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Exposing some facts lost in NBA lockout rhetoric

Billy Hunter, executive director of the National Basketball

Billy Hunter, executive director of the National Basketball Players Association, holds a press briefing following a meeting between team owners and the NBA player's union. (June 21, 2011) Credit: AP

What Billy Hunter doesn't want to tell you is that he's fighting against the implementation of something that already exists. The executive director of the National Basketball Players Association accepted a hard salary cap 13 years ago, when the NBA owners last locked out the players.

It was in the collective bargaining agreement reached in Jan. 1999 -- just in time to preserve a 50-game season -- that the union agreed to a deal that capped the players' share of league revenue at 57 percent. Though individual team payrolls were not subject to a hard cap, the revenue split was. So the league started to withhold eight percent of each player's salary and placed it in an escrow account. Each July an audit is done to ensure player salaries collectively do not represent more than 57 percent of the league's revenue.

For the first time in 13 years, the NBA returned the escrow, reportedly a total of $160 million, to the players last summer. That means it was the first time that player salaries fell short of 57 percent of league revenue. Perhaps it was a reflection of owners being more careful with their money, with the end of the CBA nearing.

But what David Stern doesn't want to tell you is that despite this notable show of self-restraint, the NBA owners still want to protect themselves from themselves with a hard cap system -- or a "soft" cap that is so restrictive it acts as a hard cap -- that limits individual team payrolls, as well. The NBA commissioner is selling it to fans as a means for competitive balance among the 30 teams, so teams like the Milwaukee Bucks can compete for free agents with the Knicks and Boston Celtics.

But let's echo something David Aldridge said to Stern during an interview on NBAtv: this league has always had dynasties throughout its history. And if I may add that there is something compelling about the small market taking on the big one, or have we already forgotten those great Hicks vs. Knicks wars?

Still, a majority of the league's owners -- looking to both spare themselves payroll expenses and level the field against the major markets -- were pushing Stern to create a model as similar as possible to the NFL, which has a hard cap that puts every team (regardless of market size or revenue streams) on equal footing when it comes to building a team. Unlike in Major League Baseball, when big market powerhouses like the Yankees and Red Sox dominate free agency, in football the cap forces everyone to spend the same. So in any given year, fans from the smallest market in the United States, New Orleans, or another virtual map-dot, such as Green Bay, can believe they have a legitimate chance at a Super Bowl than teams such as the Jets or Patriots.

But while that works in a sport that plays one game a week with national appeal, it would turn the NBA very ordinary. And Amar'e Stoudemire believes that players would be more selfish about their stats -- so they can continue to be the highly-paid star on their team -- rather than the team's success.

In the NBA, while there have been exceptions to the rule (see: Knicks, 2001-2010) that spending power equals winning power, a review of NBA Finalists from eight of past nine seasons shows 75 percent of the teams spent over the salary cap and paid luxury tax (the league did not charge tax in 2004-05). This is all the evidence Stern would need to prove that success favors spending.

But more than anything, favors intelligent spending.

This is why a soft cap system is the right idea for this league and the sides have it right to increase the tax charge against the overspending teams. The sides are arguing over just how harsh of a tax should be charged, but there is a middle ground that can be met. The bottom line is, teams that can't afford to spend over the tax threshold shouldn't. But that doesn't mean they can't build a solid team.

And let's not kid ourselves about this competitive balance thing. Of course the players, who see firsthand some awful games through the middle months of the season, realize the need for better parity in the league. But you tell a young player going into free agency that his only choices to make top dollar are Milwaukee or Utah. You have to understand why the players are against a heavily restrictive tax system, because it suppresses the free market system.

So a player can be traded anywhere a team wants to send him, but he can't sign with any team -- or city -- he wants to go to?

Now in keeping with the almighty NFL model, the NBA owners have acknowledged that there has to be a lucrative revenue sharing plan in place that not only distributes money to the poor teams, but I believe that, unlike baseball, it should also require those receiving teams to spend up to a certain amount of that income on their payroll to improve their roster. This will ensure competitive balance is achieved.

The lockout enters its 110th day as the sides meet Tuesday with the Federal Mediation and Conciliation Service. Meanwhile, the first two weeks of the regular season, which was scheduled to begin Nov. 2, have already been canceled. More games are expected to be lost if Tuesday ends without hope for a deal.

After over a decade of being buried by awful contracts (see: Eddy Curry, Knicks) and declining revenues in several markets (see: U.S. economy) that the league says cost them $300 million in losses last season, the owners are attempting to make it all up in one bite. Though their most recent proposal called for a 10 percent drop in the players' share of revenue (a $400 million swing in one year), the sides have volleyed a 50-50 concept similar to what the NFL and its players agreed upon this past summer.

The players have recognized the losses by offering to give back four percent of their take, which equates to about $160 million, but feel that a more robust revenue sharing plan, such as the ones used in baseball and football, would make up for the rest of the losses. The owners have discussed a better revenue sharing plan, one that would result in teams like the Knicks and Lakers giving up some of its lucrative income to support small market teams such as the New Orleans Hornets and Memphis Grizzlies, but have been hesitant to agree to write it into the CBA.

In the end this is, as most sports labor issues are, strictly a fight over money. For the players it's about preserving as much as they can of what they already have. For the owners it's about getting more for their investment.

The sides have spent a lot of time and energy pointing fingers across the table, making the case that the other side is wrong and their side is right. Neither are wrong because they are simply fighting for their best interests.

Oh and if you haven't noticed, you, the fan, don't primarily factor into either's best interest. Not until a deal is done, at least. Then, yes, watch them come groveling.


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