Facing a new collective bargaining agreement with his player’s union, David Stern is trying to hash out a plan that would have big market NBA teams share their revenues with those in smaller markets. Since the NBA owners are very motivated to avoid a lockout or a strike, it seems likely some kind of plan will get done to help pave the way to a new CBA with the players.
Really though the NBA has three big problems it needs to address. The first is the TV revenue is only going to grow 3% in coming years. Since players' salaries are rising at nearly 8% for those going to new teams, and 10.5% of those staying where they are, one can see the NBA must do something.
Add to that the fact that NBA tickets are in a very soft market, where many teams are being forced to give away tickets to get people to the stadium in this bad economy. On top of that there are some reports that nearly half of all NBA teams are not reporting profits. It seems there may be a need for some kind of revenue sharing plan.
Stern favors a model of revenue sharing similar to that of the NFL where visiting teams get a share of the home team’s gate. He would also like big market NBA teams to share some of their local TV and radio money with teams that cannot generate this kind of revenue.
It seems highly unlikely that NBA team owners would be willing to give up local TV and radio revenue, but an agreement on sharing some of the gate receipts seems like an ok plan.
Since the NBA, under the current CBA, gives away 57% of all revenues to its players there doesn’t seem to be a lot of wiggle room on sharing local revenue with other NBA team owners.
While it seems Stern is willing to do everything in his power to keep the owners from locking out the players, including opening the NBA books to the players, it may have a harder time convincing the Executive Committee.
Of the 11 member committee includes five members who were not owners during the last NBA lockout that canceled out much of the 1998-99 NBA season.
It is clear however that the owners will have to come up with some plan to avoid a devastating work stoppage.
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