Let’s address the elephant in the room. There has been enough talk already about the new TV deal the NBA has signed. This deal triples the amount of revenue the league is getting under its current contract at around 24 billion dollars. Players are opting out of their contracts in hopes of landing larger contracts from the best to the least of them. There could be a storm brewing with all the talk about new money and here is why.
Last summer NBA Commissioner Adam Silver made a statement about NBA teams, and how they are still losing money, and that means we have another lockout looming at the next CBA negotiations because the players aren’t buying it. Silver told the media:
“I don't know the precise number and don't want to get into it, but a significant number of teams are continuing to lose money and they continue to lose money because their expenses exceed their revenue,” Silver said.
“Teams are spending enormous amounts of money on payroll. Some of the contracts we talked about. They still have enormous expenses in terms of arena costs. Teams are building new practice facilities. The cost of their infrastructure in terms of their sales people, marketing people, the infrastructure of the teams have gone up, and in some cases their local television is much smaller than in other markets”
The issue here is, during the 2011 lockout, the NBA made the exact same claims, and the players as a result lost a 57-43 BRI (revenue split) to about 50-50, as well as max contracts length of years shortened. Over the CBA lifetime, this cost the players about 3 billion dollars in revenue, so they took a significant loss, and changes had to be made within their own association because of corruption.
What makes this even worse are the things that have transpired over the last few years. The Sacramento Kings sold by the Maloof brothers for 525 million dollars, the Milwaukee Bucks sold for 550 million dollars the Los Angeles Clippers sold for 2 billion dollars, and the Atlanta Hawks sold for 850 million dollars. Add that to the fact that there is a hefty new television contract coming up for the league starting next year that it will continue to climb, the players are scoffing at the idea that teams are still broke.
So the Kings getting sold for 525M!! And the owners ain't making no money huh? What the hell we have a lookout for. Get the hell out of here
— LeBron James (@KingJames) January 21, 2013
Haha yeah ok: Adam Silver says a “significant amount of teams” are still losing money in the NBA because their expenses exceed revenue.
— Andrew Bogut (@andrewbogut) July 15, 2015
What this all means is, even with more money to be handed out, and new TV deal in place, the players aren't buying what the owners are trying to sell.
If this is still an issue by 2017, the players will opt out of the current CBA and we will be looking at another lockout standoff with both sides trying to pull the Basketball Related Income on their side in a tug-o-war. The players are more prepared this time with solid leadership and a plan in place, and the deadline to opt out of the current CBA will be in December of 2016.
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