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NBA Faces Contentious Lockout

MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

The Dallas Mavericks are one win away from the championship. After last night's thrilling victory, they now lead the Miami Heat three games to two in the NBA finals. And if you like pro basketball, you better catch game six on Sunday. It could be your last chance to see stars like LeBron James and Dirk Nowitzki for quite some time.

The NBA's collective bargaining agreement expires at the end of the month, and there could well be a lockout. And to talk about that, I'm joined by Darren Rovell. He's the sports business reporter for CNBC. Darren, welcome to the program.

Mr. DARREN ROVELL (Sports Business Reporter, CNBC): Thanks for having me, Melissa.

BLOCK: How gloomy a picture is this, Darren? Is the lockout really a good possibility at this point?

Mr. ROVELL: Take everything that's gone on with the NFL lockout and multiply it times two. Now, we're in day 87 of the NFL lockout and their issues, from a financial perspective, are not as bad as the NBA's.

The NBA says that they have tax-audited losses of about $350 million a year. That is certainly not the case with the NFL. So they are in a bad situation, but everyone paints the picture badly when the collective bargaining agreement just expires. They're not going to have any basketball until October anyway. So you're going to hear a lot of talk of doom and gloom, certainly, over the next couple months.

BLOCK: And the NBA commissioner is saying both sides are very far apart in this. I know the union is contesting these losses that the owners are saying they're facing, $300 million. But assuming the owners are correct, how did it get to this point? How did it get to be so bad?

Mr. ROVELL: Well, what happened was the last collective bargaining agreement, they basically agreed to a deal that was bad for the owners. There's probably 16 to 18 teams that are losing significant money because the salary cap is based on the gross revenues, and at the same time, gross revenues don't mean anything.

The owners are actually just looking at the profits. The players association contests this because they say - why do you have the right to earn a profit? So, you know, they make good points on both sides. But I will say there are a lot of teams that are in trouble.

BLOCK: I've been reading a blog on espn.com from an anonymous NBA star - Player X is his given name - saying that his friends are planning for a lockout. They say - he says they've cut back on cars, bling, you name it. He's been told to prepare to miss this season and the following season.

Mr. ROVELL: No, see that - no one's ever missed two seasons. So that's - I read that line, too. I mean, that's garbage. That's typical negotiating language, and I'm sure the players association is happy with that.

Having evidenced the way that athletes spend these days, I find it hard to believe that they are truly prepared for two years - not going to happen - but two years without getting a paycheck.

BLOCK: And it's - the owners here are asking for a pretty big give-back from the players. Why don't you walk through what they're asking for.

Mr. ROVELL: Well, it's modeled after what came out of the NHL. After the NHL, seven years ago, went through a year-long lockout, the players' salaries were rolled back by about 30 percent. And so, David Stern and the owners figure why not start with an idea of that type of roll-back?

That being said, it took a year of not playing before the players in the NHL said, okay, we just got to get back on the ice.

BLOCK: What about on the players' side, Darren? Are the players indicating that they're going to budge at all?

Mr. ROVELL: Well, certainly not now. This is what negotiation is about. You're not going to say that you're going to budge before the collective bargaining agreement is up. What I will say is in the case of the NFL, the owners have a clear advantage because they are certainly more well-heeled than the players.

The players have their mansions. They have their mortgage payments. They have their three cars. And on the NBA side, I don't think the difference is that clear-cut because the owners have been losing so much more. That makes this more of a battle.

The thing that makes this so uncomfortable, Melissa, is this finals - and this year we've had record NBA ratings, we haven't seen these numbers in a long time from a TV ratings perspective and this is the best rated finals in the last seven years - that's what makes this so uncomfortable that we're heading into a lockout and the situation is so bad, but we have such great momentum.

BLOCK: Darren Rovell covers sports for the business news channel CNBC. Darren, thanks so much.

Mr. ROVELL: Thanks, Melissa. Transcript provided by NPR, Copyright NPR.