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Leitch: The NBA’s Economic Crisis

Just more than ten years ago, in December 1998, the NBA hit perhaps its lowest point. Michael Jordan had retired (again), the league lacked a signature star, and a labor meltdown over player contracts was looming. In Atlantic City, a group of NBA players who needed cash after having been locked out by the owners planned an exhibition game on Pay-Per-View. The game was a fiasco before it even began — public outcry forced the players to donate proceeds to charity; well, a charity other than themselves, anyway — and once players took the court, they were unmotivated, sloppy and, most notably, dramatically overweight. (All-Star Shawn Kemp appeared to have gained about 40 pounds, and was never the same.) When the labor issue was eventually settled, preseason was all but over already, and the All-Star game never happened. It was clear that, by letting matters get to that point, the NBA was willing to suffocate the NBA to save the NBA. If you thought that was bad, wait until 2011. At least back then, there was actually money for owners and players to fight over.

Despite (or maybe because of) one of the more exciting regular seasons in recent memory, executives and agents around the league are dropping hints that the NBA is willing to hit the nuclear button when the labor contract expires in 2011 … and in fact may have no choice. Überagent David Falk set the alarm bells blaring in yesterday’s New York Times: “The owners have the economic wherewithal to shut the thing down for two years, whatever it takes, to get a system that will work long term,” he said in an extensive interview to discuss his new book. “The players do not have the economic wherewithal to sit out one year.”

It’s difficult to argue with him. Teams are losing money, the salary cap will drop next year, revenues are flat and, perhaps most ominously, the NBA is actually now loaning its own teams money so that they will be able to stay solvent. (There are rumors that the Memphis Grizzlies, among other teams, are in danger of bankruptcy.) The prolonged recession is affecting all sports, but it’s affecting the NBA more than any others, mostly because the player-friendly system of guaranteed contracts and big signing bonuses to rookies is an outdated model. LeBron James and Dwyane Wade will always be fine, but those reserve players are going to start playing for frighteningly low salaries right soon — if there’s even a league for them to play in, or enough teams to employ all of them.

So enjoy this great season, and expectedly thrilling impending playoffs, while you can, with as much fervor as you can muster. Because the way the NBA looks right now, you can’t count on the same thing next year.

Leitch: The NBA’s Economic Crisis