Enjoy it now

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NBA basketball, that is. Though the current collective bargaining agreement (CBA) between the players and the owners is set to expire in 2021, either side can give notice of its intent to opt out in late 2016, which could imperil the 2017-18 season. OK, it’s a little premature to warn of a work stoppage in two years. But Kevin Draper’s excellent analysis makes clear that the players – who were fleeced in the 2011 negotiations that ended that year’s lockout – are going to exercise their opt-out right.

The central flashpoint, Draper says, will be how so-called basketball-related income (BRI) is defined. In 2011, the owners’ big win was securing for themselves 50% of those revenues, whereas in the previous agreement, they received 43% of BRI. The real question, though, according to Draper is not how much BRI each side should receive, but how to define it. In particular, the owners’ ability to shield revenue that should be regarded as deriving from basketball – for example, in the complicated finances governing television broadcast rights when the team owns the cable system on which the games air – will be in the players’ sights.

More broadly, Draper’s piece serves as an apt microcosm of contemporary American capitalism – rich guys leveraging the tax code and moving assets around to enrich themselves without adding any larger value to the economy.  The NBA has disputed Draper’s analysis, insisting that it’s wrong to describe as outdated attempts to assess BRI because, as the NBA notes, the players agreed to the formula for determining it as recently as 2011. Of course, Draper doesn’t dispute that and, in any event, it’s irrelevant to the question of whether the formula reflects the full scope of basketball-generated revenue. The league also says it always hands over all relevant financial data to the players. But a key point of Draper’s piece was the inexplicable decision of the former executive director of the players union, Billy Hunter, to decline to exercise the union’s right to randomly fully audit five teams. Rest assured, Draper wrote, that new executive director Michele Roberts will not make the same mistake. In this regard, too, the league’s response to Draper is disingenuous.

I know from personal experience that the NBA is prickly about these things. In 2011, during the last lockout, I wrote a piece for Huffington arguing that the league was misrepresenting the owners’ finances. This is, of course, par for the course for owners in every labor dispute with players. An NBA exec emailed me directly to explain why I was wrong to question how dire the league’s finances really were. Needless to say, this was bullshit. One of the points I made was that even if a team was losing money on an operating basis  – and this is typically the result of accounting shenanigans anyway – the financial advantages of ownership are typically extremely lucrative in the long run. Subsequent events have amply made the point, including the exploding NBA franchise values (and other pro sports franchises) we’ve seen in the past two years.

Depressingly, little of this tends to penetrate mainstream sports discourse. When the time comes, the owners will claim they’re losing money and even smart people will buy it (a classic example: Peter King carrying water for the NFL’s whining about its imperiled finances prior in its last labor dispute – the freaking NFL!).

The rich may keep getting richer, but don’t expect them to stop crying poverty when they believe it’s in their economic interests to do so.

In any event, kudos to Draper for his work.

 

 

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2 comments

  1. Keep up your great work, your site is one of my favorite reads. I have never understood how people don’t comprehend the difference between the players and the owners in these situations. “Millionaires vs billionaires!” is such an idiotic cry. If one family spends $100 on groceries every other week and another spends $100,000, who on earth would view those two as equivalent? It also kind of shows how ludicrous the argument is because I don’t think you could spend $100,000 on groceries every other week even if you were buying really expensive wine and gold flecks to decorate all your dishes (maybe I’m wrong on that last point… but I would love to see a budget for that). I wish the players unions in sports could be a bit more organized. They should get ready for PPV contests between the leagues top players with proceeds going to the players union for when the next lockout happens (and if it does well enough just ditch the owners).

    1. Jon,

      Thanks for this. In addition to the millionaires vs. billionaires mularkey, there’s another basic distinction: the players’ position in CBA negotiations is *never* – we’re going broke! Our position is untenable! It’s simply this: “we deserve our fair share.” The owners, by contrast, always insist that they *cannot* continue to operate according to the status quo, no matter how well they’re doing.

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