RealGM Analysis
The latest round of CBA negotiations ended with the players and the owners three percentage points apart on the amount of basketball-related income the players will receive. The difference between 53% and 50% of BRI amounts to $100 million a year.
While it makes sense for the owners to take the long view, the players lose $170 million in salaries for every two weeks of the regular season cancelled. Considering that the average player’s career is only 4.7 years long, that’s money most of the players will never get back.
Some have blamed the agents, who will be receiving commissions long after the current players are retired, for misleading the players into making a short-sighted, money-losing stand. But there’s a reason that veterans like Kevin Garnett, who have now been through three labor negotiations, are the ones urging the players to stand firm.
They feel an obligation to fight for the next generation of players, because they know that no number will satisfy the owners, not when they can always get more. It doesn’t matter what happens over the course of the new CBA; the owners consistent refusal to negotiate in good faith is a good indication they’ll be asking for even more money whenever it expires.
There’s a clear pattern: in 1999, with the economy booming in the middle of the internet bubble, the owners cried poverty and received landmark concessions from the players in an effort to boost parity. In 2005, with the economy slowing down but still being propped up by the housing bubble, the owners cried poverty and received even more concessions -- lowering the length of contracts and the amount of annual raises.
So after two CBA negotiations that were widely seen as victories for the owners and with the league having its most successful season in over a decade, what happened in 2011? The owners claimed hundreds of millions of dollars in loses that independent observers have repeatedly questioned. And even according to these dubious numbers, had non-player expenses (adjusted for inflation) remained constant from 1999 to 2010, the league would have made a record profit this year.
Thanks to the explosion in the value of sports TV rights, the NBA is due to receive a monstrous new TV contract in 2016. The players are already making a huge concession in agreeing to move from 57% to 53% of BRI, but the owners are demanding more under the guise of increasing competitive balance and helping small market franchises survive.
And that’s where the beauty of the owners demand for more competitive balance becomes clear. The owners will never be able to achieve competitive balance: basketball will never have as much parity as football or even baseball. Because one great player can have a much bigger impact in basketball and the better team nearly always wins a series of seven basketball games, basketball leagues will always suffer from competitive imbalance.
It doesn’t matter what economic system has been in place; the 1970’s were the only decade where a few franchises didn’t dominate the NBA. The Boston Celtics won nine championships in the 1960’s, the Celtics and Lakers combined to win eight in the 1980’s, the Bulls and the Rockets won eight in the 1990’s and the Spurs and Lakers won eight in the 2000’s.
In comparison, the NFL and MLB each had eight different franchises win championships in the last decade. Because of the inherent differences between the sports, the NBA will never have the same amount of parity as the NFL, so owners can always claim the newest CBA needs to level the playing field between franchises.
It doesn’t matter what the league’s economic situation is, if the owners want to, they can use parity as a weapon to bludgeon the players in labor negotiations. And because they can afford to wait out players worth a lot less money and with a lot shorter careers than them, both sides know the owners will always have the upper hand.
The players have to trust the owners not to use this leverage unfairly, and veterans like KG have been around long enough to know how that turns out. In the latest CBA meeting, Dan Gilbert, the Cavaliers owner, reportedly told Billy Hunter that “[Hunter and the players] should trust the owners”. Considering Gilbert’s conduct over the last year, asking the players to trust him is a suggestion so absurd on its face it’s somewhat disrespectful he even said it. LeBron James, the NBA’s biggest star, would probably be better off trusting Bernie Madoff than Gilbert.
Contrary to some suggestions, the players aren’t stupid. They know not knuckling under before more games are cancelled will cost them money they will never get back, but they also know that no agreement signed in 2011 will ensure long-term labor stability or competitive balance.
The players will eventually have to concede, but whatever concessions they make will be the starting point for the owners to offer even less in the next CBA. That’s the reason these negotiations aren’t over: they are as much about 2018 or 2021 as they are about today.
While it makes sense for the owners to take the long view, the players lose $170 million in salaries for every two weeks of the regular season cancelled. Considering that the average player’s career is only 4.7 years long, that’s money most of the players will never get back.
Some have blamed the agents, who will be receiving commissions long after the current players are retired, for misleading the players into making a short-sighted, money-losing stand. But there’s a reason that veterans like Kevin Garnett, who have now been through three labor negotiations, are the ones urging the players to stand firm.
They feel an obligation to fight for the next generation of players, because they know that no number will satisfy the owners, not when they can always get more. It doesn’t matter what happens over the course of the new CBA; the owners consistent refusal to negotiate in good faith is a good indication they’ll be asking for even more money whenever it expires.
There’s a clear pattern: in 1999, with the economy booming in the middle of the internet bubble, the owners cried poverty and received landmark concessions from the players in an effort to boost parity. In 2005, with the economy slowing down but still being propped up by the housing bubble, the owners cried poverty and received even more concessions -- lowering the length of contracts and the amount of annual raises.
So after two CBA negotiations that were widely seen as victories for the owners and with the league having its most successful season in over a decade, what happened in 2011? The owners claimed hundreds of millions of dollars in loses that independent observers have repeatedly questioned. And even according to these dubious numbers, had non-player expenses (adjusted for inflation) remained constant from 1999 to 2010, the league would have made a record profit this year.
Thanks to the explosion in the value of sports TV rights, the NBA is due to receive a monstrous new TV contract in 2016. The players are already making a huge concession in agreeing to move from 57% to 53% of BRI, but the owners are demanding more under the guise of increasing competitive balance and helping small market franchises survive.
And that’s where the beauty of the owners demand for more competitive balance becomes clear. The owners will never be able to achieve competitive balance: basketball will never have as much parity as football or even baseball. Because one great player can have a much bigger impact in basketball and the better team nearly always wins a series of seven basketball games, basketball leagues will always suffer from competitive imbalance.
It doesn’t matter what economic system has been in place; the 1970’s were the only decade where a few franchises didn’t dominate the NBA. The Boston Celtics won nine championships in the 1960’s, the Celtics and Lakers combined to win eight in the 1980’s, the Bulls and the Rockets won eight in the 1990’s and the Spurs and Lakers won eight in the 2000’s.
In comparison, the NFL and MLB each had eight different franchises win championships in the last decade. Because of the inherent differences between the sports, the NBA will never have the same amount of parity as the NFL, so owners can always claim the newest CBA needs to level the playing field between franchises.
It doesn’t matter what the league’s economic situation is, if the owners want to, they can use parity as a weapon to bludgeon the players in labor negotiations. And because they can afford to wait out players worth a lot less money and with a lot shorter careers than them, both sides know the owners will always have the upper hand.
The players have to trust the owners not to use this leverage unfairly, and veterans like KG have been around long enough to know how that turns out. In the latest CBA meeting, Dan Gilbert, the Cavaliers owner, reportedly told Billy Hunter that “[Hunter and the players] should trust the owners”. Considering Gilbert’s conduct over the last year, asking the players to trust him is a suggestion so absurd on its face it’s somewhat disrespectful he even said it. LeBron James, the NBA’s biggest star, would probably be better off trusting Bernie Madoff than Gilbert.
Contrary to some suggestions, the players aren’t stupid. They know not knuckling under before more games are cancelled will cost them money they will never get back, but they also know that no agreement signed in 2011 will ensure long-term labor stability or competitive balance.
The players will eventually have to concede, but whatever concessions they make will be the starting point for the owners to offer even less in the next CBA. That’s the reason these negotiations aren’t over: they are as much about 2018 or 2021 as they are about today.
