% of the salary cap. It then gradually slots how much a team can spend on selected players as they get older and gain more experience.
In its complexity, the CBA also slots players into several different rules, groupings, and exceptions. The most commonly known rule is the so-called Larry Bird Rule. The Bird Rule allows for a team to resign any player currently on its roster for as much money as agreed upon, even if it exceeds the salary cap.
If a team then goes over the salary cap, they’re limited on how much they can spend for free agents and who they can trade for. They cannot trade for a player if they end up more than $100,000 over their current salary level. This means they can continue to exceed the cap, but they can’t do it by more than $100,000. And, as a reminder, for every dollar a team goes over the cap, they have to pay a dollar to the league in luxury tax, essentially doubling a player’s salary.
There are several other layers, and I probably could spend solid seven pages writing about the old, expired CBA. It’s confusing, it’s weird, and it leads to some awkward moments.
One of its intricacies is that a team can’t trade draft picks after the lottery. They can only trade draft rights. That means that a team holding a draft pick has to draft a player, then trade that player to the team that wants that pick. That awkward moment came when the Boston Celtics drafted Jeff Green in ’07. It was already agreed upon that the Seattle Supersonics wanted that draft pick in exchange for Ray Allen. But Green had to be chosen by the Celtics in order for that to happen.
It’s confusing, confounding, and a lot of people, least of all the general managers of the NBA, got really sick of it. That’s ironic considering their the ones giving out the contracts, bending to the will of the players, willing to resign them and escalate the salaries just to put some butts in their seats.
NBA owners are looking for a system, which is easy for their organizations to navigate, and also gives them a break from their self-imposed budget crunch. There are too many teams with high-priced players and sub-par attendance, and, what’s worse, teams unwilling to spend. Trade deadline talk almost always centers on “expiring contracts,” leading to teams trading their best players away to clear cap space for runs at free agency. It’s hard to imagine that the Cleveland Cavaliers, who couldn’t even 20 games last year, actually have two players making more than $10 million per season. As stupid as he was for the public smear campaign against Lebron James, owner Dan Gilbert might be dumber for that little statistic.
David Stern is a smart and shrewd businessman. He knows his salary cap system is completely antiquated, and it does nothing to stop “super-teams” from forming because teams are willing to shell out cash. It surely didn’t stop the Miami Heat from signing James and Chris Bosh, even though their respective teams of Cleveland and Toronto could’ve offered them more money to stay under the Larry Bird Rule.
Stern knows that the max salary rule, while good, didn’t stop the Heat from manipulating the rulebook, just as Boston and New York did when they traded half their teams away for Kevin Garnett and Carmelo Anthony, respectively. And he realized all of this while realizing that, overall, the league was in danger of losing serious amounts of money if half of their teams began failing.
In fact, he looked squarely at the NHL when the negotiations began and, almost immediately, began lobbying for a flex cap system like the one hockey uses. Hockey lost an entire season in 2004-2005, a year that really bottomed out what was the dark age of the sport. But in the wake of the lost season, the NHL rebounded to become a heck of a lot stronger than it was before.
When the NHL came out of its lockout, it introduced a hard salary cap of just under $40 million (which is $10 million more than what Alex Rodriguez makes in an entire season). They capped what max salaries could be, and they made the salary cap contingent on how well the game was received. Having gone up every year since the lockout, the NHL salary cap now exceeds $60 million for the first time.
The NBA is worth more money and is more popular than the NHL; it’s recognized as a much more national game. If Stern can institute a system where player salaries are not 57 or 59 percent of the cap and cannot exceed a certain amount, then the NBA can ensure further profitability. If they can rollback salaries that are flaming out of control (which the NHL did when it came out of its lockout), then teams can have more money to spread across more players. By instituting a salary floor that the league could use to force some teams to avoid clearing salary cap, bottoming out, and it restores a thicker middle of the league.
In the NHL this past season, the worst team in the Eastern Conference had only 18 wins less than the first seed. In the NBA, the worst team in the Eastern Conference had 43 wins less than the top seed. Granted, the NHL has other rules governing overtimes and ties, but that’s still a massive contrast.
I’m not saying the NHL is better than the NBA; it’s no secret that I’m a big hockey fan. I am saying that the current system in place in the NHL is a model system for financial parity, and although some teams have failed or are failing (Atlanta and Phoenix chiefly among that list), that has to do more with fan attendance and a lack of interest in southern, non-winter climates than it does with escalating salaries (poor product placement on Gary Bettman’s fault). The NBA is the more nationally popular sport, and kids everywhere play ball. There’s no reason why it should be in this situation.
Very quietly, the NBA is stomping towards a lockout. As news trickles out that the NFL might be inching closer to a labor agreement, the NBA appears content to hurdle towards a lost season. A year in which it was massively popular will go by the wayside. Maybe in five or six years, it’ll be a better league for it. But for right now, the league seems prepared to sit out, its lasting image being Dirk Nowitzki emotionally going into the locker room in Miami, holding the Larry O’Brien Trophy, with fans filing towards an exit, no idea of what’s about to happen.