NBA Lockout: Men Lie, Women Lie, Numbers Lie?
After enjoying the best NBA seasons since the Jordan era, we are entering a lockout. Which is quite ironic because after the successful 1998 season; the infamous jumper over Byron Russell we were faced with another lockout.
As I analyze why this lockout is a reality, I attempt to use a simple quote “Men Lie, Women Lie, Numbers Don’t Lie”; however once scratching the surface if you understand how presenting the data of numbers work, you can make them say whatever you want for your benefit.
After reading multiple articles, “Taking a look at the NBA labor dispute” provides the best insight on the facts and figures behind the NBA lockout. There is a lot of data out there, but here are some key points for fans to consider before blaming the players for the reason of the lockout.
*Player’s salaries have stayed even with inflation. Essentially this means their pay has not been going up.
*Owners have been increasing their spending. Management’s operating costs (per their own numbers) have been going up at five times the level of inflation (that’s a lot).
*Even in the ideal case for the owners with the new CBA these problems will repeat themselves in 2020.
*The Owners are asking the players to take a pay hit to make up for bad management practices.
Players’ salaries are a fixed Cost at 57% of League Gross revenue!
Any and all cap nonsense is a bunch of hot air. By being fixed to league revenues, player salaries cannot balloon out of control. The league in fact has controls in place in the CBA to keep that number fixed. Those controls are:
1. The Luxury tax limit, which is simply set by taking the league’s estimate of gross revenue for the season dividing it by 30 and multiplying by 57% (and adjusted against actual revenue using Control #2).
2. The League holding back 8% of player salaries in escrow and using that money to make adjustments to guarantee the 57%. This is the fudge factor that allows them to keep Player Salaries at a fixed percentage of Revenue.
There is a simple equation then for determining how much money the league actually makes:
Profit Margin = League Revenue -Player salaries (a fixed cost) – Team expenses (Variable Cost)
Numbers can be tricky and why many of us did not enjoy math when in school. The truth is the owners are trying to change the system to protect no one but themselves. They are complaining about player salaries but who told:
*Portland to offer Greg Oden 8.8 million
*Why did New Jersey give Travis Outlaw a sever year pro with a 9.5 points per game average a 5 year, 35 million contract
*Who told Co-Executive of the year Gar Foreman to give Carlos Boozer 5 years between 75-80 million and he cannot defense late in games in the Eastern Conference Finals.
Owners are trying to throw shade on the players, and the Charles Barkley’s of the world blaming the LeBron James and Miami Heat for the lockout. Don’t believe the hype however, perhaps contraction of teams should be in order to get rid of the owners/franchises trying to make a quick buck and having less teams should allow competitive owners to manage their finances better since they are splitting the pie with less teams.