There was real if incremental and not wholly apparent progress in ending the NBA lockout on Wednesday, and it came in the most basic, primitive methods: the sides talked. For six hours they talked, huddling in a New York City hotel that was supposed to remain a secret to the public, but which was located before the meeting even began. (That's impressive. Pat yourselves on the backs, New York basketball writers.) Neither side will talk about what they talked about, just that everyone agreed the cannonball exchange that's marked most of August is unproductive and should end, and that it's time to meet more frequently to hash this thing out.
Progress. Incremental, not wholly apparent. But it's progress. Yep, you know you're in trouble when the league you love can count a meeting in which no one got sued productive.
One of the themes hanging over the lockout over the past couple weeks has been the idea that it's up to players to make concessions at this point. Sam Amick of SI.com had the most comprehensive explanation as to why this should be the case a bit more than a week ago.
This issue harkens back to Wednesday's Hook, where the divide between the league and players was attributed to the owners' belief in the need for a reset of the system by which players are paid and the union's consideration that an adjustment to the old system would fix the NBA's problems. Should players be willing to consider a full reset, or do they have the imperative and right to want to stick to the old system?
A lot of that question, to me, comes down to whether staying on the current path with an adjustment would continue to put teams in danger of going out of business. Players' advocates would argue that revenue sharing only can fix that concern -- give some of Jerry Buss' $200 million in annual TV revenue to the Maloofs and you have two competitive teams for the price of one. But Buss understandably doesn't want to fully subsidize his competitors, and aggregate losses for the 30 NBA owners are not a good look.
My concern is that an adjustment to the system would require massive concessions by the players, according to the league's numbers. The players received 57 percent of revenue in the last deal. Even if you dropped that to 50 percent in the new deal, by the NBA's numbers over the last few years, the league would be losing money in the aggregate ... but far, far less than under the current system, and with better than expected growth and lowered non-salary expenses, a small aggregate profit could be seen You could still have something like 8-10 teams in the red in any given year (some by choice like the Mavericks, some unavoidably so like the Bobcats), but the situation would read much better for owners.
The average team payroll last year was $72.3 million. Under a 50-50 split, holding all else constant, that'd drop to $63.3 million. That would necessitate either a much lower soft salary cap (around $50 million) or a hard/flex cap in the low 60s. Under the league's proposal, each number would be a bit higher: you might have a soft cap around $54 million and an average salary at $66 million.
The difference is that the even-lower soft or hard cap under a 50-50 revenue split would increase over time. The cap level could very easily reach $54 million in two years, and then surpass it for the next eight of the deal. Owners want to get away from that -- they want not just to capture profit growth in the next several years, but they want stability. Their proposal actually grants players a bigger allocation through the first two or three years than a 50-50 split would, but then transfer gains to the owners' accounts. In the seventh year of the deal, payroll is again tied to revenue, though at a rate below 50 percent.
There is a spectrum of requests the owners have made, and it's interesting to see which ones bother the union the most. The abolition of guaranteed contracts was clearly a touchy subject, and a hard cap is like poison. (Interestingly enough, it's impossible to see how you can have a hard cap and fully guaranteed contracts, but that's another issue for another time.) Dropping below a 50-50 split would seem like too big a reach. The players haven't really grasped on in revolt to the NBA's plan, so long as you ignore Maurice Evans' lambasting of the givebacks requested.
But it all comes back to Amick's question: should the players be more willing to pay the piper after, by all accounts, taking the owners to the woodshed over the last 10 years? And given that the 1999 deal (and 2005 renewal) boosted mid-level veterans at the expense of young superstars, should those mid-level veterans be willing to make the concessions required to get everyone back on the court?
It's almost an impossible sell, when you look at the requests, the stakes and rhetoric to date. The only saving grace for this theory that nothing budges if the players don't cave is that Derek Fisher is reasonable and compassionate, and might be willing to take a sword to get players all the way back to the table. We'll see.
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