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Players Should Just Take 50/50
Posted by: Danny Hansen on October 21st, 2011
The author's views are entirely his or her own and may not reflect the views of the Utah Jazz.
“Take it or leave it.” That is what the owners asked the players to do in regard to a 50/50 revenue split in the NBA lockout negotiations. And the players, in move which I can only classify as a boneheaded one, left it. Talks then broke off, each side went to their respective sides, and we now await the announcement of more canceled regular season games.
After taking this all in and processing as much information as I could, I have only one message for the players: TAKE THE 50/50 DEAL! At this point of the negotiations, there is much more to gain by taking the deal then waiting out the owners. Let’s break it down.
First, it became quite evident that the small-market teams are running this show in the lockout. Billy Hunter even admitted as much. He said big market owners, such as James Dolan (New York), Mark Cuban (Dallas), Jerry Buss (Los Angeles), and Mickey Arison (Miami) were the owners looking to deal, but other small market owners were not. Point being, that the small-market teams are the teams that are losing money. The teams that are losing money are enough to control a super majority on a vote on a new CBA. Spurs owner, Peter Holt, said that his team has lost money two straight years. Utah Jazz ownership and management has said multiple teams on media outlets that they recently have either lost money or broken even each season. These teams are not hurt by missing a season. It may even be more profitable for some to miss a year.
So with that in mind, let’s look at what the players would be missing if a season is missed (since we have shown there are enough owners that won’t be hurt by a missed season). Currently, the players stand at 52.5% to 53% and the owners are at 50%, which is basically a difference of 100 million dollars a season. The owners are proposing a 10 year deal. So if the players agree to 50/50 split that is 1 billion dollars they would be giving up over the course of those 10 years. However, if they were to miss the season, they would lose 50% of BRI for this season. Projected BRI is about 4 billion. So 50% of 4 billion is 2 billion to the players. The players will lose more money by sitting out the season waiting for the owners to come up to 53%, which I bet will never happen. So, while the players say they are ready to miss games to get what they want, all I hear is that they can’t do the math and like punishment.
Let’s not forget that the most popular sports league in this country, the NFL, has star players, such as Tom Brady and Peyton Manning, that don’t even have guaranteed contracts. The NBA players have guaranteed contracts. They are guaranteed millions of dollars just to be on the roster, and it doesn’t matter if they are hurt or healthy, or if they live up to that contract or not, they still are guaranteed that money. Now you may make the argument that the owners gave them those contracts. This is true, but let’s look into why. In 2003-2004, the Jazz were experiencing life without Stockton and Malone. They surprised everybody by going 42-40 that season. However, looking at that team the Jazz really only had one good, almost great, player. Andrei Kirilenko. After that season, Kirilenko and his agent demanded a max contract. They had basically handcuffed the Jazz. If the Jazz let Kirilenko walk because they weren’t ready to give him that contract, they would risk losing their best player, they would risk fielding a team that can’t compete, and they would risk losing fans and revenue. Or, they could just pay Kirilenko his money. They chose the latter and it back-fired. Kirilenko went from Mr. Do-Everything to Mr. Scared-To-Do-Anything except shoot jumpers when you didn’t want him to. And this situation has happened with multiple other teams. More examples include Michael Redd, Peja Stojakovic, and Kevin Garnett. Small market teams paying top dollar for players they can’t really afford.
Finally, there is the hard cap issue. A true hard cap is out the window. The fact that a mid-level exception starting at 5 million has already been agreed to, shows that there is not a hard cap in the owners view. How can you have exceptions if there is a hard cap? So, now there is a proposed harsh punitive luxury tax on the table, which still needs to be discussed, but thus far the players are still very much against it. So why are the players so against such a system? The players want to be able to choose their team. They want to be able to go to the Lakers, even though they are well over luxury tax levels. They want to be in Los Angeles, New York, and Miami. A hard cap, or harsh luxury tax will mostly spread the money instead of having one or two teams 40 million over the cap. But players don’t want that. They don’t want to be in small markets like Cleveland, Utah, or Sacramento. It has created an uneven playing field, and it is just plain unfair for fans in those markets.
