Sportsnet magazine: NBA players underpaid
Posted November 10, 2011 2:35 pm.
This article is more than 5 years old.
LeBron James must have been wondering what kind of athletic never-never land he’d bought into. There he was with his Liverpool FC scarf draped around his neck, watching his new team face off against Manchester United on a gorgeous October Saturday at Anfield.
“One of the single best experiences of my life!” Liverpool’s freshly-minted minority shareholder tweeted excitedly to his 2.6-million followers.
Make all the jokes you want about LFC blowing a late lead (what, was LeBron’s team playing the Mavericks?); the juxtaposition was too rich to ignore.
Back home, James was a locked-out NBA superstar waiting to see just how hard a kick to the privates he and his union brethren were willing to accept from commissioner David Stern.
At Anfield, he was a shareholder in one of the wildest sports economies on the planet, with no meaningful restraints on trade whatsoever. Who needs revenue sharing when Liverpool’s EPL rival Manchester City spent 105 percent of their income on wages in 2010?
At some point, James will go back to work, having signed a new collective bargaining agreement after being locked out by the owners since July 1. The players have, for the most part, remained united, though with lost paycheques looming, the cracks are beginning to show. But when the deal gets signed, it will either be much worse for the players (a 17 percent pay cut, a hard salary cap and more non-guaranteed contracts) or simply worse (a 7.5 per cent cut and a harder version of the current soft cap). It won’t be better.
All of which was predictable months ago, making the lockout and the posturing more irritating than usual.
The path the NBA and its players have been going down — taking less — has been well worn: The NFL is the most profitable of the major North American sports, and their players still saw their share of league revenues fall from 51 per cent to 48 per cent before coming back to work after they were locked out this past summer. Against that backdrop, what chance do NHL players have when their CBA comes up next year? “If you look at players in the NBA, NHL and NFL, it does look like they’re falling off a cliff a little bit,” says Smith College sports economist Andrew Zimbalist. “The players are getting hit.”
Um, yeah.
And did we mention that the true stars are woefully underpaid (not compared to teachers or nurses, I know, I know) when compared with their true earning potential?
When LeBron made The Decision to sign with Miami in the summer of 2010, for five years and $85 million, Zimbalist suggested that in a free market he could have commanded $30 to $40 million a year (which this off-season in baseball will be known as Albert Pujols money).
Keeping track here? Outside of MLB (the only league that has failed to get its players to accept a salary cap/revenue-sharing arrangement), stars aren’t getting paid fair value, and players as a whole are getting locked out until they come around to accepting a pay cut.
And forget about being brave and giving up a season’s salary. Even staunch unionists agree on the stupidity of that. “That’s money lost,” says Charlie Grantham, the National Basketball Players Association’s executive director from 1988 to 1995. “You don’t make it up the next year or the next contract. You will never make that money back again.” The NHLPA went to the wall in 2004-05, with the players sacrificing a full season. All that got them was a hard cap; a 24 per cent wage rollback and a union that was blown to smithereens by the end.
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“You have to fight for every percentage point, but you also have to know when to cut your losses,” says Bill Guerin, an 18-year NHL veteran and former NHLPA hardliner who lost $9 million during the NHL lockout. “It’s not worth burning a year fighting over two per cent. You’re never going to make up that two per cent.”
Are NBA players listening? Guerin hopes so. “There’s a partnership in the sense that we share the revenue; we’re trying to grow the game, that kind of thing,” says Guerin. “But it’s their league. I’m retired. It’s not my league, but they’re still there. They own the teams. They control what’s going on, that’s the bottom line.”
The question is: Must it always be this way? Is this the story that will be told every time the NFL, NBA or NHL head into negotiations? Owners lockout players and squeeze the revenue-sharing/salary-cap box ever tighter; players protest bravely and then make concessions on the threat of losses they will never recover. Repeat until the end of time.
Grantham suggests that’s been the owners’ long game. The leagues all take lessons from each other as uber-powerful commissioners, sailing on oceans of television cash they splash around to keep the owners in line, knowing as long as they wait, the players will inevitably roll over. “The owners had this figured out a long time ago,” says Grantham.
Well maybe it’s time for the players to play a long game themselves. It is never easy, given they’re such a transitory group with brief, risky career prospects (time is the unseen hand at the bargaining table, tilting things in the owners’ favour as surely as having Michael Jordan would tilt a pickup game), but the alternatives don’t seem to be all that great. The pay is good, but no one likes buckling, least of all professional athletes who reach the pinnacle of their sport by refusing to yield at every step along the way.
Grantham argues that, for starters, unions should think of themselves more as businesses than bargaining units. Sports labour has come a long way from the groundbreaking work that Marvin Miller did in baseball — he convinced players to unionize for the first time and won a jump in the minimum wage from $6,000 to $10,000 in 1968. That was the first in a string of hard-fought victories, culminating in the elimination of the reserve clause (players were tied to one team for their careers at the owners’ whim) and achieving free agency in 1976.
Given that they are partners who share in league revenues, the players need fewer lawyers and more forensic accountants poring over quarterly financials. “Why are they arguing about losses?” asks Grantham, referring to the unions doubting the owners’ claim that 22 of 30 teams are losing money and the NBA lost $300 million last year on revenues of $3.82 billion. “You should know!” Would giving up a point or two in revenue sharing be worth the opportunity to monitor revenues properly? Perhaps.
