I understand the argument, and I'm sympathetic to it.
On the other hand, no one put a gun to the owners' heads and forced them to hand out these God-awful inflated-guaranteed contracts. The players, of course, will be happy to take the money, they'd be fools not to. So the owners keep one-upping each other, and the system gets out of hand. The owners got themselves into this mess, and now they want to take it out of the hide of the players.
NBA players have unique talents, the best in the world, as a matter of fact. Why do we begrudge them their money, while we gladly shell out the bucks for Lady Gaga, U2, Julia Roberts, George Clooney, etc. who all make far more than NBA players? We pay them obscene amounts because we think they have unique talents. Why should it be different for athletes?
Owners are richer than players, some are billionaires. The NBA rakes in hundreds of millions of dollars from TV, merchandise, ticket sales etc. Why shouldn't the players, who have the unique talents, who we all pay to see, get the disproportionate share? None of us go to Jazz games to watch Greg Miller sit on the sidelines. Most owners also have other sources of revenue, they will not go broke if their NBA team does. They will continue to make millions, most of them at least.
While teams may not be turning profits, team values keep on rising. Most owners today could probably turn around and sell the team for substantially more than what they paid for it. While income may not be positive, they are earning unrealized capital gains. Also, we don't know what their cash flow is. They may be losing money, but be generating positive cash flow. Does anyone know what the true situation is?
Most owners have earned millions for a long time and will continue to do so. Most NBA players, on the other hand, have a narrow window in which to earn millions.
Etc.
I actually side more with the players than the owners. Somebody's gotta get all that money. I think the millionaires with the unique talents deserve more of it than the billionaires (or the multi, multi millionaires) who have unique talents in other areas, which is why they're billionaires (or the multi, multi millionaires).
Personally, if I were made NBA absolute ruler, the first thing I'd do is get rid of guaranteed contracts. Here's one area where I think the players benefit unduly. In essence, the owners assume all the risk, and I think this does create quite perverse incentives that significantly hurt the game. I'd also institute a hard salary cap. I know this sounds contradictory to what I just said, but I'd do this more for the reason of trying to create greater parity than for anything else. I'm tired of the NBA system in which the big market teams always have the advantage in attracting top talent. I'd like to see more teams with a legit shot to contend. Oh, and I'd pass a rule that the Lakers can't ever sign another top free agent or draft in the first round anymore. I'd do that because I hate, hate, hate, the f'n Lakers.