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NBA Lockout 2011: It's the System, Not the Contracts

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We have worked in this space to try to understand not just the details of the NBA lockout situation, but to also the fundamentals and principles on which the NBA has fallen apart. I invite you to head on over to the great Indiana Pacers blog, "Eight Points, Nine Seconds" to take a look at what one of their lead writers, Tim Donahue, has been processing and the conclusion he reaches. Really, it's quite the punchline.

(If you're unfamiliar with what the name of this blog refers to, then 1) look it up on youtube; and 2) know that as a life-long Knicks hater, it represents one of the five happiest moments of my life of NBA fandom)

The System, Not Stupid Contracts, Creates Wasted Payroll | Eight Points, Nine Seconds

I'll try to post more on this subject later, but for now, think about the following:

  • Remember that the players already were due payment for their paid-in escrow money.
  • The end of year audit indicated that even with their entire escrow refund, they were still owed money on top of that.
  • The league actually tried to hold onto that escrow money as a point of negotiation.
  • What would have happened to these repayments if contracts such as Joe Johnson or Gilbert Arenas weren't on the books?
  • Given the financial structure, is it even possible for the NBA to ever show a league-wide profit?

What this means is that if the owners had made none of their myriad [contract] mistakes, they would have realized a savings of … wait for it …