CBA Lockout Series: Part 1

If the NFL lockout didn’t have you upset with the nature of our professional sports, then

the NBA’s recent development, or rather lack of development, will. Despite several
attempts at coming to an agreement and keeping the hopes for next season alive, the
owners decided to lock out the NBA players union at midnight on Friday, July 1st. Many
fans expected something of this magnitude to happen, but with all of the uncertainty
surrounding these types of labor disagreements, there seems to be no end in the near
future for such disputes.

I know very little about the NFL and its issues, but as opposed to the NFL owners’ claims, the NBA is losing money.  “If you synthesize all the facts and circumstances between the two leagues, the main difference is that the NFL owners do not claim that the system is broken. The NFL owners claim that they want to make more money under the system,” said Gabe Feldman, the director of the school’s sports law program. Broadcasting networks, especially the likes of ESPN, FOX, CBS, and NBC, have a substantial stake in the NFL and how it does.  Whether it is a shortened NFL season or no season at all, these networks, along with some of their subsidiaries, will be affected a great deal:  they rely on the NFL to sell their incoming primetime lineups.  Basic ad-sales.

The NBA’s TV revenues, while respectable, are miniscule compared with those of the NFL, making basketball more dependent on ticket sales.  If games are cancelled as part of the lockout, reports suggest that the NBA will continue to receive income from its national television contracts, but the current eight-year deal pays a total of just $7.4 billion, little money compared to NFL’s last $17.6 billion deal. National games are equally shared in this regard, but individual teams can keep all of their local television revenues.  The Lakers, for example, recently signed a $3 billion deal with FoxSports, whereas the Hornets’ contract with COX Sports Television yields them somewhere between $8-$9 million a year.

Bill Sutton, once a marketing consultant with the NBA, recently explained: “The revenue-sharing streams in the NBA aren’t as great as they are in the NFL, and by that I mean the television contract. All the teams share equally, but all the NBA markets all have local television. In the NFL, you don’t have local television programming. The variance — say, the Knicks with MSG Network, or other teams — have more resources. So there are inequities. You have to put a revenue-sharing model in place that’s going to help the smaller-market teams.”  Simple math shows that it’s becoming very difficult for some teams to survive.

Better have some games recorded or subscribe to NBATV, the lockout could be long.

Look out for Part 2 of this Installment next weekwhen Rohit discusses the interests of the owners and players.