NBA Lockout: Inside The Issues

Saturday, July 2nd 2011, 7:46 pm
By: News 9

While the National Basketball Players Association and the NBA have been in labor disputes for some time, fans just want one thing: to see games.

The in-depth reasoning behind the current lockout might sound like a bunch of legal mumbo-jumbo, but a closer look at the real issues behind the dispute shows why neither side is willing to budge.

Basketball-Related Income – This is perhaps the most basic issue when deciding on a new collective bargaining agreement and what most people think of when they think of a lockout. It is essentially the amount of money each side (owners and players) receive from the overall income of a franchise and the league.

Under the recently-expired CBA, players were guaranteed at least 57 percent of the overall income. Owners believe that number should be decreasing, while players do not want it changed.

"Hard" Salary Cap – The NBA salary cap for 2010-11 was $58 million. The Los Angeles Lakers paid their players $91 million during the season. How does that work? Teams must pay a luxury tax, essentially doubling anything they spend on player contracts over the salary cap. Organizations that bring in plenty of revenue, such as the Lakers, hardly think twice about the extra spending if it means putting a championship-caliber team on the court.

But the owners want to know where that ends and want to put a "hard cap" on the league that would mean teams would have to stay under that cap each year, with no exceptions. That strategy obviously doesn't fly with the players, who would take a major income hit with a hard cap.

Cap Exceptions – Owners realize that the players association would never agree to a hard cap, so the next step is the salary cap exceptions. In other words, how and when teams can go over the cap and what penalties that would incur. Players essentially want as few rules as possible, so that they can collect the maximum paycheck if they have earned it. Owners could go either way on the situation. Some owners, such as the Mavs' Mark Cuban, have no issue simply buying a championship team. But owners in smaller markets and less successful teams think that fewer "exceptions" to the cap would level the playing field and prevent New York Yankees-esque teams from snatching up all the good players.

Revenue Sharing – NBA teams "shared" a total of $60 million last year, meaning that total amount was exchanged from teams that generate more revenue to those who do not generate smaller revenue. NBA commissioner David Stern said that number could increase significantly for the new CBA, even as much as tripling. This is one of the least demanding issues on the table, as most of the players and a majority of the owners (aside from those who generate the most revenue) are on board for greater revenue sharing.

Guarantees and Max Contracts – Players such as Michael Redd and Andrei Kerilenko were among the highest-paid players in the league last season for one reason: guaranteed contracts. Players who get injured, decline significantly, or never even step foot on the court can still make boatloads of money because of contracts they signed six years ago.

In the NFL, teams can essentially cut players at any time for any reason, and not have to buy out the remainder of the contract. While that might be a little extreme for the new NBA CBA, players and owners will have to find a happy medium between the two.

Check back with News 9 Sports for more NBA lockout coverage as the two sides continue the dispute.