Stern said the league wants player costs to drop $750-800 million. Deputy commissioner Adam Silver said the NBA spends about $2.1 billion annually in player salaries and benefits.
“We would like to get profitable, have a return on investment,” Stern said. “There’s a swing of somewhere in the neighborhood of $750 to $800 million that we would like to change. That’s our story and we’re sticking with it.”
Billy Hunter, the executive director of the players association, warned late Thursday that the league’s stance could lead to a work stoppage.
“The position expressed by the NBA today is regretful, since in February 2010, the players unequivocally rejected the owners’ proposal which called for a hard cap, a 40 percent rollback in player salaries, unlimited expense deductions and the elimination of guaranteed contracts,” Hunter said in a statement.
“The players and the union would prefer to work toward attaining a fair deal that addresses concerns raised by both sides and improves the game. But, if the owners maintain their position it will inevitably result in a lockout and the cancelation of part or all of the 2011-2012 season. The players and union will prepare accordingly.”
Stern and Silver spoke after completing two days of meetings with league owners, who are seeking major changes to the current CBA that expires June 30. Silver said the league has told the union that owners are in a “diseconomic situation,” with projected league-wide losses of about $340-350 million this season.
Though season ticket sales are up, both insisted that no matter how well the league does at the box office, it won’t change the fact that an overhaul is necessary to a system in which the players receive 57 percent of basketball-related income.
“Even though we reported we have record season ticket sales over the summer and otherwise very robust revenue generation, because of the built-in cost of the system, it’s virtually impossible for us to move the needle in terms of our losses,” Silver said.
“There’s no chance we can change the fundamental economics regardless of our success because it just costs us too much money to generate those sales.”
The league and union began meeting last summer, and Stern said the sides had their most recent discussion in a small group this week. But they remain far apart on talks toward a new deal, raising fears of a lockout next summer.
“I couldn’t give you any listing numerically or in word form of progress,” Stern said. “But there seems to be a mutual determination to push and probe and do and discuss, because there’s an increasing understanding on both sides of what the risk of not making a deal entails, and that this is actually palpable, but not quantifiable. So we’re very much engaged in it.”
The players association has responded to the league’s claims of massive losses by calling for expanded revenue sharing among owners. Stern and Silver said the owners agree it’s coming, but that it will arrive in conjunction with a new deal.
And while there’s still time, Silver — the lead negotiator for the league — acknowledged that business could suffer is progress is not made soon. Ticket holders and sponsors will have decisions to make early next year without knowing if there’s going to be a 2011-12 season.
“Before you know it, we’re going to be at the beginning of 2011, and it’s going to begin having an impact then and uncertainty is bad news for any business,” Silver said.
Stern agreed with Hunter’s recent opinion that February’s All-Star weekend is an unofficial deadline to know whether there’s going to be a work stoppage, saying, “We’ll have a pretty good idea how good or not good things are by the end of February.”
Also, Stern said the decision to call more technical fouls under the respect for the game guidelines won’t be an issue much longer. Players are now whistled for making overt gestures or complaining too long to referees, and some are confused by how quickly they’ve been penalized during the preseason.
The union threatened legal action, but Stern said doesn’t think it will reach that point.
“The players will do more adjusting than the referees, but there will be some referee adjustments as well,” Stern said. “I don’t think it’s going to be a problem.”
