Wednesday, November 9, 2011

NBA Deal Getting Closer

Today, the New York Times is reporting that NBA players yesterday signaled "for the first time that they would accept the league's proposed 50-50 split of revenues."

In return, the NBPA "wants the league to relax its proposed restrictions on free agency".

For players, revenue split is important. However, system issues like free agency rules and the luxury tax are also critical. As per my earlier columns, the sides would need to balance out revenue split with these system issues. It's a balancing act and not easy to achieve. However, that's why the sides negotiate.

The players get that while they want more money, surrendering 1 or 2 percentage points won't profoundly adversely impact each player. Estimates have the loss per player in the first season at about $94,000 but it could be more. Some estimates provide that the players could lose between $500 million and $1 billion over a 10 year CBA.

While players will get a fixed share of revenue (let's say 50%), by relaxing free agency rules and the salary cap sanctions, individual players may enjoy more freedom and higher salaries.

There have been obvious areas of settlement, and in light of that, settlement rather than a prolonged battle, seems like the more reasonable outcome.

Again - settlement won't happen right away. The parties though are closing in on settlement and it should happen sooner rather than later.

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