In any business you have a product or service that you are trying to sell. Usually that product of service has a cost that can be measured in materials, labor and other types of expenses. When times are good, you can play with those numbers to try and do better, and when times are bad, you can play with those numbers to try and be lean.
The NBA has a serious problem. The collective bargaining agreement (CBA) that they have operated under with the Player’s Union for years has become the same dead weight that the Unions that govern auto workers has been to GM, Ford and the like. At some point along the way, the inmates took control of the asylum and now it’s time for David Stern to come in with tear gas and take his damned keys back.
Today, NBA players’ salaries total up to 57% of all Basketball-related income that the league makes. Now if this were a lemonade stand, that wouldn’t be that threatening. I don’t know how much money the NBA makes in basketball-related income, but we can do a little fuzzy math to come up with a ball park.
The NBA Salary Cap in 2009-2010 is $57.7 million dollars. Some teams are under, some teams are over, most are dead on it, so let’s call that a dirty average. There are 30 NBA teams, so we are guessing that 57% of basketball-related income is $1,731,000,000. That’s right, you read that correctly, nearly two BILLION dollars. That means that the NBA’s Basketball related income is a shade over $3 Billion dollars. The NBA requires a minimum of 10 players and a maximum of 15. Let’s assume for a minute that all teams carry the maximum, that means that there is roughly $3.84 million dollars PER player available for salaries.
Now let’s put this into perspective. In 1991-2003, the average household income for US citizens as a whole increased from $40,873 to $43,376, an increase of $2503 or 6%. Over the same span, the average NBA salary grew from $1.1 Million to $4.9 million. For the math nuts that’s 345%.
It makes it very difficult not to agree with the public case that athletes are selfish and over paid.
Billy Hunter, who leads the Players Union, seems totally oblivious to the economy that has left 15 million Americans (i.e. Customers) out of work.
"They obviously indicated what their concerns are, how they feel they are being impacted economically," Hunter told SI.com after meeting with Warriors players. "We looked at it. We don’t necessarily agree with their interpretation of the facts and numbers. Their primary concern is that the percentage of the revenues that the players are receiving is too high under the current economic circumstances.
and then he furthers his insulting opinions to include
“I would suspect they would like to see it somewhere closer to 50-50. I don’t want to give any indication where I am. But clearly I am nowhere near anybody’s 50-50. Where I am is I propose we extend the current deal. I have already offered that to the owners.”
Am I the only one that thinks he looks like the punk kid that walks up to your door on Halloween and grabs two handfuls of the candy in the bucket while you were trying to hand him what you are giving everyone else?
The disturbing precedent has been set. It’s more profitable to be a basketball player than a heart surgeon (who’s high reported salary is 1/4 the average NBA salary if you are curious) and the structure has clearly put the players in control.
The thing is that the NBA is a business. As far as I know, there is no law on the books that says the NBA has to pay these players this much money. It’s time to stop the madness and let these players see what the workforce looks like for someone who didn’t finish college (usually) and some that have never stepped foot in one. Once the wealthy leagues in Europe took the Lebrons and Kobes, I am guessing the players looking at real jobs would be dreaming of 50%, and more than willing to take 5%, which sadly would still be $333k per player. For those of you counting, that’s more than your average doctor makes.
Just doing the research to write this post made me feel entirely cynical towards the NBA players. When I consider how much of my family on the East coast is struggling to find good work, and companies like Microsoft are laying off people by the thousands in this economy, to even bring up this type of conversation is down right offensive. To take the stance the players are taking is absurd.
I hope the players realize this, kick Billy Hunter out on his ass, and offer freely to give up a little of the income they make to keep the hand that feeds them in business.