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Economics of the NBA Lockout: Players Were Rational

NEW YORK, NY - NOVEMBER 26:  NBA Commissioner David Stern (R) and Former Executive Director of the National Basketball Players Association Billy Hunter speak to members of the press to announce a tentative labor agreement to end the 149-day lockout on November 26, 2011 in New York City.  (Photo by Patrick McDermott/Getty Images)
Patrick McDermott/Getty Images
Chris FinocchioCorrespondent IOctober 20, 2016

BRI was $3.817 billion in 2010-11 according to the league. Say it stays that way for the next six years. Say that that the BRI of the 2011-2012 season was reduced by 15 percent as a result of missing 16 games (82-66).

This is a liberal, very rough estimate from the fact that BRI was only 29 percent ticket revenue last year, and lots of revenue come from playoff ticket revenue, which is not impacted by the lockout. Also, national broadcast revenue is heavily from games towards the end of the season, which are not impacted. 

Say the players lose 50 percent of the 15 percent loss in BRI of $3.817 billion. They then lose $286 million this year from the lockout. Say that they are now going to get 50 percent of BRI and would have gotten 47 percent without a lockout.

A three percent gain of an annual $3.817 billion pie over the course of six years results in a gain of $687 million. Even if my estimates are fairly off, $687 million is a lot bigger than $286 million. 

Derek Fisher and Billy Hunter may be idiots. Agents may not represent their players' interests. And players may have inefficient internal struggles. 

But it sure looks like they did OK. 

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