The structure and profitability of the NBA is controlled through the Collective Bargaining Agreement (CBA). This is a contract formed between the NBA in the form of the 30 team owners and the players workers Union, known as the NBA Players Association (NBA PA). Once agreed this contract lasts for 6 seasons before being renewed again. If the two sides cannot reach an agreement the players go on strike, in sports this is known as a “lockout”.
What Was the Reason for the 2011 NBA Lockout? Ahead of the 2011/12 NBA Season the NBA CBA was due for renewal. Unfortunately the two sides were not able to reach an agreement ahead of the season’s usual start date. This resulted in the 2011 NBA Lockout. Once agreement was made a shortened regular season began on Christmas Day 2011, and ended on April 26, 2012 with teams playing just 66 instead of the usual 82 games.
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The main CBA disagreement between the owners and the players came in regard to the division of revenue. In particular, how the salary cap and the luxury tax were being structured for the next 7 years. The owners were hoping to reduce the players’ share of income for the season, the players wanted to meet in the middle. Owners also wanted harder luxury taxes to drive parity between teams, so one or two rich owners couldn’t “buy” a title. The players were in favor of softer luxury tax rules, which would ultimately mean more money being spent on player wages. This brilliant bleacher report article from the time lays out the details click here.
The NBA CBA has been regularly reviewed since its inception in 1964 when a near strike at the 1964 All-Star game forced the league to adopt a pension plan. The first true CBA was established in 1970, and new agreements followed in 1973 & 1976. The 1976 CBA saw the settlement of the “Oscar Robertson” lawsuit, which had been filed by the players association in 1970 in an attempt to block the NBA-ABA merger. This was a landmark moment that would see the modern NBA business emerge and go from strength to strength.
How many NBA lockouts have there been?
The 2011 NBA lockout was the most recent of 4 NBA lockouts.
The first official one was in 1995, however, no games were lost due to the 1995 lockout. A new collective bargaining agreement was signed before the start of the 1995–96 season. Among the key issues in the labor dispute were the salary cap, free agency, a rookie salary cap, and revenue sharing.
The second NBA lockout came ahead of the next NBA season in 1996. It revolved around a dispute around $50million of extra broadcast revenue and how it was to be allocated between owners and players. Ultimately the dispute was settled in hours and no games were affected.
The third and longest NBA lockout came in 1998. It lasted from July 1, 1998, to January 20, 1999, and forced the 1998–99 regular season to be shortened to just 50 games and resulted in the cancellation of that season’s All-Star Game. Again this lockout did not coincide with a scheduled review of the CBA, but rather when the owners chose to revisit the contract looking to get better terms on salary cap rules and a ceiling on individual player salaries.
2011 CBA Disagreements
The disagreements and negotiations were heated and not successful. The owners of the league were basically asking the commissioner to reduce players’ basketball income from 57 percent all the way down to 47 percent. It was reported a little while afterwards that the players were trying to counteroffer by bringing it to 53 percent instead. However, the two sides were still at an impasse that nobody saw an end too. The offers were being sent and rejected fast by both parties for a pretty substantial amount of time. It was pretty safe to say that the CBA negotiations weren’t going well. Eventually, it was reported that the players union rejected another offer from the owners and that the owners were getting fed up with it. They requested another bargaining session and told the union that they refused to continue negotiating further than this. It was pretty clear that they wanted it to be over with and weren’t going to be budging from their ground if no conclusion was reached. The union once again chose to decline the offer. After that, the union was actually dissolved and they kind of formed the NBPA into a trade association to allow the players to act as individual employees. It was essentially a time when the employees were filing a class action antitrust lawsuit against the league.
2011 CBA Settlement and the end of the Lockout
It took legal action and more time but eventually both sides agreed to continue their negotiations. They spent about two full days talking before negotiating for 15 hours on the third day. That third day was the time that both sides reached a tentative deal. The union re-formed at this point and received tremendous support from the NBA players. The union coming back allowed for more negotiations to come into place regarding smaller secondary issues that the players had. There were issues regarding things like the age limit for the NBA Draft and how players were to be recalled and sent down to the G-League. Then finally, the agreement was made public. The players were to be owed 51.2 percent of the income that season and would rubber band back and forth between 49 to 51 percent. More rules were talked about at this time as well. The Derrick Rose Rule was mentioned and started to be implemented regarding how a team can re-sign a young star fairly and effectively. It took an incredibly long time to make this dream a reality, but the players were finally able to rest easy that they were able to work for their income. However, this unfortunately isn’t the last that we are going to hear about the leagues CBA negotiations and the possibilities of another lockout. In fact, the league is about to undergo another review on these terms very soon. They might even be discussing ground-level terms as we speak. If those don’t end up going well, then we very well could face another NBA lockout in the near future.
Impact on the wider NBA
While you might not think these negotiations had a big impact on the league, you’d be wrong. It all started towards the end of September when the league announced that they would be canceling training camp entirely. Not only that, but they were forced to cancel the first week of preseason games. At this point in time, there were genuine leaks that were talking about canceling the entire season if no agreement could be made soon. The leaks were made regarding comments from the league commissioner at the time David Stern. Stern’s comments weren’t taken very well and when he pointed at Dwyane Wade in an upcoming meeting between the two, it almost broke the two sides up even further. The players attempted to storm out of the meeting from this point forward, but they were convinced to stay by another official. Stern also took back his comments about a potential cancellation of the season at this point. A week later, the league announced that the rest of the preseason could be entirely canceled. Stern announced that the league would be losing $200 million by doing so. The negotiations kept going on past the preseason ended as well, making matters that much worse for the fans and for the league’s total revenue. It lasted another full month before they were able to get the year underway again. Actually, it was so close to two months that you could probably just round up. That’s how serious these matters were at the time. On December 8th, the lockout was officially over. It was a 161-day work stoppage in the National Basketball League which caused the regular season to reduce the number of games they were going to play by nearly 20. Instead of an 82-game season, they were only going to be playing 66. Multiple reports indicate that the new season schedule lost the league approximately $400 million in revenue. Not just for the owners and the league, but for the players as well. CNBC announced that the average player lost $220,000 for the missed time. Though some sources say that the league did compensate the players $100,000 each for salaries falling below 57 percent in the previous year. Even NBA arena workers were getting hammered by the lockout. Many of them worked part-time to bring in some form of income to pay their bills. With the lockout going on, many of them were losing out on a lot of wages that they should have been collecting due to canceled games.