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Quick BRI Update

What is the BRI?

BRI is an acronym for Basketball Related Income. Just about every form of revenue falls into the BRI, from tickets to summer camps to cheerleader appearances.

What do the players’ want?

One of the major things the players want in the current negotiations for the new Collective Bargaining Agreement is to maintain the current max-salary levels. If the percentage of the BRI that they receive drops drastically, they will no longer have enough of the BRI to allocate towards player contracts, thus decreasing the max-contracts.

The players would also like to keep the Larry Bird rule: Bird rights. Bird rights allow teams to go above the salary cap if they are resigning their own players.

In my mind, Bird rights should be kept in the deal, not only because the players get the contracts they want, but also because Bird rights can help keep a winning small-market team, winning.

Why do the Owners want more?

According to the league, last year, NBA teams lost $370 million collectively. One reason they lost such a large amount of money is because they spent money in order to promote their teams. By spending money on advertisements and promotions, the owners are effectively lowering their net percentage of the BRI because they, not the players, will be the ones spending money.

Last year, the BRI split was 57-43, if favor of the players. According to the Owners’ claims, the players would take home 57% of the BRI, while the Owners would take home roughly 33.3% *.

If the Owners’ claims are true, the BRI is, in fact, unfair. But, the NBA Players’ Association is still hesitant to believe this statement, because, like we stated earlier, this loss is according to the league.

*

  • For the 2010-2011 season, BRI was $3.817 billion.
  • Now, take that BRI and divide it by 100. This will tell us what each percentage point is worth. We end up with $38,170,000 per percentage point.
  • The owners say they lost $370 million, collectively. Divide $370,000,000 by $38,170,000 and you get 9.69347655. This shows that the $370,000,000 the owners claim to have lost is equivalent to 9.7 percentage points worth of BRI.

 

Now, go back to the 57-43 split and subtract the owners’ loss of $370,000,000, also known as 9.69 percentage points.

The split of the BRI now looks like this: 57% for the players and 33.3% for the Owners.

Conclusion

In my mind, there are four potential outcomes:

  1. Owners are telling the truth and accept a deal that favors the players.
  2. Owners have a great poker face and bluffed the players into accepting a deal that favors the Owners.
  3. Owners are telling the truth and the players understand, give owners a few percentage points to make up for lost money.
  4. Players and Owners both hold out and we miss the entire season.

Outcome #3 is the happy ending outcome. But, I believe either the owners or the players will budge and accept a deal that favors the opposing party.