The NBA is in a lockout after a last-ditch effort Thursday failed to produce a new collective bargaining agreement.
Commissioner David Stern, players union executive director Billy Hunter, players union president Derek Fisher and a few other parties met for three hours in New York, but the two sides remain far apart on several key issues.
The existing CBA expired at midnight, and the lockout was set to officially begin one minute later.
“We tried to avoid the lockout. Unfortunately we couldn’t reach a deal,” said Matt Bonner, a member of the players union executive committee and the player rep from the San Antonio Spurs.
Hunter said he hopes the two sides will meet again within the next two weeks but acknowledged that as things stand, “the gap is too great” between the two sides.
“I am not optimistic that they will get a deal done anytime soon ,” said Turner Sports NBA analyst David Aldridge. “There is no real pressure on either side to get an agreement worked out by July 1. The pressure doesn’t start until people start missing paychecks.”
The lockout will suspend all league business, including free agency. The NBA canceled its summer league several weeks ago.
At issue is an almost $4 billion dollar pie, and the players and owners remain at odds over how that pie is to be split in a new CBA, a proposed 10-year agreement.
The owners want a reduction in Basketball Related Income [BRI], which is at 57 percent for the players. The owners are looking to reduce that number to around 40 percent, while the players have proposed a cut to about 54 percent.
The owners have dropped their demand to eliminate guaranteed contracts, something the players were strongly opposed to, but both sides continue to disagree on the structure of the salary cap.
This past season, it was $58.044 million, but teams could spend more and pay a luxury tax. Last season’s luxury tax threshold kicked in at $70.307 million. Teams also were allowed exceptions to the cap in order to re-sign their players, known as the Larry Bird rule, and other exceptions to sign veteran players.
With a hard cap, teams could not exceed the cap for any reason, and all exceptions to the cap would be eliminated. The players are opposed to a hard cap and want cap exceptions to remain in place.
This is the second labor stoppage in the NBA. The first occurred during the 1998-1999 season and lasted from July 1 until Jan. 20. When the league finally reached a new CBA, teams played a condensed 50-game season.
“The players are better prepared for the lockout this time than they were in 1999,” Aldridge said. “The union has been very aggressive in getting the players prepared for this. They have known for two years that this lockout was coming. They have literally handed out brochures telling guys what not to buy, and telling them how to save their money.”
In addition to the league and the players trying to reach an agreement on a new CBA, there also is a rift of sorts between the large- and small-market owners on revenue sharing.
The players have maintained that a change in revenue sharing will alleviate the need to slash their salaries, but Stern has stated that any change in the revenue-sharing structure of the league should be a separate agreement and not part of the league’s contract with the players, and should come after a new CBA is ratified.
The players take issue with the owners’ desire to have a CBA that guarantees them a profit on their investment, a guarantee the players argue isn’t found in nearly any other business.
The owners maintain that despite the fact that the league’s metrics are up, encompassing television contracts, ratings and sponsorship money, about 22 of the league’s 30 teams lost money last season and without a new business model, the league cannot sustain itself.
“Obviously, the clock is now running with regard to whether or not there will or won’t be a loss of games,” deputy NBA commissioner Adam Silver told reporters after Thursday’s meeting. “I’m hoping that over the next month or so that there will be sort of a softening on their side and maybe we have to soften our position as well.”
“I’m not scared,” Stern said of the lockout. “I’m resigned to the potential damage it could cause to our league.”