This is how confident bosses have become that they're going to be able to blame their workers for any conflicts: forget about strikes, the lockout is the hot new thing. Bargain just enough that you can't be accused of not bargaining in good faith, then lock your workers out and rest easy that your efforts to brand them as greedy will be successful.
The latest lockout is the NBA, which has been claiming to be be too broke to keep paying its players at their current level. But Nate Silver casts a skeptical eye on those claims.
For one thing, he argues, the league is profitable:
Even as it stands, however, the Forbes data suggests that the league is still profitable. Its operating income — revenues less expenses (but before interest payments and taxes) — is estimated to have been $183 million in 2009-10, or about $6 million per team. The N.B.A.’s operating margin (operating income divided by revenues) was about 5 percent in 2009-10 and has been about 7 percent during the life of the current labor deal.
A 5 percent or 7 percent profit is not dissimilar to what other businesses have experienced recently. Fortune 500 companies, for instance, collectively turned a 4.0 percent profit in 2009 and a 6.6 percent profit in 2010 (both figures after taxes). Profit margins in the entertainment industry, in which the N.B.A. should probably be classified, have generally been a bit lower than that.
For another thing, if the league is struggling, it's not because player salaries have started taking a larger share of revenues:
The league’s primary expense is player salaries. They have followed a nearly identical trajectory to league revenues, having grown at a 24 percent rate over 10 years, but with growth having flattened out since the recession. This is not a coincidence: under the league’s current collective bargaining agreement, player salaries are strictly tied to league revenues. In fact, because of a little-known provision in the labor agreement, players must return a portion of their salaries if they exceed 57 percent of league revenues, as has happened in several recent seasons. As I will discuss at more length later, the portion of revenues earned by N.B.A. players is similar to that of the other major sports leagues and has been stable over the past decade.
If you find yourself in a conversation about this, don't go with what the owners hope you'll think—that the players are guys who make more than you'll ever make and they should just suck it up. Remember instead that these are people whose salaries are tied to the revenues of their industry, that they return part of their salaries when the business suffers, and that they are being asked to take a huge pay cut for no particular reason based on their employers' accounting methods, which conflict with publicly-available data.