by Kevin L. Davis (@EsquireSports)
With the lockout finally over and an unusual NBA season is set to begin (which will start on Christmas Day for the first time in league history), I thought what better way to begin this journey than to examine the effects of the lock-out post-mortem. Instead of focusing on which side “won,” I thought it would be better to discuss how the NBA as a whole won or lost in 3 key categories: buzz among fans, financial impact, and competitive balance.
BUZZ AMONG FANS
After a season where ratings where at a record high, fans and analysts steamed for months with doom and gloom projections about the damage the lockout would cause to the league. As the lockout consumed the entire summer and most of the fall, most seemed to believe that the NBA was inflicting a blow to itself that would cause long-term damage to its popularity, but looking at the positive response I’ve seen amongst fans it seems that they couldn’t have been more wrong.
This goodwill started on the early morning hours of November 26th when David Stern and Billy Hunter (the leader of the NBPA) announced that a tentative agreement had been reached to end the lockout. Within instants the outpour of response from the fans proved that any damage was already being forgiven.
Twitter (everyone’s favorite gauge of what’s “hot” nowadays) blew up with posts about the NBA returning and every new station in the country brimmed with excitement about the impending return of the NBA. For all the disgust fans had of millionaires and billionaires bickering about money, they could not deny their excitement to see their favorite NBA players hoop it up for real.
FIANANCIAL IMPACT
Heading into this lockout the league claimed losses of $300+ mil in the last 3 seasons. For all the sites who disputed the numbers and the talk about what percentage of BRI the players should give up it almost was forgotten how poorly the league was performing as a whole financially.
While neither the Players nor the Owners ended up happy with the financial split as it was agreed to, it seems clear that establishing a band where the Players share is reduced from 57% to a band varying between 49 and 51% helps remedy this problem. Assuming the league were to bring in the exact same revenue as earned in 2010-11 this new system would save Owners somewhere between $229 million and $305 million. This one change seems enough to take a business that has been operating deeply in the red and give it a chance to be profitable.
COMPETITIVE BALANCE
Although the Owners were not successful in getting all the changes they wanted, the new Collective Bargaining Agreement will bring forth several additions that will achieve a more balanced payroll among the NBA teams. The hope is that these changes will help improve the chances of a team to compete no matter the size of its market. Will it work? My prediction is that it definitely will.
The league did greatly improve the revenue sharing system as well as make key changes to the floor and ceiling that teams will spend. They did this by first increasing the minimum a team must spend from 75% of the cap up to a percentage that once fully implemented will be 90%. This new floor means that teams will be forced to spend about $9 mil more than the currently imposed minimum (up to $52.2 mil from about $43.5 mil). A de facto salary ceiling was also created by overhauling the penalty when a team exceeds the luxury tax (currently $70.3 mil in payroll). Starting in 2013-14 the new more punitive luxury tax will tax teams at an elevated rate instead of at a dollar for dollar as the old rule did.
While these changes mean that unless an Owner decides he will not be deterred by these steep taxes, the days of big spending teams having roughly double the payroll of small market teams are over. However the question is how big of a difference will this make? It has been proven time and time again that in the NBA you don’t win without a star, and next to nothing was done to help small market teams keep their stars.
While many perceive this is a negative I for one see this as a positive. While the attention Chris Paul and Dwight Howard are getting must annoy their fan-base it keeps people talking about the NBA. As seen with the LeBron and Carmelo mini-dramas over the last few years, the energy that produces is good for business.
CONCLUSION
I think it’s fair to say that the NBA as a whole was a big winner in all 3 categories. Seeing that we only lost 16 games and there will be games on the first major basketball holiday (Christmas) my gut says any ill feelings still lingering in fans will be forgiven.
Although things got ugly at several points during the lockout, all I can say to both sides is great job getting it done.
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