NBA Lockout: Uncertain Times Ahead

September 28, 2011
By Dan Froats

Despite the refreshing drop in temperature and welcoming sight of changing leaves, the fall can be a trying time characterized by wet weather and the beginning of prelim season. Luckily for sports fans, however, the fall marks one of the peaks of the sports calendar, concluding in the month of October, when all four major professional sports leagues are competing in some fashion at the same time. Yet, when the calendar turns this weekend, one league will be left on the sidelines while its primary competitors take to the field.

This past June, the NBA was at its pinnacle of popularity. A roller-coaster season that pitted cemented superstars against the heirs to the throne and saw the rise of new contenders and the fall of past champions culminated in the ultimate hero-versus-villain NBA Finals matchup; one that was won by David himself, sending Goliath and the rest of NBA nation home eagerly awaiting the start of next season.

Then, on July 1, the Collective Bargaining Agreement (CBA) between the NBA’s players and owners expired, and with it, so did the league’s hard-earned momentum. It goes without saying that the deal’s expiry could not have come at a worse time for the sport, but the actions (or lack of action) from both sides since then have moved the situation from an ill-timed inconvenience to an impending disaster.

 The negotiations have been both controversial and complex, but at its core the dispute is quite simple. The owners want more money and the players don’t want to give it. The money — known as Basketball Related Income (BRI) and encompassing everything from ticket and jersey sales to TV deals and concessions — is currently divided between the groups, with 57% going to the players via salaries and the remaining 43% into the pockets of the owners. The owners are seeking a percentage closer to what the players are earning now, while the players are only willing to budge a few percentage points from where they currently stand. The result is a large gap in understanding and a lockout until that gap is bridged.

But the NBA doesn’t actually have anything to worry about, right? After all, the NFL endured a similar labor dispute and has seemingly recovered just fine. The answer here lies in three key differences between the two leagues’ financial negotiations. While at the most fundamental level the lockouts are similar — that is, the owners in each respective league seeking a greater percentage of league revenue from the players — there are several reasons to believe that the NBA may not be as fortunate as the NFL if and when the smoke finally settles.

The first factor is money: the NFL has a lot of it and continues to make more, while the NBA has experienced revenue losses for the greater part of the last decade, including a reported $300 million loss this past season. Obviously, when money is tight, negotiations involving anything green in color are bound to be equally as tense, and thus far this logic has held true.

But what is the point of fighting over money and how it will be shared when the very act of doing so will ultimately cost both sides millions? The NBA, despite its reported losses in 2010-11, was on the rise at the conclusion of last seasons’ finals. Playoff ratings over the last two years have skyrocketed and the NBA has finally appeared to move on after a decade of desperately trying to expand and retain its often-casual fan base. Because of this, and a new TV contract to be signed just a few years down the road, the league stands to see a significant rise in revenue in the near future. But if the players and owners spend all their time arguing over how that revenue will be divided, they may sacrifice the growing popularity and fan base that brings in the dough in the first place.

Then there is the availability of other employment opportunities for the players of each respective sport. For the locked-out NFL players, such opportunities were scarce. Football is primarily an American sport and if the game’s biggest stars were to take to Europe and Asia seeking similar employment, they would likely have been greeted with a very different type of “football.” Basketball, on the other hand, is a universal sport, with professional leagues offered across multiple countries and continents. Unsurprisingly, the players have taken notice, with many stars taking their talents abroad in search of a gym without a lock on it and a paycheck complete with an owner’s signature.

In the worst-case scenario, this could pose a catastrophic problem for the NBA. After all, the NBA is a business, and it would be nothing without its players, a.k.a. its product. Is it too far fetched an idea to think that another organization would swoop in and steal the NBA’s finest (and the league’s revenue, as a result)? Even if it was just for a season, it is a possibility that owner’s couldn’t afford to see happen.

And finally, the biggest difference between the NFL and NBA lockouts, and ultimately the biggest reason NBA officials have to worry, is the leagues’ relationships with their fans. For the most part, the NFL has experienced a happy marriage with its fans, with this year’s labor dispute serving as just a mere hiccup in an otherwise committed relationship. The NBA, on the other hand, has been so off and on with its fans since its previous lockout in 1998-99 that the dreaded Thanksgiving break-up (a.k.a. Turkey Dump) may be a very real possibility if a new deal isn’t ratified soon. Throw in the fact that the lockout is pitting the rich against the richer in a time of economic recession, and the NBA might as well slap its fans across the face before showing them the door.

Until then, though, the lockout will serve as a mere cloud tainting otherwise clear skies, and if the owners and players come to their senses, the sun will shine on the NBA again in the near future. But if the cloud lingers, the lockout may defy science, halting the seemingly unstoppable momentum that the league worked so hard to achieve by last season’s end. It would take a perfect storm for this to happen — one that would require years of damage control from both sides to overcome — and yet, as opening night nears with each passing day and the wet, fall season presses on into October, the cloud looms darker than ever.