NBA Lockout Explained for the Uninformed

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Trevor Rechnitz, Online EIC

The NBA and NBA Players Association have failed to reach an agreement, so the NBA is officially shutdown, or locked out.

Now what does it mean to be in a lockout? Players and team officials, including coaches and staff are denied any contact with their players. No player or staff member gets their paycheck, and every player’s contract is temporarily expired until the new collective bargaining agreement has been signed. 

In the lockout announcement, NBA deputy commissioner Adam Silver said the old CBA “created a broken system that produced huge financial losses for our teams.” The NBA has claimed that 22 of its 30 teams are losing money, and the league and owners weren’t satisfied with labor proposals from the NBA Players Association.

The first big issue on the table is salary. The owners of the NBA want to mimic the NFL and put a “flex cap” in place, which would limit team salaries to $62 million. Currently, there is a soft cap at $58 million, but teams are allowed to surpass this amount with the threat of luxury taxes upon exceeding $70 million. This hard cap of salary would mean a dock in pay for the athletes. The current proposal would set players’ combined salaries to $2 billion annually, about a $5 million dollar per player average. However, in the 2010-2011 season, players made a total $2.1 billion and don’t want to be locked in to the salary capped pay decrease.

The BRI or the Basketball Related Income received by each side is a substantial talking point in this lockout. Currently, the players own about 57% of the league’s income, and the owners hope to reduce that to the 40% range. However, the players’ latest offer only stretches down to 54%.

If the two sides fail to reconcile, which doesn’t seem unlikely at this point, both the players and owners will suffer substantial losses. Among these losses include approximately $1 billion, which would make their petty 3% BRI argument seem ridiculous, cause long-term damage to the league’s relationship with television and radio networks and the risk the creation of a rival league.
One hundred games have already been canceled and pessimism is growing. The next lockout “round” could extend through Christmas and cancel marquee matchups like the Boston at New York, Miami at Dallas and Chicago in the Staples Center.

Sixty players have already signed contracts to play overseas if the season is canceled. While hundreds of other players wait nervously, basketball is being played elsewhere.