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This is the 4th blog exploring the issues facing the owners and players negotiating teams working on the next Collective Bargaining Agreement (CBA). The first three parts covered a tiered luxury tax,an amnesty clauseto allow teams to cut one player’s contract andthe length of contracts in the NBA.

As most of our readers likely realize the league has cancelled all of the pre-season games, or actually postponed them to some later date I suppose, after negotiations collapsed Monday with the players refusing to accept anything less than 53% of the basketball related income (BRI) of the league for the life of the contract. The players previously received 57% of BRI. The owners offered between 49-51% of BRI after initially offering 45-46%.

The Proposal: As I mentioned above, the owners upped their offer to basically 50% of BRI to the players.

What it Means: This is a very difficult issue for both sides. The players have received at least 54% of BRI since the 90s and taking a significant cut from that level is something of a make or break issue. The union even sent out a letter yesterday to their members explaining their position.

The players believe that reducing their take from 57% to 53% would shift over $1.1 billion dollars over the life of the contract to the owners from the players over the life of the contract. Accepting these figures and assuming that the league is serious in saying owners lost $300 million last season alone, despite record revenue, then the players are offering to defer losses for a little over 3 seasons over the next 10 years.

The owners refused to accept the players offer. The owners want a profitable league not a league that is lsoing money at a slower rate. It has been pointed out that the most popular league in North America, the National Football League (NFL), gives their players only 46% of the league revenues. The league is losing money even if some owners, like Jerry Buss who owns the Lakers, are making fantastic profits.

What people need to understand is to achieve the owner’s desired level of player compensation every player in the league would have their pay reduced for the next two seasons. The remaining years of the contract would allow some pay growth but not as much as the players have been receiving under the old CBA.

Derrick Fisher, the players lead representative in the meetings, had this to say about the owner’s offer, “The overwhelming feeling was that the players are prepared to sacrifice and stand for what we believe is fair. The clear message we have received from the players, and the one that we will heed, is not to back down. Yesterday the owners gave us an opportunity to back down. We refused.”

It appears the players view is fair means more than half of all income produced by the league should go to them despite no other league receiving that much in North America.

Making the issue all the more explosive has been the development of an anti-union stance by some of the super agents including Arn Tellum who Grizzlies fans should remember as the agent who held out Xavier Henry last season demanding the Grizzlies pay him an unconditional 20% bonus on top of the negotiated rookie salary. The agents want the players to decertify the union and allow them to negotiate on the players behalf.

So far this has not succeeded but the risk that a settlement worked out by the players union and owners could be derailed by agent interference has made the likelihood of anything being accomplished this season much less likely.

The Reasonable Solution: This is the most difficult position to come to a reasonable solution. Common sense would say a 50/50 split of BRI would be reasonable. It is a greater percentage than any other professional league enjoys after all including the NFL. However the players response to the owners offer makes it highly unlikely that this will occur. Perhaps if the players would concede to owner requests on other items such a contract length or salary cap exceptions then a 51-52% split would be acceptable but as it stands now neither side seems willing to move in the other’s direction.

 

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