I thought now might be a good time to look into why a league that appears to be entering a renaissance is having such a difficult time reaching a labor deal.
Consider the economic reality of the players. The NBA is often called a league of stars, and for marketing purposes it is. However the stars aren’t the only one voting, and when the players vote to ratify a CBA, the minimum-salary player’s vote counts just as much as Carmelo Anthony’s. The average NBA player salary is $5.15 million, but that number is skewed by a few players at the top making considerably more than the average hoopster. To compensate we can look at the median wage, which better represents the general NBA player. The median salary in the NBA is $2.3 million. $2.3 million might sound like a lot, but there are more factors to consider:
1) The Average NBA Career Lasts Five Years: Since most NBA players forego the years wherein they’d most likely be building a “normal” career, their earnings after their NBA careers are likely severely diminished. In other words a normal person would work into their 60s, but a basketball player is lucky to earn money in his 30s, and highly unlikely to still be getting a paycheck in their 40s. Yes, stars can go on to sell sneakers or underwear. And a few will be suited coach or work in broadcasting, but for most players, this is not likely an option. If we look at this median player’s salary spread out over the average worker’s forty years of income, that $2.3 million salary turns into a $287,500/year. That’s great money for most people, but it’s not filthy rich. In essence the average NBA player is more a six-figure salaried employee than millionaire.
2) Missing Games For a Better Deal Is Still a Net-Loss For Current Players: Let’s say you’re halfway through your five year NBA career. If you hold strong, the Player’s Association may finagle an extra 3% in salary, but that’s chump change compared to the 20% of your overall earnings you lose by not playing for a season. Almost without a doubt you are sacrificing income. Maybe it’s for a good cause, but how much is that good cause worth to journeymen NBAers?
3) One Season Constitutes 20% of the Average Player’s Career Earnings: That’s a huge sacrifice. Compare that to a person in an auto-worker union, who even if he strikes for a year only gives up 2.5% of his lifetime income (assuming a forty year career). To put that figure into context, losing a season drops the average yearly income of a player from $287,500 to $230,000.
4) Taxes: Because he makes most of his money in a short period of time, Mr. Median NBA Player will find himself in a higher tax bracket than the person with a longer career but the same lifetime earnings. He will send Uncle Sam up to a million dollars more than his dentist neighbor. Now his real-world salary is down to $200k/year. Again, that’s a good living, but not one on which you should be buying fourteen luxury cars…
5) Poor Money-Management: As the article linked above explains, NBA players as a group are bad at managing money. This subject has been well-chronicled, but due to its importance to the current negotiations, it bears repeating. No matter how well the union has tried to prepare its players, many of them (Eddy Curry, take a bow) still live paycheck to paycheck and end up in financial trouble when the checks stop coming.
All these factors combine to put the NBPA at a huge disadvantage in negotiations. It is in a bargaining position that no amount of Dwyane Wade outbursts or Billy Hunter All-Star Game “soliloquies” can overcome. The owners know that the more checks the players miss, the more the union’s stance will soften. Issues like a hard cap and reducing bad contracts are mostly just smokescreen so that the owners can appear as though this lockout is “for the good of the game,” so that they can keep the pressure on the players until they’ve gotten the best deal possible.
I am dubious about the claim that the NBA is losing money (1, 2, 3), but even if it is, the current offer from the players should more than make up for those losses. Moreover, with the renewed interest in the NBA due to the Heat’s big three; our Knicks’ acquisition of two stars; the rising careers of marketable players like Blake Griffin, Kevin Durant and Derrick Rose; and, as Mike Kurylo explained, the increased popularity of basketball among younger people, revenue has nowhere to go but up.
The problem is the owners benefit by making the lockout longer and even canceling games, up until a point. For instance if the players are clinging to an extra 3%, and the owners cancel 15% of the games this season, that means the common NBA player has gained absolutely nothing. (Common player plays 5 years and 3% * 5 = 15%). The biggest stars and players who are likely to play multiple years will gain by such a hold out, but not those on the short end of the spectrum. Hence among the players there isn’t consensus, which weakens their position, since some would take a lesser deal than others.
The owners know this & therefore are operating from a hard stance. (Steve Nash Tweets: “Why are people saying the players are asking for more money?” and “The players are negotiating to take less money & let’s be clear that’s not going to lower ticket prices, it just lines the owners pockets.”) And at this stage the owners are all together on this issue, because their interests are all being met here.
But the owners can only push so far, because the players have one tactic they can use to strengthen their hand: decertify the union. In the NFL labor dispute the players disbanded the union, and after some legal wrangling both sides negotiated a deal in time to save the season. By breaking up the union, the players can sue the NBA using class action lawsuits & challenge everything including the draft, the salary cap, restricted free agency, etc. Obviously this is something that could hurt the owners severely, if they had to openly bid for rookies and free agents without any restrictions. (see: The Dollar Auction for why owners would inevitably pay more than a player’s worth.)
Billy Hunter may not like what decertification suggests about his negotiating abilities. However, the hardline stance of the owners, even after the players have conceded to the owners a higher revenue percentage than that in any other professional sports league, is proof that the owners are trying to rig the game. The only way for the players to get their fair share is if they move the game to a casino where the league isn’t dealing the cards.