1998–99 NBA lockout
Encyclopedia
Lockout (industry)
A lockout is a work stoppage in which an employer prevents employees from working. This is different from a strike, in which employees refuse to work.- Causes :...
in the history of the National Basketball Association
National Basketball Association
The National Basketball Association is the pre-eminent men's professional basketball league in North America. It consists of thirty franchised member clubs, of which twenty-nine are located in the United States and one in Canada...
(NBA). It lasted from July 1, 1998 to January 20, 1999, and forced the 1998–99 season to be shortened to 50 games per team and that season's All-Star Game to be canceled. NBA owners reopened the league's collective bargaining agreement (CBA) in March 1998, seeking changes to the league's salary cap
NBA Salary Cap
The NBA salary cap is the limit to the total amount of money that National Basketball Association teams are allowed to pay their players. This limit is subject to a complex system of rules and exceptions and as such is considered a "soft" cap....
system and a ceiling on individual player salaries. The National Basketball Players Association
National Basketball Players Association
The National Basketball Players Association is a trade association that represents basketball players in the National Basketball Association . It was previously a labor union before dissolving during the 2011 NBA lockout. It was founded in 1954, making it the oldest trade union of the four major...
(NBPA) opposed the owners' plans and wanted raises for players who earned the league's minimum salary. After the two sides failed to reach an agreement, the owners began the lockout.
The dispute received a tepid response from sports fans, and provoked criticism from media members. It continued into January 1999, threatening cancellation of the entire season. After division within the players union, however, NBPA executive director Billy Hunter reached an agreement with NBA commissioner David Stern
David Stern
David Joel Stern is the commissioner of the National Basketball Association. He started with the Association in 1966 as an outside counsel, joined the NBA in 1978 as General Counsel, and became the league's Executive Vice President in 1980. He became Commissioner in 1984 succeeding Larry O'Brien...
on January 6 to end the work stoppage. Quickly ratified by the owners and players, the deal was signed later in January, ending the lockout after 204 days. The settlement provided for maximum salaries for players and a pay scale for first-year players. In the months after the lockout, television ratings
Nielsen Ratings
Nielsen ratings are the audience measurement systems developed by Nielsen Media Research, in an effort to determine the audience size and composition of television programming in the United States...
and ticket sales declined during the 50-game season, and both remained below pre-lockout levels in subsequent seasons.
Background
Before 1998, there had been two lockouts in the previous three years: a labor dispute that lasted more than two months in 1995 and a brief work stoppage in 1996 that ended within three hours. However, on both occasions, the players and owners reached a deal before the start of the season, and before 1998, the NBA was the only major sports league in the United States that had never lost a game because of a work stoppage. A six-year CBA had been in place since September 1995, but it included a clause allowing NBA owners to reopen the contract after three years if more than 51.8 percent of "basketball-related income" went to player salaries. By the 1997–98 season, 57 percent of basketball-related income was used to pay players, while the previous deal called for a 48 percent split. According to the NBA, 15 of the 29 teams posted losses that season. The NBPA disputed this figure and claimed that only four teams had losses. The league's owners voted on whether to reopen the CBA on March 23, 1998, and the vote passed by a 27–2 margin. Negotiations between the NBPA and owners started on April 1, and nine further bargaining sessions took place in the next three months.The primary issue was that of player salaries, which owners sought to curb. A salary cap
NBA Salary Cap
The NBA salary cap is the limit to the total amount of money that National Basketball Association teams are allowed to pay their players. This limit is subject to a complex system of rules and exceptions and as such is considered a "soft" cap....
had been a part of the CBA since 1983, but it included loopholes that allowed teams to exceed the payroll limit. Among them was the "Larry Bird exception", named after the former player
Larry Bird
Larry Joe Bird is a former American NBA basketball player and coach. Drafted into the NBA sixth overall by the Boston Celtics in 1978, Bird started at small forward and power forward for thirteen seasons, spearheading one of the NBA's most formidable frontcourts that included center Robert Parish...
