NBA Lockout: (No) Pay Day

Since NBA players are paid in 24 equal installments throughout the year, today is the first day that guys are missing paychecks for the 2011-22 season.  Unfortunately, that money isn’t being reimbursed whenever the lockout does eventually end.  Given that 60% of NBA players go bankrupt five years after they retire, every lost paycheck exacerbates their need for a new labor deal.  Here’s an idea of what some notable players lost today (and will continue to lose every two weeks until a new CBA is reached).  The totals are gross amounts that don’t take into account taxes or escrow payments.

2011 All-NBA First Team
Kobe Bryant- $1,051,833

Dwight Howard- $745,225

LeBron James- $667,604

Kevin Durant- $566,833

Derrick Rose- $291,404

2011 All-NBA Second Team

Dirk Nowitzki- $795,536

Pau Gasol- $779,756

Amar'e Stoudemire- $759,071

Dwyane Wade- $646,333

Russell Westbrook- $211,767

2011 All-NBA Third Team

Chris Paul- $681,658

Manu Ginobili- $540,876

Al Horford- $500,000

LaMarcus Aldridge- $491,666

Zach Randolph- FREE AGENT

Rookie of the Year: Blake Griffin- $238,795
Sixth Man: Lamar Odom- $370,833

Most Improved Player: Kevin Love- $192,071

The NBA Lockout: By the Numbers

 

The NBA season should be underway right now.  At this very minute, the up-and-coming Chicago Bulls should be on the court against the defending champion Dallas Mavericks. Instead, you know the trending Twitter topic #ThingsLongerThanKimsMarriage?  Well, the NBA lockout is longer.  Literally, twice as long.  Kris Humpheries was out of work for 72 days before being married to Kim Kardashian for 72 days.

Regardless of when the NBA season starts, the lockout is doing some serious damage to the business of basketball.  Over the last couple weeks, I've compiled some stats indicating what’s being affected.  Let's take a look at The NBA Lockout: By the Numbers.

3- Three NBA teams have been sold during the lockout.  Though these new owners of the Hawks, Pistons and 76ers knew what they were getting into, they certainly wished their teams would be back on the court by now.

14- Last month, mayors in 14 of 29 NBA cities wrote an open letter to the league and its players asking – well, more like pleading – that they end the lockout.  An Indiana real estate consulting firm estimated $55 million in losses to the state if the Pacers don’t play this year.  Not surprisingly, Indianapolis Mayor Gregory Ballard signed the letter.

400- Although progress reportedly is being made on a new collective bargaining agreement, job losses attributed to the work stoppage have reached 400.  The losses are estimated at 200 at league headquarters and 200 amongst the 30 teams.

$500,000- Miami Heat owner Micky Arison was fined $500,000 for his candid tweets about the state of labor negotiations.  Arison’s tweets indicate a divide in the ownership group, but the tension supposedly is far worse on the union side.

$600,000- The National Basketball Players Association spent $600,000 in the year leading up to the lockout on legal, consulting and public relations fees.  With the lockout ongoing and players losing the PR battle, the money doesn’t appear to be well spent.

$1.5 million- Each NBA team could lose up to $1.5 million in ticket revenue for every regular season game lost to a lockout.  Adding to the potential losses, all NBA teams have promised refunds plus interest for cancelled games.  Consider this: your money is safer in NBA tickets than it is in the stock market.

$18 million- Memphis taxpayers could be on the hook for $18 million in FedEx Forum bond payments if the entire season is cancelled.  The city-owned arena relies on taxes from game revenue to cover the annual debt service.  If the lockout extends into December, Memphis could file a lawsuit against the NBA to recoup the money.

$100 million- The city of Orlando projects $100 million in economic impact from hosting the 2012 NBA All-Star Game.  Should the game no take place, losing the money would be devastating for the Orlando economy.

$400 million- To date, the NBA has canceled the first month of the regular season.  In losing nearly 200 games, the NBA is forgoing more than $400 million.  That money isn’t coming back.

$500 million- Financial analysts predict the shoe industry could lose $500 million this year if the league cancels the entire season.  That’s approximately a quarter of the annual basketball shoe market.  Some of the brands with the most at stake: Adidas, Nike, Champs and Foot Locker.

$700 million- TV networks and the NBA stand to lose nearly $700 million in ad sales if the entire season is lost to a lockout.  Recently released data indicated advertisers spent $627 million on national NBA broadcasts last year, and thanks to high ratings, the total was expected to increase by 10% this season.

$4 billion- The NBA is a $4 billion business.  To put that into perspective, the NBA is a bigger business than Hasbro Toys, JetBlue Airways or MetroPCS.  Try imaging one of those companies shutting down operations for a whole year.  However, if as many as 22 NBA teams are collectively losing $300 million annually, losing a season to revamp the business model isn’t just reasonable – it’s critical.  

Would you invest hundreds of millions of dollars in a sports team that essentially was guaranteed to lose you money?  Neither would I.

Rome Wasn't Built in a Day

Tired with slow moving NBA collective bargaining negotiations?  Delonte West is.  Since the free agent can’t sign with a new team until the lockout’s over, he instead took a job at a furniture warehouse in Maryland. 

Worried about life after basketball?  That’s top of mind for Brandon Jennings.  The Milwaukee Bucks guard has been interning in Under Armour’s footwear department since the summer.  Jennings goes into the office regularly and sits in on meetings with top executives.

Things have gotten so out of hand with the NBA season on hold that even the King, LeBron James, is flirting with the idea of playing in the NFL.  Never mind the fact the last time he put on pads and a helmet was for a State Farm commercial.

Furniture stores?  Internships?  The NFL?

With the first two weeks of the NBA season cancelled, and much more of it in jeopardy, the absence of basketball is causing players to think and do crazy things.  The craziest of them all?  The notion that someway, somehow, the players might walk away from the negotiating table to form their own league.  There’s a better chance of LeBron catching the winning touchdown in February’s Super Bowl.

Despite what the players may think, starting a league from scratch is much more complicated than throwing together the occasional exhibition game.  They’d need to find places to play, and a majority of arenas are owned or operated by NBA teams.  They’d need to generate enough revenue to cover salaries – remember this dispute is about money – and players made a collective $2.176 billion last season.  They’d also need to hire a couple-thousand person support staff to do everything from producing TV broadcasts to selling concessions on game nights, as well as experts in traditional management functions such as corporate sales, international affairs, marketing and retail operations.

They say Rome wasn’t built in a day.  Well, neither was the NBA.  It’ll take several years and boatloads of money for players to create a successful, rival league.

Their best option?  Drop the pipedream and stay at the negotiating table.