When the Boston Celtics 1998 annual report was issued in September, it
predicted dire financial consequences for the team if the National
Basketball Association’s labor dispute disrupted the season.
“If the lockout extends into the 1998-99 basketball season, it would
materially affect BCLP’s (Boston Celtics Limited Partnership) financial
condition and results of operations,” the report said.
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“There can be no
assurances that Celtics basketball, or the NBA, upon expiration of the
(1995 collective bargaining agreement between players and team owners)
will be able enter into new agreements on terms as favorable as current
agreements.”
On June 29, the NBA announced that it was “locking out” its players
until a new collective bargaining agreement could be reached. All games
at least as far as Nov. 30 have been canceled, as talks between the
parties have failed thus far.
The Boston Celtics stock tumbled soon after the lockout took effect June
30. In June, stock was trading at about $20 per share. This summer and
fall, however, it plummeted, hitting $7+ on Oct. 22. It has since
rebounded to trade in the double digits, at $10.62 on Nov. 10.
In the September report, the team reported 1998 sales of $75.7 million,
a one-year sales change of 20.1 percent. Net income for the year was $12
million.
The lockout stems from the sides’ inability to agree on how much of the
league’s revenue should go to the players. In 1995, they agreed that
players should receive 48 percent of all the league’s revenue.
But according to the league, player salaries consumed 57 percent of
revenues last season, and that 15 of 27 teams lost money because of it.
The players association disputes the league’s assertion that that many
teams are actually losing money.
Probably the biggest stumbling block has been the so-called “Larry Bird
exception” to the NBA salary cap — created for the former Celtics
forward — which permits teams to sign veteran players at any cost. The
league wants to pull the reins in on the exception; the players want it
left alone.
The two sides are also feuding over rookie contracts, marijuana testing,
free agency, what sources of revenue should be considered “basketball
related income” in determining the league salary cap, and the league’s
ability to discipline players.
During the lockout, teams are not allowed to conduct any kind of normal
operations, such as practices, team meetings, workouts, or negotiations
with players or other teams. The league is paying cash refunds to season
ticket holders, plus 6 percent interest, for all games lost in the
dispute.
With the dispute threatening to put the rest of the season in jeopardy,
many fans have begun to profess their indifference toward the league.
But the hard feelings among U.S. fans will have little impact on the
NBA’s overall popularity, said Providence lawyer Dennis M. Coleman, who
has represented the NBA’s retired players’ association and who recently
returned from a goodwill mission to China with former league stars
Kareem Abdul-Jabbar, Moses Malone, Adrian Dantley, Oscar Robinson, and
others.
Enthusiasm for NBA basketball is running high in China, Coleman said.
“It was amazing the way the Chinese were talking about basketball,”
Coleman said. “People around the world are interested in seeing
basketball played again.”
Asked about the former players’ take on the dispute, Coleman said the
players naturally lean toward the players’ side. But he also noted that
many of the former stars are now successful businessmen who can see that
the owners have legitimate concerns.
