2011 NBA lockout

The 2011 NBA lockout is the fourth lockout in the history of the National Basketball Association (NBA). The owners began the work stoppage at 12:01 am EDT (4:01 am UTC) on July 1, 2011. The main issues dividing the owners and the players are revenue sharing and the structure of the salary cap. During the lockout, teams cannot trade, sign or contact players and players cannot access NBA team facilities, trainers or staffs. All preseason games and the first six weeks of the 2011–12 season through December 15, 2011, have already been canceled. Some players have signed contracts to play in other countries, and most have the option to return to the NBA as soon as the lockout ends. The lockout will remain in effect until the National Basketball Players Association (NBPA) reaches a deal with the NBA owners.

Contents

Chronology

  • July 1, 2011 : The lockout begins.[1]
  • September 23 : The NBA canceled training camp, which was to begin October 3, and the first week of preseason games, which were to run October 9 through 15.[2]
  • October 4 : The NBA canceled the remainder of the preseason.[3]
  • October 10 : The first two weeks of the regular-season canceled.[4]
  • October 28 : All games through November 30 canceled.[5]
  • November 14 : The NBPA dissolves labor union into a trade association.[6]
  • November 15 : The NBA canceled all games through December 15. Players filed antitrust lawsuits against the NBA in California and Minnesota federal courts.[7]

Background

After the previous lockout, which shortened the 1998–99 season from 82 to 50 games, a six-year deal between the owners and players was reached. As the Collective Bargaining Agreement (CBA) was set to expire on June 30, 2005, the two sides began to negotiate in early 2005. There were several issues obstructing the new agreement, which included adding an age limit for rookies, toughening the existing drug-testing program and limiting the length of long-term contracts. However, negotiations went smoothly and the two sides were able to reach a deal in June 2005, avoiding the lockout.[8][9] That deal guaranteed players 57 percent of basketball-related income (BRI) and lasted for six years, until June 30, 2011.[10] A year after signing the deal, eight owners signed a petition requesting NBA commissioner David Stern address the disparity between small-market and large-market teams. They wrote that "the hard truth is that our current economic system works only for larger-market teams and a few teams that have extraordinary success ...The rest of us are looking at significant and unacceptable annual financial losses."[11]

Negotiations on a new CBA began in early 2011. The league claimed that it was losing $300 million a year (22 out of 30 teams were losing money last season) and proposed to reduce 40% of players' salary (about $800 million) and institute a hard salary cap (at $45 million per team) as opposed to a soft cap (at $58 million) currently in use. The union disputed those figures and steadfastly opposed those changes. Players union director Billy Hunter said that he was advising players to prepare for a lockout.[12] In May 2011, the NBPA filed a complaint with the National Labor Relations Board (NLRB), accusing the league of negotiating in bad faith by failing to provide critical financial data to the union and repeatedly threatening to lock out players. The NBA quickly rejected the complaint, saying that the league complies fully with federal labor laws. The union also considered the option of decertification, which allows players to file an antitrust lawsuit against the NBA.[13]

With time winding down, negotiations continued in May and June. On the salary cap, the owners, in their newest proposal, call for a system called the "flex cap" that limits payroll at $62 million but penalizes teams if average payroll of all teams exceeds that amount.[14] The union argued that it is still a hard cap because the ceiling would kick in eventually.[15] On salary reduction, players offered to cut $500 million over the next five years (their share of BRI would be reduced from 57 to 54.3 percent). The owners instead proposed to cut $2 billion over the next 10 years.[16]

As a last-ditch effort to avert a lockout, owners and players met again on June 30, 2011, to negotiate, but both sides failed to reach a resolution on key issues like salary cap and BRI splits. Both Stern and Hunter said that the two sides remained far apart. The owners demanded a larger share, claiming that they were losing money. The players, on the other hand, were willing to make concessions, but they refused to completely cave in to owners' demands. Negotiations broke off, and the CBA expired at midnight.[17]

