NBA AM: It’s Time To Make A Deal
It’s Time To Sit Down: So what is really at stake for the NBA Players if they hold their line that a deal, especially a deal like the one the NBA owners are offering, is unworkable and unacceptable?
The NBA is coming off arguably one of its best years in its 65-year history. Total gross revenue eclipsed $4 billion, the Players received almost $2.1 billion in salaries and benefits, it should be easy to say let’s just stay the course. That’s what the Players want. However with the NBA shattering records in revenue, more than 20 of its teams are losing money.
Read the news headlines in any Money section in the world. Stock markets are down. Recession talk is again center stage. There is no escaping the world is not in a good place financially and continuing the terms of a deal reached almost seven years ago, doesn’t make sense. The Players know this.
So what’s really at stake?
In a very broad way, I ran the numbers on the labor deal in play after listening to several players talk about how “unacceptable” the owner’s proposal is.
Here is the premise…
Basketball Related Revenue (BRI) last year was $3.817 billion, representing a 4.8% growth from last year.
Assume that growth rate is a constant. The Owners 10-year proposal equates to $49.847 billion, assuming BRI is computed the same in whatever deal is reached.
Under the now expired deal, the Players would have gotten $28.413 billion.
If the Players were to propose a 52% split, I think they’d get a deal, meaning their percentage of the pie would be $25.920 billion over ten years, or a $2.492 billion giveback., based on the now expired deal.
Now what happens if the entire season is lost?
First the league goes backwards in BRI.
It is safe to assume the NBA would lose roughly $600 million in sharable revenue. So for purposes of discussion let’s call the next season after a lost season $3.25 billion in sharable revenue, and growth at the same 4.8% which would be extremely aggressive after losing a full season.
The owners would then be able to force through a harder financial system which lets call it 50/50, which again is aggressive. The owners would likely knee cap the players with a 45 to 48% split, but let’s call it 50/50 to reach a deal.
So, the Players lose $2.280 billion in salaries and benefits that first lost year, and then lose roughly $275 million per year after that.
In total a lost season would equate to more than $9 billion in lost BRI and more than $5.115 billion in player compensation, assuming the league goes 50/50 after losing a season. It could be much worse than that.
Lose $2.280 billion now or $5.115 billion later.
The short of it is the NBA Players stand to lose twice as much if they don’t make a deal. They’ll cost the owners just under $10 billion along the way too, which you know the Owners will look to recover in any deal reached after the season is lost.
The deal the Players will get after a season is lost won’t be anything like the deal they get in September.
Some of the posturing that’s taking place is about trying to move a percentage point here or there, but the reality of it is that if even one preseason game is missed the Players deal is going to get progressively worse.
If even one regular season game is missed the deal that’s on the table will go into the shredder and the $2.280 billion giveback that could get a deal done will become a distant memory.
It is time to sit down and make a deal fellas. If you try and push this into missing games, the damage that will get done looks to be twice what a compromise could yield.
The Players are saying they want to sit down and meet in September. If talks are not productive by September 15th the pr-season is in real jeopardy and that will start a chain of events that will hit the Players the hardest.
Chase Hits The Beach: Houston Rockets forward Chase Budinger is finally realizing a dream thanks to the NBA Lockout. Budinger who is an avid volleyball player has entered the Corona Light Wide Open beach volleyball tournament in Hermosa Beach, CA this weekend.
Budinger was a two sport player in high school and was named the 2006 Mizuno National Player of the Year Award in volleyball.
During the NBA draft process Budginer had asked his agent how NBA teams would feel if he played pro volleyball in the offseason, to which is agents explained wouldn’t go over well.
With the Lockout in effect Budinger is free contractually to do whatever he wants, and he’ll serve it up this weekend.
“Volleyball has always been a passion of mine, and it has been great to get back out on the beach and train,” Budinger said. “I’m really excited about this opportunity and I’m looking forward to seeing how my skills match up against some of the top players.”
The total purse for the tournament is $75,000, with $11,250 awarded to the winning team in both the men’s and women’s division.
Landry Likes Portland: Hornets’ forward Carl Landry looks to be one of the more coveted free agents when the NBA’s 49-day old lockout is lifted and free agency is allowed to begin.
Landry who will be an unrestricted free agent says he’ll give the New Orleans Hornets, who acquired him in a trade at the trade deadline this year, the first chance to sign him. However Landry made it clear he has eyes on other situations too, especially if things don’t work out in NOLA.
“David West and Chris Paul were great to me,” said Landry to Chris Haynes of Slam Online. “New Orleans brought me to a winning situation. For that, I’m very thankful.”
If it does not happen quickly with the Hornets, Landry revealed that he has a situation in mind and the affections are most assuredly mutual.
“I think I can fit in with Portland,” Landry revealed. “They’re in need of a big post presence down low. I’m not taking anything away from (Greg) Oden and (Marcus) Camby. I just know what I can provide. The Blazers are a good team and I know I can help.”
