NBA Audit: Negotiated Salaries Declined $100M

by Ryne Nelson

The NBA and Players Association issued a press release detailing both good and bad news (mostly bad news, though) regarding basketball-related income (BRI) in ’10-11.

The good news: BRI and player compensation each increased by 4.8 percent this past season. The bad news: That the entire 4.8 percent increase was due to a compensation guarantee in the old CBA. Player salaries also declined by $100 million in total last season, their lowest level in five years.

CBS Sports points out the details:

As part of the old rules, the league withheld a certain percentage of salary (8 percent last season) and would keep a portion of it or give it back so player salaries and benefits equaled 57 percent of BRI. In every prior year of the CBA, negotiated salaries — the contracts offered by owners and signed by players — rose and the owners kept most or (as in the case of the 2008-09 season) all of the escrow.

What does this mean? Well, to some degree, it means that owners became more judicious in the contracts they doled out. On another level, it means that many teams — like the Kings and Timberwolves, who hovered near the league-minimum salary, and the Pistons, who did not make a single roster transaction last season — simply folded up the tents in anticipation of the lockout, a looming ownership change, or both.

So the evidence seems to be getting twisted, as it often does. Sure, the popularity of the NBA last season helped. But the BRI guarantee—which automatically gives that money to players—helped much more.

The costs to generate that 4.8 percent revenue increase were too steep. And, as CBS notes, “A deficit reduction compromise and debt-ceiling deal almost certainly will come out of Washington, D.C., before a resolution to the NBA’s labor impasse.”