Lockout

Initial months

The lockout was officially started by the owners on July 1, 2011, and negotiations resumed at an August 1 bargaining session, but it fell apart after three hours.[1] On August 2, 2011, the NBA filed two unfair labor practice claims against the NBPA, one at the NLRB and another at a federal district court in New York. The league accused the players of being uncooperative in negotiations by making threats to dissolve their union and file antitrust lawsuits. Hunter, in a statement released by the union, called the lawsuit "without merit" and that the union will seek to dismiss it in court.[18] On August 4, Hunter said that he thought the entire 2011–12 season would likely be canceled.[19]

The NBPA and the owners returned to negotiate for the second time on August 31 with a sense of urgency. No specifics were disclosed although both sides hoped to meet again soon. "Everyone loses if we don't reach an agreement, that's something that I think has always been understood," said union president and Los Angeles Lakers guard Derek Fisher. "I will say we are not apart in terms of an agreed urgency on getting a deal done," said NBA deputy commissioner Adam Silver.[20]

The union and owners met again on September 13 but the negotiation soon collapsed. The salary cap structure remained the main source of disagreement. Owners wanted to create a hard cap for team payroll. The union wanted to keep the current structure intact, referring to it as a "blood issue". Players were willing to cut salary only if owners agree to compromise on the salary cap. But owners were unwilling to concede, saying that there must be a system in place that allows all teams to compete.[21] Five of the sports agentsArn Tellem, Bill Duffy, Mark Bartelstein, Jeff Schwartz and Dan Fegan—who represent one-third of NBA players spoke with each other about decertifying the union. They believed owners have most of the leverage in negotiation and viewed decertification as a way for players to take control. Hunter said however that players have not considered decertification at this point.[22]

On September 15, Fisher sent an email out to 400-plus players asking for unity. In the email, he said that the recent meetings were "effective". He suggested that the failure of having a deal was not due to disagreement between players and owners, but due to disagreement among owners. Fisher also used the opportunity to counter agents' suggestion of disbanding the union, saying that they were not making "a drastic move that leaves players without a union". According to sources, there was indeed disagreement among the owners. Some thought players' proposal of taking 52% of BRI was fair, and were willing to compromise on things like tying players' future earnings to NBA's future revenue growth and maintaining current salary level. Cavaliers' Dan Gilbert and Suns' Robert Sarver were among the hardliners who oppose the deal while Knicks' James Dolan and the Lakers' Jerry Buss were among the group in favor of it.[23] Stern denied that there was a rift among owners the following day, saying, "I don't know what the basis of Derek's belief is."[24]

Cancellations

On September 23, 2011, the NBA canceled training camp, which was to begin October 3, and the first week of preseason games, which were to run October 9 through 15.[2] The incident marks only the second time in league history that games have been lost to a labor stoppage. Both the owners and the union had planned to meet on September 30 in New York and pledged to continue through the weekends if progress was being made. A source close to the situation leaked to ESPN that Stern plans to threaten the cancellation of the entire season if no deal is made, but that the union sees this as a scare tactic and not a serious threat.[25] Commentators speculated that Stern wants to put pressure on the players and prevent negotiation from dragging through the fall.[26] The meeting on September 30 was tense as Dwyane Wade reportedly yelled at Stern after he pointed his finger at Wade. The players nearly stormed out, but they remained in the meeting only after Hunter asked them to. Stern also backed down from his earlier threat that he would cancel the season if there is no deal.[27]

On October 4, the NBA canceled the remainder of the preseason. Stern said the league would lose $200 million from cancelling the preseason, and warned that the first two weeks of the regular season would also be canceled if a deal was not reached by October 10. The players proposed that they receive 53 percent of BRI, while the owners countered with 47 percent. The two sides then discussed a 50-50 split of BRI, with the owners offering the players 49 percent of BRI with incentives that would raise the value to 51 percent. The players countered by asking for 51 percent, which would increase to 53 percent using those same incentives. It was rejected by the owners.[3] Attempts for the sides to meet on October 7 failed. The union said the NBA demanded a 50-50 revenue split prior to the meeting, while the league refuted making any such demands.[28] After talks on October 9 and 10, the two sides were unable to reach a deal and Stern subsequently canceled the first two weeks of regular-season games.[4][29] BRI remained the main issue, but other differences between the two sides included topics such as luxury tax, player contract length, and the mid-level exception. The owners proposed a $2 tax for every $1 that a team spends above the tax threshold for player salaries. The tax would rise to as high as $4 for every $1 above the limit for teams that are repeat offenders. The previous CBA in comparison called for a $1 tax for every $1 over the limit.[4] The players refused to accept a hard salary cap, which they felt the more punitive luxury taxes would effectively create.[30] Stern said the owners felt a harsher luxury tax would make the league more competitive. Wade countered that a small-market team like the San Antonio Spurs had won multiple championships.[31] Andrew Zimbalist, an economist at Smith College, said that "the statistical correlation between payroll and win percentage is practically nonexistent" in the NBA.[32] ESPN.com wrote that an NBA team's draft efficiency accounted for 34 percent of its winning percentage in the past decade, while payroll showed only a 7 percent correlation.[33]

