Sports Law Analysis: NBA Lockout Will be Much Worse than NFL Lockout


I enjoyed the chance the other day to speak with a magazine writer about the impending NBA lockout. Time permitting, I'm happy to oblige. In our conversation we reviewed the basic issues in the NBA labor-management discussions and their likelihood of resolution. But what troubled me was his last question, for which I admitted not having an answer.

Why, he wondered, is the current NFL lockout receiving so much more public attention than the NBA's labor troubles? Why the apparent disparity in media coverage? Does the NFL situation raise more issues, perhaps as a legal matter, than does the NBA's predicament?

No, in fact, less. Comparatively speaking, the NFL labor negotiations should be child's play. The NFL owners already have their league set up in a way they like. But it's the owners of the NBA who are deeply dissatisfied. They are hoping to remake the structure of their league in a very fundamental way. It's the NBA situation, not the NFL's, that should garner most of the media attention and cause worry among sports fans.

Let's break this lockout down, pre-game style.

1. Start with the NFL. From an owner's perspective, the basic labor structure of the league is golden. Player contracts are not guaranteed, meaning that players may be cut at several junctures throughout the NFL year with little financial obligation, short of an injury settlement. Teams operate under a "hard cap" that ensures spending parity among teams. Vigorous sharing among teams of revenue from nearly all sources results in a unified, cohesive and nearly foolproof means of sustaining operations and making a profit. Add in beautiful cheerleaders, huge public exposure, lavish media attention and glistening luxury boxes and, well, it's good to be an NFL owner.

2. So why do we have an NFL lockout? What's the big beef? Not much. There are a few pimples left on the fanny of NFL progress to be sure. The owners want to address inordinate rookie salaries at the top of the draft, to resolve complaints about health care for retired players, and to knock a percentage point or two off the current split of revenue with the players. But none of these seem large enough, even in combination, to justify such a significant labor action as the current lockout. I'm convinced that the owners' beef at this time isn't really with the players or the players association. The owners beef is with themselves. The financially successful teams are tired of subsidizing the financial losers. The NFL's insistent and pervasive approach to revenue sharing is simply irksome to certain owners, like Jerry Jones of the Cowboys and Dan Snyder of the Washington team. Implicitly, revenue sharing rewards failure and penalizes profitability. Yet the only way owners can try to adjust extant revenue sharing provisions is to rewrite the document that contains them, the Collective Bargaining Agreement. And the only way to rewrite the CBA is to let it expire (done) and then negotiate a new one with the players. It's odd, but the owners have to lock out the players in order to renegotiate among themselves.

3. So the NFL lockout in theory should be easy to resolve. The owners have to devise a more acceptable formula for revenue sharing, perhaps including a reduction in overall player compensation to make up for some of the shortfall. But that's it, the lockout is just about money, and for the NFL, there's plenty of that to go around.

4. Things look different in the NBA. It appears the league is not awash in money. The owners have tried to make the public case that they are collectively losing money and that those losses are substantial. Indeed, if the NBA is to be believed, it loses more as a league in total than the entire amount the NFL designates as "revenue sharing" among its teams. So, if the NFL is willing to risk adverse public reaction and experience a prolonged labor battle over revenue sharing, imagine the lengths to which the comparatively smaller NBA will go with even more at stake. The NBA is not asking its players association to give back a small portion of salaries to iron out revenue sharing. Instead, the NBA wants to become the NFL. It wants a hard salary cap, an end to the various cap exceptions, increased revenue sharing, and an overall diminishment in league-wide player compensation. These are big issues that involve changes to the fundamental relationship between players and teams.

5. If the NFL owners are serious about these fundamental changes, and it appears they are, then the players will dig in for a protracted fight. The NBPA is not the NFLPA. The football players union has a sketchy history. Members crossed the picket line with regularity during the last NFL interruption in 1987 and who would likely do so again. That the NFL owners hold the upper hand in their negotiations is beyond dispute. But in the NBA, it's a players league. The players are very well paid, and all but the most profligate should be able to withstand even a significant job action. (For the liberal spenders, they might be able to sign with a foreign league to help make ends meet during the lockout.) The players are also tight, having grown up together playing all-star level basketball and commonly hanging out together after games. This is not the NFL, where players will do nearly anything to win the competition among their teammates to get on the field, and then to win the on-field competition for victory and its spoils. This is the NBA, clubby, tight, and friendly. If the owners want a fight, these players will stick together and give it to them.

6. And they will fight, as will the owners, over the one issue that most animates both sides. Above all, this is the key issue in the NBA labor battle. The issue is the guaranteed contract. Take Rashard Lewis of the Washington Wizards. (Take him, please!, beg the owners.) Lewis is at best a journeyman pro. He is also the second-highest paid player in the league. For the owners, Lewis embodies all that is wrong with the league, where such a mediocre player draws such huge compensation and the owners are powerless to change it. Devoting large compensation to underperforming employees is hardly the ideal business model. For the players, Lewis is the poster child for the good life. A few quality seasons, well-timed with impending free-agency, landed Lewis one of the richest contracts in the sport. This contract ensures him against bad play, poor coaching, or injury, and sets him up financially for life. NBA players have long grown accustomed to teammates with bloated guaranteed contracts sitting on the bench. To them, the situation is not troubling; it's inspiring.

7. So forget about the NFL lockout. That will get fixed soon. Instead, keep your eye on the donnybrook just getting started on the NBA side. If the owners are to ever impose such radical changes in the structure of the sport, if the NBA is to become the NFL in terms of labor relations, then the NBA may have to emulate its brother league. Not the NFL, but the NHL. The NHL had to sacrifice an entire season to bring about fundamental, structural changes in player relations. So might our other favorite winter sport, I'm afraid.

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