So what needs to be done? The league and players need to get back in contact. The players should agree to the 50/50 split. The league should come off a little on the strict tax levels they earlier discussed, but not that much. Players should look at other ways to keep their jobs longer, such as making players play 2 years of college before coming into the NBA and taking veterans’ jobs. Then, they can get back to work and we can start talking basketball and not BRI.
Replies: 13
Views: 823
13 Responses
The BRI is of no importance to the fan. The abuse of the luxury tax is.
If the abuse of the luxury tax is penalized by the loss of exceptions, like the bird and mid-level, that levels the playing field, almost as well as a hard cap, eliminating the exemptions.
Jazzaholic
Earth to the NBA–we’re in the worst economic situation since the Great Depression in the U.S. When people are losing their homes and their jobs, they have little patience for NBA players who are in a non-essential business (entertainment), and who can’t recognize they must give back some of what they received in the last CBA in order for their employers to stay in business.
When a below-average player today makes more than what former superstars Magic Johnson or Larry Bird made in their best years 20-25 years ago, something is amiss. The NBA went through “boom years” during the last CBA, but that “boom” period has now ended. Just like the housing market, NBA player salaries will naturally require some rollbacks, if the industry is going to survive.
If the players were smart, they would take the rollbacks currently being proposed by the NBA owners, because the offers are going to get worse from now on, not better.
I’d be completely fine with the owners saying ‘OK, we’ll give you your 53% BUT you have to agree to the system changes’. Strict punitive luxury taxes (semi-hard flex cap), shorter contracts, revenue sharing. Ways to keep your stars. Less exceptions.
Because, honestly, the difference between 53% and 50% is $100M. Divided between 30 teams is $3M each or so. I’m sure teams can figure out ways to either cut spending or boost revenues to come up with that $3M difference. And much more important to ME, as a fan, and especially as a small-market fan, I would LOVE to see the playing field level as I belive a lot of the teams with deep pockets are at a disadvantage to our organization in terms of good management, good coaching, and good player development.
It’s not about the 50/50 as much as it about the 50/50 + other issues. I’m 70% sure that the players went into these meetings with the idea that they could negotiate into the 50/50 if the other issues were fine. For the record, the players said: 50-52.5% band depending on revenue!!
Nope, this last one is completely on the owners. The parties spent 2 days of tough negotiations only to have Paul come in and give a dumb ultimatum.
The owners don’t know what they want and that’s why there’s very little optimism in the BBall community
KC you’re right on the money!
If the structure is right, the money takes care of itself.
If the structure is right, the league becomes more competitive and makes more money for owners and players to split.
Let’s hope the small market owners stick to their guns!
Jazzaholic
It hasnowcome down to “Pride” and who will lose the tug of war..
Sorry.. It looks like Aurther is helping me type again.
thanks for this post danny it is well written and explains things so I can understand them. I agree with you, I am pretty sure the players will lose more money missing this season than getting a higher BRI percentage.
I think the damage both the owners and players are doing to the image of the league is great during this recession. I imagine average fans haven’t missed the NBA and won’t care when it comes back.
I’ve got one vote saying the players can go kick rocks and most of which I’d like to see washing my car this “offseason”
Stern pretty much said it today that the offer is only going to get worse. I feel for players who just want to play. Hunter and Fisher need to be smarter about this. They aren’t going to win.
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Well, I certainly am on the owner’s side. Giving employee’s 57% of REVENUE before cost? That’s just mad.
And I certainly want to see Ty Corbine and the young players we have succeed, without the fear that when/if any of them emerge into budding superstars, they just leave for greener pastures.
Go owners, make those greedy players heel!
BTW: How much power do the agents have? It looks like their interests play a major role in this conflict (they certainly should have enough people who can do the math, even if some players never finished their college education)?