Lockout!!!

[InGameStrategy]

50% and no hard cap is a pretty good deal for the players considering what the owners wanted originally and what they could basically continue to hold out for (45% and a hard cap).

I don't see, though, where 45% is anything more than a number that the owners pulled out of their billionaire asses. Was there any financial analysis behind it?

I'm skeptical, because if the players' share was 57% and the owners are threatening a random 45% number, and if $123 million represents 3%, then each percentage point represents about $40 million, suggesting that the draconian drop from 57% to 45% PRI is about ($40 * 12) = nearly $500 million savings by the owners. I think that this is annually. That's a huge profitability cushion relative to a more equitable value (literally) of 50% or so. Under broad accounting standards (i.e., including non-cash amortization), the NBA was losing "only" $300 million per year--and that's before any teams are folded or moved to more financially stable areas.

If the MLB and NFL can "get by" paying the players about 50% of revenue, I don't see why the NBA--which has fewer players per team, thus saving on associated costs such as insurance, lodging, travel, etc.--can't.

For my part, I think the players should get 51% under a flex cap system with most of the existing rules remaining. Max length for MLE deals should be shortened one or even two seasons with a provision where the free agent's last team can offer that additional year or two even without Bird Rights.

I agree that a number in the low 50's is about right, and I think that they will come to agreement in that range. Anything below that is a bit greedy and bullying on the part of the owners (as if it were possible to bully employees averaging $5 million in income). Also, maybe a lot of owners can afford holding out longer, but it's still in their best interest financially to start things going again as long as they can get a deal that makes sense, especially if the fan base gives up on the NBA for good if it were to be dragged out for too long. (We're probably not to that point yet.)

With the players already having capitulated to 53%ish, I reaffirm my prediction that they'll be playing by New Year's--maybe as early as Thanksgiving. I'm sure David Stern and the owners would like to see NBA fans cheering for Kobe between helpings of turkey.

 

[Deleted member 848]

I don't see, though, where 45% is anything more than a number that the owners pulled out of their billionaire asses. Was there any financial analysis behind it?

I'm skeptical, because if the players' share was 57% and the owners are threatening a random 45% number, and if $123 million represents 3%, then each percentage point represents about $40 million, suggesting that the draconian drop from 57% to 45% PRI is about ($40 * 12) = nearly $500 million savings by the owners. I think that this is annually. That's a huge profitability cushion relative to a more equitable value (literally) of 50% or so. Under broad accounting standards (i.e., including non-cash amortization), the NBA was losing "only" $300 million per year--and that's before any teams are folded or moved to more financially stable areas.

If the MLB and NFL can "get by" paying the players about 50% of revenue, I don't see why the NBA--which has fewer players per team, thus saving on associated costs such as insurance, lodging, travel, etc.--can't.


I agree that a number in the low 50's is about right, and I think that they will come to agreement in that range. Anything below that is a bit greedy and bullying on the part of the owners (as if it were possible to bully employees averaging $5 million in income). Also, maybe a lot of owners can afford holding out longer, but it's still in their best interest financially to start things going again as long as they can get a deal that makes sense, especially if the fan base gives up on the NBA for good if it were to be dragged out for too long. (We're probably not to that point yet.)

With the players already having capitulated to 53%ish, I reaffirm my prediction that they'll be playing by New Year's--maybe as early as Thanksgiving. I'm sure David Stern and the owners would like to see NBA fans cheering for Kobe between helpings of turkey.

My preditction is that we will start the season on time, and all 82 games will be played. Of course, this is simply a hunch on my part, however things are really progressing to the point where "one bad meeting" wont destroy progress as much as it would have, say, two weeks ago. Things are looking up.

 

[Gyp Rosetti]

Sounds like the players aren't negotiating in good faith.

 

[Deleted member 848]

https://sheridanhoops.com/2011/09/22/nba-lockout-update-generous-amnesty-provision/

By Chris Sheridan

NEW YORK — Negotiations to end the NBA lockout are resuming today in Manhattan with all the heavy hitters in attendance, so there will be some news before the end of the day. Stay tuned on that front.

In the meantime, chew on these two articles:

In the Oregonian, columnist John Canzano reports an amnesty provision could be part of the new labor agreement, and it would provide some serious cap flexibility leaguewide:

“Two NBA sources told me Tuesday that they believe there’s consensus among owners on a few important lockout issues. One of those issues being an amnesty clause that would give NBA teams the ability to release one player, pay his salary, take no luxury tax liability, and also, not have that player count against the season salary cap. This is different than the last round of amnesty, which didn’t give the cap relief. And if true, it would likely allow Portland to strongly consider releasing three-time All-Star Brandon Roy, creating an additional $15 million in cap relief next season. Which is only to say, the Blazers need a general manager in the chair now, as this develops, if they’re going to fully maximize the advantages of making such a powerful play.”