“I really like Portland,” said Landry. “I’m good friends with Greg Oden, and Wes Matthews is from Wisconsin like me. There are a lot of ties there and I have no doubt that I would blend in fine.”
The Trail Blazers won’t have much to offer Landry in terms of cap dollars as they are currently sitting on $73.4 million in salary commitments next season.
With the NBA Owners looking to radically trim costs around the league in the next labor deal, Portland may have to liquidate assets to reach whatever new salary threshold gets established.
Landry’s best hope of landing in Portland is that sign and trade deals are still permitted in the next labor deal, which most insiders believe won’t be the case.
Landry has never had the big time NBA contract so it’s unlikely he is giving Portland a discount, but it is pretty clear he is letting the Blazers know he has interest, now it’s up to Portland to figure out how to make it happen once the lockout is lifted.
Landry says he has no immediate plans to look for work outside the NBA, which is smart for a guy seeking a payday once the lockout is lifted, but was also clear he wouldn’t sit forever.
“The first of December is my deadline,” said Landry. “If no agreement is reached by then, I’m looking overseas. To sit out a whole year without basketball is tough. I can’t do that. I would have to play somewhere.”
Landry averaged 11.8 points and 4.1 rebounds in his 23 games for the Hornets, averaging about 26 minutes per contest. Over his final ten games which included the playoffs versus the Lakers, Landry averaged 13.8 points and 4.8 rebounds per contest.
The NEW HOOPSWORLD: If you haven’t checked out the new HOOPSWORLD site yet, make sure to swing by today (beta.hoopsworld.com), we are almost finished testing and soon the new site will replace the old one and there are a few things worth noting.
First, the site design is about putting more content on the main page of the site with less clutter and more categorization. Finding the latest news should hopefully be easier.
The Navigation bar has been simplified so you can easily find what you are looking for. The red “Quick Links” box will always feature the latest tools and resource-type links you’ll want like Draft Pick debt, the latest Mock Draft and our daily rumors page.
The drop down menus on the right side give you quick access to each team page and each team’s salary page. We have one of the most accurate salary databases in the business, and finding where your team is situated cap wise is always just a mouse click away.
We also wanted to make sure the design loaded fast. One of the biggest embarrassments for us has always been how slow this current site loads, so we spent a lot of time on performance tweaks and insuring our servers could serve pages quickly and efficiently so we can improve the user experience. For you tech folks out there, we are in a monster server solution and using Content Distribution Networks to speed up response time, with the new site kicking back an average load speed of less than 3 seconds for our main page.
We have also changed our comment platform to Disqus. If you have not used this tool before, it allows you to log in using multiple authentication methods. If you want to use your Facebook account as a login, you can, if you want to use your Twitter account as a login you can, or you can simply create your own login inside Disqus. Many of you voiced displeasure about Facebook as a comment platform so we have responded.
Disqus also allows for nested and threaded discussions, so the comment stream can function in a message board-like format. You can also be alerted via e-mail if there is a thread you are invested in. Each comment stream also has an RSS feed you can use to track the conversation. There is spam protection and inappropriate comment flagging, so we can keep the conversations above board and on topic.
Disqus also has a free Android app that allows you to manage your comments on your phone, so you’re never away from discussions that matter to you.
We have also updated stat providers and altered the layout of our stats. Our game module will feature faster updates on scores and stats. We have a deeper selection of information including robust injury reports and transaction logs that include almost any detail you can think of.
Our Wire news module will feature deeper storylines, updated hourly, so you’ll never miss a story either from our team or from the news wire.
The new chat tool is a bit more streamlined on the backend, so our guys can see questions better and hopeful respond to more questions during their chats. Improving the chat experience is something we will continue to work on, but the new chat tool should help us see and respond to your questions in a better way.
If you are one of our smartphone app users, you will be prompted to upgrade in the coming days. If you see that update, make sure to push down the latest build as the current app is tied to our old content system and will stop functioning once we make the move, so make sure to update as soon as you see the alert.
There is no such thing as the perfect solution, but we feel like this new upgrade will not only improve the user experience, but also allow us to service your need for news and basketball commentary.
We hope you enjoy the new site, and be sure to drop us a note if you experience any issues or problems (email@example.com).
More Twitter: Make sure you are following all of our guys on Twitter to insure you are getting the very latest from our team: @stevekylerNBA, @AlexKennedyNBA, @jfleminghoops, @TheRocketGuy, @EricPincus, @joelbrigham, @alexraskinNBA, @TommyBeer and @YannisHW.
NBA Chats: There will be one NBA Chat today featuring Yannis Koutroupis at 11am EST. Get your questions in now as the chats do fill up fast. Susan Bible will host her weekly NBA Chat on Saturday at 11am EST, so drop a question in for Susan as well. If you are looking for the next NBA Chat, you can always find them here: Upcoming NBA Chats.