NBPA leaders met with around 30 players on October 14 and stressed unity. Washington Wizards player JaVale McGee left the meeting early and told reporters there were some players in the meeting "saying that they're ready to fold", but the majority was united.[31] McGee later denied mentioning that players were ready to fold, but his comment was recorded by reporters.[34] Fisher said McGee had "no ability to make that statement" based on the limited time he spent at the meeting.[31]

Owners and players met again on October 18–20 for 30 hours of talks over three days.[35] They met before a federal mediator, George Cohen—the director of the Federal Mediation and Conciliation Service. Cohen earlier in the year tried unsuccessfully to resolve the 2011 NFL lockout.[36] At the conclusion of the meetings, the sides remained split on the revenue split and the structure of the salary cap. The league proposed a 50-50 split of BRI, and the players proposed a range that would allow them as low as 50 percent of BRI to a maximum of 53%, depending on the league's revenues.[35] Gilbert told the players to trust that the salary cap issues could be resolved if they accepted the 50-50 proposal. Hunter responded, "I can't trust your gut. I got to trust my own gut."[37] Silver and San Antonio Spurs owner Peter Holt told reporters that the players refused to negotiate after the 50-50 proposal. Fisher told the press "that you guys were lied to" by the owners.[37] Hunter said the owners told them, "Take it or leave it."[37] Cohen decided that there was "no useful purpose" to continue mediation with the two sides.[37] Tentative agreements were reached on smaller issues, allowing a one-time exemption for teams to waive players without counting against the salary cap, granting teams an annual exemption to waive players and prorate the impact to the salary cap over multiple years, and a mid-level exception of $5 million.[38]

Hunter characterized the small-market owners as being inflexible to negotiating a deal. However, The New York Times wrote that the views of individual owners "cannot be easily categorized by market size, revenue, personal wealth or championship aspirations."[39] Dallas Mavericks owner Mark Cuban, whose team is in the fifth-largest market and has one of the highest payrolls, is as interested as small-market owners in changing the economy of the NBA. Portland Trail Blazers owner Paul Allen, the 23rd-wealthiest person in America, also supports cutting player salaries in an effort to increase competition. While owners of profitable teams like Buss and Dolan are willing to accept modest changes to the CBA, they remain united with the small-market teams based on concerns for the league's long-term health.[39]

Despite the earlier cancellation announcement, the players and the league hoped that a full 82-game schedule could be salvaged if a deal was reached in time.[40] On October 28, Stern announced the cancellation of all games through November 30 after negotiations regarding division of revenue ended without an agreement. He said that Hunter was unwilling "to go a penny below 52 [percent]" on BRI, while Hunter said, "We made a lot of concessions, but unfortunately at this time it's not enough."[5] Stern indicated that an 82-game season was no longer possible. He added that there was a tentative agreement reached for maximum contract lengths of five years for players staying with their teams or four years when signing with another team.[5]

