The Loss Of The NBA's Middle Class? Hogwash!

Jason Terry, who makes $10+ million a year, fears for the little guy. (AP Photo/Mike Fuentes)

The players this weekend are saying, while punching their chests and popping their jerseys, they'd rather miss the entire season than swallow the gruel that Stern has presented to them. And while they're at it, they'd rather leave it up to an impartial judge some time in the next couple years to decide the future of their careers rather than support their hardworking union representatives.

This nuclear tactic has never, ever worked. It would certainly kill the entire season (and ~$4 billion in salaries revenue), and is more likely to ruin future playing careers than David Stern's lunch. So why in the world would half the players be in favor of trying it?

Because agents have convinced these guys that the first step (signing a petition to request a decertification vote) is not binding, allows them to present a collective middle finger to David Stern and Adam Silver, and forces Stern and the owners to beg for mercy.

Ignoring for the moment that Stern and Silver know this, and don't believe for a second that the players would actually make good on their threat, let's ponder what the players are really fighting for.

"Our reasoning and what our strategy is, is we are trying to grow the game of basketball, and under the terms that have been presented to us, the game of basketball for us, from a players' perspective, financially, will not be growing," (Mavericks guard and union representative Jason) Terry said Friday morning during an appearance on the "Ben and Skin Show" on 103.3 FM ESPN.

"We will actually be getting rid of a class. In life and society there are three classes: There's the upper class, the middle class and lower class. And what the owners are trying to do right now, what their proposal is, get rid of the middle class so you have one or two guys on each team making 'X' and the rest of the guys crunched down at a smaller number and then no middle ground."

I call BS on this argument. Hogwash! Poppycock!

Read on.

"...the game of basketball for us, from a players' perspective, financially, will not be growing."

Excuse me while I throw up in my mouth a little bit. The players' share is still based on a percentage of BRI (Basketball-Related Income). As long as the NBA is growing - which it has continued to do - the players' share will grow. 

Terry is right, but he is only speaking about the first 3 years. From what I've read, the salary cap and player salaries will remain stagnant for the first 2 years of the deal, then the 50% BRI will be enforced starting in year 3. Let's map out the next ten years, under the old rules versus the new rules.

Bri-salary-projections_medium

I assumed a 4.5% increase in BRI annually, same as the league. Terry is right that in the first 3 years of the proposed CBA there will be no growth, financially, for the players. League BRI is growing (allowing teams to make a profit, ostensibly), while the player share stays the same. 

However, in year 4 the players total share grows and continues to grow through the full 10 years to nearly 3 billion dollars. Overall, it's a 36% increase over the lifetime of the CBA even factoring in the stagnant first 3 years. Granted, it's a much worse deal than the old CBA. Under the old CBA, they would garnered a 55% increase in salary over 10 years.

The average player salary today is nearly $5 million. In 2021 under the new CBA, the average salary will be more than $6.5 million. These guys are not going to peddle their wares to feed their kids.

But Terry fears the "average player salary" will disappear. That's hogwash too.

 

"...In life and society there are three classes: There's the upper class, the middle class and lower class. And what the owners are trying to do right now, what their proposal is, get rid of the middle class so you have one or two guys on each team making 'X' and the rest of the guys crunched down at a smaller number and then no middle ground."

I don't see how this is true. The league has promised to keep the salary caps (normal, and luxury) the same for the next 2 years. By then, BRI will have increased to a level that the allows those caps to still remain the same and eventually rise. See the chart above. Players will never see a smaller pool of money than they have today.

As far as individual contracts are concerned, the max salaries remain the same, as do minimum contracts and everything in between. Qualifying offers for players on rookie contracts are increasing in the latest proposal. "Bird Rights" are still there in full bloom. The mid-level exception (for teams above the cap but below the lux-tax) is only dropping nominally to $5 million, which is still "middle class". The NBA added a new exception - $2.5 million for teams just below the normal cap - to allow for more signings. That still seems to be "middle class". The mini-mid-level for luxury-tax teams of $3 million still seems to be "middle class".

And again, the total pool of money that the owners HAVE to spend on salaries is NEVER GOING DOWN, and in fact will eventually rise. There is still competition for services. Multiple teams will want the same player. And in fact, with shorter contracts there is more money every summer to spend on new contracts.

 

Yes, the future is worse than the past, and worse than it "shoulda been".

But that's the case for all of society across all of the world right now, and there's no end in sight.

Play ball!!


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