An Open Letter To NBA Union Head Billy Hunter
CNBC Sports Business Reporter
All along you've told the NBA players who you represent that you are looking for a "fair deal." Sorry Billy, that "fair deal isn't coming.
Memo to you: You're not getting a fair deal because you don't have leverage to get a fair deal.
Realize that. Explain it to your players. Be a realist.
I know it's hard.
It's hard to tell the players that your best is a seven percent cut in annual revenue. But it's even harder to tell your players that because you weren't willing to go down three percentage points — each percentage point is worth $280 million on a seven-year deal — you lost a season.
Let's do the math.
In the old deal, you got 57 percent of Basketball Related Income (BRI). Let's say you agree to get 50 percent in the new deal. A 7 percent drop costs your players $1.96 billion over seven years. But that's not even right. Because you weren't ever getting the last deal. Remember, the owners opted out of having another season at that price.
So let's say the best you could do is the 53 percent you want now. A three percent drop to 50 percent of BRI means your players are giving up $840 million over seven years. If you lose the season, you'll lose $2 billion in salaries and benefits in one year alone.
Here we go: I give you $2 billion this season and you give me $840 million over the next seven seasons. That's what we have, Billy. And you have to take that deal. Factor in the loss of revenue from fan apathy after a lost season and the losses you share with the league will be even more defined.
Now, I know, you are going to tell me there are problems with the system. No there aren't. Let's simplify it. Whether you want to call it a hard cap or not, once you figure out how much the owners can pay the players in BRI percentage, it's a hard cap. You spend less, the players get the difference. You spend more, the owners get back the difference. Everything stems from that split number.
And there's really no need to argue over guaranteed contracts and their length. As the split comes down, the market will react. Money will be used to give the top players raises. The role player will see his salary flatten out and he'll get fewer years on his contract. The NFL players got a bad a deal, but after their loss in the court system, they knew they had no choice. You don't have a choice either. You can't afford to get into a game of cat and mouse with David Stern. Understand that and then tell your players that, come Tuesday, it's over. A deal has to be done.
Hope you listen,
Questions? Comments? SportsBiz@cnbc.com