Larry Coon: The Lockout Break-Even Point for Players is Simple
by J.A. Sherman on Oct 6, 2011 1:05 PM CDT
in 2011 NBA Lockout
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Larry Coon writes today on ESPN that if we are to believe that the disparity between what the players want and what the owners want to give them is 53% compared to 50%, respectively. In fact, over the past weekend LeBron James and Dwyane Wade urged the NBPA not to go below that 53% threshold. The owners, once entrenched at a 46% portion for the players, have inched closer to that 50% mark, and so now, the 3% spread is all that remains between a "regular" season and the juice running.
The Player Salaries Lost to a Lockout | ESPN
As we saw yesterday from Ken Berger, each percentage point equates to about $40 million, so the current disagreement is worth about $120 million.
Coon takes us through some quick math:
- Next season, BRI is expected to be about $4 billion.
- Under the owners' offer, players would get 50%, or $2 billion.
- Under the players' demand, players would take 53%, or $2.12 billion.
- Ergo, the difference between what the players want and what the owners want to give them THIS SEASON is about $120 million in the aggregate. If the CBA lasts another six years, you're looking at a number a shade under $800 million (assuming historical growth rates).
- In the aggregate, players earn about $82.4 million each week.
- Donahue estimates that about $200 million was lost by a canceled pre-season.
- Donahue estimates that the league will lose approximately $250 million per month.
- The teams would capture $160 million in savings by capitulating to the players, which would be the difference between paying out 57% last season and 53% in the new agreement.
"For every 1% reduction in the revenue forecast for the next six-year period, the NBA will lose about $263 million (in today's dollars). This loss will be distributed more or less equally between the two sides and would be in addition to the lost income discussed above."
"You have a reasonable idea," a person connected to the negotiations said. "But you're not dealing with reasonable people."
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Well, if the people in charge can do math
Then ‘yes.’
But as that last quote says, we’re assuming that the people in charge are reasonable, and not driven by ulterior motives.
Donahue quoted one guy as saying, “we understand the economics.” But clearly they don’t, otherwise this game of chicken would be over once the gap shrunk to something manageable.
www.welcometoloudcity.com
the last quote scares me
the term “pissing contest comes” to mind.
"Maybe I’m old school," Nash said, "but I signed a contract to play here and I want to honor it. I feel like I owe it to my teammates and the city and everybody to keep battling until they tell me it’s time to go." STEVE (God of Basketball) NASH
And the calculations above divided 4 billion over 12 months
But the regular season plus the playoffs last for 8 months. Using 8 months, the league would lose 120 M by missing a week of games.. There goes the 3% difference for this year. This is exclusive of the 200 M in losses from missing pre-season games. If they need a Math teacher, I can work for them for less than 0.01% of whatever they earn from the BRI.
Players Lose Anyway
Onething no one really mentions is that the current players lose! They don’t have time to make up the losses. They have a finite time to make their money. If the season is cancelled Kobe loses 26M less the 3M he might get in Italy. That can not be made up.
Another hit for the players is endorsement deal. NO PLAY – NO ENDORSEMENTS.
However, the owner can make it up in 2 ways: One if they get the cut to 50-51-52 whatever that’s 80M per point x number of points x 10years in 800M – 1.6B- 2.4B. That’s not including the 4 pts the NBPA has already suggested they might agree to. Secondly, if the team are able to start turning a profit, they will increase the worth of a team. I’ve heard and seen where the price for teams might jump 2 or 3 times. A team worth 100M instantly becomes 300M. I’m just reporting what has been written. don’t know that I necessarily agree, but I would say that the value of a team would increase with a better CBA and ROI.
Both sides will also lose in the short term as revenues will shrink rather than increase. as fans stay away, souvenirs aren’t purchased etc. Again, we know that eventually the fans will come back but it might take 3yrs, 4yrs, 5yrs or longer. Well most owners will still be owners and they will reap the benefits. Most players 60-70% will be gone.
Just my observations!
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