Stern: Player Salaries to Be Cut By 1/3

[THE HCP]

Hey Nik, can I come work for you next fall?

 

[Minstrel]

And they all want to pay them less.

They want to, which is hardly unusual. If we went by what employers would prefer to pay in salaries, every worker in the US is overpaid. Fairly bizarre metric.

They choose to pay players these salaries because they've decided it's worth it to them, as owners, in terms of what they make back from paying the salaries. Even if there were no salary cap, LeBron James wouldn't make $100 million per year, because at that cost it wouldn't be worth it to the owner.

 

[VanillaGorilla]

They want to, which is hardly unusual. If we went by what employers would prefer to pay in salaries, every worker in the US is overpaid. Fairly bizarre metric.

They choose to pay players these salaries because they've decided it's worth it to them, as owners, in terms of what they make back from paying the salaries. Even if there were no salary cap, LeBron James wouldn't make $100 million per year, because at that cost it wouldn't be worth it to the owner.

How is it worth it when I see everywhere that the NBA loses money every year? I really haven't researched anything about it or even talked about it so I want to know.

 

[VanillaGorilla]

Do the players even have a legitimate reason they shouldn't have their salaries cut? It's business. Businesses have to cut salaries all the time if they aren't performing well. Unless the players have a better option, I don't see how they have any leverage.

 

[Minstrel]

How is it worth it when I see everywhere that the NBA loses money every year?

The NBA claims it's losing money. MLB teams, for example, often claim to run at a loss, but then independent surveys by entities like Forbes often disagree. It's a popular tool in labour disputes to claim losses.

I don't know for sure, either, whether NBA teams are losing money but I know owners are willingly signing these contracts (either directly, or by proxy through their hired executives). Unless you believe that NBA owners are all stupid businessmen, why would they all keep signing deals that are losses for them?

 

[Minstrel]

Do the players even have a legitimate reason they shouldn't have their salaries cut? It's business. Businesses have to cut salaries all the time if they aren't performing well.

That happens in a largely free, open market. The NBA is far from one...there are artificial constraints, like salary caps and maximum contracts. All of these things are aimed at artificially reducing contracts. If the NBA were a free market, where any team could offer a player any contract (i.e. open bidding, like workers in other industries), I think you'd see salaries go up not down.

 

[andalusian]

That happens in a largely free, open market. The NBA is far from one...there are artificial constraints, like salary caps and maximum contracts. All of these things are aimed at artificially reducing contracts. If the NBA were a free market, where any team could offer a player any contract (i.e. open bidding, like workers in other industries), I think you'd see salaries go up not down.

To be honest, if it was a truly free market teams would not have to carry the albatross of Curry or Darius Miles contracts on their caps as well. It's a double-edged sword.

It's not just the teams that are on the "not a free market" side here...

 

[Nikolokolus]

Hey Nik, can I come work for you next fall?

Do you know anything about photogrammetry, geology, botany or GIS?

 

[Minstrel]

To be honest, if it was a truly free market teams would not have to carry the albatross of Curry or Darius Miles contracts on their caps as well. It's a double-edged sword.

There wouldn't be "caps." They'd still have to pay those contracts, though.

It's not just the teams that are on the "not a free market" side here...

How so? The cap implications of Curry/Miles deals don't benefit players.

 

[BGrantFan]

To be honest, if it was a truly free market teams would not have to carry the albatross of Curry or Darius Miles contracts on their caps as well. It's a double-edged sword.

It's not just the teams that are on the "not a free market" side here...

That's a really good point. Perhaps Stern's bizarre 1/3 reduction statement out of the blue is a bargaining point for the players to agree to an NFL-type non-guaranteed contract/hard cap structure.

If Stern wants a model for growth, the NFL is a great place to start. Plus, the length of player careers in the NBA is longer than the NFL, so the players should be more agreeable to that model as well.

 

[andalusian]

There wouldn't be "caps." They'd still have to pay those contracts, though.

No, they would not, the real point was that in a truly free market they would be allowed to put termination performance clauses in the contract - which they are not now.

How so? The cap implications of Curry/Miles deals don't benefit players.

No, but the no-termination because of performance issues sure does benefit players, at least these specific players.

 

[BGrantFan]

There wouldn't be "caps." They'd still have to pay those contracts, though.

Those contracts wouldn't be guaranteed by collective bargaining, though.

How so? The cap implications of Curry/Miles deals don't benefit players.

The fact they are guaranteed benefits the players. In most workplaces, the employer can terminate an employee for a lack of performance. In the NBA, this is impossible under the current CBA. I'd say that is a benefit to Curry, Miles, and any other slug who signs a big contract and then stops performing.

 

[BGrantFan]

No, they would not, the real point was that in a truly free market they would be allowed to put termination performance clauses in the contract - which they are not now.



No, but the no-termination because of performance issues sure does benefit players, at least these specific players.

Eh, I basically parroted your points, but I didn't read your post while I was posting.

 

[andalusian]

Eh, I basically parroted your points, but I didn't read your post while I was posting.

Hey, attack the post, not the poster buddy!

Maybe I am PapaG too!

 

[Minstrel]

No, they would not, the real point was that in a truly free market they would be allowed to put termination performance clauses in the contract - which they are not now.

No, but the no-termination because of performance issues sure does benefit players, at least these specific players.

That's true, they could put in termination clauses. I don't know how widespread that would be in practice (if some teams will do contracts without them, you'd be at a competitive disadvantage in signing players if you insisted on them) but at least notionally I agree with this point.

 

[andalusian]

That's true, they could put in termination clauses. I don't know how widespread that would be in practice (if some teams will do contracts without them, you'd be at a competitive disadvantage in signing players if you insisted on them) but at least notionally I agree with this point.

You would be in competitive disadvantage if you do not insist on them and things go sour as well, as the team would not be able to afford replacement players - I suspect that for the super-stars you would not have these clauses - but for the vast majority of the players - they would exist, just like in the real world.

The point is that the NBA being different from the real world is not always an advantage to the owners, it is just as big an advantage to the players, or at least, most of them.

 

[Minstrel]

The point is that the NBA being different from the real world is not always an advantage to the owners, it is just as big an advantage to the players, or at least, most of them.

I don't necessarily agree that it is just as big an advantage to the players. But there is some advantage to them that they wouldn't have in a non-collectively bargained environment.