July 15 (Bloomberg) -- The National Basketball Association eliminated 114 jobs, or 11 percent of its workforce, as part of a plan to strip out $50 million in costs.
The cuts come two weeks after the league locked out its players following their failure to reach an agreement with team owners on a new labor contract.
“The layoffs are not a direct result of the lockout, but rather a response to the same underlying issue; that is, the league’s expenses far outpace our revenues,” NBA spokesman Mike Bass said in an e-mail yesterday.
The NBA and its players disagree over how to split money from a league that said it will lose about $300 million this year from revenue of about $4.3 billion. Owners want to tighten payrolls, while players say they shouldn’t be punished for management errors. The NBA said in April that 22 of the 30 franchises are losing money.
“The roughly 11 percent reduction in headcount from the league office is part of larger cost-cutting measures to reduce our costs by $50 million,” Bass said.
NBA Commissioner David Stern said at a June 30 news conference that, following the lockout, “we have to go back and look at everything about our operations.”
The cuts were primarily made in New York and New Jersey from departments including marketing, community relations, player programs, broadcasting and information technology, the New York Times reported. Most employees received the news during the past two days, it said.
The reductions would have happened regardless of the lockout and the workers won’t be rehired once the dispute is over, the Times said, citing Bass. Before the latest move, the NBA had cut 275 workers since 2008, the report said.
In October 2008, Stern announced a 9 percent cut on its U.S. staff after season-ticket sales slowed.
The Charlotte Bobcats began laying off employees in the past week, with radio play-by-play announcer Scott Lauer becoming one of at least seven let go, according to the Associated Press. The Detroit Pistons also fired 15 people in recent weeks, AP said.
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