A Lockout Nears

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Hopefully, these two smile together in the near future. From Media Daily LA.

For most of the season, I approached the lockout like it was a distant fantasy. It was an imagination, similar to when I was younger, in about seventh and eighth grade, and didn’t want to let it dawn on me that I was indeed growing up and having to prepare to enter high school. That type of feeling, where you don’t what to recognize the clear fact that things are completely changing, is what helped to lead me through this year almost oblivious to what would follow. And I imagine most fans had that same feeling.

But, like others, I now know to some extent what’s coming. Here’s how I came to.

About 10 weeks ago, I was lucky enough to attend a presentation held by Sixers CFO (for the time-being, at least) Andrew Speiser. He was there to discuss the financial side of the NBA, what his job entailed, and what made up the revenues and expenses for the team. It was, for someone like me, a very interesting presentation. This won’t be in order, but by and large this is what he discussed during the presentation.

Well, first, he had the people there put up the #ShowYaLuv sign, which about 5 people in the crowd knew before he made the sign himself. He also announced that he would be asking questions to the crowd, for which he would give away prizes.

Then I won a Sixers t-shirt (a plain blue one, not the #ShowYaLuv one) for giving the four names of the building currently known as the Wells Fargo Center.*

*I’m expecting a collective “Cool story, bro” response from my readers for this one. Free t-shirts are always nice, though…

Anyway, he talked about his responsibilities as CFO, which do not include negotiating contracts. He’s in charge of ensuring the team is in compliance with salary cap rules and helps write the legal jargon found on NBA contracts. I could only imagine what it was like to help write Sam Dalembert’s contract with a clear consicence.

He talks about the team’s revenue. The Sixers have had attendance problems, ranking 25th in the NBA this year. While league-wide ticket revenue is the largest revenue source, the Sixers’ biggest revenue stream is their TV deal.* Meanwhile, the league takes less than 10% of revenue made during the year, while during the playoffs the league took 45% of all playoff revenues from teams. So making the playoffs isn’t as profitable as it seems on the surface.

*We can connect some dots here, but that connecting will come at a later time.

He also talked a lot about the salary cap, “the 57% rule”, as he referred to it, and what happened if player salaries did not hit 57% of revenue.

Finally, about 5 minutes before the end of the presentation, someone in the crowd asked about the lockout.

Speiser described himself as an optimistic thinker, but believed that there would be some sort of lockout. He described the league as having many teams that were losing money and implied that the Sixers were among those. He expected that the league would fight for a lower revenue split percentage for players, add a franchise tag function. He hoped that the season would be completed as scheduled, but he didn’t believe that, as things stood, that it would be likely.

And the presentation ended on that somber note. Needless to say, I didn’t like the tone to the ending, especially as I looked forward to the playoffs with the Sixers in contention.

The Sixers’ postseason lasted exactly 5 games, losing to the Heat, the team which epitomizes the reasons for a lockout the most. That sucked, but they fought hard and gave us hope that this team could go somewhere in the future. But in the back of my mind, I knew the future was unclear. And this was before the trade speculation and sale talks began.

The NFL lockout has been THE story of the summer, at least in ESPN’s eyes. The back and forth of lawyers and owners and players who have everything to lose and nothing to gain from a game-stoppage, to me, is boring. Everyone’s best interest was to get a deal in order before games started. Why? Because the league is profiting, everyone involved would lose profits, and as I mentioned, there was nothing to gain for either side by extending a lockout into the season.

The NBA, however, is a different mess. According to the NBA, the teams are losing substantial money, while the players have a favorable deal. Not a great labor situation for the league, with teams and players horribly far apart. How far? Well,

  • Owners have, until recently, insisted that the NBA’s contracts no longer be guaranteed. The players did not want to give that up. However, the guarantees on long-term contracts will be discussed and argued over.
  • Owners state the league is losing $300 million annually, and that 22 of the 30 teams are losing money. Players dispute these facts.
  • Owners want a hard salary cap, which is currently not in place. Players do not, opting for the soft cap currently used.
  • Owners want to create a 50-50 revenue split. The current split is 57-43, in favor of the players. The players are willing to decrease their percentage, but only to 54.3%.

Credit for this: AP (via ESPN) and CBS Sports’ Ben Golliver

It’s not as dire on the surface as the NHL’s lockout (where players received a substantially higher percentage of revenue, over 70%, and a salary cap was not in place), but the results could be nearly as catastrophic.

The league had been (and, ostensibly, is) riding a wave of momentum, with increasing ratings (including record conference finals ratings) and a buzz unmatched by any other American sports league.

A lot of questions need to be answered, and we don’t have answers for pretty much any of them.

So that’s the situation we’re in.

The Sixers, meanwhile, are in a holding pattern. The team is up for sale, but it’s hard to believe a sale will go through during the lockout. The team’s best player is still on the block, with no resolution to the situation until after a lockout ends. The team’s starting center and 6th man are restricted free agents. The team’s coach seems to be here for the long haul, but we’re not sure about the front office or almost anything else.

I still don’t want to face the lockout reality. Big NFL fans, and I know there’s a lot of them, have had to deal with the back and forth talk for over 3 months now. Well, actually everyone has, because the talk is everywhere. But somehow, you always knew the league would come back. The sides could not be dumb enough to lose anything of significance. While a few preseason games could be out of play, the sides will eventually get it together for a full season.

For the NBA, we’re not so sure. They could play a full schedule. They could play a 50-game season, like the last time. They could even miss a season. The thing is, we really don’t know when this will be resolved.

And that scares the crap out of me.

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Tags: 2011 Offseason CBA Lockout Talk

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