Plenty of interesting tidbits from Ken Berger latest article on the CBA.
“What we told our players initially is that
we’d like to get profitable and we’d like to have a return on our
investment,” Stern said. “And there’s a swing of somewhere in the
neighborhood of between $750 [million] and $800 million that we
would like to change. That’s our story and we’re sticking with
In another staggering development, CBSSports.com
learned that salaries may not be the only area cut as the NBA
tries to gets its financial books up to speed with the explosion
in popularity the league will experience this season. A person
with knowledge of the owners’ discussions said the league “will
continue to be open to contraction” as a possible mechanism for
restoring the league to profitability.
After two days of meetings with the full Board of Governors, Stern
pulled no punches in quantifying just how much salaries would need to be
reduced to stem losses that NBA officials pegged at $380 million
last season. Deputy commissioner Adam Silver, who is spearheading
the labor negotiations, revealed Thursday that the league
currently is projecting between $340 million and $350 million in
losses for the upcoming season — despite robust season-ticket
renewals and record new season-ticket sales generated by the
historic summer of free-agent movement that landed LeBron James
and Chris Bosh in Miami with Dwyane Wade, plus Carlos Boozer in
Chicago and Amar’e Stoudemire in New York.
Stern conceded that “business is good,” and pointed
out that as revenues rise, player salaries rise with them. “It’s a
sliding scale,” the commissioner said after his session with the
media was over.
But more than that, the point league
officials have made to owners — both during bargaining sessions
with the labor committee and to the full Board of Governors on
Thursday — is that significant savings could be achieved by
changing the NBA’s economic model without forcing the players to
take such a big cut. League negotiators believe a hard cap,
shorter contracts, less guaranteed money and a revamped revenue-sharing
system with what Stern called “modest performance standards” would
go a long way toward improving competitive balance and satisfying
Stern’s goal of assuring “all teams will have an opportunity to
In all of that, you’ve got three or four basic points:
1: The league wants to trim salaries by 750 million in total. That represents basically a third of player salaries. The players will not be real amped about that.
2: Contraction is thrown out there as a scare tactic. I don’t believe there’s any viable way the league can contract teams. They’d need to pay out a crapload of money to the owners of the contracted teams while the players would lose a crapload of jobs. It’s a lose / lose for everyone really.
3: The league is really aiming at non guaranteed salaries and shorter contracts. They know they’re not going to get a 33% cut in player salaries, so what they’re starting the negotiation off in an unreasonable place to hope they can win the concessions they really want. Most likely something like 4 year partially guaranteed deals.
I’m not sure where the league’s numbers come from, but if you look at the estimate from Forbes they paint quite a different picture of NBA accounting. It makes you wonder if the league is throwing a bunch of phony numbers around to make their point. I know they’ve said they’ve handed over tax documents, but those frequently have a bunch of accounting tricks to lower the real money involved.
At any rate, it will be interesting to see where this goes next summer. Some of the contracts recently negotiated could end up looking pretty bad if the new salary structure changes things around considerably, including Joakim Noah’s.