On the heels of one of the highest-rated NBA Finals in television history, which was followed by the biggest and craziest off-seasons the league has ever seen, all would seem well for professional basketball. However, the NBA has some pretty bad news: It’s losing money. Lots of money. About $350 million, to be exact.

How does the league expect to make up for these losses? By reducing the players’ salaries about a third, which will create $750 million to $800 million. However, that’s just one proposal on the table (something the players have known about since January). On top of that, NBA Commissioner David Stern admitted the league may have to weigh the option of contraction—translation: getting rid of a few teams—in order to keep costs down and profits up.

How did the league get into this mess? The truth is, it’s tough to say. League officials say the problem is players get 57 percent of basketball revenue and such a system cannot continue to work. However, some on the side of the players’ union don’t believe the numbers and think the league may be making them up—especially when one considers the numbers Forbes reports for the NBA.

According to ESPN, Stern was pretty defiant in his assessment of the situation.

“We would like to get profitable, have a return on investment. There’s a swing of somewhere in the neighborhood of $750 to $800 million that we would like to change. That’s our story and we’re sticking with it.”

Maybe it’s just us, but doesn’t that sound just a little fishy?

Contraction seems to be one of those items thrown on the table just to boost negotiations. The loss of players, payback to owners, and loss of ticket revenue (not to mention the loss of hundreds of other office jobs within the pro-sports franchise) just doesn’t seem to be a good idea for anyone involved. If it truly is a scare tactic, is it working?

Despite the threat of contraction, the biggest scare tactic of them all is the reduction in salary. There’s no way the players would let this happen without a fight (especially not in Miami and L.A.). However, the alternative is a hard salary cap, the end of guaranteed contracts, and shorter deals, which is probably what the league is really after. Such changes would hurt teams like the Lakers and Heat the most as their payrolls are very high and set to increase over the next few years. Essentially, they’d have to let some players go to get under the salary cap. It would also affect the free agency of blockbuster players (such as Carmelo Anthony and Chris Paul) if and when they decide to leave their respective teams.

Stern seems confident the league will be able to work through negotiations and reach an agreement before next season, preventing a lockout. Judging by his statements to the Miami Herald, he seems to think that his experience gives him an edge.

“I’m allowed to be optimistic and not consider it a cloud because I’ve probably been in a dozen collective bargaining negotiations, the last ten of which involve some of the same actors that are currently at this table,” Stern said on Friday. “So we know we’re going to get an agreement done, and we think that the enthusiasm of the season and the prospective growth that it will ultimately represent will enable us to sit down with the players and negotiate in good faith, and we both seem intent on doing all that we can to reach a deal.”

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