Future of the NBA

The future of the NBA 2011-2012 season looks in dire trouble. David Stern, the NBA Commissioner, stated on Thursday that the NBA 2011-2012 season has a strong chance of being delayed or not happening altogether. If this is news to you, as it was to me, I have done some research and hope to enlighten you to the possibility of the greatest sport in the world being cancelled or postponed.

In the 2009-2010 NBA season, the league had a $340 million debt, it has projected that this season will be over $370 million in debt. If the league, under negotiations by Commissioner David Stern, does not come to terms about a new Collective Bargaining Agreement (CBA) with Players Association executive directive Bill Hunter, there is a strong chance the season will start late or not at all.

There are current negotiations being discussed in the NFL as well as the NBA. At the heart of both negotiations is the Salary Cap. Currently in the NBA teams are allowed to go over their Salary Cap, but then are taxed a higher “luxury tax” threshold. Large market teams can afford the tax – Lakers have a payroll of $91.5million, which works out to more than $110 million with the tax, while the Salary Cap is just $56 million. The Kings, in contrast, have a payroll of $44 million. To tackle this indifference the NBA is currently looking at a NFL style labour contract where there is a Hard Salary Cap and all clubs cannot go over the cap. The bigger teams, as it would reduce their roster, superstars, talent and future success dramatically, are currently blocking this.

Another NFL aspect the NBA is analyzing is Revenue Sharing. Big clubs like L.A, Knicks, Boston and co. currently keep all revenue that they make to themselves to help pay players salaries. What the NBA is after is to share those profits with the struggling teams such as Charlotte and Minnesota, allowing them to reinvest that money into their players, which would create a more competitive league.

The last NFL aspect is that the NBA wants to make contracts limited and guaranteed, instead of allowing clubs to maximize a players contract and not be able to cut them if they do not play well in years four, five and six of a six year contract (Michael Redd, Eddy Curry, Jermaine O’Neal). The NBA will make contracts not fully guaranteed no matter how big a star the player is/was; this allows clubs to have more say in balancing their roster and Salary Cap in hindsight of a bad decision.

The NBA wants its players to fund the difference so that the debt can be wiped clean. As is expected the players do not want their salaries reduced. It has been suggested by the NBA to reduce player’s salaries by thirty percent, or to cut the top 25-30 paid players in the league by thirty-five percent. This proposal was scoffed at by the NBA elite and Bill Hunter, but remains a strong possibility because if it comes down to a one-man, one-player vote system, the majority of players will vote for twenty-five players reducing their salaries over the other 400 or so who have significant less income to lose. Players like LeBron and Kobe can huff and puff as much as they want, but what would you do if you were a minor player in the NBA? Take your cut so that Kobe can keep every one of his mansions?

Commissioner Stern is in charge of giving the owners of NBA teams financial relief but to do that he needs to negotiate a new CBA that tackles the issues that have arisen in the NBA since the last CBA negotiation in 2005. It looked like for a while like a lockout would be unavoidable in 2005, until the two sides agreed on principal terms in late June 2005. Next seasons lock out will occur unless an agreement is reached before July 1st 2011. In 1998-1999 the league and NBA Players Association did not reach a settlement until mid-January, resulting in the season being delayed four months until February 5th, seeing 50 games and an All-Star game being completely cancelled.

The owners are adamant that they want to take a far greater percentage of the basketball-related income. They want to pay millions less for maximum deals and shorten contracts, but most of all, they want a Hard Salary Cap and assurance that protect themselves against a diminished economy, and in fact their own bad decisions. Bill Hunter has been battling for the Players Association said, “we need to start from scratch and develop a system in which everything is designed about creating the most competitive environment possible so that we drive revenue.”

It could take Mr. Hunter and Commissioner Stern a long lockout to reach an agreement on a system like that – maybe much, if not all, of the 2011-2012 season – to get there.

I bloody hope not.



12 responses to “Future of the NBA

  1. Hard salary caps, prominent in basically all of Australian major codes, have proven to increase competitive balance. Having more competitive leagues results in a more even competition and greater unpredictability. Basic economics of sport suggest greater unpredictability in sport leads to greater interest/spectatorship, which ultimately leads to increased revenue. Therefore I massively support the concept of introducing a hard salary cap in the NBA. Hopefully its all sorted before the commencement of the next season.

    • Thanx Brad. That’sa really indepth answer. Do you think teams like Miami, Lakers, Knicks and Boston will sign a CBA with a hard salary cap? If so, Miami will only have Wade, LeBron and Bosh (not saying they don’t already) but a few teams will need to trade and get rid of alot of players. I support the hard salary cap too, but I don’t see it being agreed to this off-season, and I expect a month or two delay in the NBA season.

  2. Hard salary cap needed. How’s that for indepth.

  3. Thanks a lot for trying to describe the terminlogy for the newcomers!

  4. I totally agree with the idea for hard salary cap. Even though I’m a Boston fan who see’s the luxury that my team has, it’s within best interest of the game and it’s supporters to create balance and fairness between teams. Unlike now where some teams are completely stacked with the best talent in the world, practically buying themselves a championship.

  5. Howdy blogger, thank you for providing this article.. I found it first-class.

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  7. two words excellent, bravo!

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