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NBA lockout: What’s at stake?

Marketplace Staff Oct 5, 2011

NBA lockout: What’s at stake?

Marketplace Staff Oct 5, 2011

Tess Vigeland: Hockey fans across the country are getting ready for the puck to drop on the 2011-2012 National Hockey League season, which starts tomorrow. Basketball fans may have hockey on the brain, too. Many are wondering if the National Basketball Association will follow NHL history with respect to their current labor struggles.

Seven years ago, the NHL lost an entire season over a contract dispute. And the NBA faces a similar fate. The preseason is gone and the first part of the regular season is in jeopardy. Liz Mullen covers labor for the Sports Business Journal and joins us now. Welcome.

Liz Mullen: Thank you very much.

Vigeland: Remind us very briefly about the NHL labor dispute back in ’04-’05 and why they eventually lost the season.

Mullen: Well, the NHL in 2004 asked for a massive change to the economic system. Most importantly, they asked for a salary cap. Back then, the NHL had no salary cap. At that time, the league said it was losing hundreds of millions of dollars and the percentage of revenues going to players was about 70 percent. What happened in the end is the players were locked out for several months. They agreed to the salary cap that they said they would not agree to and then they agreed to a number of concessions. The owners, essentially, were seen as the big winners in that negotiation.

Vigeland: All right, now catch us up on what’s at issue right now for the NBA, the National Basketball Association. What are they debating over?

Mullen: Right now you have a situation where the NBA is asking to reduce the players’ percentage of revenues from 57 percent to 47 percent. The players agreed to reduce it to 53 percent. The owners said that is not enough and right now we’re at a stalemate and it looks like we could lose games in the NBA.

Vigeland: So we’re at an impasse over 6 percent?

Mullen: Six percent of the revenues is where we are right now.

Vigeland: Now one of the interesting aspects right now is that there are six NBA owners who also own NHL teams. And some of them have said that they think it’s worth the NBA sticking it out even if it means the season. And their argument has been that yes, they lost the NBA season. And their argument has been that yes, they lost the NHL season, but the league has come out perfectly fine and the agreement ended up being more owner-friendly. Would that potentially then work for the NBA owners and the league?

Mullen: There’s a split among the owners is what people on the player’s side say. One of the big problems that the NBA has it is has the least amount of revenue sharing of any league. And you have hardliners and you have doves in the NBA situation. The question is if the NBA loses a season, will they really come out as popular as before? After the ’98-1999 NBA lockout, you saw a huge decrease in fan interest in the NBA. Whenever you lose a season, you risk alienating your fans.

Vigeland: You cover labor for all of the major sports, do you have any sense of what might happen here with the NBA?

Mullen: You know, I’ll tell you something. I see sports writer make predictions and I’ve said nobody can make predictions. It’s sort of like a poker game in some ways. David Stern doesn’t know what the real will of the players are. On the other hand are the owners — or there are some owners — who don’t want to go through with this lockout scenario. Will they be willing to go up on the number? And nobody knows that answer. I think whenever you have a sport that’s losing money, like the NBA is, you have a greater chance of losing regular-season games.

Vigeland: Liz Mullen covers labor for The Sports Business Journal. Thank you so much for joining us.

Mullen: Thanks Tess.

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