It has been over three months and the owners aren’t close to making a deal with the players. Deals have now reached near a 50-50 split of revenues, but issues concerning attempts to balance teams such as the luxury tax are delaying a final agreement. An agreement anytime soon is unlikely even with the numbers getting closer.
The most recent offer given by the owners is 50% of basketball related income for both sides. This offer also includes a luxury tax of $1.75-1 to start coming into effect after $70 million has been surpassed. and increased to $2.25-1 after $75 million.
Owners have decided to stay put on the basketball related income split, but negotiations over things like a salary cap are still open for discussion. The players union has refused a 50-50 split on basketball related income. They feel the players deserve more than 50%.
The longer the lockout lasts, the better the deal will be for the owners. This would benefit owners of less valued teams like the Cleveland Cavaliers, but owners of teams like Miami Heat and the L.A Lakers would prefer to settle as soon as possible. To make matters worse for a resolution, the majority of the owners are thinking it’s better to fix the system and get more money than to actually try to contest the big teams and gain money through that path even if it takes a season.
Egos are a big part in negotiations between rich people. Despite a deal that is almost balanced for both sides, neither wants be the loser. Whether it will take a week or a season, the deal has to be one that makes both owners and players alike feel like the victor.
Showing posts with label owners. Show all posts
Showing posts with label owners. Show all posts
Wednesday, November 2, 2011
Thursday, October 27, 2011
NBA Owners are refusing to budge
The NBA lockout is certainly causing a big commotion, and there does not seem to be any end in sight. What started on July 1st as a talk about how to divide the $4.3 billion in league revenue has turned into a three month long lockout. One hundred games have already been canceled and many analysts don’t expect there to be any more games until Christmas.
Last season the players were being paid 57% of the revenue. During negotiations the players offered a 53-47 split, which would be a loss of over $180 million dollars to the players. The owners, however, refused, proposing a 50-50 split. Deputy commissioner Adam Silver said, “What we told the union was that we were not prepared to negotiate over the B.R.I. split beyond the 50-50 concept that had already been discussed.” NBA commissioner David Stern has said the teams are experiencing over $300 million dollars in losses annually.
Owners have been pushing other requirements as well. They originally proposed a hard salary cap. This cap would limit the amount of money that teams would be able to spend on the player’s salaries. This was proposed in order to make it easier for lesser teams to be able to compete. The owners conceded to the player’s demand for there to be a flexible cap by creating a harsher luxury tax. This would create a situation where the teams can only spend a certain amount of money on certain purchases without being harshly taxed. The players argue that this would effectively institute a hard cap.
Tom Ziller, a writer for SBNation put it best, “Canceling two weeks because the union won't approve a very hard cap-ish luxury tax in addition to giving up more than $200 million in annual salary is like flipping the Monopoly board because another player bought Marvin Gardens out from under you, while you have hotels on all of the green and blue properties.”
It seems as if we are going to be in for a very tough ride. Neither side wants to give in, nor are the owners refusing to negotiate the division of revenue. Negotiating sessions are going on for 16 hours a day; everyone is exhausted. Both sides don’t seem eager to resolve their issues. Players are leaving for foreign countries; others are talking about starting their own teams. The NBA will be in for a very rough few years if this doesn’t get resolved sometime soon.
Last season the players were being paid 57% of the revenue. During negotiations the players offered a 53-47 split, which would be a loss of over $180 million dollars to the players. The owners, however, refused, proposing a 50-50 split. Deputy commissioner Adam Silver said, “What we told the union was that we were not prepared to negotiate over the B.R.I. split beyond the 50-50 concept that had already been discussed.” NBA commissioner David Stern has said the teams are experiencing over $300 million dollars in losses annually.
Owners have been pushing other requirements as well. They originally proposed a hard salary cap. This cap would limit the amount of money that teams would be able to spend on the player’s salaries. This was proposed in order to make it easier for lesser teams to be able to compete. The owners conceded to the player’s demand for there to be a flexible cap by creating a harsher luxury tax. This would create a situation where the teams can only spend a certain amount of money on certain purchases without being harshly taxed. The players argue that this would effectively institute a hard cap.
Tom Ziller, a writer for SBNation put it best, “Canceling two weeks because the union won't approve a very hard cap-ish luxury tax in addition to giving up more than $200 million in annual salary is like flipping the Monopoly board because another player bought Marvin Gardens out from under you, while you have hotels on all of the green and blue properties.”
It seems as if we are going to be in for a very tough ride. Neither side wants to give in, nor are the owners refusing to negotiate the division of revenue. Negotiating sessions are going on for 16 hours a day; everyone is exhausted. Both sides don’t seem eager to resolve their issues. Players are leaving for foreign countries; others are talking about starting their own teams. The NBA will be in for a very rough few years if this doesn’t get resolved sometime soon.
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