The collective bargaining agreement (CBA) that the National Basketball Association (NBA) players and owners have been functioning under for the past 6 years expired on June 30, 2011.  The CBA sets the rules for salaries, trades, and profit allocation.  As the previous CBA came close to ending in June the players union and the owners tried to negotiate a new agreement.  Players, owners and fans certainly want to avoid a strike that could cause the cancellation of any games.  June 30^th has come and gone and there is still no agreement between the players and the owners.  On June 30^th the owners declared a lockout and this battle went into overtime.

NBA Commissioner David Stern claims that 22 of the league’s 30 teams are losing money and expected to lose $340 million this season.  The owners have not been willing to open their ledgers and demonstrate this loss.  The NBA does not have revenue sharing like the NFL, so all teams do not benefit when one team negotiates a lucrative, local television deal for example.  Because there is no revenue sharing the owners want to impose a hard salary cap which the players strongly oppose.  A hard salary cap would put a limit on the amount that any team could spend on player salary.  This would make it nearly impossible for one team to have several star players.  Under the last CBA, there was a soft salary cap.  If a team spent over a certain amount on player salary, a “luxury tax” was imposed on that team and then shared by the other teams that did not overspend. The players and owners have fought the hardest over basketball-related income (BRI), which includes, among other things, ticket sales and concessions.  Under the last CBA, the players received 57% of BRI and the owners received 43%.  During negotiations, the players agreed to split the BRI 53-47, but the owners will only agree to a 50-50 split.

The players have rejected the owners’ most recent offer.  The National Basketball Players Association (NBPA) has disbanded the players union and is suing the league for antitrust violations, which prohibit anti-competitive behavior and unfair business practices.  It appears that all basketball fans will have to watch is a battle in a court room, rather than on a court.