Lockout!

By Rothberg, Peter | The Nation, August 10, 1998 | Go to article overview

Lockout!


Rothberg, Peter, The Nation


The National Basketball Association is about to lose its distinction as the only major sports league never to lose a game to labor strife. On July 1, the owners locked out the players and suspended all league business until the two parties sign a new labor accord. This is likely to drag on past the pre-season opener in late October.

The key issue is the salary cap, which under the 1995 contract was not to exceed 51.8 percent of total revenues--said revenues hitting $1.7 billion last season. The owners say salaries have skyrocketed to 57 percent, and now insist on eliminating what's known as the Larry Bird Exception. This allows teams to re-sign their own free agents at any price over and above the cap. This is how the Chicago Bulls were able to pay Michael Jordan $33 million last year even though the supposed cap for an entire team of twelve was set at $26.9 million. The players' union sees any closing of this loophole as an unacceptable giveback. As Billy Hunter, its executive director, explains, "Our position is if you don't want to pay it, just don't do it. Just say no." The owners' position, in effect, is that they can't say no; that with thirteen of the twenty-nine NBA teams having lost money last season, they need to be saved from themselves. The union counters that no more than four or five teams are in the red and that the owners have to be accountable for the salaries they themselves mete out. Would the owners favor a cap on their stock options?

Such free-market arguments notwithstanding, it's clear that the current salary structure makes it difficult for small-market teams--with less TV money, lower ticket prices and smaller shares of merchandising revenue--to compete. It's also true that the NBA's lowest-tier players are being squeezed by the astronomical salaries commanded by the mega-stars. Last year about 120 players (more than 20 percent) earned the league minimum of $272,500, while thirteen earned more than $10 million each. Currently 9 percent of the players earn 82 percent of the approximately $1 billion in salaries.

The league has proposed forbidding any one player from earning more than 30 percent of his team's available cap. This would make for some pay equity by forcing salaries down at the highest end, but the union opposes it, arguing that stratospheric salaries for stars ultimately mean higher wages for all. Although the union favors a raised minimum wage for veterans, its version of trickle-down economics is as dubious as the one Reagan peddled to the country.

The fortunes of professional athletes were not always thus. As workers they were late in organizing, and just a generation ago they were bound forever to the team that first signed them. The so-called reserve clause, which applied in basketball as well as in baseball, football and hockey, stripped them of any effective bargaining power. Even a legend like Joe DiMaggio was forced to take pay cuts at the peak of his career. …

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