June 14th: State of the Lockout

Where Things Stand:
Lockout to be implemented July 1st.

Stern and Hunter meeting, talking openly, but extremely far apart on most points.

The Players' Side:
Largely want things to stand pat.

Proposed eliminating the LLE and having 2 annual MLEs.

Opening up trades by having salaries agree to within 250% versus current 125%.

Reducing team restrictions on FAs (-->less rFAs, more uFAs)

Undoing the age limit

Willing to come down slightly from the 57-43 revenue split.

Claim league financial issues should be handled by better revenue sharing.

The Owners' Side:
Stern claiming that 2/3rds of league is losing money and revenue split needs to be reduced to 51-49.

Asking for $45M hard cap, phased in over three seasons. Hard cap would eliminate all exceptions (MLE, LLE, Bird, etc) and contract guarantees (small buyouts introduced).

Shrinking rookie pay scale.

Max years reduced to 4.

Resistant to revenue sharing as a CBA solution.

My Take:
Both sides are full of it, though the NBA does need a major economic shift.

Stern claims 22 are losing money, but that is an exaggeration. About 10-12 teams are upside down financially and borrowing tremendous amounts of money to stay afloat.*

The league is arguing things from a perspective of a system that caters exclusively to the bottom tier teams and allows the high revenue ones pocket the excess revenue. The players are arguing that there's plenty of money if it's shared more equally among teams.

There is a split amongst the owners: the hard cap advocates led by the owners that have been NHL owners as well (Toronto, Atlanta, Denver, Washington) and the low revenue guys (Pacers, Bucks, etc) versus the "capitalist" big boys (Buss, Cuban, Dolan, etc) that like the idea of having a financial advantage.

The CBA is set up for a cap that represents a 51-49 revenue split ($58M) and in spirit as a soft cap agrees to a 57-43 split ($65M)....but this year the league had an average payroll of $67.6M.

Luxury Tax is there for bridging the gap, but you end up with a total of $80M to be dispersed...and that won't do it even if it were only split amongst the 10 lowest revenue teams.

As easily as we fans write things about getting rid of the exceptions and putting in a hard cap, this is Collective Bargaining and the players have to sign off. They know if they give up guaranteed deals, they'll never see them again. If your employer flatly stated they were going to call for 30% paycuts across the board and the elimination of all benefits, I'm pretty sure you'd be up in arms. And if that happened to a union, there'd be serious trouble. If the owners stay the course and don't back down, there will not be a 2011-12 season. This is far far far more serious than the NFL standoff.

Also, a good point is that there are ~430 NBPA members, the vast majority of which make less than 8M a year. They fought for the MLE and LLE to protect the "middle class" and don't share the view many fans do that stars deserve the big money and the rest of the roster can live with small dollars. These are the people voting on the deals. Not you or I. A hard cap with no MLE/LLE means no more middle class. It's like asking Congress to vote a paycut for themselves or passing major campaign reforms.

I still advocate a more moderate approach.

Only six teams crossed the tax line this year - proof that it works. I've always liked it as a way for championship-caliber teams to temporarily stay intact while otherwise putting the clamps on league spending. Plus, it's already there as a revenue sharing tool. Don't scrap it, improve it.

What I would do:
Walk the Soft Cap back to $52M over two offseasons ($58M, $55M, $52M)
Walk the $1-per-$1 Tax Line back to $60M over two offseasons ($70.3M, $65M, $60M)
Implement a $2-per-$1 Double Tax Line at $66M, in effect after next season.**

Make the LLE an annual exception, make the MLE a biannual exception. Reduce the LLE to two years, reduce the MLE to 3 years.

Allow exceptions to exist, but with a new, major restriction:
Exceptions may be used to exceed the soft cap, but may not be used to exceed the Double Tax Line. Only the Bird exception may be used to exceed the (regular) Tax Line.

Eliminate the S&T.

Add an addition restriction to the 125% trade rule: the sum of all contracts over their entire lifetime may not exceed 250%. No more trading an expiring player or TE for a massive long term deal.

Lemon Law: After two years into a contract, teams can buy out contracts for 75% of the next year's value. It has to be expensive to prevent cheapskate owner abuse, but is needed to dodge Elton Brand, Gilbert Arenas albatross deals. Additionally to prevent abuse, owners are not permitted to do a lemon law buyout in consecutive years.

Rookie pay scale is fine, especially with option to terminate busts after 3 years. But I would drop the early max extensions and force payers to wait until rFA to get max deals.

* Kings, Wolves, Warriors, Pacers, Hornets, Bobcats, etc


** This year, the Lakers pay $22M in luxury tax for their $92M payroll. Under this formula, they would pay $58M. Even Buss would feel that extra $36M hit.




Some articles worth reading:
http://www.denverstiffs.com/2011/6/2/2201814/collective-bargaining-the-owners
http://www.denverstiffs.com/2011/6/9/2214121/collective-bargaining-part-2-of-3-the-players
http://www.sbrforum.com/nba-basketball/news/nba-lockout-breakdown-a-20285/
http://www.bloomberg.com/news/2011-...tions-with-union-commissioner-stern-says.html

 

June 14th...13th....same difference

(oops!)

 

...and meant to mention one other topic: Teams most in danger of being squeezed by a restrictive new cap atmosphere.

I personally don't believe at all that the NBA will put a $45M Hard Cap in place, even with a three year phase in. But if they did, two teams would absolutely be in trouble:
MIA ($71M committed in '13-'14) and LAL ($61.5M)

If the league came out with the luxury tax replaced with a hard cap, the following would be above it next season and forced to cut payroll (via amnesty):
LAL
ORL
BOS

If it were harsher and the current soft cap became a hard cap:
LAL
DAL
ORL
BOS
ATL
POR
NYK
MIA
CHI

It wouldn't be as catastrophic as it was for the NHL. But MIA and LAL could be forced to break up their teams unless the owners cave in a big way.

Teams in best position to thrive in a nuclear winter hard cap scenario:
DEN
NJN
WAS
MIN
IND*
SAC*

* extremely unlikely to spend much above league minimum

 

I think college basketball this year will be the best since the 90s, easily.

 

Both:

(a)
Duke: Austin Rivers (G)
Kentucky: Anthony Davis (F), Michael Gilchrist (F)
James McAdoo (F, UNC)
Quincy Miller (F, Baylor)

(b) UNC and Kentucky are so stacked it's scary. Duke, Baylor, OSU, and Florida are right behind them. Villanova should be pretty good too.

Regardless of the lockout, I plan to pay for ESPN fullcourt this coming season.

 

It's been around for a couple years.

http://www.directv.com/DTVAPP/conte...global/component/cmpt_v.jsp&_requestid=133682