Would this 50/50 split solve the NBA lockout?
|09.22.11 at 2:55 pm ET|
While NBA owners and players continue the debate on Thursday over a collective bargaining agreement to end the league’s lockout, let’s offer the two sides a fairly simple solution that took only a couple of hours to calculate.
Based on figures published by Forbes, teams raked in $3.8 billion in revenue during the 2009-10 NBA season — 57 percent (or $2.2 billion) of which went to the league’s players — yet 17-of-30 clubs managed to lose money that year. That’s not what Wyc Grousbeck & Co. are looking for, obviously.
But what if the players agreed to split that $3.8 billion in revenue down the middle, giving seven percent (or $154 million) in total salaries back to the owners? Such a 50-50 split would increase each of the 30 team’s operating income by $5.1 million — instantly chopping the number of squads losing money from 17 to 12. Not a bad start.
Too much of a concession on the player’s behalf, you say? Well, according to Adrian Wojnarowski‘s latest report, such a reduction appears not only possible but likely. Besides, a 50-50 divide is still better than the 53-47 split that favored NFL owners in their recent deal. Now, what to do about the 12 teams still losing money?
Let’s say the 18 NBA owners who are profiting agree to place 50 percent of their operating income into a revenue sharing system. That’s a grand total of $202.5 million. Divided up evenly, each of the 30 teams gets $6.75 million from that pool. Based on those 2009-10 numbers, only three teams would be left in the red: the Magic (-$11.3 million, because they stupidly paid Rashard Lewis and Vince Carter a combined $34.1 million), the Bobcats (-$8.2 million, because the league granted a new team to a city that failed to support the Hornets) and the Pacers (-$5.1 million, partly for overpaying Troy Murphy, Mike Dunleavy and T.J. Ford).
Still, based on the 2009-10 numbers, 27-of-30 NBA teams would be profiting from that system — in one of the worst economic downturns in the country’s history. That’s about as foolproof as you can get, right?
Sure, this hypothetical system means less money for the 11 most profitable teams — the Knicks, Bulls, Rockets, Lakers, Pistons, Raptors, Thunder, Suns, Warriors, Clippers and Blazers — but all of those teams benefited from either their location (a top-12 media market or Canada) and/or spending significantly less on player salaries.
In fact, the NBA could withhold all or a portion of a team’s $6.75 million in revenue sharing for failure to spend to the luxury tax threshold. That would provide an incentive for owners to put as much money back into their teams as possible — a spending floor, if you will — something that would surely please the players at the bargaining table. Such a concession might even open the door for players to consider the hard salary cap that the owners are so hell bent on securing during these negotiations.
Obviously, I understand that there are intricacies of a collective bargaining agreement that I’m never going to understand, but a 50-50 split of total revenue between the players and owners as well as a 50-50 split of total operating income between the owners and themselves seems like a pretty fair deal to me.
Discussions about owners and players dividing up millions and billions of dollars are understandably both confusing for those following them and infuriating for fans who just want to watch professional basketball again, so I offer this chart of the hypothetical revenue sharing system to benefit all parties involved …
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