Image by Getty Images via @daylife
It seems as though we will have an NBA season after all.
And though a full analysis of the lockout’s resolution is premature as details about the new CBA are slowly emerging, there is no doubt that the restoration of a 66-game schedule that commences on Christmas Day will accomplish 3 things:
1) Prevent the loss of nearly $4 billion that would have resulted from a cancelled season.
2) Restore jobs and income for workers that rely on arena operations as a larger share of their income.
3) Continue the NBA’s momentum coming off a 4-year stretch that has seen traditional powers re-flex their might while new exciting teams emerge.
The Money Angle from Various Perspectives
During the 2010-11 NBA season, the NBA made a reported $3.8 billion in revenue…up from $3.6 billion the year before. Last year when players received 57% of basketball related income (BRI), their total financial take was $2.17 billion.
So assuming that the eventual BRI split is approximately 50-50 and presuming – for simplicity – revenues similar to last year, this means a $270 million revenue transfer from players to owners. Alternatively, one could say that the players’ willingness to jump from 57% to 50% of BRI was akin to accepting more than a 12% reduction in revenue shares.
I suspect that the owners were willing to show compromise on some of the so-called system issues – such as cap exceptions, escrow system, luxury tax rates, and maximum contract length and salary increases – to get the league on the cusp of resuming play in 2011-12.
But make no mistake, folks. The owners are the big winners in these negotiations because they have successfully tilted the economics of the sport heavily towards their end of the court.
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