NBA appears headed for long lockout

By Jason Lloyd

Akron Beacon-Journal

As we settle in for a summer of gridlock in half of the major professional sports in this country, there is one glaring difference between the lockouts involving the NBA and the NFL.

In the final hours prior to the NFL lockout, both sides were scrambling to file extensions, talk sensibly and eagerly work toward a deal.

In the final hours prior to the NBA lockout, both sides picked through the snack mix, milled around the negotiating table and eagerly counted the hours until they could go home. They were an unhappy married couple determined to file for divorce, but forced to sit through one last counseling session just in case.

There was nothing salvageable in this marriage. The divorce proceedings have started — although eventually, they’re going to have to marry each other all over again.

This is the tangled mess we’re forced to stand by and watch. Owners are determined to shatter the previous deal that just expired and institute shorter contracts for less money. The players are amicable to that, but only to a certain extent.

The league insists that 22 out of 30 teams lose money every year, demanding the need for change. But Deadspin.com obtained the New Jersey Nets’ financial records for three seasons, from June 2003 to June 2006, and discovered a legal financial loophole a number of NBA teams can use.

According to Deadspin, the Nets claimed a $27.6 million loss during a 2003-04 season that ended with the Nets in the Eastern Conference semifinals. Only that loss is a paper loss, University of Michigan sports economist Rodney Fort told the website. The Nets didn’t actually write checks to cover that amount. Rather, it represents the amount the Nets’ owners reduced their tax obligation under the roster depreciation allowance.

Without turning this into an accounting class that I’m not qualified to teach, the RDA dates to 1959, when former Indians owner Bill Veeck (always the schemer) convinced the IRS that professional players depreciate over time like a car or livestock. Seriously.

As a result, Deadspin reports that the IRS grants teams to essentially write off roster expenses twice, creating a tax shelter for every owner of every professional sports team to exploit.

Given all of that, it’s fair to wonder just how many of the 30 teams actually do lose money. We’ll always have to wonder, since no team will ever willingly open their financial books.

The Deadspin report appears legitimate. If it’s accurate, it gives the players more ammunition to stand firm against the owners’ demands.

At this point, the only thing we know is it will be a long, gruesome battle. There is a distinct possibility the NBA is going away for a long, long time.