The summer of 2011 loomed as a critical moment in sports, an uncertain time period pitting the owners of two of the most popular sports leagues in the world against world-class athletes. The differences presided over a myriad of issues, including revenue splits, salary caps and guaranteed contracts. In what was termed “billionaires vs. millionaires,” the NFL players succumbed to the pressure of NFL owners and potential lost wages and allowed the NFL season to begin on time.
The labor negotiations and early season of the NFL, the most lucrative sports league in the world, may influence the NBA collective bargaining agreement negotiations. The NBA, in the midst of a contentious labor strife, has made little progress and has already seen the first two weeks of the regular season cancelled. As the NBA labor negotiations enter a critical stage, they can look to the agreement the NFL implemented earlier this year and the developments on the field as a guide to reviving their own league.
Revenue Split
The NFL players made huge concessions in their CBA agreement, dropping from a 60% share of the revenue split (in reality, 53% due to certain stipulations under the previous CBA) to 48%, a difference of hundreds of millions of dollars. Projected increases in revenue and the owners’ guarantee to commit to a salary floor each year permitted the players to agree to a smaller share.
The NBA, on the other hand, currently allocates 57% of its income to its players and 43% to the owners. The owners are demanding a 50-50 split but NBA players, the most marketable in the world, believe that it is their intrepid performances and international appeal that has rebranded the NBA and that they deserve a majority share.
The NFL does not have any players with the worldwide reach that players such as Kobe Bryant and Lebron James do. Therefore, by appeasing the middle-tier players (a majority of the NFL) through a higher salary floor and controlled rookie scale, the NFL was able to convince the players to agree to a reduced share in comparison to the previous CBA.
In the NBA, however, it was their attempt to appease the middle-tier of players through mid-level exceptions and setting maximum contracts that landed franchises in financial turmoil in the first place. Therefore, the NBA is seeking to overhaul its entire financial structure, one skewed in the players’ favor. The revenue split is the most decisive issue in the NBA collective bargaining and with superstars such as Bryant, James and Dwayne Wade directly involved in negotiations and standing resolute, the players will not give in as easily as the NFL players did.
The Salary Cap and Contracts
The NFL imposes a hard salary cap with a salary floor, no guaranteed contracts, franchise tags and revenue sharing. These mechanisms ensure parity because the best players may be restricted from leaving their franchise, ineffective players may be released with no financial consequences and smaller market teams receive revenue from other teams to reinvest in their own teams. The new CBA used a model similar to the older one, altering only the salary floor minimum and the way revenue is distributed to smaller market teams.
The NBA, on the other hand, uses a soft salary cap, has guaranteed contracts and an ineffective revenue sharing. The financial woes claimed by owners can easily be solved through a stronger revenue sharing program. They may look to the NFL’s model to address this problem as the NFL has an extremely successful program that allows teams in markets such as Buffalo (two sports franchises) and Jacksonville (one sports franchise) to be successful. Additionally, guaranteed contracts have riddled NBA franchises for years because owners have overpaid mediocre players and their contracts have restricted flexibility in their free agency decisions. Shorter guaranteed contracts would move the NBA towards a system more similar to the NFL’s, allowing teams to retool quicker and release ineffective players.
League Momentum
As the United States’ most popular sport, the NFL was able to avoid any games cancellation and therefore, maintained the allegiance of its fans. The NBA, on the other hand, has already cancelled the first two weeks of the season and may cancel more games in the near future. This has caused alarm for the millions of fans around the world and may destroy the momentum the league has worked so hard to create.
The NBA is coming off one of its most impressive regular season and postseason ever, has more athletes that are marketable today than at any time since the Michael Jordan era, is growing at an astounding rate internationally, and can ill afford to stagnate its growth. In 1999, when the NBA had an extended lockout, it led to declining TV ratings and ticket sales that took years to recover from. In 2004, the NHL locked out its league for an entire year and has yet to still fully recover from the effects.
The NFL understood the importance of playing a full slate of games on time and not alienating the casual fan; the NBA and players union need to end the negotiating posturing and commit to finding a viable solution before years of growth unravel, adversely impacting both parties.
On Field Performance
The NFL, once they reached an agreement, accelerated their offseason by shortening training camps and jumping straight into preseason and regular season games meant to be played after a full off-season. This may or may not have had an effect on the increased number of season-ending injuries that occurred this year. Impactful players such as Eric Berry, Jamaal Charles, Kenny Britt, Jon Beason and Thomas Davis had all been ruled out for the season before Week 4 had even concluded. The NFL, by rushing its players, not considering the potential effects of no off-season oversight by team coaches and trainers and watching their players engage in a physical game without adequate offseason training programs, may have seen instrumental players go down.
The NBA should learn from the impact a rushed offseason had on NFL players and ensure that a full training camp and preseason occurs. The NBA season is long and can be especially detrimental to rookies, who must jump from approximately 40 games at their peak to 82 regular season games, including a number of back-to-back games, and up to 28 more postseason games. This can be devastating to the joints in the long run as the NBA game is physical and requires constant cuts and athletic maneuvers. Veterans only know how to play the game in one gear and pushing their body to play at 100 percent without an offseason of team drills and trainer-led injury rehabilitation could malign key players, similar to the NFL.
Conclusion
The business facet behind the NFL and NBA has made this season especially strenuous on fans. The NFL was able to reach an agreement; with the NBA players believing they have leverage and owners arguing that they cannot function financially under the current system, a compromise may be difficult. When an agreement is finally reached, the CBA must address the biggest problems plaguing the NBA. This CBA is especially important for the league because it is the precursor to a TV rights contract in 2016-2017 that could be worth as much as $1.2 billion. The NBA, in order to be successful, must follow the example set by the NFL and work vigorously to reach an agreement, for the sake of its players’ health and to maintain projected revenue streams, the loyalty of fans, and the future of the league.
