Monday, April 05, 2010

The myth of a potential lockout as a rationale for UK players entering the 2010 NBA Draft

As many as five University of Kentucky players could soon declare for the 2010 NBA Draft. There are many legitimate and personal reasons for them to declare for the draft, but the threat of an NBA lockout in June of 2011 is clearly not one of them.

The distinct possibility of an NBA lockout during the 2011-2012 season certainly exists. A lockout in 1998 cost the NBA a substantial portion of the 1998-1999 season. The United States economy is emerging from an economic recession. Attendance is significantly down at arenas throughout the country. NBA owners are unhappy with the current collective bargaining agreement and claim to be losing hundreds of millions of dollars.

There are numerous points of contention between NBA owners and players. Owners want a hard salary cap, but the Players' Association adamantly opposes one. Owners want to reduce the length and amount of guaranteed deals and kill most or all salary-cap exceptions. Despite these and other disagreements, the NBA rookie salary scale is not a major point of contention and unlikely to radically change if there is a lockout and new collective bargaining agreement. Currently, NBA rookie contracts are four years in length. The first two years are guaranteed and the last two years are optional if NBA teams wish to exercise them. Any future NBA collective bargaining agreement is likely to include at least two year minimum contracts for rookies at a similar or even greater salary than today.

A final point often overlooked is that even NBA players with guaranteed contracts would not get paid during a lockout. If Eric Bledsoe declares for the 2010 NBA Draft and is selected with the 20th pick, he’ll receive a two year guaranteed contract- about $1.1 million for 2010-2011 and about $1.2 million for 2011-2012. If there is a lockout during the 2011-2012 season, he will be paid nothing for the second year and hence end up receiving about $500,000 per year for two years of service in the NBA. The NBA has said players can play overseas during a lockout, but FIBA, the governing international body, has refused to admit NBA players if they are bound to rejoin the NBA after a lockout.

There are numerous legitimate rationales for why University of Kentucky players should declare for the 2010 NBA Draft, but the potential of a lockout in 2011 is not one of them. UK players should listen to the advice of Miami Heat forward and union board executive James Jones, who recently told the Sun Sentinel, "I would advise guys to not look at the lockout or the possible lockout scenario as a reason for coming out, but if they're ready to come out, come out. If they don't think they're ready, then hold off and continue to grow. Because at this stage, no one knows what the future holds. If you start to make all your decisions based on what could happen and that thing doesn't happen, you could find yourself in a tough spot."


Wheatgerm said...

"If there is a lockout during the 2011-2012 season, [Bledsoe] will be paid nothing for the second year and hence end up receiving about $500,000 per year for two years of service in the NBA."

That's not counting taxes and other deductions! From "NBA players essentially see only about 50% of their actual contract amount and sometimes even less depending on the state they live in and whether or not the NBA Escrow tax kicks in."

In the Bledsoe hypothetical, that's closer to $250,000 a year for the first two years. Not bad, but hardly the stuff dreams are made of.

Anonymous said...

I still don't buy your argument. If you aren't ready to be a first rounder this year, you aren't ready, but if you are a mid-late first rounder, but you could stay in school and improve your position, the risks are great. Imagine you are ready to come out next year but there is a lock out. Now you leave school and risk no income (except maybe some endorsements) until the lockout is over, or you stay in school and end up playing 2 more years instead of 1 - thus delaying pay for play even more. If you are junior (like PPat) you don't have the option of coming back to school after next year, so you now an unemployed expectant NBA player. I suppose for Bledsoe and Orton, who could come back to UK after next year, that risk would be acceptable, but not for any juniors considering this move. Better to get one year of pay and save as much as you can for the lockout year.


Anonymous said...

This is certainly a problem that all the guys at UK are facing. Either go now or have to stay two more years. If it were me, I would go, ready or not, if I thought I were a first round pick and certainly a top 20 pick. For Patterson it is a no brainer, for Bledsoe and Orton it is a tough call. I thought I heard someone say that Cal had advised Patterson not to sign with an agent. But he did not say that to the others? Makes me wonder the motive behind it.


Cranston said...

Nice piece, Aaron. This situation makes the decision to go to the pros that much more difficult.

I do think that a lock-out is something players should consider, though. It changes the pay-off structure completely for some of the guys, and since leaving school is more likely than not a financial decision, that must play a role.

Tom said...

Your argument makes no sense. In fact, the facts you present make a better argument for going than for staying. Let's say that a worst case scenario occurs and the entire 2011-2012 NBA season is lost. If a player goes this year they will get whatever they will get in the 2010-2011 season and nothing in the next. However, if a player returns for the 2010-2011 season they would almost forced to return for the 2011-2012 season as there would not be any place for them to pay for play that season. I don't see how you can make the argument that the possibility of an NBA labor problem is not something that would cause these guys to be more willing than usual to go into the draft.

The good news is that those who sign in the 2010 class are more likely to stay for two years since they may not have an option in the 2011-2012 season.