Maybe the usefulness of players’ associations has run its course entirely. The NFL players gained some leverage when they dissolved their union during the summer lockout, and NBA agents and some players were recently pushing to do the same. In each case, it was considered a tactical move to challenge the league’s anti-trust exemption.
Over the years, the players’ greatest gains have generally come in court rather than at the bargaining table. When NFL players went on strike in 1987, the union was crushed in their attempt to win unrestricted free agency for veterans. League owners rolled out replacement players, and regulars were crossing the picket lines after two weeks (tensions were so high that Dallas Cowboys defensive lineman Randy White threatened to run over running back Tony Dorsett with his truck as White made his way across the lines to pick up his paycheque). The owners’ “win” was so total that in 1989, the players decertified their union and filed a series of lawsuits with enough success that when the players’ union returned in 1993, they were able to get free agency and 64 per cent of league revenues in exchange for a hard salary cap.
The irony is that for all their union-crushing swagger, pro sports owners want their workers to remain unionized. The presence of a union allows owners to argue that they aren’t operating a sports cartel. Without a union there would be no salary cap, no draft and a permanent bidding war for talent — it would be like European soccer, and the owners don’t want that.
Certainly this would benefit the stars and the major franchises, but according to Zimbalist, it’s a state of affairs that would quite possibly squeeze the players in the middle and lower classes as money would trickle upward, not to mention threaten jobs as smaller-market teams would be destabilized. But it might also give the players the leverage needed to alter the trend toward increasingly unfavourable agreements. Consider it a reset button.
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And if we’re thinking outside the box, why stop there? If the owners want to lockout the players every chance they get (there have been 21 work stoppages in the big four North American sports since 1968, but the last strike was in baseball in 1994), maybe it’s time the players made the first move? The NBPA got a kick-start at the 1964 NBA All-Star Game when players staged a wildcat strike moments before the game was to be broadcast on network TV for the first time. The owners blinked and the players earned some significant pension concessions on the spot, and the path to the players getting 57 per cent of basketball-related income was set.
Could the players gain some benefit from guerrilla labour action preceding the NBA Finals? It would be horribly unpopular — this is the “greed is great” era, not the sympathetic ’60s — but if the players are serious about reversing their losing streak in collective bargaining, maybe it should be an option. Fortune — we are talking about splitting a minimum of $40 billion in revenue over the next decade — favours the brave.
But perhaps the solution may be for the players to begin thinking like owners themselves. Hollywood stars have long been able to participate in the equity their films create by getting points on the back end. Maybe players should look into getting a small share of the upside when franchises are sold, with the proceeds being paid into player pensions? Sure, it’s unlikely-“Uhh, that will never happen,” said Guerin when I floated it by him — but again, desperate times call for creative measures.
The Holy Grail, of course, would be starting a league of their own. In this, the obstacles would be significant. Even with a superior product (the world’s best players), the league’s stranglehold on the means of distribution (arenas, TV contracts) would make creating a viable league with as many jobs and as much revenue to share as the current version the most untenable of pipe dreams. But it needn’t be big or permanent — the American Basketball Association was started in 1967 to force the NBA to add new franchises, essentially. The same plan drove the founders of the American Football League and the World Hockey Association, and in each case the more established leagues ended up merging, to some degree, with their rivals.
In the meantime, player salaries generally took a big jump due to the presence of competition. The goal need not be to put the NBA out of business. All that’s needed is a viable plan to skim off the league’s most marketable players and generate revenue that keeps them in custom Prada while the owners fiddle. This isn’t the 1960s. NBA stars are entertainers and celebrities as much as they are athletes. They are brands unto themselves and they have resources. Together, Shaquille O’Neal (maybe he comes out of retirement to be player/commissioner), Kevin Garnett, Kobe Bryant, Dwayne Wade, Dwight Howard and LeBron have easily earned more than $1 billion in salaries and endorsements. They are represented by shoe companies desperate to keep their brand relevant sans NBA (hence Nike’s “Basketball Never Stops” ad campaign for the lockout).
How about an eight-team league with 80 of the world’s best playing a 32-game season, financed in part by the players? You don’t think a sports network outside the NBA’s current orbit, Comcast Sports, would take a flyer on that? It would be impossible that the league’s championship tournament wouldn’t get a title sponsor and media coverage. And it would be inevitable that a few hoops-loving hedge fund managers would come on as co-investors in this ultimate fantasy league.
A few more superstars in one league and less in the other would get Stern’s attention. He built the NBA on star power, and suddenly he’d have none. The image of Team Kobe facing off against Team LeBron in a winner-take-all final, playing for their own money and for the love of the game, would certainly resonate with the world of sports fans who might like seeing sports’ corporate interests set on their heels for once. And a guy like LeBron just might like the idea of working for himself.
Is it far-fetched? Absolutely. But then again, a poor kid raised by a teenaged single mother in failing Akron, Ohio, owning a piece of a storied EPL team would have been difficult to predict even 10 years ago; yet there he was during the lockout, hanging at Anfield, watching his team, tweeting with glee to fans across the planet.
The message for him — for all modern athletes contemplating sports labour 2.0 — might be to start thinking bigger, or get back to work and take whatever you’re lucky enough to get.
