Is the Next NBA Lockout Looming?

by Brandon S. Ross

On October 6, 2014, the National Basketball Association (“NBA”) publicly announced that it had reached a nine-year exclusive media-rights deal with ESPN and Turner Sports, worth an eye-popping $24 billion.[1] Starting with the 2016-2017 NBA season, ESPN and Turner Sports will pay the NBA $2.6 billion per year – a 180% increase over the last deal.[2] To put this into context, when the NBA reached its last television deal back in 2007, which was worth around $930 million, it represented a mere 21% increase from the previous one.[3] While the deal will have a minimal effect on the fans,[4] you can bet that there is one group of people that it will have a major impact on – the players.

After a lengthy, 149-day lockout in 2011 that wound up costing the NBA twenty-six games out of a possible eighty-two,[5] the players union and the owners eventually agreed to a Collective Bargaining Agreement (“CBA”) that would last for ten years, with an opt-out provision that the players could exercise after six years[6] – the exact same time that the new television deal kicks in. Should the players decide to opt out of the current CBA in 2017, many NBA pundits believe that this time around, the players will use the massive infusion of wealth from the new television deal, as leverage to negotiate for a bigger piece of the basketball-related income (“BRI”) that they relinquished to the owners in 2011.[7] The main reason that the owners were able to increase their share of BRI during the 2011 negotiation period was that twenty-two out of thirty of them were losing money, and that overall losses in the 2010-2011 season added up to about $370 million – a figure that made cutting the players’ share a top priority for the owners.[8]

During the negotiations that will inevitably take place after the 2016-2017 NBA season, look for the players to aggressively demand back much, if not all, of the BRI they surrendered in 2011. When asked about the new multibillion-dollar media deal, NBA superstar LeBron James made a pointed statement by asserting that, “[t]he whole thing that went on with the negotiation process was that the owners were telling us that they were losing money. There is no way they can sit in front of us and tell us that right now.”[9] Fellow NBA legend and future Hall-of-Famer Kobe Bryant took to Twitter to voice his opinion on the matter: “[p]layers are ‘encouraged’ per new CBA to take less to win or risk being called selfish [and] ungrateful while [NBATV] deal goes [up] by a [billion].”[10] Perennial NBA all-star Kevin Durant added, “[t]hat’s a lot of money. I don’t see how the owners can say they’re losing money now.”[11] These sentiments, uttered by arguably the three most polarizing figures in the NBA, sent shockwaves throughout the entire league. It let the owners know that once the negotiation period in the summer of 2017 rolls around, the players are going to do what they do best: come ready to play.

[1] See Bill Littlefield, NBA Inks New $24B TV Deal: Lockout Likely, Only a Game (Oct. 11, 2014), http://onlyagame.wbur.org/2014/10/11/nba-tv-deal-espn-turner.

[2] Id.

[3] Kevin Draper, What the NBA’s Insane New TV Deal Means for the League and for You, Deadspin (Oct. 6, 2014, 2:49 PM), http://deadspin.com/what-the-nbas-insane-new-tv-deal-means-for-the-league-a-1642926274.

[4] See Only a Game, supra note 1 (“For fans nothing really is going to change. . . . But basically you’ll continue to watch the NBA the same way you have for the last decade.”).

[5] Paul D. Staudohar, The Basketball Lockout of 2011, Monthly Lab. Rev., Dec. 2012, at 28, available at http://www.bls.gov/opub/mlr/2012/12/art3full.pdf.

[6] Id. at 32.

[7] See id. (explaining that the 2011 CBA resulted in a 50-50 split of BRI between players and owners, with the players’ share dropping from 57% under the previous CBA).

[8] Id. at 30.

[9] Harvey Araton, Owners’ Poverty Claims Are History, James Says., N.Y. Times, Oct. 7, 2014, at B12.

[10] Kobe Bryant, Twitter (Oct. 7, 2014, 12:42 PM), https://twitter.com/kobebryant/status/519543277771427840.

[11] Darnell Mayberry, Twitter (Oct. 7, 2014, 12:36 PM), https://twitter.com/DarnellMayberry/status/519541673877975040.

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