Reports of division among players and owners surfaced. Jason Whitlock of Foxsports.com wrote that Fisher was privately working with Stern on the 50-50 split and that Hunter confronted Fisher about the issue.[41] Fisher and Stern denied a private meeting took place.[42] In a letter to the players, Fisher called the reports questioning his loyalty "absurd" and demanded "a retraction for the libelous and defamatory stories" through his attorneys.[42][43] Hunter said his "relationship with Derek is very good. There was no confrontation."[43][44] Fisher, as union president, is not empowered to make unilateral decisions for the union. While Fisher believed a 50-50 deal could be considered, Hunter maintained that the owners should never "make the same or more than the players."[45] Miami Heat owner Micky Arison, one of the owners willing to settle with players,[39] responded to a fan complaining about greedy owners and players on Twitter. Arison replied to the fan, "You are barking at the wrong owner." He was fined $500,000 by Stern, five times larger than any previous amount against an owner for publicly commenting on the lockout.[46] A group of 10 to 14 hardline owners want to cap the players' share of BRI at 50 percent and as low as 47. The group is led by Charlotte Bobcats owner Michael Jordan. During the labor dispute in 1998, then-player Jordan told Washington Wizards then-owner Abe Pollin, "If you can’t make a profit, you should sell your team."[47] Whitlock called Jordan a "sellout" wanting "current players to pay for his incompetence."[48] He cited Jordan's executive decisions to draft disappointing players Kwame Brown and Adam Morrison.[48]

In early November, about 50 players renewed talks of union decertification if the union went lower than 52.5 percent of BRI or agreed to additional restrictions on contracts, salary-cap exceptions, or free agency. Decertifying would require that 30 percent of the union—about 130 players—sign a petition, allowing an election under the auspices of the NLRB by all NBPA members to decertify with a simple majority. The NLRB traditionally does not consider a decertification petition while a charge is pending, such as the NBPA's unfair labor practice charges filed in August.[45]

The owners and players union met on November 6, and they were joined again by federal mediator Cohen. The players proposed that they receive 51 percent of BRI, with a one percent portion taken out for retired players. The owners offered a "band" that would pay the players 49 to 51 percent, depending on revenue growth. Jeff Kessler, the union’s attorney, said the league's proposal was really 50.2 percent and called the possibility of reaching 51 percent a "fraud" and an "illusion."[49] The league also proposed restrictions for teams that pay the luxury tax, banning them from sign and trade deals and limiting their use of the mid-level exception. They also proposed a "repeater tax" for teams that exceed the tax threshold thrice in a five-year span. Stern issued an ultimatum, giving the players until November 9 to accept the deal before it is lowered to 47 percent BRI and a flex salary cap.[50]

On November 15, the NBA canceled all games through December 15.[7]

Dissolving the union

The union rejected the offer on November 9 and asked for another bargaining session.[51] The two sides met again as the deadline passed. After two days of negotiation, the owners put forth a revised final offer and said that they were done bargaining. If accepted by the players, Stern hoped to start a 72-game season in mid December.[52] On November 14, the union rejected the last offer and dissolved the union.[6] The NBPA was converted into a trade association, enabling the players as individual employees to be represented by lawyers in a class action antitrust lawsuit against the league, calling the lockout an illegal group boycott.[53][54][55] Attorney David Boies, who represented the NFL owners in their 2011 lockout, agreed to represent the players and join sides with Keesler, who also represented the players in the NFL lockout.[56] On November 15, one group of NBA players (including Carmelo Anthony, Chauncey Billups, Kawhi Leonard, and Leon Powe) filed an antitrust lawsuit against the NBA in a California federal court, while another (including Anthony Tolliver, Ben Gordon, Caron Butler and Derrick Williams) filed their own suit against the NBA in a Minnesota federal court.[7] November 15 was also the day players were to receive their first paychecks if the season was played.[57]

Racial comments

Bryant Gumbel on his HBO Real Sports show in October likened Stern's role in the lockout to a "modern plantation overseer, treating NBA men as if they were his boys ... keeping the hired hands in their place."[58] The NBA owners are predominantly white, while the players are mostly black.[59] ESPN noted that William C. Rhoden in his book $40 Million Slaves had earlier dealt with the topic of players as "slaves" in spite of earning millions of dollars.[60] Stern dismissed Gumbel's comments as "an occupational hazard" of being the NBA commissioner.[61] In early November, Kessler criticized the owners' "take it or leave it" bargaining approach: "Instead of treating the players like partners, they’re treating them like plantation workers."[62] Hall of Famer Magic Johnson called the comments "ridiculous" and defended Stern's record of promoting blacks.[63] ESPN The Magazine said that the NBPA did not condone Kessler's statements, and they had intentionally avoided getting involved with Gumbel's earlier remarks. Kessler later apologized for his comments.[64]

