Group Created with Sketch.
Volume 21 No. 2
  • Created with Sketch.
  • Created with Sketch.
  • Created with Sketch.

NBA responds on salary cap, league revenue issues

In “How use of business analytics could have benefited union” (SportsBusiness Journal, April 14-20), author Charles Grantham, who served as executive director of the National Basketball Players Association from 1988 until 1995, suggests that players’ unions would benefit from a greater use of analytics. Mr. Grantham’s article contains several factual inaccuracies and misleading assertions.

Mr. Grantham refers to both “tighter salary caps” faced by players and “financial footing lost over the last 20 years.” To the contrary, since 1994 the NBA salary cap has grown from $16 million to over $58 million, and NBA players have seen their average salary nearly triple from approximately $1.8 million to $5.2 million, the highest in all of professional team sports.

In questioning the purposes and effects of the NBA’s rookie salary scale, Mr. Grantham asserts that salary saved on rookie contracts goes back to NBA teams. The CBA expressly guarantees that players in total will receive approximately 50 percent of specified leaguewide revenues each year. As a result, the rookie scale has no effect whatsoever on total player compensation.

In discussing the importance of tracking league revenue to ensure that players receive their designated share, Mr. Grantham states that “leagues block union access” to important financial information. In fact, an accounting firm jointly retained by the NBA and the Players Association audits league and team revenues each year precisely to ensure that NBA players receive their CBA-specified share. The NBA also has elected to turn over to the Players Association extensive additional financial information during past rounds of collective bargaining, including audited league and team financial statements.

Finally, Mr. Grantham recommends that a larger percentage of players compensation be deferred as a means of helping players “relieve some of the financial stresses of retirement.” We agree and proposed doing so in our most recent negotiations. Yet it should be noted that NBA players already receive, in addition to their salaries, a team-funded pension, a 401(k) plan with a 140 percent employer match, and other substantial post-retirement benefits.

Mike Bass
NBA Executive Vice President, Communications
New York