US And Canada Report

For the NBA, dividing $24 billion not as easy as it sounds

For the NBA, dividing $24 billion not as easy as it sounds

It’s not so easy as it sounds, apparently, the dividing of $24 billion. Not when half of it goes to 30 team owners who are quite sure fans show up because of the arenas, marketing and operational excellence they provide. And not when the other half goes to 400-plus athletes of varying skill who are certain that the fans are clicking the turnstiles to see them. That’s been the dynamic that has ruled the relationship between management and labor in the NBA since the advent of collective bargaining — there has long been the notion that what’s best for the game benefits all involved, but in the last two decades, there’s only rarely been agreement on just how much benefit should go to each side.130520111642-lebron-james-miami-heat-indiana-pacers-nba-playoffs-2013-single-image-cut

The league is contract-bound to ensure that out of all revenues, 51 percent goes to the players. That number is derived from the total basketball-related income of the NBA. So what happens when you take the primary source of those revenues — the national television deal — and, essentially, triple them? The NBA is on a path to find out, and it could cause mayhem in front offices everywhere. League commissioner Adam Silver had presented the NBA players union with a proposal that would have eased some of the shock expected to come from the sudden burst of income. Termed, “smoothing,” the idea was to artificially hold down the salary cap in the first year of the television deal in order to ramp up to the new level of income.

Players would still get 51 percent, but the difference between the salary paid out under the artificial cap and what players should have been paid would be given to the union in a lump sum. On Friday in Manhattan, new NBPA director Michele Roberts said that the union — after having the idea weighed by experts — had flatly rejected that idea. After all, players who were in position to cash in with new deals in 2016 would find their contracts starting at a lower figure than without smoothing.

“The proposal that the league submitted was, frankly, let’s call it proposal, it would artificially deflate the salary cap,” Roberts said. “And that, of course, meant that player salaries would not increase as much as they would otherwise were it not for smoothing. That pretty much was what killed it. It killed it in the eyes of the economists that made the recommendations, and it killed it in the eyes of the players.” Without agreement from the players, the league can do nothing to change the situation — Silver and the owners can only accept the new television money and let the numbers work out however they may. That will almost certainly open a wild free-agent period in which all teams will be handed a huge swath of cap space, and players will be eligible to bring in starting salaries unheard-of under the max-salary structure that came into play after the 1999 lockout.

What if the Knicks suddenly had the opportunity to sign up two max-contract players? Or if the Lakers could sign three? Or if the already-stocked Bulls could add another All-Star? Where does that leave, say, Milwaukee or Minnesota or New Orleans? It’s hard to see an easy way for the union and league to come to an agreement on this. The union has no particular incentive to help the league’s front offices out. At the same time, the union has to deal with the problem of players who are already under contract when the new money kicks in missing out on their share of the loot — and with players like LeBron James and Kevin Durant, potential 2016 free-agents, signing for an artificially lowered maximum salary.


January 2018
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