NBA Lockout Looms, Owners' Draconian Rollbacks Leaked

There was news recently about the on-going NFL lockout that pushes any hope of a court ordered resolution back at least another month. As opposed to the NFL situation which has the sides fighting over pie slices, the NBA owners, according to a leaked document, are proposing a radical shift in the entire structure.

Forgot splitting the pie, the NBA owner want to go from pie to cupcakes.

That makes the lockout facing the NBA far more serious than the offseason work stoppage the NFL is dealing with which will almost certainly be resolved before a game is missed in September.

The NBA Players Association sent a letter to its members which detailed a list of rollbacks and changes that would represent massive shift in salary costs away from the talent on the court and into the pockets of the already wealthy owners. 

It's hard to imagine the owners being able to justify such changes without releasing the details of the poverty they are now claiming. Almost daily we receive press releases telling us how popular that league is with fans.

TNT CONCLUDES ITS SECOND ROUND COVERAGE WITH MOST WATCHED AND HIGHEST RATED NBA PLAYOFFS TO-DATE IN CABLE TELEVISION HISTORY, AVERAGING A 3.0 U.S. HH RATING AND 6 MILLION TOTAL VIEWERS, +25% AND +33%, RESPECTIVELY FROM A YEAR AGO

That doesn't sound like a league in crisis. That sounds like a league who's looking to solve an internal battle between large market and small market teams by taking a big bite out of the players share of the bounty.

There may not be much sympathy for a 22-year-old making $4 million per year to play a game, but the owners' notion that they need to engorge themselves further by making such radical cuts to the portion of the spoils shared with the talent is a recipe for a long, long time with no NBA.

According to the leaked memo, here's some of the changes being proposed:

$45 million hard cap: The most recent salary cap was $58 million but in the NBA that's a soft cap that has almost as many loop holes as the tax code. Teams regularly spend up to $70 million luxury line and the top teams, like the Dallas Mavericks ($87m) and the LA Lakers ($90m) willingly speed right through that limit and happily pay the fine.

A hard cap that's half of what the top team is spending on payroll would cause a huge redistribution of wealth (aka talent) within the league. The notion of leveling the playing field between big market-super rich teams and smaller market-medium rich teams is a good one. But faced with the choice of a revenue sharing plan within the owners country club or forcing the cuts on to the players of a league primarily comprised of young, urban men there's little doubt which direction the owners opted to go.

The current luxury tax is a revenue sharing system that hasn't worked because the penalties are not stiff enough to limit spending. The answer is simple, increase the penalties on the wealthiest teams to achieve the desired result. No hard cap needed.

Non-guaranteed contracts: According to the report, "no player contract be guaranteed for more than 50 percent for the first $8 million in salary and 25 percent for any amount above $8 million."

There's no doubt that it is painful to see a team carry a bad contract for several years. Some changes are in order to allow a team to shed itself from its own bad decisions and break the agreements they willingly made with their players. In other words, the owners want to be protected from themselves.

Contract cuts: The proposal from the owners reportedly proposes cutting annual raises from 8 or 10 percent to 2 or 3 percent. Do you know what a business that only sees two or three percent annual growth is called? A failure. They would also propose reducing the contract length from a maximum of six years to four. And of course to fit all the players under a much lower hard cap, salaries would be uniformly rolled back by 25 to 40 percent. 

A pay cut right when the league is raking in new fan support is the very definition of slaughtering the goose and frying the golden egg in lard and then feeding to the pig which is then sliced up for bacon sandwiches. 

Franchise tag: According to multiple reports, the league is eying a franchise tag which would restrict the ability of star players to leave after the current seven years they presently play for the team that drafted them.

"It would be a huge coup for the owners if we can get this done. Not only would it give some modicum of control back to teams, but it would also help us to reduce costs by ending the bidding wars that have been taking place on the higher-end players," one NBA GM told ESPN.

Needless to say, the players see it differently. Only in sports can an employer select in a one-sided arrangement (the draft) who will work where and through the current rules keep that employee from leaving for seven years. But seven years isn't enough apparently to convince someone to stay with you so more restrictive shackles are needed.

"The franchise player tag has been devastating for NFL players," according to one NBA agent. "It has penalized players for being great by limiting their right to change teams when their contract expires. Why should 90 percent of the players in the league be free to move, while the best players aren't afforded the same right?

"In the NBA, with smaller teams, the impact would be paralyzing. You can pretty much kiss free agency goodbye. There's no way the players will agree to it. If the NBA owners push for it, there won't be a season next year."

Sharing is caring

Under the current agreement the players get 57 percent of the pie in the form of salaries and benefits. While that might seem like a lot, remember that they are the ones people pay to see.

Mark Cuban can be entertaining at times, but I doubt fans are going to pay good money to watch him dance around on the sidelines. There are many (most) service oriented business that would kill to have only 57 of their revenues going to employee costs. Only in the sports would that be considered an unfair distribution.

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