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Larry Coon:
Welcome to the chat, everyone! Last one before the lockout, so I can imagine what most of the questions are going to be about.

And sorry for starting off the chat on a down note (as if they NBA doesn’t have enough down notes already), but I need to begin with a rant — or a request — take it whichever way you want. Hoopsworld has been blanketed recently by people who ask the same questions in everyone’s chats. For example this question from Susan was asked and answered yesterday in Eric Pincus’ chat.

Our chats receive many more questions than we can answer in an hour, and we do our best to get to as many people as we possibly can. Blanketing chats with the same questions only means that others’ questions are less likely to be answered. At best it costs us time as we’re distracted by determining whether a question has been asked already. At worst it means that a few people will have the same question answered multiple times, while others don’t get their questions answered at all. Please have respect for your fellow fans and readers of Hoopsworld — if your question has been answered, then don’t ask it again in someone else’s chat.

Larry Coon:
The luxury tax is in indirect means of revenue sharing. It starts with the premise that the big market teams will tend to spend more and the small market teams will tend to spend less, so distributing money based on salary will help level out the playing field. (It certainly doesn’t do much to dissuade spending by the big-market teams.) Since the league intends to greatly increase the amount of revenue sharing and harden the cap in the next agreement, I expect the luxury tax to go away.
 

Larry Coon:
To a certain extent, landing a star player is akin to lightning striking. If they hold out for another star, it may not happen. I think they’re better off filling their holes as best the can.
 

Larry Coon:
I’m sure there would be another trade deadline. The all-star break would be eliminated, but other than that, it’d be just a compressed version of a normal season.
 

Larry Coon:
Starting a new league is a tougher prospect than you might think. They’d have to find arenas to play in, and remember, most of the best arenas already have contracts with the NBA. They’d have to find financial backing, and the investors would have to be willing to risk their money, knowing that if the NBA lockout ends or the NBA makes a go at it with replacement players, their investments are in trouble. The same goes for advertisers.

So is it possible? Yes. But is it likely to happen? I don’t think so — at the very least, not unless the season is canceled.
 

Larry Coon:
Reminds me of that line from Gladiator:

"People should know when they’re conquered."

"Would you, Quintas? Would I?"

I don’t think anyone harbors any illusions that the players are going to come out of this with a better deal than they have now. The only real question is how much they’ll be able to preserve. At some point, choosing the deal on the table will be better for them than choosing to prolong the work stoppage. At that point, we’ll have a deal.
 

Larry Coon:
More than subtle. The NFL’s system is a form of restricted free agency. Once the team chooses to franchise-tag their player, he’s not free to leave.

The NBA prefers to have a system that encourages players to stay, rather than preventing them from leaving. Their franchise tag proposal was more akin to glorified Bird rights — allowing the team to re-sign the player for much more than he could receive by changing teams.
 

Larry Coon:
I disagree with you for a number of reasons.

One is that the league could easily withstand the loss of one player — even a superstar. And the FIBA leagues aren’t in a financial state to either give players comparable money or sign enough of them to make a difference. Also remember that a player under contract can’t get a necessary Letter of Clearance to play in a FIBA league (at least, not without a court battle), so at beast you’re looking at the exodus being limited to the 2011 free agent class.

The longer this goes, the more the advantage shifts to the owners.
 

Larry Coon:
This is precisely the cost of a lockout — the alienation of fans.

The same thing happend in 1998-99, and when the lockout was settled David Stern admitted "We have some winning back of fans to do." The effects were felt for 4-5 years, but eventually the fanbase did come back.

This year the league will have to weigh the repurcussions from a continued lockout against the long-term gains they will make. If they make a deal just to get it done, they’ll alientate fewer fans, but the financial implications will be felt for many years. And remember, one agreement alwys feeds into the next, so any gains they make will be felt for a very long time. For them, it’s worth the short-term alienation of fans to get a better deal.
 

Larry Coon:
I don’t know if that’s possible. The team rolled the dice by acquiring Gilbert Arenas and reacquiring Hedo Turkoglu. Neither player really panned out, and now they’re stuck with them. Improving their roster is going to be a lot more difficult with those two players there.

The other thing to consider is that Howard may have already played his last game for the Magic. If there’s a year-long lockout, then Howard will be a free agent next summer without ever suiting up in 2011-12. The team needs to weigh this possibility when deciding what to do.

In the end, I think that if he was going to sign his extension he would have done so already. I think we have another Carmelo Anthony situation on our hands. It just depends on how picky Howard is about his destination.
 

Larry Coon:
I know the NHL had to deal with this situation, and came up with a solution that worked for everyone. I’d do something based on what they did.

Of course, you can’t just repeat the 2011 draft order — that’d be "rewarding" teams twice for the same bad season. Some sort of weighted lottery involving all 30 teams is probably the best solution. I think this is what the NHL did.

But if you want to know what I really think is the best solution for determining the 2012 draft order, it’s for the teams to play a full 82-game season to work it out.
 

Larry Coon:
No. From what I understand, the league put a steward in charge of the franchise, and while he has to have financial moves approved, he has atonomy over basketball decisions. I don’t think the league would stand in the way of a trade that Dell Demps and the other Hornets’ management feel is best for the team.
 