who was an early beneficiary of the rule. The Bird exception enabled teams to spend an unlimited amount of money to re-sign their own players, causing a substantial increase in the value of upper-end contracts. Club owners wanted to remove the exemption and place limits on maximum player salaries. Owners also desired a modified pay scale for rookie
Rookie
Rookie is a term for a person who is in his or her first year of play of their sport or has little or no professional experience. The term also has the more general meaning of anyone new to a profession, training or activity Rookie is a term for a person who is in his or her first year of play of...
players that would prevent them from gaining unrestricted free agency after three seasons. The players union, wanting to avoid a decline in salaries, opposed changes to the salary cap system, in particular those involving the Larry Bird exception. Other NBPA positions included opposition to a cap on individual player salaries and support for a raise of the minimum salary, which 22 percent of NBA players earned during 1997–98.
Lockout
1998 FIBA World Championship
The 1998 FIBA World Championship was the 13th FIBA World Championship, an international basketball tournament held by the International Basketball Federation and hosted in Athens, Greece from July 29 to August 9, 1998...
. USA Basketball
USA Basketball
USA Basketball is a non-profit organization and the governing body for basketball in the United States. The organization represents the United States in FIBA and the men's and women's national basketball teams in the United States Olympic Committee...
, the governing body for the sport in the U.S., elected to send a team consisting of lower-level professional players and amateurs. Negotiations resumed at an August 6 bargaining session, the first since the start of the lockout. NBA commissioner David Stern
David Stern
David Joel Stern is the commissioner of the National Basketball Association. He started with the Association in 1966 as an outside counsel, joined the NBA in 1978 as General Counsel, and became the league's Executive Vice President in 1980. He became Commissioner in 1984 succeeding Larry O'Brien...
and several owners left the talks after the NBPA presented an offer that included increased revenue sharing
Revenue sharing
Revenue sharing has multiple, related meanings depending on context.In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner and limited partners in a limited partnership...
between teams.
By September 25, 24 exhibition game
Exhibition game
An exhibition game is a sporting event in which there is no competitive value of any significant kind to any competitor regardless of the outcome of the competition...
s were canceled and training camps were postponed indefinitely as a result of stalled talks. Further negotiating sessions took place in October and November, but no agreement was reached. The season's first two weeks were officially canceled on October 13, and 99 games scheduled for November were lost as a result. It was the first time in NBA history that games were canceled due to a labor dispute. On October 20, arbitrator John Feerick
John Feerick
John D. Feerick is a law professor at Fordham University School of Law in New York City. He served as the school's eighth dean from 1982-2002. From 2002-2004, he was the Leonard F. Manning Professor of Law at Fordham, and in 2004 was named to the Sidney C. Norris Chair of Law in Public Service...
ruled that the owners did not have to pay players with guaranteed contracts during the lockout. Feerick's decision gave the owners leverage in bargaining talks. Another factor favoring the owners was that their teams received money from the NBA's television broadcasters, whose contracts with the league called for payments to be made if games were not played.
Further games were canceled as the lockout continued through November and December, including the 1999 All-Star Game, which had been scheduled to be played on February 14, 1999 at the First Union Center in Philadelphia. Discussions during the lockout were characterized by frequent hostility between the players and owners. One example of the heated nature of the talks came at an early December bargaining session, when Stern and NBPA executive director Billy Hunter became involved in what CBS News
CBS News
CBS News is the news division of American television and radio network CBS. The current chairman is Jeff Fager who is also the executive producer of 60 Minutes, while the current president of CBS News is David Rhodes. CBS News' flagship program is the CBS Evening News, hosted by the network's main...
called "an extremely heated, expletive-laden screaming match". Both men temporarily walked away from the bargaining table, and indicated after the session that the entire season might be canceled. Although the 1998 portion of the schedule was not played because of the lockout, 16 NBA players participated in a December 19 exhibition game in Atlantic City, New Jersey
Atlantic City, New Jersey
Atlantic City is a city in Atlantic County, New Jersey, United States, and a nationally renowned resort city for gambling, shopping and fine dining. The city also served as the inspiration for the American version of the board game Monopoly. Atlantic City is located on Absecon Island on the coast...
