The NBA Lockout: Lesson Learned?

December 6, 2011

Political economy


The NBA Lockout is finally over to everyone’s relief–or at least mine.  As lnk72792 discussed, the players and owners finally managed to set aside their differences and come together to save this year’s season.

The NBA, as we all knew, had been broken for years.  Billionaire owners consistently competed to pay players millions of dollars more than their worth.  Even under the new labor deal, not much has changed.  Collectively, players will only be receiving $200-300 million less under the new deal.  That’s out of an estimated $4 billion pie.  It’s safe to say that the owners will continue to sign their fair share of Gilbert Arenas’ and Rashard Lewis’.  Realizing this, the player and owners actually went ahead and added an “amnesty clause” to this new deal.  Teams will now be allowed to waive the contract of any player they choose–as long as he was signed before the lockout, of course–essentially wiping that contract from its books.  All of this shows that–despite what they are saying in the media–both sides used a somewhat ‘Burkeian’ approach to negotiations.

I, however, believe even more radical changes should have been made.  Employing conservative ideals to labor negotiations has led to little change.  Billionare owners–or the elite in this case–have proven time and time again that they cannot be trusted to make rational decisions–a notion contrary to that ‘Burkeian’ principles that would have left decision-making in their hands.  Even owners themselves realized their incompetence in negotiating the last labor deal in 2005, and as a result, decided to bargain on tough terms immediately after the previous deal expired.  At the end though, unfortunately, real change–an overturning of the way the system operates–has not come.

One graffiti artist's interpretation of the new deal...

As a result, most analysts believe that both parties will opt out as soon as the new labor deal will let them (six years in this case).  Had the NBA fundamentally changed the way it operated and not put its trust in the hands of its decadent elite, this may have not been the case.

The entire structure of the league should have been altered.  You know things are bad when five of the thirty teams in the league would have been financially better off had there been no season this year.  As lnk72782 discussed, the NBA is primarily a business, and as such, should have ensured that they could have established a sustainable business model during negotiations.  Such drastic change, it seems, will probably take several years to come (if they come at all).

What do you guys think?  Did the new labor deal do a good job addressing the NBA’s problems?  Will LeBron James ever win his illusive first title?  Were the players and owners right in negotiating in relatively ‘Burkeian’ and conservative ideals?

I personally don’t care.  I’m just excited to watch my Chicago Bulls make it to the finals (For any of those who disagree, come talk to me in June).  With three games scheduled for the 25th of this month, I guess it’s going to be a white Christmas after all.

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6 Comments on “The NBA Lockout: Lesson Learned?”

  1. Obada Ghabra Says:

    I think that the NBA could have negotiated a better deal, in which players were given more reasonable salaries. However, in some ways, it is better that the players and owners brought about more conservative change as Burke would suggest. The requests for more radical change have been causing problems. If the owners had pushed for even lower pay for the players, the lockout may have continued which would be of no benefit to anyone. Hopefully, as Burke would prefer, we will see a gradual re-negotiation of the deal over the next decade or so which would lower the ridiculous pay of the players the next time this issue comes up.

    • ymsyed Says:

      I definitely agree with you in that they lockout would have lasted much longer had the owners demanded more radical change. There probably would not have been an NBA season this year if that was the case.

      The problem is that players–especially those of middling talent–are always overvalued right before there contracts are negotiated. Owners and teams need to understand the true worth of a player before signing him for a large sum of money and suffering the consequences for several years thereafter. Hopefully you’re right, and we eventually see more change come in negotiations in the future.

  2. ceabee Says:

    I don’t think the new labor deal has done a good job addressing the NBA’s problems, because I don’t think it is going to help the unprofitable teams make a profit. I understand that the players, who make such an enormous amount of money in the first place, were arguing not only for themselves, but for players years in the future. It is unavoidable that the players will get less money in the next CBA, and the players of this day and age were willing to lose a few pay checks to make sure their point was made. I side with the players in this argument. There are only roughly 400 people in the world who can do what they do, so I agree in them being paid such high salaries. I think both sides were right in negotiating in relatively ‘Burkeian’ and conservative ideals, however I don’t agree in the way David Stern, as an individual, negotiated at all (but that’s beside the point).
    On another note, I am less concerned with the CBA, and more concerned with future possible trades. I need my Orlando Magic to do everything they can to make sure Dwight Howard stays in Orlando!

    • ymsyed Says:

      Players are definitely going to continue making less and less real money as future labor deals are negotiated. While I agree with your point that there they have a very special and selective skill, I still think they are overpaid. The demand–the revenue that franchises are making–clearly cannot keep up with the “supply.” I believe the fact that NBA teams cannot make money giving players such huge contracts implies that the players are not worth those contracts in an economic sense.

      Also, while I agree with you that a “Burkeian” negotiation was probably the right thing to do, I think it’s more about the fact that they didn’t really have any other options. More radical change probably would not have been accepted.

      Keep dreaming about Dwight Howard staying with the Magic. You can look forward to seeing him in a Bulls uniform on Christmas day.

  3. joeyalessi Says:

    I think the new labor deal did a decent job of solving the NBA’s problems. In the end, no side will ever be fully happy but that’s life. Who really cares as long as there is basketball. Im not a huge hockey fan, so I need some NBA in my life. If neither side decided to budge at all, then this lockout would have lasted at least this season and most likely part of next season. I still don’t think the small market teams will have much of a chance to survive. It’s not a stretch to say in ten years there will only be 16 NBA teams. I think both sides were right in arguing with ‘Burkeian’ and conservative ideals. The players salaries will probably never go down again but I have no problem with that. LeBron will not get that first title this year. I think it comes down to the Lakers and the Bulls in the Finals. It will go seven games………………..LAKERS WIN

    • ymsyed Says:

      Yeah I don’t know how my life would have been if there wasn’t an NBA season this year. I agree; there definitely should have been some sort of contraction in the league. I don’t think there will ever be 16 teams, but I could easily see a league with 25 or 26 teams instead. I think it would make the whole system more efficient and maybe solve some of the NBA’s problems. I also think it would result in a product problem for us fans.

      You had it right just until you said that the Lakers would win….

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