In my opinion, the biggest sports business conflict in the last 5 years is
the 2011 NBA Lockout. It was the fourth lockout in the history of the National
Basketball Association (NBA). The
lockout began on July 2011, and lasted for 161-days. It postponed the beginning
of the regular 2011-12 season, from November 1 to December 25, and decreased
the regular season to 66 games from the original 82.
There were circumstances separating the owners and the players,
represented by the NBA. While the lockout was going on, teams could not sign
contact players, sign contracts, or trade players. Nor was there access to
staff, trainers, or NBA facilities.
The fundamental conflict of the NBA lockout was money. Stephen
Greyser,
instructor of The Business of
Sports
said in an interview with Harvard Extension Blog, “It’s a $4 billion plus business, and the biggest issue is how to
divide basketball related revenue. “
As the primary matter of the NBA lockout was
how to divide revenue, there was another issue of the hard versus soft salary
caps. The NBA has a soft salary cap, in comparison to the NFL and NHL hich have
hard, with barely no exceptions. . However, they do have the Larry
Bird exception, which has some exceptions, yet allows teams to go over the
salary cap to sign and re-sign their own players. However some, “NBA teams also
pay the ‘luxury tax’ based on total payroll,” Greyser said. This luxury tax is an additional expanse of another area of argument. However, it does not put player against the owners, yet owners versus owners. “If a team really wants to pay a lot for players and go over the cap it pays a tax,” said Greyser.
An article by Nancy N posted in Harvard Extension Blog stated, “The Lakers pay $110 million, including the luxury tax, while Sacramento only has a total payroll of $45 million. The owners purport that this is not a matter for the players, but if the luxury tax on the highest payroll was a stiffer tax then it would tend to keep the payroll from escalating.”
On September 13th, 2011, the union and owners met again to negotiate but the negotiation did not work out. The main source of disagreement regarding the salary cap, remained. The union wanted to continue with the structure of soft caps. However, the owners disagreed and demanded to formulate a hard cap for the team payroll. The players were willing to reduce their salary in exchange for the owners cooperation with the salary cap. However, the owners were reluctant to accept. They believed that they had the most control in negotiation of NBA matters, and refused to give leverage to the players.
On November 26th, 2011, a provisional deal was met . Afterwards, owners let players have unpaid workouts at team sites on December 1. On December 8th, 2011 the deal was approved. Free agency, trades, and trainings camps started the next day.
I think that this is a big sports issue because the owners didn’t seem to think of everyone’s involvement as a whole. And because of their initial lack of cooperation to give the players leverage within rights to salary caps, let to a hold up is season. The lockout not only affected the owners and players, but all the staff that come into play when running the NBA and it’s games. Everyone suffered in some shape or form, the custodians, referees, snack bar employees, media, sponsors, and fans alike.
The NBA lockout put a halt to many productions and salary going into the pockets of the producers. However, when the issues were resolved, the staff whom kept up with the maintenance was back up and running.
References
http://bostonglobe.com/business/2011/11/11/broadcasters-scramble-cope-with-nba-lockout/3VcgB0EZXc6ljaoNr7DTcP/story.html
http://thebottomline.as.ucsb.edu/2011/11/nba-lockout-dilemma-the-lockout-valid-debate-or-stubbornness
http://www.nba.com/2011/news/12/08/labor-deal.ap/index.html#
http://www.nydailynews.com/sports/basketball/nba-bitter-lockout-ends-lebron-james-kevin-durant-finals-article-1.1097006
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