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NBA Lockout: David Stern on the League's Financial Future

By

Billy Hunter and David Stern

NBAPA president Billy Hunter and NBA commissioner David Stern smile at a press conference announcing that the NBA and the NBA Players Association have agreed on a new 6-year CBA prior to Game 6 of the 2005 NBA Finals.

Getty Images / Brian Bahr
Updated October 17, 2011
Days after the latest breakdown in talks - and days before a Federal moderator joins the discussions - NBA commissioner David Stern took to the airwaves, discussing the league's latest proposal, the current status of the negotiations, and what might happen next with Mike Francesa of WFAN Radio in New York. (You can listen to the interview in its entirety here.)

On League Finances:

The claim that the majority NBA teams lost money last season is one of the most scrutinized talking points of this conflict. The league says over 20 teams were in the red during the 2011-12 season; union leader Billy Hunter continues to put that number closer at eight.

According to Stern, this is not a dispute about actual dollars and cents made and lost, but rather a matter of accounting. He told Francesa that the union still does not believe that expenses - the example he used was $10 million for a scoreboard - should be factored in to the revenue formula.

Of course, the players might dispute Stern's claims of transparency. Just last week, Steve Nash, via his Twitter feed, suggested that the owners still haven't "opened their books."

On Revenue and Growth:

The NBA made $4.3 billion in basketball related income (BRI) during the 2010-11 season, despite a bad economy. Stern said both sides are projecting annual growth at four percent, which would increase the BRI number to roughly $6.4 billion over the life of a ten-year deal.

Stern claims that would also boost the NBA's average salary from $5.5 million to $7 million. But the use of average salary in this discussion has become a bone of contention.

The players - and perhaps more importantly, their agents - believe that median salary is a much more important measure.

A quick refresher in grade-school math: average is computed by adding up the total salaries of every NBA player and then dividing by the number of players. The median, on the other hand, is middle value in a list of figures. While Stern is correct in saying the average NBA salary is at $5.5 million; the league median is closer to $2.3.

As Bill Duffy - who represents Nash, Rajon Rondo and other NBA stars - told NBA.com's Steve Aschburner, "It's the median salary that's more important. Look at the Miami Heat as an analogy here: You've got three guys making $17 million and probably six guys making $1.2 [million]. So that's a little misguided, that average salary."

Of course, there's another reason the NBPA side would prefer to use the median figure - the average salary of an NBA player is the highest of any professional sports league in the world.

On Splitting Basketball Related Income:

The league and players have yet to agree on a split of league revenue, but according to Stern, division of BRI has not been on the table at the last several bargaining sessions. As the commissioner put it, "When one side is at 53 (percent) and the other side is at 47 (percent), you have an idea where you might be going."

Stern also suggested that negotiators from the union floated the idea of a 50-50 split, but hinted that a group of high-profile players including Kobe Bryant, Kevin Garnett and Paul Pierce had squashed that idea.

A 50-50 split sounds reasonable, but even that characterization is in dispute. According to a number of reports, the 50-50 split that has been floated by the league would include a restructuring of the BRI formula, factoring in some expenses for the first time. That change in formula would put the players' true share of revenue under that magic 50 percent barrier.

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