With players' lawsuits filed, hope barely flickers for an NBA season

Is it time to kiss the NBA season good-bye?

Hopes that at least part of the season could be salvaged are dimming by the day, especially now that the NBA players have disbanded their union and filed two antitrust lawsuits against the league. 

“My sense is that we are going to see months and months of legal wrangling, so much so that it’s highly unlikely there will be any games to watch for the 2011-12 season,” says Robert Boland, academic chairman at the New York University Tisch Center for Sports Management.

The main issues dividing the 450 players and the 30 club owners are how the league’s roughly $4 billion in income should be divided between them.

The owners say that 22 of 30 NBA teams are losing money – totaling $300 million in 2010 – and they proposed to cut players' salaries 40 percent (about $800 million). They also want a hard salary cap of $45 million a year per team, compared with the soft cap of $58 million currently in use. Most recently, the owners rejected the players' proposal of a 50-50 split of all basketball-related income.

Collective bargaining on a new agreement began early this year, with the expiration of six-year pact signed in 2005. 

The legal issues are very complex, says Mr. Boland, who teaches courses in law and sports, because American professional sports leagues are formally exempt from national antitrust laws.

But that is probably small consolation to fans, say public relations specialists. 

“While there is certainly merit to both the owners' and the players' sides, from a PR perspective, fans only see rich people arguing with other rich people over sums of money that most fans can't even fathom. That's what makes it such a PR headache,” says Jason Milch, vice president of public reputation services for Jaffe PR. “It's not workers fighting for basic health benefits. It's the rich wanting to get richer, and in this economy Americans have zero tolerance for that.”

The NBA’s business model has been due for correction for years, and the struggling economy has served as a catalyst for that adjustment, say some observers.

“Everyone in the ticket business knows that that NBA ticket prices have been placed way too high, and it has to do with players’ salaries,” says Don Vaccaro, CEO of TicketNetwork, who has more than 30 years' experience in the sports ticketing industry. That happened because every team wanted to cement its reputation by having top superstars – which for several years running as bid those players' salaries to exorbitant levels, he says. 

“The NBA is due for a contraction,” Mr. Vaccaro adds. Faced with competition from soccer and other sports – including college basketball, which has shown a 40 percent rise in ticket sales over 2010 – many arenas are not selling out with the regularity they came to depend on, which also drives TV contracts. “The current economic model is unsustainable,” says Vaccaro.

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