Impact

The cancellation of each month of the season costs the players around $350 million in lost pay.[5] According to CNBC, the average player lost $220,000 after the first missed paycheck on November 15.[57] As of October 25, an estimated 400 NBA jobs have been lost due to layoffs and attrition since the lockout—around 200 in the league office and another 200 among the 30 teams.[65]

The NBA would need three to four weeks to start the season if a labor deal is reached for the 2011–12 season.[65] The league will build a new schedule from scratch based on available arena dates. In October, the league allowed arenas in Los Angeles and Chicago to reassign NBA dates for other events. The number of games between conferences could be affected as was the case in the 1999 lockout, when each team played only five or six interconference games in a 50-game schedule. Normally, each team plays teams in the other conference twice each.[65]

Players' alternatives

Going overseas

The players union encouraged players to find work overseas, hoping owners would offer better deals if they saw players having more options. Josh Childress, who played for Greek team Olympiacos before returning to the NBA in 2010, said he would not consider playing overseas during the lockout. He cited concerns with reliability of getting paid, differences in coaching styles, and lower standards of business travel compared to the NBA.[66][67] International Basketball Federation (FIBA) announced on July 29 that it would allow players under NBA contract to play overseas, provided that the contracts they signed have opt-out clauses that allow players to return once the work stoppage ends.[68][69] Stern said the league would allow players to play overseas, but he warned that it could divide the union and possibly jeopardize players' contracts if they were seriously injured.[70] Most leagues permitted the signing of locked-out NBA players with the option of opting out; the Chinese Basketball Association, however, only allowed its clubs to sign foreign free agents who could play for at least the entire season.[71][72]

NBA All-Stars signing overseas
Player Date signed New team NBA team Ref.
United States Williams, DeronDeron Williams 02011-07-16 July 16 Beşiktaş Milangaz (Turkey) New Jersey Nets [73]
Turkey Okur, MehmetMehmet Okur 02011-09-20 September 20 Türk Telekom (Turkey) Utah Jazz [74]
United States Martin, KenyonKenyon Martin 02011-09-21 September 21 Xinjiang Flying Tigers (China) Denver Nuggets [75]
Russia Kirilenko, AndreiAndrei Kirilenko 02011-10-04 October 4 CSKA Moscow (Russia) Utah Jazz [76]
France Parker, TonyTony Parker 02011-10-05 October 5 ASVEL Basket (France) San Antonio Spurs [77]
For the list of all NBA players going overseas, see 2011–12 NBA season transactions#Going overseas.

More than 80 players have decided to sign with foreign teams during the lockout. The New York Times called the migration of players overseas "one of the most overblown stories of the lockout" with a majority of those signing being "rookies, middling veterans and fringe players."[78] Deron Williams is the only 2011 All-Star going overseas, signing a one-year contract for $5 million to play for Beşiktaş of the Turkish Basketball League.[73][78] Former first overall draft pick Kenyon Martin, a free agent, signed a one-year contract with the Xinjiang Flying Tigers of the Chinese Basketball Association that will make him the highest paid player in the league's history at $500,000 a month.[78][79][80] However, he would not be able to return to the NBA until the Chinese season ends in March.[75] Unlike players who signed more lucrative contracts overseas, three-time NBA champion Tony Parker opted to play for the minimum wage of $2,000 per month with ASVEL Basket, the French team he partly owns.[77][81] Parker joined several foreign players, such as Leandro Barbosa, Boris Diaw, Rudy Fernández, Andrei Kirilenko and Mehmet Okur, who opted to play in their home countries until the lockout ends.[82]

An NBA player playing in Europe could earn as little as $50,000–$75,000 per month, while the average NBA annual salary was $5.8 million with the minimum around $500,000. The large contracts signed by Williams and Martin are extreme exceptions. In October after the cancellation of regular season games, it was not anticipated that many additional NBA players would be signed overseas; leagues had started playing, their rosters were full, and new players could disrupt the teams.[78]

Other alternatives

The Drew-Goodman game was one of the many exhibition basketball games played during the lockout. Here are James Harden (left) for the Drew League and Gary Neal (right) for the Goodman League.

