HOOPSWORLD | Basketball News & NBA Rumors

Shaquille O’Neal just got hired to be on the TNT broadcast.  The lockout can’t get in the way of that, it just wouldn’t be right.

But this isn’t an article about Shaquille O’Neal.

Unfortunately the business side of the game has taken over to the point where that’s all there is.  Not the fun part of the NBA business (free agency, trades, etc.), but a single impasse that threatens to envelop the entire season.

It would be a shame to have Shaq, with his boisterous personality, sidelined for a year without a single sparring section with Charles Barkley.

Instead today’s topic is about the league making further cutbacks.

According to the Associated Press, the NBA laid off 114 employees which amounted to about 11% of their workforce.

While none of the unemployed were cut because of the lockout (allegedly) it seems like organizations across the league are using this opportunity to clean house.

The impact is far-reaching.

The battle may be between “billionaires vs. millionaires,” which is certainly a simplification, but it’s the regular guy who is caught in the crossfire.

Gone too are many video coordinators, scouts and general support staff.  It extends to periphery industries like journalism, broadcast and game-night support (concessions, ushers, security, ticket takers, etc.).

Who it will really hurts most are people living paycheck to paycheck.

Trimming the staff is one of the normal moves a company will make when faced with a financial crisis, but that doesn’t make it bearable to watch.  Of course there are different interpretations as to how bad things truly are for the NBA.

Hopefully the bargaining will pick back up shortly after a break since June.

Zach Lowe of SI.com reported the league and union will meet today on some minor issues, essentially to close out the books on last year.

Both sides will reportedly set up meetings for late July or August to restart negotiations which ended with players shaking their heads at what they felt was a predetermined lockout, despite their best efforts to find resolution.

That doesn’t mean the Players’ Association is blameless or even in the right.  Both sides have significant points that need to be made.

According to Steve Aschburner of NBA.com, the league will be returning the 8% escrow withheld this past season to the players (approximately $160 million).

There’s a chunk of money set aside to make sure the players aren’t overpaid past their 57% cut of Basketball Related Income (BRI).

In negotiations, the league was trying to keep those funds which not surprisingly, the union found shocking.  The NBA wanted to keep money the players had already earned.

Wisely the league relented on this one given the players had already filed a complaint to the National Labor Relations Board.  That would not have gone well for the league, but they’ll still fight to get that money back from somewhere else in the mix.

Nonetheless one of the many, many sticking points has been positively resolved.

Having spoken to players in the union throughout the process, the lockout was no surprise. It seemed to the athletes involved in the process the owners simply didn’t want to work it out.  HOOPSWORLD’s Alex Kennedy posted a revealing interview with Mo Evans, a vice president with the NBPA (NBA Saturday: Players Won’t Back Down) and that sentiment is echoed.

“At no point did I truly feel that the NBA owners consciously tried to make a deal,” said Evans.

From the other side, an NBA executive had a different perspective, saying the proposal that included the “flex cap” was a sizable step forward on their part.  The same executive acknowledged a hard cap may cost a season and owners know that.  At the time, he suggested eventually the owners would relent on that issue.

The question is, in July, is a lost season more than just a threat?  The NFL is supposedly near resolution to its own, somewhat similar conflict.  Will there be an eventual resolution for the NBA before it’s too late?

The truth is the league is indeed losing money.  How much is up for debate.  Is it some teams, most, all, 22 or about 15?  Is it the NBA investing too much time and resources into the WNBA, NBADL and other non-income producing ventures?

Don’t go by what’s published in Forbes Magazine, their numbers are essentially reversed engineered and not based on a first-hand look at the books.  Still – there are sizable grains of truth that numbers can be skewed to paint a worst-case picture.

Nonetheless, a quick look around the league via the naked eye shows some franchises can’t come close to a full house or even a half house, meaning the system that worked well pre-economic downturn isn’t going to make sense when it costs the NBA more money to bring in each dollar.

The Los Angeles Clippers cut ticket prices to keep attendance high.  They have an aggressive, fan-friendly organization (outside of record mind you) that makes sure the building is relatively full.

