Arturo kindly decided to make a cheat sheet for the NBA Players that are currently in negotiations. Above is chart showing the different pay grades in the NBA and how a new BRI split would alter each player’s pay. Arturo also kindly phrased this in another way for the players: “How much of a pay cut will I take if we accept this deal? ” (shown below)
You’ll notice that I’ve highlighted the 47% column (the owners initial offer), the 53% column (the players’ counter), and the $2,000,000 salary row. Why is the $2,000,000 salary row important?
Table 3: 2010-2011 Player Salary Tier breakdowns
| Current Salary | Players at or below salary | % Affected |
|---|---|---|
|
$500,000 |
100 |
22% |
|
$1,000,000 |
196 |
44% |
|
$2,000,000 |
240 |
53% |
|
$3,000,000 |
279 |
62% |
|
$4,000,000 |
314 |
70% |
|
$5,000,000 |
337 |
75% |
|
$6,000,000 |
354 |
79% |
|
$7,000,000 |
369 |
82% |
|
$8,000,000 |
378 |
84% |
|
$9,000,000 |
386 |
86% |
|
$10,000,000 |
397 |
88% |
|
$11,000,000 |
409 |
91% |
|
$12,000,000 |
412 |
92% |
|
$13,000,000 |
423 |
94% |
|
$14,000,000 |
431 |
96% |
|
$15,000,000 |
432 |
96% |
|
$16,000,000 |
436 |
97% |
|
$17,000,000 |
444 |
99% |
|
$18,000,000 |
447 |
100% |
|
$19,000,000 |
448 |
100% |
|
$20,000,000 |
448 |
100% |
|
$24,000,000 |
449 |
100% |
While it is often floated around that the “average NBA player” makes around five million dollars, that is a little skewed. Because certain superstars like Kobe Bryant make lots of money it brings up the average for the whole. According to Basketball-Reference, 449 players were paid to suit up last season. Just over half of these players made less than $2,000,000. Again, the $5 million average is very misleading.
When we look at how much of an impact of the player giving into the owners (accepting 47%) versus getting what the players want (i.e. 53%) we see for the $2,000,000 group it’s only a difference of $170,000. And for the lowest tiered workers — who make $500,000 or less — it’s only $50,000!
This reminds me of an interesting story from Freakonomics about real estate agents. When selling a $200,000 house a difference in $10,000 seems huge. Leaving a house on the market longer can actually be worth as much as $10,000. A real estate agent though only gets a 1.5% cut (6% commission split between the buyer and selling agent. The agent then splits their commission with their firm) so an extra $10,000 for the seller only gets the agent another $150. For several weeks of work this in not a lot for the agent. As such, the real estate agent actually has an incentive to sell lower for a quicker sale even though it hurts the seller — who is supposed to be on the same side as the agent!
Back to the NBA… the current BRI is around four billion dollars. That means every percentage point is worth around $40,000,000 for the players collectively, and the difference between the 47% and 53% offers is a quarter of a billion dollars! However, for a majority of the union it’s less than a few hundred thousand dollars. As the NBA union argues collectively we see that most players merely have an incentive for the lockout to end as opposed to fighting for tens of thousands of dollars (again, even though hundreds of millions of dollars are at stake). The players talk of standing strong may not hold up as many of them have an incentive to cave. And it’s entirely possible the league knows this. So in the fight between the players and the owners, it may be that the owners are using the same sheet as Arturo and that may be why we could still see basketball this season.
-Arturo and Dre
Wages of Wins Journal 
mosiplatt
October 19, 2011
I think I get the point this article’s trying to make, but without knowing the details of the next CBA it doesn’t really mean much. The owners already took rollbacks of existing contracts off the table so I guess this article is talking about the money existing contracts would lose in escrow?
dberri
October 19, 2011
No. The comparison is between how much money the players lose when they are not getting paid in the lockout to what they lose by taking the owners offer. For many players, a long lock-out simply isn’t worth it.
A.K.S.
October 19, 2011
As mosiplatt pointed out, the owners have taken salary rollbacks off the table. Thus, players who are being paid (on their current contracts) $2 million/year are not losing $170,000/year by giving in to the owners. They would be losing that much money only if you assume that their future contracts would also be at the $2 million level at 57% BRI. I would submit that’s not necessarily a good assumption. For example, Nicholas Batum and Goran Dragic both would have made about $2 million in a full 2011/12 season. I’d argue that Batum has a lot more money at stake than Dragic in this negotiation.
I do agree, though, with Prof. Berri’s bottom line that, for many players, a long lock out isn’t worth it financially. But for the vocal leaders – folks like Garnett, Kobe, Wade, and Pierce – maybe it is. And it’s not clear to me that the rank and file players are acting rationally, rather than listening to the Garnett’s and Wade’s.
Dre
October 19, 2011
Mosi + AKS (and Arturo jump in if I’m wrong here),
NBA player salaries actually have to match the BRI. At the start of the year it’s an estimate and money is kept in escrow. If the BRI is higher than expected (as in last year) the players get some money back. If it’s lower then they lose some of the money in escrow. What Arturo is showing here is the money they’d lose from that if the BRI levels go down.
AKS,
Great point. Arturo’s actually got some more coming on contract length and the effects of that too.
Arturo Galletti
October 19, 2011
To Dre’s point, under the CBA the player’s total salary has to add up to the total BRI share specified. A drop in BRI share is directly proportional to a drop in player salary. If the league “froze” salaries on signed contracts, they would have to rollback the cap ridiculously and allow player to be signed only using bird rights or the veteran minimum. If the new BRI was say 50/50, total player salaries would still significantly exceed the agreed share and they would have to be rolled back thru the give back mechanism at year end. No matter how you cut it, less money is less money.
mosiplatt
October 19, 2011
Of course, this is all based on the assumption the next CBA will have the same escrow provision in it. The NBPA is probably negotiating that very heavily since they’ve offered to take a lower % of BRI.
It also depends on how the split of BRI is phased in b/c the numbers reported are an average over the life of the deal, I believe.
Combine that with the fact that salaries don’t stay the same over the life of the contract and this amounts to an attempt to paint broad strokes on a moving train, I think.
A.K.S.
October 19, 2011
Arturo, I don’t think it is correct to say that a drop in percentage of BRI is “directly proportional” to a drop in any particular player’s salary. It all depends on what the remaining players as a group are making. I don’t know what the total guaranteed salaries are for 2011/12, but if less than the percentage of BRI that is finally agreed to, then it is possible that the total salaries would not exceed the specified percentage. And in any event, the total is likely to not add up to 57% (the specified percentage under the old CBA), so the salary cut any particular player takes will likely be less than the difference between 57% and the new specified percentage.