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

'Months and months of legal wrangling' ahead dim prospects for any sort of 2011-12 NBA season, says one sports management expert. Two groups of players filed federal antitrust lawsuits Wednesday.

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.

Those with the most to lose, he says, are the big NBA stars with endorsement deals. “No company wants to be seen giving millions to some player already making millions during this economy.”

Not everyone expects the standoff to hurt the league in the eyes of the average fan.

“The NBA has shut down before and baseball has had its strike seasons, and it took awhile but the fans did forgive,” says Dan Lebowitz, executive director of the Institute for the Study of Sport in Society at Northeastern University.

“At first, fans have very visceral reactions of ‘how can you do this?’ or “why my team?’ But when your team is back out there and you want to cheer – or have that tail-gate party – the anger vanishes,” agrees Villanova sociology professor Rick Eckstein. “It may be slow in coming back, but I say within a half-year this will be forgotten.”

Legal analysts say there's a reason that groups of players elected to file their two antitrust suits in northern California and Minnesota. The federal court in San Francisco is under jurisdiction of the Ninth Circuit Court of Appeals, which has the reputation of being one of the most labor-friendly in the appellate court system. The federal court in Minnesota was where 20 years of litigation between NFL players and owners took place, with players winning the lion’s share.

They also say that fans should watch the litigation carefully and not rely solely on local media reports, which can have an ax to grind.

“What's lost in the coverage is the NBA's goals in initiating the work stoppage," says Larry DeGaris, director of the Academic Sports Marketing Program at the University of Indianapolis, in an e-mail. "They want to  ensure that each team has a chance to be competitive on the court, and each team has a chance to be profitable … if it is run well. That's just not the case under the current system. There are several teams on the brink of folding, as there aren't a lot of potential owners lined up looking to by a business that loses $10 million plus a year.” 

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