If they’re hitting their numbers it’s taken twice as much effort to do so and an increased expense.

Meanwhile players generally have raises of 8-10.5% built into their contracts when job security nationwide is a concern and wages are essentially flat or in some areas decreasing or disappearing.

The owners need to lock in a better system so they can bring in a higher cash flow.  That’s just basic economics.  Owning an NBA team shouldn’t be a money drain.

The players are going to have to understand the split of the BRI needs to shift dramatically from the current 57% to the players.  If the 43% remaining goes to expenses then it’s essentially a 57%-0% split.

Billy Hunter, the union president, on radio recently said the NBA already lops off a chunk of income before it ever gets to the 57% which already lowers the player portion to about 50%.

That rhetoric is about as accurate as the league saying it lost $300 million this last year.

Accounting is a funny thing in that it really can be tilted in one direction or another, within certain fully legal parameters.

Players are going to have to accept less money overall to catch up with the world they’re living in (still with a few more zeros at the end, regardless of outcome).  Contracts need to be shorter on some level, which in many ways will help clear up some of the competitive balance issues.

Revenue sharing can be a big part of the solution but it’s not a panacea by any stretch.  It’s not like the Los Angeles Lakers want to use the money they are set to make after next season from Time Warner cable to keep the Kings in Sacramento or the Bucks in Milwaukee.

Figuring out how to level the playing field isn’t the responsibility of the players.

Where the owners are losing the union in this discussion is in future growth.  The past few years have been difficult but if the league flourishes over the next decade, the players should be rewarded in kind.

The NBA is trying to lock in flat growth for a full ten years and that’s just too extreme.

A flat five-year plan makes sense but beyond that, the players should be able to grow financially by the success they create on the floor.  They are the product itself and the reason why the public shells out for tickets and gear – and why they give TNT, ESPN, ABC, NBATV (and local broadcasts) the high ratings they’ve enjoyed this past season.

Short-term losses, while significant, don’t change fact most NBA teams are sold at a much higher dollar than they were originally acquired.

The players have relatively brief careers by and large a limited opportunity.  A hard cap doesn’t make sense because there’s no hard cap on what an owner might net from the moment they buy the team to the time they sell it.{AUTHOR_BOX}

The NBA is projecting roughly a 4-5% rate of growth so naturally the raises players get under the current deal don’t match.  To try and lock out that growth by keeping salaries relatively flat for a decade doesn’t make sense either.

There’s a happy medium in the middle somewhere and both sides need to reach it.

There will be plenty to write about here and there while we wait, but at some point this thing needs to be worked out.

Ron Artest is changing his name to Metta World Peace.  Twitter is full of athletes planking, a la JaVale McGee who wedged himself facedown into a grocery store’s freezer/fridge.

That only goes so far.  What about the ongoing saga that is LeBron James, the Miami HEAT, the Cleveland Cavaliers and the Dallas Mavericks (which desperately needs to keep the “ongoing” adjective)?

Will Coach Mike Brown in Los Angeles have a chance following in the footsteps of Phil Jackson?  Can Kobe Bryant and the Lakers get back to where they were?  Will Italian coach Ettore Messina, bringing his brand of international ball to the Lakers as a consultant, add an unexpected dimension?

Will Blake Griffin get the Clippers to the playoffs or miss half of his first four seasons (one to injury as a rookie)?

Can the New York Knicks get the right combination around Carmelo Anthony and Amar’e Stoudemire?

Will the Orlando Magic, New Orleans Hornets or New Jersey Nets feel compelled to move their stars (Dwight Howard, Chris Paul and/or Deron Williams) before free agency?

Derrick Rose, Kevin Love, Kevin Durant (vs. Russell Westbrook?) and so many other exciting stories are waiting to be written.

Isn’t losing Shaq on TNT for a year is reason enough?

Unfortunately we’re faced with lockout fatigue and it’s still just two weeks in . . .

Debating BRI, amortization and unemployment just doesn’t have that same ring to it.