How Will the NBA Lockout Affect the Sportsbooks?
by Richard Gardner | Bodog Sportsbook Manager - 7/5/2011
Not to be outdone by the NFL, the NBA locked out its players on Friday. Who knows how long it will take to negotiate another collective bargaining agreement, but it doesn’t look good right now.
At Bodog’s online sportsbook we’re preparing for the worst.
The general feeling around here is that the NBA might not be back for a while. Both sides appear dug into their positions, and those positions are far, far away.
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The owners claim that 22 of the 30 teams are losing money. Whether that’s completely accurate or not, there’s no denying that a number of franchises are in trouble.
The players, meanwhile, maintain that enough franchises are profitable that it’s up to the owners to figure out a revenue-sharing agreement that helps out the less profitable teams.
Personally, I think the owners’ resolve is going to be very strong in holding out for a deal that works for them. Certainly the teams that are losing money will be willing to shut things down for an extended period of time. Before the NHL locked out its players for the 2004-05 season, so many clubs were losing money that a lengthy work stoppage was inevitable. The NHL’s business model was essentially broken.
Granted, I’m not sure the gap between the players and owners is as wide in the NBA today as it was in the NHL in 2004. Remember that there was no salary cap whatsoever in hockey before then.
Now there’s a hard cap. The NBA already has a salary cap, even if it’s a soft one, so perhaps the formula just needs some tweaking.
We’ll definitely feel some pain if the NBA lockout lasts into next season. Not as much as we’d feel if the NFL can’t hammer out a CBA, but I’m much more optimistic about football getting something done before games are lost. The NFL is such a wildly profitable business that owners have a lot to lose by dragging a labor dispute into the season.
The large majority of teams make enormous amounts of money, so it’s not like the business model is broken. If the NBA season is affected by this lockout, most of our bettors will just wager on other things, like college basketball or hockey.
But we’ve got a handful of players who only bet on the NBA, and those players might just stop betting altogether. Hopefully the two sides will come to an agreement before it gets to that, but I wouldn’t hold your breath.
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