Sunday, February 14, 2010

NBA Projecting $400M Losses

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-Digger's Daily-

NBA owners vs players.
$400M league-wide losses.
Current CBA (Collective Bargaining Agreement) expires 2011.

Trouble brewing? Apparently so after a contentious meetings between owners and player association reps turned sour. We're in the early stages of what promises to become very public and cantankerous negotiations. The realities of this situation are very clear. NBA teams are bleeding. $400M projected losses this season after years of losing millions as a result of the current CBA.

"The right adjectives were thrown around, and our proposal appropriately denounced. Our response is, 'You can denounce it, tear it up, you can burn it, you can jump up and down on it, as long as you understand that it reflects the financial realities of where we are," Stern said during his annual All-Star press conference.

"And if you would like to have your own proposal, as long as it comes back and deals with our financial realities, that's OK with us. That's fine with us. In fact, that's what we would like to do."

It's time professional athletes take notice of economic conditions. Many remaining baseball free agents have learned the hard way that owners wallets are no longer free flowing with outrageous contract offers. NBA players have luxurious contracts which can no longer be supported.

Stern criticized the union's behavior at the session, saying it earned "high marks on the list of theatrical negotiations." He revealed that the players' side brought in a lawyer who threatened that the union would be decertified, making negotiating more difficult.

Unions rarely seem willing to negotiate for lower revenues. Doesn't seem to matter what industry is losing money, unions rarely give up anything without a fight even when their position flies in the face of sound economic practices. Take a look at airline and automotive industries. Professional sports players are making unsustainable salaries in our current environment. Something has to give.

Stay tuned... this is only the beginning of what promises to be salary restructuring within most major sports. NFL & MLB will be next.

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