Sunday October 9 2011 – 11:56pm Eastern – Toronto, ON
I’d be happy to have one of the owners or a member of the players association tell me that the theory below is wrong.
I’m quite content with the fact that I may be missing something here … or that there’s a flaw in my system that I’m not quite seeing.
‘Cause as it stands now … it would seem like the battle between the NBA owners and the NBPA is about little more than ego.
Neither side wants to appear to be ‘giving in’ to the other. Neither side wants to appear to be the ‘loser’ in these negotiations.
But after 100+ days of labour war (the 2nd longest work disruption in league history), ego should be cast aside and both sides should realize that they can’t really exist without the other.
If it weren’t for the deep-pocketed owners (even the supposed ‘poor’ ones) who were willing to give millions of dollars to these athletes, there wouldn’t be as many basketball jobs (especially in North America) available to the players. But if it weren’t for the immense talents of the players, the NBA would not be considered the premier league in the world and the owners would be losing hundreds of millions of dollars per year. The league, as a result, likely wouldn’t exist.
They both need each other.
Sure, there are still questions about when a ‘cap’ may kick in (at what amount) and whether there will be new rules regarding the Larry Bird exception and other cap wrinkles like the Mid-Level exceptions, etc.
However, the owners have ensured that the players will still receive guaranteed contracts and they will not be subject to rollbacks of their current salaries either. Plus, the 10-year CBA proposal offers an opt-out to the players after 7 years and the owners have pulled back on their ‘hard cap’ demands as well.
Major hurdles have been overcome, but the ‘ego’ comes into play (in my mind) when we’re talking about the split of the basketball related income (BRI).
All we’ve heard about for days now is BRI.
Under the last CBA, the players received 57% of the BRI while the owner got 43%. As of last week, the players were willing to go as low as 52% (with the owners getting 48%) and the owners floated the idea of splitting things 50/50.
Since then, word has leaked out that the players are actually (supposedly) staying firm on 53% and they aren’t willing to budge beyond that number. The owners, meanwhile, are locked in on their 50/50 proposal.
According to several reports, every percentage the union is willing to drop its share of BRI is equal to $40-$50 million. So if the players give up another 2% and drop from 52% (their original ‘lowest offer’) to 50%, they’ll be leaving $80-$100 million per year on the table.
Union Exec. Billy Hunter is also on record saying that every month of regular season games that is lost in the NBA is worth around $350 million to the players.
So, if the NBA is dark for November, the players will, collectively, lose $350 million. If they miss December … we’re up to $700 million. Heck, miss January and start in February (like in 1999) and we’re over a BILLION dollars in lost salary now!
Now let’s go back to the BRI drop — going from $80-$100 million in losses if you slip from 52 to 50.
The length of the owners CBA offer was 10 years with an opt out after 7 …
Let’s assume the players take that opt out. That means they’d apparently lose $80-$100 million per year for 7 years (if they agree to the 50/50 split with the owners). That’s $560-$700 million in losses.
Wow! That is a huge number … and a lot of dough to leave on the table …
Go back to the current lost wages that Hunter has said: $350 million per month. Again, if you miss 2 months, you’ll lose $700 million. Whereas over SEVEN YEARS you’ll lose $560-$700 million.
Does that make ANY sense?
Either my math is way off…or this labour war — with both sides digging in their heels — is crazy.
If they players refuse to come down to the 50/50 split they will likely lose at least 1 if not 2 or more months of the season. Thus, they’re looking at losing $700 million or more in salaries … just like that. And they will be fighting this battle to save themselves $80-$100 million per year over the next 7 years.
It’s a wash. They’ll break even at best! And if more than 2 months of the regular season is canceled and the players go into their 3rd month (or more) without a paycheque, they’ll simply be losing money; money they could have earned by signing off on the 50/50 split of the BRI.
Granted, the counter argument to this philosophy could simply be: If it’s so easy for the players to give up $80-$100 million (2%) per year, why don’t the owners take less and swallow the $80-$100 million in lost profits each year?
And that’s a fair point.
But I guess I come from the school of thought that says playing in the NBA is a privilege, not a right. So while the fans may come out to see the players, there wouldn’t be a show to put on — to showcase those players — without the owners who pay them so handsomely. Keep in mind, when the NFL and its PA signed a new 10-year deal back in July, the owners got 53% of the revenue while the players will earn 47% of the split.
Hard to see where the NBPA has much ground to stand on – especially when compared to the NFL.
Again, neither side may want to blink. Nobody wants to be the ‘loser’ in this negotiation (on the surface or from the periphery) … but the PA should bite the bullet and put pen to paper.