Game of (Basketball) Thrones

In 1998, the NBA was hemorrhaging money and fans, and the owners didn’t think it was a tenable financial situation, and they were right.  MJ’s retirement sent ratings and future revenues into a tailspin, free agency was out of whack, and the product of the game was not good enough for anyone to be making money.  Accordingly, David Stern locked out the players and canceled 32 games.  For all of the hoopla about players caving when missing paychecks, the reality is that it was the owners that caved, in maybe the worst CBA ever signed by a professional sports league, ceding 57% of income to the players, and only keeping 43% for themselves.  They were terrified of losing value on their franchises and caved to the players, resulting in a payday for every single current and future player in the league.

Fast forward five years and the popularity of the NFL soared, mostly on the back of a CBA that called for a 50-50 split in income and almost equal revenue sharing, which allowed owners to spend freely to upgrade facilities, train players, and make the product of the game more enjoyable than ever to watch.  Envious of the enormous profits that the NFL was making as compared to the NBA (roughly 9 billion in the NFL vs. 4 billion in the NBA, while the NFL plays 16 games and the NBA plays 82), the owners begin to get antsy with their complete failure of a CBA robbing them of dollars, as well as any kind of fair revenue sharing among small and big market teams.  However, in 2006, the NBA had yet to see an MJ-era-like resurgence in popularity, and fearing an epic backlash, the league and the players agreed to a new CBA that pretty much mirrored the 1998 CBA, calling for a 57/43 split in income.

Fast forward five more years, and the NBA is coming off its most popular season ever.  Basketball is making the front page of newspapers and the league’s stars are again among the most popular individuals in the world, more than just athletes.  Owners feeling that they have done their part to build the game back up lock out the players, crying foul over a 57/43 split which is completely unheard of and makes no sense in the modern market.  Months into the lockout, the sides begin to talk, the players lowering their offer to 54, the owners calling for 46.  Weeks later, the owners raise their offer to 47, and the players lower theirs to 53.  The split begin as a 14 percentage point split, and after a lockout that is incredibly costly to the league’s PR image, the split is now down to 8 percentage points.  Meanwhile, the owners, stipulating that the league lost 300 million dollars, agreed to quadruple their 80 million dollar revenue sharing pie to 320 million dollars, effectively eliminating the shortfall from the previous (tv record-breaking) season.

So, as it stood at approximately 2:30 PM on Tuesday, October 4th, the league had solved the revenue sharing problem, came back from the precipice on all of their systemic demands, and now only had to modernize their income split in order to compete with other leagues, and position themselves to challenge the NFL in the new TV deal to be signed in 2016, which by all accounts should at least double the current BRI from 4 billion dollars to 8 billion dollars (while the NFL’s new tv contract rose them from 9 to the 12 billion dollar area).  Seeing that the players and owners committees were both standing pat at 53 and 47 percent respectively, David Stern and Adam Silver pull Billy Hunter and Derek Fisher aside, stipulating that the owners agree to give the players 49%, going up to 51% if the NBA beats projected revenues over the life of the CBA.  The players countered with a base of 51%, rising to 53% if the NBA beats its revenue projections.  The players reject the owners, the owners reject the players, everyone goes home gloomy and empty handed.

Long story short, the NFL, the gold standard of professional sports in this country, has a 50-50 split.  The NBA had a 57/43 split.  The NBA now offers 49%, the NBAPA offers 51%.  If this were a schoolyard, David Stern and Billy Hunter would have agreed to a 50-50 split years ago, and gone off to have an ice cream cone.  Instead, we find ourselves in a media battle, with the sides 2% points apart, and destined to reach the only spot they were ever going to reach: a 50-50 split.  The players will make more money, the owners will make more money, but yet again, as it always is, the fans get boned in the ass by being pawns in this Game of (Basketball) Thrones.

What. The. Fuck.


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Filed under NBA Lockout

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