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2011 NBA lockout. Kevin Chu. Background. The previous Collective Bargaining Agreement signed on July 2005 was set to expire on July 2011. Did not want a repeat of the 1998-99 lockout. Negotiations on a new CBA began in early 2011.

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2011 nba lockout

2011 NBA lockout

Kevin Chu


Background
Background

  • The previous Collective Bargaining Agreement signed on July 2005 was set to expire on July 2011.

  • Did not want a repeat of the 1998-99 lockout.

  • Negotiations on a new CBA began in early 2011.

  • The owners and National Basketball Players Association (NBPA) could not agree on the split of Basketball-Related Income and how the salary cap should be implemented.


Timeline
Timeline

  • July 1: The lockout begins

  • 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.

  • October 4: The NBA canceled the remainder of the preseason.

  • October 10: The first two weeks of the regular season canceled.

  • October 28: All games through November 30 canceled.


Timeline1
Timeline

  • November 14: The NBPA dissolves labor union into a trade association.

  • November 15: The NBA canceled all games through December 15. Players filed antitrust lawsuits against the NBA in California and Minnesota federal courts.

  • November 26: The NBA owners and players reached a tentative agreement to end the lockout.


Timeline2
Timeline

  • December 1: The NBPA re-formed as a union.

  • December 8: The new CBA is ratified, officially ending the lockout.

  • December 25: The first game of the season starts.


Points of contention
Points of Contention

  • There were many provisions in the new CBA

  • I picked 6 points to show the owners and player’s disagreements about the CBA.

  • Ending the lockout

  • Split of Basketball Related Income

  • The Salary Cap

  • The Luxury Tax

  • An Amnesty Clause

  • The Mid-Level Exception


Ending the lockout
Ending the Lockout

  • Although both sides wanted to end the lockout, the players were more pressured for the lockout to end

  • For most players, their NBA salary is their only source of income. The Owners are all investors and real estate moguls who have other sources of income.

  • Owners: 10

  • NBPA: 15


Split of basketball related income
Split of Basketball Related Income

  • Under the previous CBA, income was split 57-43 between the players and owners.

  • The owners claimed that the league lost 300 million last year and 22 out of the 30 teams failed to make profit.

  • Owners wanted the players to only have 47%. The players compromised with 53% but the owners would not agree.

  • Owners: 35

  • NBPA: 30


The salary cap
The Salary Cap

  • Team Owners wanted a hard salary cap in order to reduce player salaries and to close to close the gap between rich and poor teams.

  • Players wanted a soft cap so they could get more money. The players were very adamant that there would be only a soft cap.

  • Owners: 20

  • NBPA: 25


Luxury tax
Luxury Tax

  • Team Owners wanted to have a higher luxury tax to stop rich teams from overspending and overpaying players.

  • Players wanted a lesser luxury tax so rich teams would be willing to overpay. The players believed that a harsh luxury tax was essentially the same thing as a hard cap.

  • Owners: 20

  • NBPA: 20


Amnesty clause
Amnesty Clause

  • Team owners wanted to be able a player and remove his contract from the team salary.

  • Players did not care too much and they would still be paid.

  • Owners: 10

  • NBPA: 0


Mid level exception mle
Mid-Level Exception(MLE)

  • Teams over the salary cap could still sign players will a Mid-Level Exception currently valued at $5 million.

  • Owners wanted to lower the MLE to $2.5 million and only allow it to be used every other year.

  • Players wanted to keep the $5 million MLE the old CBA had it at.

  • Owners: 5

  • NBPA: 10


Aw protocol
AW protocol

The Owners original AW without adding in the luxury tax add up to 45 while the Player’s AW add up to 50. So the Owners get a harsher luxury tax and it becomes 65-50. We will say the fluid item is the BRI, rather than the luxury tax.

  • 65-(35x)=50+(30x)

  • X=3/13

  • So each side gets ~57.


Compare to real life
Compare to Real Life

  • Mostly consistent with what happened in real life.

  • All of the arguments were fluid so even if they “won” it would not be a complete victory.

    Ex. The players wanted the keep the $5 million mid-level exception, but the MLE in the new contract varied between $3 to $5 million depending on the current team salary.


Impacts of the nba lockout
Impacts of the NBA Lockout

  • Estimated $1 billion in lost television advertisement revenue.

  • Estimated 400 NBA related jobs were laid off.

  • Sports bars and other sports related venues lost customers.

  • The season was shortened to 66 games with less time to rest in between games. Many team trainers and doctors said that this led to an increased frequency of injury.


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