Blog Entry

Sources: Owners' offer still below 50 percent

Posted on: September 23, 2011 11:45 am
Edited on: September 23, 2011 12:28 pm
NEW YORK -- More details emerged Friday of a revised proposal from the owners on the split of revenues with the players, with two sources telling that the aggregate share offered by the league remains below 49 percent.

The number offered Thursday by commissioner David Stern and deputy commissioner Adam Silver was deemed "unacceptable" by representatives of the National Basketball Players Association, according to one of the sources familiar with the proposal. The two sides emerged from a five-hour negotiation with no deal and with full recognition that training camps would be postponed and preseason games would be canceled.

That inevitable and widely expected announcement came Friday, when the league postponed indefinitely the start of camps -- which were supposed to open Oct. 3 -- and scrapped 43 preseason games scheduled from Oct. 9-15.

The two sides are communicating Friday to schedule another bargaining session for next week, when the owners' gesture -- however small -- to move off the $2 billion-a-year players' share for the first eight years of a 10-year proposal is expected to accelerate negotiations on the economic portion of the agreement.

This is the first time the league has formally offered a number in terms of the BRI split since they proposed an annual guarantee of $2.01 billion as part of a 10-year proposal in late June.

It is both curious and an inevitable function of the calendar -- the league is still three weeks away from having to cancel regular season games -- that the owners emerged from a series of productive bargaining sessions and a full Board of Governors meeting to present a BRI split that still has the players receiving less than half of the league's approximately $4 billion in revenues. After NBPA executive director Billy Hunter stated his intention to go below the union's previous offer of a 54.3 percent share for the players, Stern and Silver acknowledged that an agreement on the economics was within reach.

Stern told reporters last Tuesday that the players' gesture -- which was preconditioned on the owners dropping their insistence on a hard salary cap -- was "on the road" to a compromise on the overall dollars.

"The question is, how long is that road?" one person connected to the talks said Friday. "Is it the Road to Hana?"

Under the six-year CBA that expired July 1, the players were guaranteed 57 percent of basketball-related income.

Examining the owners' June proposal of $2.01 billion for eight years, the numbers work out to an average of 44 percent of BRI for the players. (Estimating 4 percent annual revenue growth, total revenues in the first eight years of the deal would be approximately $36.4 billion, reaching $5 billion for the first time in league history in the seventh year.)

So even though the players would get an estimated 51 percent of BRI in the first year of the deal ($2.01 billion out of $3.95 billion), with revenues increasing and salaries remaining flat, their share would decline to 39 percent in the eighth year.

The numbers offered by league negotiators Thursday amounted to an average share for the players that was still less than 49 percent and provided what one person familiar with the numbers described as a lesser decline in their percentage over the years.

So in estimating how far apart the owners and players are economically, my presumption that the league must have offered more than 50 percent on Thursday -- since that's what they'd offered in the first year of the June proposal -- did not take into account the declining percentage over time. Since the previous offer was 44 percent in the aggregate over eight years, what the owners came forward with Thursday had to have been in the the 45-48 percent range on average over the life of a new CBA.

So how far apart are they? It's hard to say for sure since so many of the proposals have been hypothetical and they haven't gotten around to negotiating what system they'd be tied to. But if you look at a six-year horizon -- the longest proposal the players have offered -- the difference between 53 percent for the players and a possible owners' proposal of, say, 46 percent, would be about $2 billion.

What's a couple of billion among friends? It's a lot of ground to cover in three weeks, but vastly less than the $8 billion over 10 years that separated the two sides three months ago.


Since: Sep 17, 2011
Posted on: September 26, 2011 3:53 pm

Sources: Owners' offer still below 50 percent

More and more people are staying home to watch games on TV, and save the price of a ticket at the arena. Others have chosen to stop following the NBA altogether because of the salaries paid to the athletes.

Since: Sep 20, 2006
Posted on: September 25, 2011 5:49 pm

Sources: Owners' offer still below 50 percent

Show me ANY other business where a private owner gives employees more of the revenue than they bring in....There isn't one.

Players have unique skills...and there are 1,200 others with similar (in many cases superior) skills each year. Kobe's and LeBron's are rare, but Derek Fishers and Joe Smith's arent...these guys don't take a cut of the team loses money, and they have no financial risk. Owners are stupid if they give them half the revenue.

Owners should stop negotiating with the union, period. End the lockout and open camps for tryouts and players that want to play. If owners had any moxy at all, they would issue a deadline to report, and issue a lifetime ban for those that don't...MAKE Kobe and LeBron go overseas...forever, or go to work.

Since: Mar 25, 2011
Posted on: September 24, 2011 1:14 pm

Sources: Owners' offer still below 50 percent

KountryKookin: Arrogant much? I'm upset with the players because I may not get to watch NBA ball this season. I may not get to watch it because the players aren't getting enough millions. It's as simple as that. You may resume walking on water.

Since: Aug 11, 2010
Posted on: September 24, 2011 12:06 pm

Sources: Owners' offer still below 50 percent

Any assumption that revenues will grow 4 percent a year is laughable. What world are the players and owners living in ? For fifty years we have been used to annual raises, increases in salary etc. Well look around and clearly that world is gone. If the players were smart they would take that two billion per year , maybe try to cut it back to five years. The owners are dumb to offer any flat amount. A percentage is fairer and 45 percent is about right.

Since: Oct 6, 2009
Posted on: September 24, 2011 12:09 am

Sources: Owners' offer still below 50 percent

I think that this will be resolved when the regular season games are put in jeopardy.  I'm not a fan of the players getting a 50% split of the revenue with the owners but if that's what it takes I think the owners will go with it.  I think that if more NBA stars went to foreign leagues to play then the owners would have felt even more pressure.

Since: Sep 13, 2011
Posted on: September 23, 2011 11:31 pm

Sources: Owners' offer still below 50 percent

I love how my comment got deleted when I used not one foul word at all. The admins. here are also a joke just like the NBA owners, now I will probably get banned, oh well I will just make another name.

Since: Sep 13, 2011
Posted on: September 23, 2011 7:07 pm
This comment has been removed.

Post Deleted by Administrator

Since: Oct 10, 2006
Posted on: September 23, 2011 6:35 pm

Sources: Owners' offer still below 50 percent

Who cares.  If the season gets cancelled I will not miss it
You obviously care enough to post your opinion. Wink

Since: Oct 26, 2006
Posted on: September 23, 2011 6:14 pm

Sources: Owners' offer still below 50 percent

Who cares.  If the season gets cancelled I will not miss it

Since: Apr 29, 2011
Posted on: September 23, 2011 4:17 pm

Sources: Owners' offer still below 50 percent

LOL KountryKookin are you really Lebron? I swear you were about to tell us that we are going to wake up tomorrow to our pathetic lives while you will still be you.

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