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Money Ball
Chris Mannix
December 20, 2010
A numbers dispute between labor and the league bodes ill for the NBA in 2011
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December 20, 2010

Money Ball

A numbers dispute between labor and the league bodes ill for the NBA in 2011

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Chances that there will be NBA games next season seem to be diminishing by the day. Last January the league submitted its proposal to the players' union for a new collective bargaining agreement, to take effect when the current one expires July 1. The proposal called for a 38% reduction in player salaries (between $750 million and $800 million), a rollback of existing salaries, a hard salary cap, shorter contracts, elimination of all cap exceptions and a reduction in contract guarantees.

This month the union distributed a podcast to players detailing its counterproposal, which, according to a person briefed on it, seeks a deal more in line with the current system, with minor tweaks such as flexibility in signing and trading and a second mid-level ($5.8 million) exception. Says a team executive, "It feels like we're a million miles apart."

Why such a gulf? The answer lies in the interpretation of the NBA's financial state. Commissioner David Stern has said the league will lose around $350 million this season. The union projects league revenues will grow by more than $100 million. The league has opened its books to the union, but it's clear that after a look at those books the union interprets the numbers differently.

Those looking for reasons to be optimistic that the NBA can avoid a work stoppage are finding few. The union last month told players that it's "unlikely that any real progress will be made in the coming months" and has stocked a $175 million war chest to support players. The one major concession the union has made—offering to reduce the players' guarantee of 57% of revenue—has fallen on deaf ears. The league believes owners would lose less money in a lockout than they would playing another season under the current system. No meetings have been scheduled, and it appears, for now, both sides are playing out the clock.

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