Economy

Did Owners Or Players Win In Proposed NBA Contract?

Both sides in the NBA labor dispute are reading the fine print on a potential agreement that could lead to the end of the NBA owners' lockout and the NBA players' anti-trust lawsuit. The pending deal seems close to what was on the table two weeks ago when both sides were so angry with each other that NBA commissioner David Stern warned 'nuclear winter' could occur.

That storm got worse when the NBA players rejected the deal, broke up their union and went to court. The catastrophe of a lost season with billions of dollars in revenue may now be averted, thanks to a marathon negotiating session both sides held the day after Thanksgiving.

Stern and Billy Hunter, the head of what used to be the players' union, met for about 15 hours straight in New York, accompanied by a handful of people. While the commissioner expressed satisfaction with the tentative agreement, the New York Times noted during the announcement "Hunter...sat stoically...no one on the players' side praised the agreement."

NPR's Mike Pesca says simply, "In absolute terms, the owners won."

He's swift to add the owners didn't get everything they wanted in the negotiations, but they prevailed on one big money issue known as BRI, or basketball related income. Under the last contract, NBA players took home 57 percent of BRI. Now they'll divide the income 50-50 with the owners, and that's worth about two billion dollars for each side.

The owners also succeeded with a more punitive luxury tax, a fee imposed by the NBA to prevent clubs with deeper pockets from outspending less expensive teams. The downside to players is that other franchises might not be able to afford to lure a talented ball player from his current team to a new city with a higher salary, thus reducing players' movement and possible wage increases. The NBA hopes with less financial incentive to move, talented players will be spread around the league instead of bunched up in a handful of cities with the wealthiest owners. USA Today has a good breakdown of the contract points.

This potential agreement could turn out to be a massive transfer of wealth to the owners; the Times estimates it could be worth three billion dollars over a decade. While the pending contract is set up to last for 10 years, either side may opt out after six years.

No wonder Hunter wasn't smiling.

While ESPN's Henry Abbott agrees the owners got large concessions, he's focusing on what's in the deal for players. He notes the NBA still doesn't have a hard salary cap and players can still become free agents. Minimum salaries are going up and even if teams must pay a bigger fee to lure superstars, they can still do it.

If the players want this agreement, they have to drop their anti-trust lawsuit, form a new union and then vote to accept a new collective bargaining agreement. The owners must drop a pending labor lawsuit of their own in New York state, and a majority must agree to accept the deal.

And even with the thorny money issues settled, Sports Illustrated's Michael McCann warns there are several outstanding issues that could require more negotiation. These include broader drug testing policies; raising the minimum age before a player can join the NBA; the disciplinary power of the NBA commissioner; and pensions.

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