Adrian Wojnarowski of Yahoo Sports raises the issue of whether Billy Hunter might make so many concessions, the league’s most powerful agents would encourage their clients to vote against ratification.

“Everyone knows this is Hunter’s final stand as executive director of the Players Association, and he ultimately won’t have to live with the consequences of the agreement. He’ll take his millions of dollars, and go, and that leaves some agents and players suspicious of his willingness to fight NBA commissioner David Stern and the hard-line owners to a determined, defiant end. “There’s a lot of money and control at stake here,” one NBA front-office executive said. “I’ve never seen people who are in negotiations with each other give up those two things easily. There will be a nasty fight at some point among the owners, the players and the agents. At some point, two of those three entities will square off and go to war. It’s just a matter of which two entities it will be.”

Two words come to mind when I read this article;

Raja Bell.

 

[InGameStrategy]

Sounds like the players aren't negotiating in good faith.

Really? In what way? They've already offered a 4% to 5% drop, and with things like the amnesty clause being bandied about, it sounds like it's the owners who are driving the bus. To me, it sounds like the players are giving up ground.

 

[GVC]

Really? In what way? They've already offered a 4% to 5% drop, and with things like the amnesty clause being bandied about, it sounds like it's the owners who are driving the bus. To me, it sounds like the players are giving up ground.

It sounds like the players have basically already ok'd a drop in 10% of their share of revenue (from 57% to 51% of BRI). That's pretty ****ing significant.

 

[GVC]

Also, I hope they allow that amnesty provision to be exercised once by every team any time in the next 2 or 3 years. It's a little unfair to teams that won't benefit instantly to make the provision only exercisable in a narrow window IMO. It's why the last one was dubbed the "Allen Houston" rule...utter ********.

 

[theonlyone]

Also, I hope they allow that amnesty provision to be exercised once by every team any time in the next 2 or 3 years. It's a little unfair to teams that won't benefit instantly to make the provision only exercisable in a narrow window IMO. It's why the last one was dubbed the "Allen Houston" rule...utter ********.

How about allowing the teams to start waiving one player of their choice once a year if they wish? The threat of that happening to the players will ensure that players stop milking injuries or not giving their full effort.

 

[GVC]

How about allowing the teams to start waiving one player of their choice once a year if they wish? The threat of that happening to the players will ensure that players stop milking injuries or not giving their full effort.

The players have probably given up enough for now. Guaranteed contracts are the last thing they'll be giving up. Plus, if they implemented that as they're reportedly planning on implementing the amnesty provision, it would be a huge benefit for wealthy teams, since the waived player won't count against their cap number (but they'll still be required to pay the player). The Lakers and Knicks would have little incentive to not overpay when able, since they can just cut the player the next year (and not have to pay dollar-for-dollar on their overages due to paying said waived players, like they've had to with the LT).

 

[Gyp Rosetti]

Really? In what way? They've already offered a 4% to 5% drop, and with things like the amnesty clause being bandied about, it sounds like it's the owners who are driving the bus. To me, it sounds like the players are giving up ground.

If I take the whole apple pie and say, okay, I'll give you 25% of it now, am I really being fair? Who cares how much they've given up if the end number still isn't fair or financially responsible?

 

[InGameStrategy]

It sounds like the players have basically already ok'd a drop in 10% of their share of revenue (from 57% to 51% of BRI). That's pretty ****ing significant.

Exactly. That's why I don't think that the players aren't negotiating in good faith. If anything, it's the owners who aren't negotiating in good faith, but I just think that they are being putzes about it (and also having internal arguments, which aren't helping).

 

[InGameStrategy]

If I take the whole apple pie and say, okay, I'll give you 25% of it now, am I really being fair? Who cares how much they've given up if the end number still isn't fair or financially responsible?

So you're referring to the owners taking the whole apple pie, right?

Or are you referring to the players taking 57% in the LAST contract, which the owners foolishly agreed to? Was that really a lack of good faith on anybody's part--or just very good negotiation on one side and very bad negotiation on the other?

And what percentage of total revenue starts or stops being fair or financially responsible?

A percentage in the low 50's seems both fair (which seems hard to define, given that that's a notable drop) and financially responsible (which is also hard to define, but seems to be a level at which the franchises should be able to be profitable--at least NBA-wide, if not every team). At a drop from 57% to 51%, it's a savings of about 6% * $40 million/percent = $240 million, which covers most of the income-statement losses (some of which are non-cash losses anyway).

Any remaining shortfall can be taken care of by revenue sharing, which the Lakers have already agreed to; not sure if the other few profitable franchises have. They should agree to it; the revenue sharing will pay for itself in one saved season.