Friday, July 01, 2011

How I Would Solve The NBA Lockout

It seems like there in no major sports league that isn't having problems.  The NFL is in there lockout for over 100 days.  The owners and players are crying about having to share profits as far as the eye can see.  The NHL in 2012 is going to have it's own problems with revenue sharing and labor.  MLB's system is so far out of whack that small market teams get the shaft each and every year.  Sorry, Derek Fisher, but the MLB system is broken.  And the 4th sports league here in America that is having problems is the NBA.  They have instituted a lockout, but this is different than the NFL.  Why?  Because both the owners and the players have acknowledged that there are teams losing money each and every year.  So here is how I would solve the strife in basketball.

1.  Basketball Related Income (BRI) should be set at 52% for the players.  Yes, it is 5% less than what they are making now, but I didn't see one basketball player in 2008 or 2009 during the recession coming forward and telling their owner that I will give you 10% of my paycheck because of the economy.  So you are going to have to take a hit on this at these negotiations.

2.  No soft cap, no flex cap, but a hard cap.  God, this would hurt all the top teams.  I would put the hard cap at $69 Million.  Just for 2011.  Then we index the Salary Cap with the BRI.  And we also bring out the dreaded salary floor.  Of course we are going to be smarter than the NHL and not have a set $ amount for the difference between the cap and the floor.  I say put the floor at 70% of the cap.  So the floor for 2011 would be just over $48 Million.  Considering that the Sacramento Kings were the lowest payroll in the league last year at $44 Million, that shouldn't be that hard to do.

3.  The elimination of the "Larry Bird" Exception.  With a hard-cap, the Larry Bird exception should and would die.  Also, the mid-level exception should die as well.  If we are worried about cost certainty, and I would be with the fluid situation that some NBA teams are in right now, getting rid of these exceptions would help the clubs.

4.  The lengths of guaranteed contracts being reduced to 5 years if a player resigns with a team.  4 years if the team signs the player in Free Agency.  I understand that this makes players unhappy because there is less guaranteed money for them in a contract.  However, if you look at the way teams need to evaluate and look at talent, they need some sort of relief when players like Eddy Curry all of a sudden go off the rails.  And shaving off a year at $12 million off a contract for some player that sits on the bench each and every night just makes good business sense.  Also, the elimination of every contract being guaranteed.  You want big money, go earn it.

5.  Eliminate the Guaranteed Raises.  Right now, a player that resigns with his old team get an automatic 10% raise.  Free Agents get 8%.  Eliminate those.  Why should a player get an automatic raise?  If the Miami Heat want to resign, Mike Miller, for example, they need to up the money to resign his ass.  That in turn make other players at the same talent level want more money because someone else got it.  And in my example, if mike Miller does get his 10% for resigning with Miami and all of a sudden he turns into Eddy Curry, well, the Heat are paying him because he is under a guaranteed contract and he got a automatic raise.  Seems stupid for my vantage point.

6.  Amnesty Clause.  I would allow the clubs to eliminate one contract that they have and strike it from the hard salary cap figure.  So say Miami wants to eliminate the Wade contract from Salary Cap consideration, they have that opportunity.  And that one contract stays off the salary cap figure for the length of that contract.  No signing somebody else to a contract and then switching the one that is off the salary cap books.

7.  Maximum amounts in contracts.  $12 Million per year for a player.  Rookie Wage scale that gives them Restricted Free Agency in 3 years or Unrestricted in 4 years.  All rookie contracts will have a team tender that is due after the 3rd year if the team want to keep the rookie for the 4th year.  Compensation for signing a Restricted Free Agent would include Draft Picks and money.

8.  Revenue Sharing.  All clubs will give 3% of their local gate and TV revenue to the league to put into a pool which will be distributed to the 5 teams that are the worst off financially at the end of the year.  A team can only receive revenue sharing once in three years.So if the team gets revenue sharing funds in 2012, the next time they will be eligable is 2015.

9.  Probably won't come up in the labor negotiations, but implementing a rule that says you have to have 2 complete years after the completion of High School before you can be drafted or play in the NBA.  That will allow teams to become better when evaluating players, because they will have grown up just a little bit more and the scouts will have more data to evaluate talent.

10.  This one would never fly from the owners, but an audit of every teams books by someone that the player's choose.  Of course there would have to be oversight of those books by said teams, but until we actually know what is going on with the teams that are losing money, you can't fix the problems.  And if the organizations are found to be stashing money or playing games with the books, you can hit them with jail.


Zebster said...