Larry Coon:
Nice to hear — thanks!
 

Larry Coon:
The players want something similar to what they have now. They’re willing to give up a little, but nowhere near the level of cuts the owners are asking for.

And no, I don’t think they’re particularly concerned with the superstar team-ups. The stars have to align just right for that to even be possible. And for what it’s worth, it certainly did generate interest this season.
 

Larry Coon:
Depends on the new rules, of course, and nobody knows what those will be yet.

But if anything, I think the new rules would make it harder for the Magic to keep Howard, not easier.
 

Larry Coon:
If anything, the players have been adamant about not having a hard cap. Derek Fisher even dismissed the idea  of the league’s "flex" cap when he said, "We view that as just a total distortion of reality. It’s not a flexibile cap, it’s a hard cap." In the end, I think we’ll end up with a "harder" cap (i.e., fewer and less powerful exceptions), but not a true hard cap.

The owners have already given up on the idea of non-guaranteed players, which is another point that’s very important to the players. And if anything, I think the owners giving up on this so early in the process signals that they will eventually have a soft cap. A hard cap and guaranteed contracts don’t really go together. If they were going to hold firm to the idea of a hard cap, then they wouldn’t have given up on guaranteed contracts so early.
 

Larry Coon:
From what I hear, they’re willing to give up Minnesota’s pick if it means landing a superstar. Howard would certainly qualify, and I can’t see the Clippers passing up any opportunity to go after him. I also heard the Clippers pitched the pick to New Orleans as part of a package for Chris Paul.

Kaman can be had in return for the right small forward. For example, they tried to complete a deal with Philly for Andre Iguodala. They weren’t inclined to sweeten the deal with any of the other players you mentioned,  but if they did, I imagine that Aminu would be the most likely to go. Bledsoe would be harder to pry away, and there’s almost no chance they’ll move Eric Gordon.
 

Larry Coon:
No, the money goes to charity.
 

Larry Coon:
The contracts end when they say they end. So for example, if the lockout lasts the entire season, then Dwight Howard is a free agent on July 1, 2012 without playing another game for the Magic.
 

Larry Coon:
From what I hear, the owners are trying to reduce the rookie scale salaries. But I don’t think it’s anywhere near the top of their priority list.
 

Larry Coon:
The owners have asked for a 10-year deal. Their latest offer was to leave salaries around $2 billion per year, so as revenues go up from year to year, they’ll make a lower and lower percentage. Under that system, it’d take 10 years to get salaries down to the levels they want them to be.

The players, for obvious reasons, don’t like that idea. They proposed a five-year agreement — timed to expire the year after the league renews its TV deals.
 

Larry Coon:
They’ve been negotiating for two years. But without the pressure there’s no reason for either side to move on any important issues. If anything, it makes it worse. It gives both sides ample time to dig in their heels and refine their rhetoric.
 

Larry Coon:
I think that if there was any realistic hope of an agreement before June 30, we would have had many more meetings this week. I think Thursday will be primarily for both sides to look at each other and say, "So this is where we stand, huh?" and then go talk to the press & blame the other side.
 

Larry Coon:
As soon as a lockout starts, it begins to cost the league money — advertising dollars, season ticket sales, fan goodwill, etc. The offer changes on July 1 because the economics change on that day as well.
 

Larry Coon:
The frist thing that came to mind when I saw your question is that there are 27 teams not like Miami, Dallas or the Lakers.

The league wants to level the playing field and have much better cost control. A hard cap is the most effective way to get that done, despite the difficulties it would pose to the teams you mentioned.

But in the end, I think we’ll have a system where the cap is harder, but not a true hard cap. There will still be exceptions, but there will be fewer of them and they’ll be less powerful.

Larry Coon:
It’s not just a question of the percentage — it’s also what it’s based on.

One of the league’s arguments is that the players receive a guaranteed percentage of the gross income, but don’t share in the expenses. So when both revenue and expenses go up, the players reap the benefit without sharing in the burden. They want a system where expenses are taken out first, then the sides divide up what’s left over.

So you couldn’t compare the percentage guarantee in such a system to the current 57% guarantee of gross revenues in the current system. But if you were to do a comparison to a comparable figure, I’m guessing it’ll eventually end up in the mid to high forties.
 

Larry Coon:
From a pure data perspective, you have a point. If you rank the players by salary and divide them into three groups, the ranges are $0-$1 million, $1-$4 million, and $4+ million. There are about the same number of players in each group.

The $0-$1 million group accounted for about $82 million in total salaries this season. The $1-$4 million accounted for about $378 million, and the $4+ million group accounted for about $1.556 billion. This is why I think any salary rollbacks will be staggered — it will take less out of the low wage earners, and progressively more the higher the salary gets.

But the counter to your argument is that the top players are responsible for most of the revenue. Fans don’t buy tickets, turn on their TVs and buy merchandise to see the rank-and-file players. They do it for the starts. Kobe Bryant earned about $24 million this season, but he’s one of the primary driving forces behind the league’s $3.8 billion income this season. Since they’re the guys who primarily bring in the money, the argument can be made that they deserve much more of it.

That’s it for today — As always, thanks for the questions and apologies to those I missed.