As we reach the end of the 2014-15 NBA All-Star break, there is much to be thankful for with the current state of the NBA. The premier basketball league is flush with stars, from mainstays like LeBron James and Kevin Durant to upstarts like Stephen Curry and James Harden. Social media and the NBA’s tech-savvy approach have made basketball a huge part of Internet culture, and indeed have made the game more popular and accessible than at any other time in its history. Right now, the biggest league-wide controversies are what to do about the draft lottery, maybe tweaking the playoff system, and if the regular season schedule should be shortened. Basically, life in Adam Silver’s NBA is very good.
And yet, there’s a massive potential storm brewing that could bring a sudden end to all of this controversial tranquility.
Within hours of the new TV deal, power players like James, Chris Paul, and Durant were already considering a push for the end of max contracts.
Either the players or the owners can opt out of the NBA’s current collective bargaining agreement—signed after a contentious series of negotiations between the league and the players union and a 161 day lockout from July to December of 2011—in the summer of 2017, and given how favorable the current deal has been for the owners it seems almost a certainty that the players will invoke their right to do so. What could follow is yet another volatile, bitter series of negotiations that will threaten to cancel games and erode the goodwill the NBA has built up with its fans.
The central issue during the 2011 lockout was how owners and players would split the Basketball-Related Income (BRI) generated from things like ticket and merchandise sales, along with TV revenue. Owners wanted the players to cut their share of BRI from 57 percent to 47, and the players countered by offering to cut it to 53. The resulting staring contest led to a work stoppage that saw the season reduced from 82 to 66 games, with the owners eventually “winning” the negotiations by getting the players to cave and agree to a 49 to 51.2 percent share of BRI.
The owners’ central argument (which did have some truth to it) was that the previous CBA was causing 22 of the 30 teams to lose money, indirectly damaging the players as a result. In the wake of the NBA signing a $2.66 billion per year TV deal (triple what the last one was worth) along with even small market franchise values skyrocketing, that argument is simply no longer an option.
Nobody knows this more than the players, with newly-elected NBPA Vice President LeBron James saying in October that “The whole thing that went on with the last negotiation process was the owners telling us that they were losing money. There's no way they can sit in front of us and tell us that right now after we continue to see teams selling for billions of dollars.”
While players stand to benefit from the new TV deal before the current CBA expires (the salary cap and value of max contracts are dictated in part by BRI, and there’s about to be a whole lot more of that), the issue of max contracts is likely to be a huge sticking point. Within hours of the new TV deal, power players like James, Chris Paul, and Durant were already considering a push for the end of max contracts. It’s hard to see a world in which owners would willingly go for that; imagine the salary someone like LeBron or KD would command on the open market? How many years would someone be willing to offer Durant, or even a younger player like Andrew Wiggins? It would create a fundamental shift in how teams are put together, and such dramatic changes are something the owners have never shown a particular fondness for.
Another significant factor in making a lockout more likely is the fact that the players are much better prepared now than they were in 2011. Back in July, the NBA Players Association quietly sent a letter to players recommending that they opt into a pay system that will allow them to keep receiving checks even in the event of a work stoppage in 2017. Rather than receive their yearly salary over a 12 month period, a provision in the CBA allows for players to stretch those payments out over 18 months instead. Interim executive director Ron Klempner wrote to the players that:
“We suggest that you consider including this provision in any multi-year contract you negotiate, specifically for the 2016-17 season. An 18-month payment schedule for 2016-17 will allow a player to continue receiving paychecks throughout the 2017-18 season, even if the players are lockout that season.”
You could certainly make a case that Klempner and the union are simply encouraging the players to be financially prepared and learn from the mistakes of the past. However, given how the owners successfully used players’ lack of preparedness last time as a negotiation ploy, the union is also trying to put itself in a better position if and when the time comes to stare down the owners at the bargaining table.
the NBA Players Association quietly sent a letter to players recommending that they opt into a pay system that will allow them to keep receiving checks even in the event of a work stoppage in 2017.
While it's mostly doom and gloom concerning whether owners and players can bridge what look like significant gaps, there is some reason for hope. It begins with Silver, the new commissioner whom players seem to genuinely like after the way he handled last year’s Donald Sterling fiasco. Indeed, on both the player and league sides the names and faces we’ll get to know in the CBA negotiations will be entirely different than they were in 2011. In addition to Silver replacing David Stern, Billy Hunter is out as head of the players union, Chris Paul is the new lead player rep after the ouster of Derek Fisher, and Michele Roberts is in as NBPA executive director.
So does this mean that a lockout can be avoided this time around? With team values and league revenues never higher, both sides have a vested interest in actually playing basketball and keeping those numbers up. The sticking points discussed here are very much a real thing though, and will undoubtedly cause a lot of discomfort for fans between now and whenever a new deal is eventually struck. In addition to the aforementioned BRI and max contracts, there are significant factors like the luxury tax and salary cap structure that will require a lot of attention when the sides begin negotiating.
If money is the problem in striking this new deal, it’s also the solution. Basically, there’s a lot of it to be had. Let's hope both the players and the owners are smart enough to realize that the way to ensure both sides get paid is to keep fans entertained with uninterrupted NBA basketball.