SBJ/20091012/This Week's News
Losses may be vast, NBA tells union
Published October 12, 2009
The NBA has told the National Basketball Players Association that owners will lose “hundreds of millions of dollars” over the course of the current labor deal, based on the last four years of the deal combined with projections of declines in revenue for the next two years, said NBPA Executive Director Billy Hunter.
The NBA, meanwhile, has begun disclosing its finances to the union, sending two boxes of documents to the union last week, Hunter said. The NBA’s statements about losses in the league were based, at least in part, on projections of what will happen in the future, and Hunter noted that the league last year projected revenue declines and ended up with a 2 percent revenue gain for the most recent season.
“They say they have lost money … and they want to recoup those losses and achieve a more positive financial statement or balance,” Hunter said last week. “Their contention is the players are receiving too great a portion of the revenues.”
Hunter added that some NBA projections were based on a worst-case scenario for the economy and noted that some experts are saying the economy could turn around.
NBA owners are pushing for another bargaining session, while Hunter said he wants to be cautious and digest the financial information the league sent before meeting again. “They would like for me to negotiate a deal now in the current climate,” Hunter said. “If I am an owner, I want to negotiate now because, like Chicken Little said, the sky is falling. If the economy turns around it makes it much more difficult to make those kinds of arguments.”
The NBA had no comment on Hunter’s statements regarding the negotiations or league finances.
The NBA and the NBPA have held two formal bargaining sessions, on Aug. 4 and Sept. 22. The NBA made a presentation about its losses at the first meeting, Hunter said.
“They are losing money because of their alleged reduction in fans … and as a result they have had to reduce ticket prices,” he said. “That is why they are losing money.”
At the second bargaining session, the players union opened the meeting with its own presentation, Hunter said. The NBPA’s presentation focused on the players’ position that the collective-bargaining agreement signed in 2005, which guarantees players 57 percent of revenue, works. “If there is a reduction in revenues, the players suffer along with the owners,” Hunter said.
“Keep in mind, [at the time the union made its presentation] we had not received any records — we have just received the records,” Hunter said. He said he could not describe what records the union had received under a confidentiality agreement.
Hunter described the mood at the two bargaining sessions as “rather amicable.” Hunter did not reject outright the owners’ contention that they will lose hundreds of millions of dollars under the labor deal, but did not just accept it either. “We don’t know what the losses are going to be until we get to the next few seasons,” he said.
Hunter said he is preparing players for the potential of a lockout when the deal expires in June 2011 and has told them for the last two seasons to save a portion of their paychecks in case games are canceled. He said he intends to tell players when he begins visiting locker rooms later this fall to save 20 percent of their paychecks.
In June, the NBPA’s board of player representatives voted unanimously to withhold all licensing money to build a war chest. Hunter noted that union assets were $90 million to $100 million in 1998, when the league last locked the players out. The union reported assets of nearly $133 million for the year in its latest filing with the Labor Department (see related story).