Stern says NBA teams are in $400M hole
NEW YORK DAILY NEWS — NBA players need to face the harsh economic facts and prepare to take major pay cuts in the next collective bargaining agreement, commissioner David Stern said Saturday night.
During his annual state of the NBA speech at All-Star Weekend, Stern said the league will lose $400 million this season – roughly double its annual losses over the last four years – and has to come up with a new “sustainable” economic model.
“We’ve shown the players the facts,” Stern said. “Our current level of revenue devoted to player salary is too high. I can run from that, but I can’t hide from that. And I don’t think the players can hide, either. We need to make significant changes to deal with the very substantial losses that are in the hundred of millions of dollars.”
Owners presented a proposal Friday to the players that called for massive cutbacks in guaranteed salaries, and cutting the percentage given to players from basketball-related income, from its current level of 56%, to around 43%. In terms of salaries for superstar players, the days of those making in excess of $20 million in a season would be over, with those players likely making no more than $13 million. Maximum contracts would plummet from an average of $18 million per season to around $11 million per season.
The players’ executive director, Billy Hunter, rejected the owners’ proposal out of hand.
“You can denounce it, you can 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, while refusing to detail the specifics of the proposal.
Although the two sides have plenty of time to reach a deal – the CBA runs through next season – Stern gave no indication that the owners’ demands will change over the next 18 months. League sources told the Daily News recently that about half the 30 teams are losing “tons of money.”
Despite the glum outlook for labor peace, Stern tried to leave on an upbeat note.
“There’s always a deal,” he said, forgetting to mention that in 1998-99, his owners shut down the league, for the first time, and reduced the season to 50 games. “We plan to make a deal this time, too.”
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