. The event's organizers intended to give NBPA members a share of the money raised, but the idea proved controversial, and charities ultimately received the proceeds.
Settlement
On December 23, Stern announced that he would recommend canceling the season if there was no deal by January 7, 1999. At a December 27 meeting, a "final" deal was proposed by the owners. The sides met again on January 4, and the NBPA gave its last proposal to the owners, who turned it down. Stern discussed the possibility of having replacement playerReplacement player
In professional sports, a replacement player is an athlete who is not a member of the league's players association and plays during a labor dispute such as a strike or lockout.- National Football League – 1987 :...
s brought in to begin the following season. As Stern's deadline approached, the NBPA showed signs of division from within. Highly paid players were seen as the ones most affected by the disputed issues, rather than the union's membership as a whole. Agent
Sports agent
A sports agent procures and negotiates employment and endorsement contracts for an athlete.In return, the sports agent generally receives between 4 and 10% of the athlete's playing contract, and 10 to 20% of the athlete's endorsement contract, though these figures vary...
David Falk
David Falk
David B. Falk is an American sports agent who primarily works with basketball players in the National Basketball Association. Falk began his career representing professional tennis players for Donald Dell's ProServ and is best known for representing sports icon Michael Jordan for the entirety of...
, who was considered an influential voice for the players, represented NBPA president Patrick Ewing
Patrick Ewing
Patrick Aloysius Ewing Sr. is a Jamaican-American retired Hall of Fame basketball player and current assistant coach for the National Basketball Association's Orlando Magic. He played most of his career with the NBA's New York Knicks as their starting center and played briefly with the Seattle...
and nine players on the union's 19-person negotiating committee. The NBPA scheduled a meeting in New York City on January 6, where players would vote on the proposal by the owners, which the committee had recommended opposing. Several players, including Shaquille O'Neal
Shaquille O'Neal
Shaquille Rashaun O'Neal , nicknamed "Shaq" , is a former American professional basketball player. Standing tall and weighing , he was one of the heaviest players ever to play in the NBA...
and Hakeem Olajuwon
Hakeem Olajuwon
Hakeem Abdul Olajuwon is a retired Nigerian-American professional basketball player. From 1984 to 2002, he played the center position in the National Basketball Association for the Houston Rockets and Toronto Raptors. He led the Rockets to back-to-back NBA championships in 1994 and 1995. In 2008,...
, wanted the vote to be conducted by secret ballot
Secret ballot
The secret ballot is a voting method in which a voter's choices in an election or a referendum are anonymous. The key aim is to ensure the voter records a sincere choice by forestalling attempts to influence the voter by intimidation or bribery. The system is one means of achieving the goal of...
, while others indicated a desire to return to competition regardless of how the vote went. Kevin Johnson
Kevin Johnson
Kevin Maurice Johnson is the current mayor of Sacramento, California. He is Sacramento's first African American mayor. Prior to entering politics, Johnson was a basketball player in the NBA, playing point guard for the Cleveland Cavaliers and the Phoenix Suns...
stated that most players "were just ready to throw down [fight] Wednesday at our meeting if an agreement hadn't been reached." Faced with a splintering union, Hunter moved to resume talks with Stern. On January 6, the day before Stern's deadline, he and Hunter reached an agreement, which was ratified by the NBPA later that day and by the NBA Board of Governors on January 7.
