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NBA labor dispute leads to canceled preseason games

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Bob Moon: Only about a week before pro basketball players were supposed to start reporting to training camps for the new season ahead, there’s been a shift in plans that’s bound to leave fans disappointed.

Today, the NBA postponed the training camps and canceled preseason games. Players and team owners remain divided over how to divvy up the profits. And now, as Marketplace’s Jeff Tyler reports, both sides are anxiously calculating how much they can afford to lose.

Jeff Tyler: When negotiations stalled yesterday, NBA team owners took a look into the abyss, but did not blink.

Kenneth Shropshire is director of the Wharton Sports Business Initiative. He says that by canceling the preseason games, the owners are sending a message.

Kenneth Shropshire: It’s certainly a strategic move in terms of, ‘This is how serious we are. And you know we have put the season by the wayside in the past, back in ’98. And we can do it again this year if we need to.’

The standoff is all about money. Players currently get 57 percent of revenues; team owners want to cut that to around 50 percent. Under any deal, in percentage terms, players will make less.

But University of Chicago economist Allen Sanderson says it’s not because all NBA owners are greedy.

Allen Sanderson: In the NBA, it’s entirely possible for an individual franchise to lose money. And some are.

According to Forbes last year, more than half the teams lost money. Eventually, Sanderson expects teams in smaller markets — like Memphis or New Orleans — could be transferred or simply disappear.

Sanderson: It wouldn’t surprise me to see the NBA, which has 30 teams now, move down to 28, for example.

Some teams are flush. Others are broke. Kenneth Shropshire says the owners of teams in small markets would like big-market owners to share more revenues.

Shropshire: Until that happens, a lot of the push comes to get some of those dollars back from the players.

If a deal isn’t reached by mid-October, the NBA season will be cut short or canceled.

I’m Jeff Tyler for Marketplace.

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