Many players opted to stay in the United States instead. Americans especially would have found it hard to leave and change their lifestyle.[78] Some played in local pick-up games,[83] while others played in the more organized exhibition tournaments such as the Drew League in Los Angeles, the Melo League located in Baltimore or the Goodman League in Washington, D.C. An exhibition game between the two leagues was played on August 20, 2011, with the Goodman League defeating the Drew League, 135–134.[84][85] Drew commissioner Dino Smiley said such pro–am games during the NBA off-season were not new, but "the lockout has taken these games to a new level".[86] A tournament of NBA-only players was held in September in Las Vegas, Nevada, featuring eight teams with seven to eight players each.[87] Named the Impact Basketball Competitive Training Series, the league was dubbed by The New York Times as the "Lockout League".[88]

Training camp was not expected to be long if there ended up being a season. Some players organized workouts for their teams to build team chemistry. The NBPA announced it was setting up workout centers in Las Vegas, Los Angeles, Houston and possibly Miami for players to workout at the union's expense.[89]

The continuing lockout in October and the canceled preseason allowed Renaldo Balkman, José Juan Barea and Carlos Arroyo to play for Puerto Rico in the Pan American Games that month. Puerto Rico won the gold medal.[90][91][92]

Outside impact

Olympics

Although the 2012 Olympic men's basketball tournament was then more than a year away, qualifying tournaments in all five of FIBA's continental zones were to be held in the Northern Hemisphere summer of 2011 (the traditional basketball offseason throughout the world). The lockout resulted in the suspension of an agreement between the NBA and FIBA by which the NBA would take on most of the costs for insuring the value of its players' contracts in the event they were injured during international competition. As a result, national federations that wish to have NBA players on their squads must now provide full coverage instead of supplemental insurance.[93]

These costs are surprisingly high—one agent who represents an unnamed NBA player set to earn $10 million in the 2010–11 season said the player had received a $400,000 quote to insure his contract for his national team's FIBA qualifier. The Spanish Basketball Federation said that insuring all the NBA players on its national team for EuroBasket 2011, which doubles as the European Olympic qualifiers, could cost as much as $5.67 million. Basketball Australia announced that Andrew Bogut would not be available for the 2011 FIBA Oceania Championship; his agent indicated that the final deal-breaker was when insurers stated that they would not insure his remaining $39 million in NBA salary unless pre-existing elbow, wrist, and back injuries were excluded from the policy.[93]

The French, Russian and Argentine federations were able to insure their NBA players, and several other federations were also expected to be able to do so.[94][95] Over 30 NBA players participated in EuroBasket 2011, while Ben Gordon and Marcin Gortat opted out due to insurance concerns.[96]

Other sports

A couple of weeks before the NBA season was originally scheduled to start, Reuters and Bloomberg Businessweek speculated on the prospect of increased interest in the National Hockey League (NHL) among NBA fans. The NHL had experienced steady growth since the 2005–06 season, and they again opened the 2011–12 season in early October to record crowds. Businessweek wrote, "Just maybe, the NBA’s sketchy situation is already having a positive effect on the NHL."[97][98] However several NHL teams (nearly half of which do not have an NBA team in their market) do not plan to market directly to NBA fans during the lockout.[99][100]

The University of Texas at San Antonio (UTSA), in its inaugural college football season, drew 40,000 fans to its games in September. The San Antonio Business Journal speculated on UTSA's opportunities to grow its fan base with the canceled NBA games in San Antonio.[101]

Boston Herald speculated that NCAA college basketball would have higher television ratings and attendance during the lockout.[102] However, Sporting News noted that "there was no obvious boost in popularity in the college game" during the previous lockout when college basketball attendance increased by an average of 21 people per game.[103]

NBA cities

Mayors from 14 NBA cities wrote an open letter to NBA commissioner David Stern and NBPA chief Billy Hunter, requesting that they end the lockout based on "the perspective [of city] residents and the negative impact a canceled season might have on them, our cities, and our local economies."[104] TIME noted that arena workers would be affected by the cancellation of games. However, separate studies by University of Maryland, Baltimore County and Lake Forest College found no historic significant impact to the economies of cities with sports franchises affected by work stoppages. Explanations included consumer shifting of spending on sporting events to other forms of entertainment, reduced local government spending on crowd and traffic control, and higher productivity by the general workforce without the distraction of games.[104]

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