Widely viewed as a victory for Stern and the owners, the agreement was signed by both parties on January 20, officially ending the lockout after 204 days. It capped players' salaries at between $9 million and $14 million, depending on how long they had played in the NBA. A rookie pay scale was introduced, with salary increases tied to how early a player was selected in the NBA Draft
NBA Draft
The NBA Draft is an annual event in which the thirty teams from the National Basketball Association can draft players who are eligible and wish to join the league. These players are usually amateur U.S. college basketball players, but international players are also eligible to be drafted...
. The Larry Bird exception was retained, though maximum annual pay raises were capped. New "average" and "median" salary cap exemptions, which the NBPA had proposed, allowed teams to sign one player per category even if they were over the spending limit. The league's minimum salary was increased to $287,500, a $15,000 raise from before the lockout.
Reaction and aftermath
The lockout prompted indifference among most American sports fans, who thought that greed was shown by both sides; the latter was a similar sentiment to what fans voiced during the 1994–95 Major League Baseball strike. A CBS News–New York TimesThe New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
poll conducted in October 1998 showed that, while most fans' opinion of professional basketball was unaffected by the work stoppage, 29 percent reported that their views had become more negative. The same poll showed that fans backed the NBPA in the dispute by a 36–29 margin, while the general public supported the owners 24 percent to 22 percent. One-quarter of basketball fans who responded to the poll stated that they did not know enough about the lockout to give an opinion, along with 45 percent of the general public. Media members were frequently critical of the owners and players. Sportswriter Tony Kornheiser
Tony Kornheiser
Anthony Irwin "Tony" Kornheiser is an American sportswriter and former columnist for The Washington Post, as well as a radio and television talk show host...
described the labor dispute as one "between tall millionaires and short millionaires." An article in Newsweek
Newsweek
Newsweek is an American weekly news magazine published in New York City. It is distributed throughout the United States and internationally. It is the second-largest news weekly magazine in the U.S., having trailed Time in circulation and advertising revenue for most of its existence...
termed the lockout "an incomprehensible and unconscionable dispute between rival gangs of millionaires". Time
Time (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...
s Bill Saporito believed that each side was damaged by the lockout, in terms of financial losses and negative publicity. Stern said that he had made concessions in the agreement, while Hunter said that the parties "both blinked."
The 1998–99 season, which began on February 5, 1999, was shortened to 50 games per team, as opposed to the normal 82. As a result of the 204-day lockout, 464 regular-season games were lost. In addition to the lockout, the NBA's popularity was affected by the second retirement of Michael Jordan
Michael Jordan
Michael Jeffrey Jordan is a former American professional basketball player, active entrepreneur, and majority owner of the Charlotte Bobcats...
, who had been largely responsible for an increase in fan interest during his career. The average attendance during the shortened season was 16,738 fans per game, down 2.2 percent from the 1997–98 average of 17,117 spectators per contest. Ticket sales fell nearly two percent further in the opening months of 1999–00, and remained under 17,000 per game for the following three seasons. The league also saw television ratings
Nielsen Ratings
Nielsen ratings are the audience measurement systems developed by Nielsen Media Research, in an effort to determine the audience size and composition of television programming in the United States...
drop for three consecutive seasons after the lockout. In the years following the lockout, a higher percentage of players signed contracts worth the maximum amount possible under the cap. Some young players, such as LeBron James
LeBron James
LeBron Raymone James is an American professional basketball player for the Miami Heat of the National Basketball Association . Nicknamed "King James", he was a three-time "Mr. Basketball" of Ohio in high school, and was highly promoted in the national media as a future NBA superstar while a...
, began signing shorter contracts that allowed for more flexibility in team choice and salary. The agreement expired in 2005, and both sides became concerned about the possibility of another work stoppage. A fourth lockout in 11 years was prevented, however, when a six-year CBA was reached in June. After the expiration of that CBA, a lockout began in 2011.
2011 NBA lockout
The 2011 NBA lockout is the fourth lockout in the history of the National Basketball Association . The owners began the work stoppage at 12:01 am EDT on July 1, 2011. The main issues dividing the owners and the players are revenue sharing and the structure of the salary cap...