SBD/Issue 96/Leagues & Governing Bodies

Sources: NBA Will Propose Giving Players Around 45% Of Revenues

Stern Intent On Getting League's
Cost Structure Back In Line
When the NBA hands the NBPA its first proposal for a new CBA "sometime in the next 10 days, the percentage of revenues that the league wants to give to the players will be 'well below'" 50%, according to league sources cited by Frank Hughes of SI.com. The players currently receive 57% of basketball-related income, and NBPA Exec Dir Billy Hunter in early January said that he "thought the league was going to offer a 50-50 split." Sources confirmed that NBA Commissioner David Stern, "intent on getting the league's cost structure back in line and positioning teams so they once again can be profitable," will propose that the players "get closer to 45[%] of basketball-related income." Hughes noted there also is a "strong chance that Stern will try to redefine exactly what 'basketball-related income' is so the financial onus is not so much on owners." The "biggest question the union wants answered is whether the NBA intends to roll out a low proposal at first in order to give the league room to negotiate later, or whether Stern is putting forth low percentages because that is truly what the owners expect to get."

LOCKOUT REPERCUSSIONS: Hughes reported the two sides have until June 30, 2011, "to work out a deal, after which the league likely would impose a lockout of its players," and a "drastic decline in the players' percentage of BRI would increase the chances of an ugly lockout." But Hughes reported that even if the owners impose a lockout, they will "continue to be paid the revenue from their television contracts with ABC and Turner Sports, a figure that amounts to close to" $900M, or $30M per owner. Under that scenario, with "no player salaries and in some cases no coaching salaries, some teams will actually make more money by not playing under the current economic conditions." But the NBPA is "quick to point out that the league must at some point pay back the money to the networks -- probably by extending the contract for a year -- so it is not free money." Warriors F and player rep Devean George: "We are saving our money for ours and they are going to be able to profit while we are out. Wow, this is going to be a bloody battle. I'm curious to see what Billy has to say after his talks with the commissioner" (SI.com, 1/29).

Duffy Believes Hard Cap
Won't Be Installed In '11-12
HARD CAP COMING? SI.com's Ian Thomsen reported four team execs have said that they are "anticipating a hard cap on payrolls" with the new CBA. A hard cap "would transform the way teams are assembled," and if one is installed after next season, it would "likely be preceded by a transitional system over a short number of years." One GM said, "I really think worst case it will be a hard cap that gets phased in over three years." Another senior exec said, "If there's going to be a lockout, then there's a 99[%] chance there is going to be a hard cap." Thomsen noted players including Cavaliers F LeBron James and Heat G Dwyane Wade will be free agents after this season, and one team exec said of their options in free agency, "Teams might say, 'I don't want to give [$15-20M] to one guy because that might lock me out of a hard cap.' It could change everything." Thomsen noted if a team "signs a player to a five-year contract this summer, four of those years will be paid under the rules of a new CBA starting in 2011-12," which is "why owners will be taking the new realities into consideration as they make offers." But NBA player agent Bill Duffy "believes the NBA won't be able to install a hard cap in 2011-12." Duffy: "I've heard all of that (speculation). If the league tries to go too far with this, then my prediction is the union will disband. If the league is going to try to force a hard cap down the players' throat, then they'll disband the union and file antitrust (lawsuits) against the league" (SI.com, 1/29).

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