NBA CBA Expires, League is Locked Out

It’s offical, the National Basketball League has locked out. Owners decided Thursday afternoon to lock out the players after failing to come to an agreement on the new Collective Bargaining Agreement.

The lock out ended at 12:01 ET on Thursday, July 1st. Last time the league locked out was 1999. The league saw 32 games missed in a strike shortened season. Early sources have said that owners are willing to miss the entire season. They [owners] feel that they’ll lose less money by missing an entire season than having a strike shortened season.

Few things really hindering the CBA from being completed. These are just a couple of quick bullet points, not the entire thing.

  • Hard Salary Cap. Owners are pushing for a hard salary cap up $45 million dollars. Currently the Salary cap is $58 million dollars. However, that is what we call a “soft cap.” It allows teams to go over to a point, without paying a penalty. When a team goes over $72 million, they’ve exceeded the luxury tax threshold, and must pay a cut of their revenue to the rest of the league evenly. Such as, the Dallas Mavericks won the World Championship with a roster priced at $86 million dollars. Roughly 30 million over the cap.This is a big handicap to the smaller markets. Teams like the Lakers, Heat, Mavericks are able to over spend to buy their championships. However, teams like Oklahoma City, Indiana, San Antonio, etc., must penny pinch to be able to get a competitive roster. Owners feel they’ll save more money by having a hard cap and would open parity throughout the league.
  • Revenue Sharing The players have already offered to cut by $500 million of their revenue sharing to help end the lockout, owners feel the system is just broken.
  • Roster and Cap Exceptions Players want to keep the exceptions, such as the Larry Bird exception, and the veteran minimum. Larry Bird exception allows teams to resign their players even if they go over the salary cap and not pay a penalty. the Veteran minimum allows teams to sign veterans to a minimum contract that doesn’t fully go against the salary cap. Owners feel that this is hindering their profit earnings.

Make sure you read Jason Hines’ CBA articles, Part 1 and Part 2 to fully understand the CBA.

Hopefully this lockout won’t last too long. However, don’t expect to hear anything for at least a month. Expect both sides to back off, and regroup and try to bring together a proposal that might be agreeable by both sides.

Here’s the official press release FAQ from NBA.com

Frequently Asked Questions On NBA Lockout
By Steve Aschburner, NBA.com
Q. What happens in a lockout?

A. All contact between NBA players and the teams ceases. No communication. No use of team facilities. No contracts signed. No free-agent shopping. Players still owed salary for the 2010-11 season will continue to receive payments but other benefits (insurance) are suspended.

Q. What are the most important issues holding up a deal?

A. The NBA owners are seeking changes in both the financial split of league revenues dedicated to player compensation and the structure of the system. In the expiring collective bargaining agreement, players received 57 percent of basketball-related income. The owners – citing combined losses approaching $300 million last year, with 22 of 30 teams in the red – had offered a 50-50 split in their latest proposal. The owners also want to function under a “flex” salary cap that the players interpret as a hard cap similar to those in the NFL and NHL, as opposed to the current “soft” cap.

Q. How far apart are the two sides?

A. A chasm at the moment. Besides the dispute over cap structure, the players – whose latest offer was a 54.3 percent split to 45.7 for the teams – contend the owners’ 10-year proposal would lose them about $7 billion over its term (allowing for projected growth in league revenues).

By the way, both sides traditionally take their most recent offers off the table once a work stoppage commences, so the above numbers might not be the starting points the next time the parties talk.

Q. When is the next negotiating session?

A. TBD. When the two sides broke off talks in July 1998, they did not meet again until early August – and then for only 90 minutes, without progress. The owners and the players did not exactly sequester themselves heading toward the June 30 deadline this year, with just three meetings – totaling about 12 hours – in the final two weeks.

Q. What does this mean for 2011-12?

A. There are no dates chiseled in stone by which a deal must be struck for next season to escape unscathed. But if history is a guide, a lockout in 1995 lasted 74 days – into September – without changes in preseason or regular season schedules. In 1998, the NBA cancelled preseason games once the lockout reached Sept. 24. On Oct. 13, the first two weeks of the regular schedule were zapped.

The league kept pushing about a month out in terms of cancellations, until NBA commissioner David Stern issued a Jan. 7 drop-dead date to stage even a 50-game game season. Free agency, training camps and two preseason games were crammed into a period of less than three weeks once the new agreement was ratified.

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