I have a problem with implementing so many rules that seem to be required solely to protect the owners from themselves. They screwed up and gave the players too much, so now they'll have to negotiate to fix it. Just because a team is losing money, doesn't mean they deserve help. Sometimes they lose money because they're inept and foolish.
I do agree there needs to be a hard cap and floor, as well as a rookie cap, especially if they're going to continue to allow 18 & 19 year olds to be drafted.
If you want to fix giving too much for too long to kids, then I say 3 or 4 years max first contract and team's right of first refusal on that player's 2nd contract.
You will need some fudge room on that hard cap though so that you can keep a great team together that you built through the draft and smart trades. Just my 2 cents

Brent said...

I view it a different way. I have always liked "small market" teams. And the rules that I put forth are trying to even the playing field between those teams and the large revenue teams. Everybody always points to the Spurs as a model small market franchise. Last year they lost money. They aren't inept or foolish. It is just that the price of having talented players keeps going up and up while revenue doesn't increase at the same rate.

And as for the owners gave up too much in the past, I will agree with that. However, if they didn't they would have been crucified by the fans back then like they are now. And if they can't correct the economics of the NBA, where over half the teams lost money last year, you will start having teams fold. Over the past 10 years, there have been a dozen teams that have obtained new Ownership. There is something wrong when there is an average of one sale of a team each year.

I wouldn't allow any fudging of the hard cap. That is what has gotten the teams in this problem in the first place. Because you can sign your own free agents even if it takes you over the cap. You can use the mid level exception even if you are over the cap. Pretty soon you have the Lakers that are at $110 Million on the salary cap scale.

Zebster said...

I agree with you that this new deal has to be much more owner friendly and I too am a fan of small markets and fairness. I think we disagree about the extent to which it needs fixing.
Let's say that through the draft I put together a team with a couple/3 superstars -- a couple top 10 guys and maybe a top 25 guy, and I got them all through the draft; and to make this more fun, let's say I'm the OKC Thunder or Milwaukee Bucks. We've had a couple great seasons, the crowds and revenues are way up but to keep that team together I'll need to go over the cap. You're telling me there shouldn't be a way to do that?
You'll never create a situation, I don't think, where the playing field is completely level. And aren't you at all suspicious that during a time when so many owners are supposedly losing money that there's no shortage of buyers for these franchises that are losing money?

tpubgu said...

I like Brent's post and logic. I think one (of the plethora) of the reasons basketball has become a fourth rated sport in this country is the fall of poorer (small market) teams from making the playoffs. All of the loop holes for rich teams to sign free agents actually hurts the game and the market.

So I read that Sen. Herbie Kohl borrowed $55 million last year, which 19 teams also did. So when you have 20 teams needing to borrow money from the league, does that signal prosperity or disparity amongst the league?

Brent said...

Thanks for the complement, tpubgu. I hope I understand a little bit about sports. I understand that I view it from a different lens than most, though.

Look at the teams that lost money according to Forbes (2010):

Dallas, Miami, San Antonio, Orlando

Let's stop at those 4. Because these are teams that are consistantly (besides Miami) that are winning 50 games and are contenders for winning their conference if not the entire enchilada.

Dallas and San Antonio are model franchises. Dallas for the First Class treatment that Mark Cuban gives his players and people in the organization. San Antonio because they aren't a major market and have won multiple championships.

Miami will have made money this past year because of LeBron, Wade, and Bosh and the need for everybody to know what they are doing. Orlando won't be so lucky because of the lack of publicity besides the Dwight Howard saga. But when these 4 franchises are losing money and are some of the marquee franchises out there, there are major problems that need to be fixed and the players have to recognize that.

Brent said...

As for the team that drafts well and has superstars that need to be resigned and that will put them over the salary cap, I have two words for that franchise, tough luck.

The reason that I say that is because when you start letting teams go over the cap, it favors the large revenue teams yet again. And no matter what LA and Boston think, the system needs to be put in place that helps the other teams and not those two franchises. The Celtics and Lakers are firmly entrenched in the league and do not need help from the league. They need to help teams like the Bucks, Kings, and Spurs. And one of those ways is the hardest cap that the league can get.

Zebster said...

One of the problems with free agency is that fans can't get attached to their players. If you're smart about how you create that loophole, it's better for the league and will help the small franchises more than the big.
And I feel the need to point this out unfortunately: This has nothing to do with the fact that I'm a Boston fan. I'm very sympathetic to the small market teams. When your teams (especially Sox vs Yanks) have to beat NYC teams to make the playoffs, you are in essence a small market team; and the city of Boston is smaller than 2 of the cities you mention as struggling.
As I said, I'm all for giving the owners more and the players less but you need to be smart about it. More often than not the problems lie with bad player personnel decisions, bad ownership and bad coaching.