The Knock on The Lockouts by Marc “Razz” Rasbury

The NBA rookie class of 2003 including Camelo Anthony, Dwyane Wade, Chris Bosh, and LeBron James has change the game in more ways than one

The NBA rookie class of 2003 including Camelo Anthony, Dwyane Wade, Chris Bosh, and LeBron James has change the game in more ways than oneCommissioner David Stern has his work cut out for him with this his 3rd work stoppage under his reign.

 

A little more than two weeks after wrapping up one of the most entertaining and compelling campaigns in years, the NBA Owners locked out the players putting, at a minimum, the start of the 2012 season in jeopardy.  Obviously, it always about the money. However, there are two underlining issues that the Owners will have to deal with before they can begin negotiating with the Players Association.

First they must come to terms with their internal battle among the “haves” and the “have nots”. Then I assure you that the Owners are going to want come up with a way to limit player movement via free agency.

The NBA was riding a wave of prosperity looking from the outside. The TV ratings were as high as anytime during the Magic-Bird or Jordan eras. Arenas around the League appeared to be packed every night.  Interest on and off the court were at an all time high. So why in the world would the Owners want to interrupt this momentum by locking out the players?

Well, apparently things are not so rosy within the Association. According to the Commissioner’s office, as many as twenty teams are losing money. One may find that hard to believe but there are some Owners who are willing to forfeit the upcoming season vs. going through another year under the current economic system that is hemorrhaging money. But there is more to this story than who is making money and who is not.

Think of this situation as a river with two separate but equal under currents beneath the surface.  How to split the pot, approximately four billion dollars, could be looked upon as the surface. The first under current swirling beneath the surface is in-house battle between the Owners who are making more money than the law allows and those Owners who are struggling to keep their doors open. The second current may be the key to this whole lockout. How can the smaller market teams keep their franchise players?

If you think that these Owners are going to go through another Summer of LeBron, then I would like to sell you a bridge that connects Manhattan and Brooklyn. LeBron James, Dwayne Wade and Chris Bosh were well within their rights to exercise their entitlement to explore the world of free agency. They honored their contracts and then became their own GMs structuring a deal that put them on the same team. Listen, the Cavs then GM, Danny Ferry, had six years to put a world championship caliber team around James and he failed to do so. Therefore, James and his partners took it upon themselves to get together in Miami where the weather is beautiful and there is no state tax. That sure beats waking up in Cleveland in February and mailing out a check to Uncle Sam on April 15th.

This sent shock waves throughout the League for more reasons than one. First and foremost, the smaller market teams knew that it would be impossible to keep their stars beyond their initial contract. Milwaukee and Cleveland realized that they can not compete with the likes of the Texas teams and Miami were the weather is nice all year around and the players can save money on State taxes. Now players are even willing to give up some money from their base salary to enjoy a warm winter and save on their 1040 forms. Then you have the big market teams like New York, Chicago, Boston and Los Angeles who can offer players Madison Avenue, Hollywood and all of the off the court advertisements that a potential free agent can take advantage of.

The large market teams do not have to worry about going over the luxury cap tax level. They all have nice local television contracts that pay them dearly and they do not have to share that extra revenue with the other teams. And we are not going to mention their local advertisement dollars which they do not have to share either. The main revenues that all teams share are the National TV contracts (i.e. ABC, ESPN and TNT) and merchandising. If things continue as presently constituted, the smaller market teams will be looked upon as Minor League affiliates for the larger market entities.

This is why the smaller market Owners want to establish a hard salary cap where a team can not spend beyond a predetermined limit. Under the current Collective Bargaining Agreement (CBA) there is a soft cap where if a team exceeds the limit, they have to pay a certain tax which is also shared among the smaller markets.

The smaller market teams generally do not generate enough revenue to pay beyond the salary cap limit because they do not have the extra revenue sources like the big advertisers and local TV contracts. Therefore, they tend to let their emerging stars walk after their contracts are up. And now players are taking less money so that they can build these super teams, play in desirable locations or/and take advantage of the larger markets.

This is why this lockout is going to be messy. Unlike the NFL, all Owners are not making money here. Before they can start even discussing how they are going split up the pie, the majority of the Owners feel the need to bake a bigger pie or redistribute some of the ingredients. The recipe starts with leveling the playing field. Some Owners want to initiate a hard cap, that no team can exceed, and/ or reducing the players’ salaries across the board. You know that the Players Association wants no part of that proposal. The next issue that needs to be addressed is keeping the stars at home.

I can understand the fans’ and Owners’ anguish over seeing players’ whom they have drafted, cheered for and groomed over a period time just walk out the door. That is why I can see that the smaller market teams insisting on a “franchise tag” for their soon-to-be free agent franchise players. Moreover, I do not think that some of the Billionaires Owners appreciated being participants in those Dog and Pony shows those free agents put them through last summer. No one is going to admit it but that is just my humble opinion.

I have to laugh sometimes at the predicament that the NBA finds itself in. I covered the NBA All Star Weekend in Los Angeles back in 2004. The one thing that stood out in my mind that weekend was how impressed I was with that rookie class which included James, Wade, Bosh, and Carmelo Anthony. Those guys carried themselves like season veterans although most of them could not legally drink. I came away thinking that this group was going to change the perception of the League which at that time was not good.  Little did I know that they would later collaborate in a manner that would frustrate Owners to the point that they would want to tear up the CBA. 

For some, the NBA is a cash cow, while for others it is an albatross strangling their finances. Before the Owners can truly sit down and negotiate with the Players Association, they will have to come to terms with their internal issues before confronting the players. They already share the national TV revenue. In order for them to all survive, they might have to start sharing some of their local revenue as well. There is a slim chance of that materializing. You might have a better chance of getting the players to agree to reduce their salaries.

One thing is for sure, this will get uglier before it gets better. Look on the bright side at least the NFL appears to be on the verge of resolving their lockout issues. Then again, baseball’s CBA is due to expire in December. It is tough being a sports fan these days.

Advertisements

About RazzandJazzSports

The Razz and Jazz Sports Blog was created by Marc "Razz" Rasbury and Derrel "Jazz" Johnson to create fresh opinions on New York Sports and beyond from two credentialed members of the media.
This entry was posted in Uncategorized and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.