The NBA had signed a nine year 24 bn $ deal with the current broadcasters ESPN and Turner. It is a 180% increase from the current deal. The new deal will take effect from 2016-17 i.e after the end of the current season. NBA is set to receive around 2.6 bn $ per annum from ESPN and Turner combined.
I love the fact that most of the money is set to go to the players as part of the new players association agreement with the league. Atleast 51% of the deal is set to be distributed to the players.
The current salary cap of 70 mn $ looks like peanuts in comparison to the above deal which is the reason why players like Enes Kanter and Roy Hibbert almost get the same pay as Russell westbrook and Kawhi Leonard who are expected to be future Hall of Fame players.
This anomaly in the pay-talent scale is so prevalent in the NBA that it upto the player to make the choice of either opting for more money or a paycut to chase the ring.
Russell westbrook can, if he chooses play for the sixers , get a 25mn p.a deal but he chose to continue playing with the team he was developed in OKC.
Such decisions are critical to the team as they need to limit their player salary spend within the cap. Otherwise they need to pay double for every dollar above the cap.This system is meant to ensure that there is a talent parity in the league across the 30 teams. The intention was to ensure that the large market cities like NY and LA dont spend buy the entire talent pool with their deep pockets and push all the smaller market teams to the D league.
It is absolutely essential for the NBA to ensure that all the 1230 regular season games (man thats a lot !!!) are competitive and valuable TV time to sell. This strategy has worked for the NBA.
The National Basketball Association is the most watched sports league in the United States and they are not looking for one major annual event like Superbowl for their entire revenue (NFL) or the World series like Major league baseball
As I saw recently even Milwaukee Bucks game against GSW is as interesting as a top tier contest. It has ensured that there are not many bad games in NBA relatively to the other leagues.
It has also ensured that most of the teams are able to sell their season tickets easily and creating valuable ad space for the entire 1230 games which keeps all the team owners happy.
This also ensures that the NBA brand is valued at a premium and even a team like OKC or Bucks will fetch a huge profit when sold.It looks like NBA has been at the forefront of all other sports leagues their management and preserving at their brand.
But I believe it is time for NBA to give it back to the players. The league makes around 4 bn $ annually. By standards lets assume around 10% is required as operating costs for running the league and a further 25% as the expected return for the owners then we are left with a cool 65% for the players salaries.
Lets do the math. 65 % would be like around 110mn$ as the salary cap for the players which would be more appropriate in the current scenario.
The league has no business in withholding huge cash reserves and has an obligation to distribute the same to their stakeholders. And there are no valuable stakeholders than the players involved.
By the way this agreement is not only important to the players like Lebron James and James Harden. They would still get their money from their individual lucrative shoe deals.It is important for players like Hassan Whiteside, patrick beverley who in their own way are extremely valuable to a team but simply cant get the big bucks in the existing CBA. Now valuable role/fringe players would be paid a just price. It is important for them as they cant get a shoe contract or multi year sponsorship deal and basically their entire life earnings needs to come from the small 5-10 year window in the league.
This new deal should ensure that there are atleast three 20 mn$ players in the playoff teams and superstars can earn upto 40mn$ per annum.
Only such an agreement would do Justice to the ridiculous amount of money that NBA earns now and can someone please pay Stephen curry 30mn$.
How can the best player in the league earn a meagre 11 mn$.
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