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Blog Entry

BRI, revenue sharing take center stage in talks

Posted on: October 20, 2011 12:01 pm
 
NEW YORK -- Setting up an important day in the NBA labor mediation Thursday, with BRI and revenue sharing in the spotlight:

* After more than 24 hours of federally mediated bargaining over two days, the two sides are right back where they were on Oct. 4 when it comes to the key issue of BRI split. Two people involved in the negotiations confirmed to CBSSports.com Thursday that the owners are back to offering a range of 49-51 percent for the players, with the percentage varying based on where revenues come in. This is where things were when a crucial session broke down more than two weeks ago, and we all know how that ended: Depending on who you believe, the players either rejected that informal proposal or countered with a band of 51-53 percent, which the league rejected. Either way, the economic negotiation has settled in the sweet spot that it has been heading toward ever since.  The final number A) more than likely will vary based on revenue trigger points, and B) is expected to wind up with the players receiving a share of between 50-52 percent -- the midpoint of the range each side is comfortable with, which we told you on Oct. 4 meant the two sides were only about $80 million-a-year apart. 

* With the owners' planning committee presenting its recommendations on a new revenue sharing plan to the full Board of Governors, the next step will be for the owners' labor relations committee to share the results with the players' executive committee Thursday afternoon when mediation resumes. While the owners have kept their revenue sharing plans separate from the collective bargaining talks, Thursday is expected to be the day when those two crucial topics unite. Before making any further economic moves, the players have been eager to examine the owners' revenue sharing plan as a way to ensure that the union doesn't bear a disproportionate burden of the economic and system changes owners are seeking. Commissioner David Stern has said the plan is to initially triple the revenue-sharing pool and eventually quadruple it. Shifting money from high-revenue teams to low-revenue teams is viewed as a crucial aspect of fitting the league's vision of a flatter payroll disparity into a CBA that already has significant economic concessions from the players built in.  

* Finally, as I examined here, the most prominent sticking point in the talks remains the method by which a reduction in player salaries will be linked up with a new system that seeks to create more competitive balance. Two mechanisms that I didn't mention in that piece could help: an amnesty clause and the escrow system. The latter already was in place in the previous agreement, while the former is a new concept proposed by the owners. Under the league's amnesty proposal, sources say teams would be able to waive a player and have up to 75 percent of his contract removed from the cap and tax, with the remaining balance amortized against the cap over the number of years left on the contract. The player would still be paid 100 percent of the guaranteed money owed; this would be an NFL-style cap management tool to help teams adjust to the new system. The escrow, which evens out any underage or overage in the players' guaranteed share of BRI, also could be used to account for existing contracts that would make it difficult for teams to comply with the lower cap. But this is a tricky one, since any amount paid to the players that winds up exceeding their assigned BRI percentage would have to be refunded to the owners. Union officials may view this as a salary rollback by a different name.

* So, right on cue, sports attorney Matt Tolnick has written a thoughtful piece detailing other solutions to the problem of marrying lower salaries to a more restrictive system. Writing for Hoopshype.com, Tolnick suggests two remedies: 1) Instead of requiring teams to be under a hard or harder spending ceiling (be it a cap or tax level) every year, they would simply need to meet the requirement on average over the course of four or five years; and 2) a rollback of existing contracts commensurate with the players' overall reduction in BRI percentage. The union has flatly rejected rollbacks, and the owners have agreed to back off on the concept. But it might just be the most equitable and simplest way to make all these moving parts fit together without causing a certain class of players (i.e. draft picks or free agents) to bear a disproportionate burden. 

How all of this plays out at the bargaining table Thursday is anybody's guess. But there seem to be enough good ideas to go around.

 
Comments

Since: Jun 25, 2009
Posted on: October 27, 2011 10:21 am
 

BRI, revenue sharing take center stage in talks

It's not like the owners ever risk any of their own money building an arena. How 'bout the players agree to assume some risk in the buildings as well? WHO SPEAKS FOR THE CITIZENS/FANS???

First of all, why on earth should an owner risk very much building an arena?  It's bad enough an owner has to seek and acquire league approval before he moves his own team and business, but because it's a franchise there's nothing an owner can do about that.  But you want an owner to risk his own money while not only creating hundreds of local jobs in that city but also feeding small business owners and bringing more traffic into the city, tourism, etc ?  I think if that's what you're asking, it's a little too much to ask imo....

The players? They don't take any risks, none at all and they aren't responsible for any expenses.  Yet they were getting 57 percent of basketball related income.... weird.   The players will never contribute to anything..... not short term and not long term. Never happen..

Remember something else.  The day professional sports owners are forced to risk too much of their money building arenas will also be the day they'll have more options when they are losing money and ticket sales are down.  Right now if an owner of a pro sports team wants to move his team to a more profitable city, they need approval from the league's board of governorns or they go nowhere.  If you stick them with the responsibility of spending hundreds of millions on buildings and even more on taxes on a yearly basis and things go wrong, you can't make them stay.  You can't have it both ways.... if the owner is paying out of pocket, the owner should and would be able to do whatever he pleases....  right now with the taxpayers footing the bill fans are pretty well guaranteed at least 95 percent of the time or better the team can't really go anywhere else.... 



Since: Jun 22, 2009
Posted on: October 20, 2011 1:36 pm
 

BRI, revenue sharing take center stage in talks

I guess this author's blog is meant for NBA hardcore fans, and not for the general sports fan.  Looking at the title, I had no idea what "BRI" stood for.  As it wasn't defined anywhere, I assumed this must be part of everyday acronym vernacular, like IRS, EPA, CDC, NBA, MLB, NFL, etc.  What I found when I Googled it was that it stands for "basketball related income".  Really? Is that something that should be intuitive?  Mr. Berger, get some perspective.



Since: Mar 30, 2010
Posted on: October 20, 2011 1:15 pm
 

Where are the local government stakeholders?

It's not like the owners ever risk any of their own money building an arena. How 'bout the players agree to assume some risk in the buildings as well? WHO SPEAKS FOR THE CITIZENS/FANS???


The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com