The past NBA season was simply a blockbuster. The Chicago Bulls finally stepped out of Michael Jordan’s shadow, Phil Jackson drew the curtains on an illustrious career and the Dallas Mavericks overcame the much-favoured Miami Heat in a thrilling finals series to secure the franchise’s first NBA title.
But the league is now in lockout and once again, money is the root of this evil.
A negotiating session on Thursday (30 June) ended in a stalemate with owners and players still in disagreement over how salaries and revenue should be distributed among players. We take a look at the issues and propose a solution to end the lockout.
NBA franchise owners want to introduce a hard-cap for salaries set at US$62 million over a ten-year period. This means that teams are bound by terms and conditions set by the cap and have little leeway in exceeding the salary cap.
Players on the other hand like the soft salary cap which comes with several significant exceptions that allow teams to exceed the cap to sign players. This is done usually to allow teams to keep their own players who are key in fostering fan support and is also one of the reasons behind how the Miami Heat were able to get Chris Bosh, Lebron James and Dwayne Wade on their roster.
Owners also want to reduce the revenue split with players to a 50-50 share, which will see players earning drop by around US$800 million a season. Players see no fault with the current 57- 43 split which is easy to understand as the split brings them a total of US$2 billion in wages and benefits.
Contract length is another bone of contention between the squabbling parties. Franchise owners want do abolish guaranteed deals and replace it one which pays a player based on the number of appearances. Of course, the likes of Yao Ming, Michael Redd and Eddy Curry would stand to lose tens of millions of dollars if this were to be enforced.
Our Solution
Stay with the soft cap so that players who are important to a team are rewarded accordingly. However, keep contract lengths short so that owners are able to let go off under-performing players sooner and top players have greater bargaining power when their contracts near expiry.
Negotiating revenue splits is always a slippery slope but players have to understand that the American economy is in the doldrums and that the existence of a franchise is vital for them to continue their playing careers. Locking the share rate could be premature but having a progressive model which sees players earn more if the team earns more could be a step in the right direction.
This in a way gives players incentives to perform well, as top teams are more likely to fill up the seats and sell merchandise both at home and around the world.
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