NEWS OF THE MORNING
No. 1: Cuban: Ending max deals creates new issue — Now that the NBA has secured its new media-rights deals, superstars LeBron James and Kevin Durant are among the players to chime in on how said deal will affect future Collective Bargaining Agreement negotiations. Those two basically share the mindset that the new media-rights deal means the current CBA should be torn up, with Durant going as far as to say max deals shouldn’t exist anymore. Dallas Mavericks owner Mark Cuban explained before last night’s Rockets-Mavs game how making such a move could have far-reaching repercussions, writes our Jeff Caplan:
“If you give up guarantees,” Cuban said. “It’s a trade-off.”
Oklahoma City Thunder star Kevin Durant suggested there should no longer be a restriction on how much the league’s top talent can earn because those players generate significant revenue and can’t be paid what they’re worth under the current collective bargaining agreement.
Durant, who can become a free agent in 2016, made the suggestion to do away with max deals in the wake of the NBA announcing a nine-year TV and digital rights extension that the New York Times reported is worth $2.66 billion annually.
Cuban said owners discussed doing away with max contracts during labor negotiations in 2011 and would be willing to do so again, but players would have to be willing to give up fully guaranteed contracts. When an NBA player signs their contract, he is guaranteed the full amount even if he is eventually cut by the team or injured.
Doing away with guaranteed contracts would move the NBA to more of an NFL model where guaranteed money is only a portion of the total stated value of the contract.
“It was discussed during the lockout time among owners, but never got anywhere. So it was just one of those trial balloons,” Cuban said. “I’m not offering this as a negotiation, I’m not suggesting it, all I’m saying is that was something we discussed before, and max contracts are always big question, guarantees are always a big question. But we have two years before that’s even an issue, so no point discussing it now.”
Durant, LeBron James and Kobe Bryant have been quick to point to the new TV deal, plus unprecedented sale prices of several franchises including the Los Angeles Clippers for $2 billion, as further evidence that team owners can no longer claim they’re losing money.
During the last negotiations, the league said 22 of the 30 teams were operating at a loss. The players eventually agreed to a CBA in which their take of the league’s annual basketball-related income (BRI) was cut from 57 percent to 50 percent.
Cuban, however, essentially told the players to slow down.
“It’ll be the first time our TV money comes in above our ticket revenue,” Cuban said of the new deal. “It’s a lot of money, don’t get me wrong, and I’m grateful, but it’s not going to create so much incremental revenue after you pay out the percentages to the players that it’s going to be a shocking windfall. It’ll be good, but not shocking.”
The new TV deal virtually triples the $930 million per year the league takes in from its current TV deal. It takes effect for the 2016-17 season, and the salary cap is expected to rise with it to unprecedented levels, which will also raise player salaries across the board.
“Our net effect of impact per team is significant, but it’s not like, ‘Oh my gosh, we’re just going to be making $50 million apiece,” Cuban said. “We haven’t gotten NFL money.”