NBA Lockout: Millionaires vs Billionaires, and One High School Teacher's Opinion

David Heeb@@DavidHeebCorrespondent IOctober 21, 2011

Derek Fisher has to be tired of saying the same thing over, and over, and over...
Derek Fisher has to be tired of saying the same thing over, and over, and over...Patrick McDermott/Getty Images

The NBA players and owners both sat down for more than 30 hours of negotiations this week with a federal mediator.  Sadly, according to the latest report, there appears to be no end in sight to this lockout.

Both sides walked away from negotiations last night, and as has been the case throughout this ugly ordeal, they are both blaming each other. 

I could go on and on about how David Stern said this.  Or I could talk about what Dwayne Wade said. or Andrew Bogut said .  I could go into great detail about how a bunch of millionaires and billionaires are arguing over how to divide over four billion dollars in revenue a year. 

I could even talk about how in this economy, where so many Americans are struggling to make ends meet, the NBA Lockout is costing ticket vendors and maintenance people their jobs.  I could talk about how petty this makes the players look.  I could talk about how greedy it makes the owners look.

I am not here to talk about that today.  You can go somewhere else to read that. 

To quote Kid Rock, this is "for the 40 hour overtime workin' man, and to the good women out there, I know you'll understand..."

I am a high school teacher in Missouri, and I also coach high school basketball.  So it is really hard for me to comprehend the NBA players basically saying, "no, this is not enough money for me to play basketball.  Seriously?  You get paid millions and millions of dollars to play a game! 

Gilbert Arenas makes more in one year that a teacher or police officer could make in an entire career.
Gilbert Arenas makes more in one year that a teacher or police officer could make in an entire career.Mark Wilson/Getty Images

As a matter of fact, the NBA is the highest paying sports league in the world, at least according to this report by FOX.  The average NBA player makes $4,790,000 per season, or roughly $92,199 per week.  That is an outrageous amount of money to get paid to play the game you love.

Considering the average starting salary for a Philadelphia police officer ($42,474), or what it pays to be a firefighter in Los Angeles (about $51,000), these NBA players are making a pretty good living.  When you consider that most young Marines fighting in Afghanistan ($20,000 or less to start out) are making less than a quarter of what the average NBA player makes in a week, it is just hard to feel sorry for the players.

On the other hand, the players are the entertainment.  They are what the fans pay to see.  The owners, they just foot the bill.

These owners are making a killing off of the talents and efforts of their players.  So let's all remember that first of all.  Also, these owners are so obscenely rich that they had money to spend on a pro sports team!  Think about that for just a second—Peter Guber, the new owner of the Golden State Warriors, had an extra $450 million dollars laying around, so he just decided to buy a sports team.

Jerry Buss, the owner of the Los Angeles Lakers, has a net worth of over $600 million dollars.  Of course, the Lakers are probably the most glamorous franchise in the NBA, and Buss always spends plenty of money to keep the Lakers contending for championships.  But Buss's net worth is a drop in the bucket compared to the man that bought the New Jersey Nets.

Don't feel sorry for the owners.  Jerry Buss can afford to lose a few dollars.
Don't feel sorry for the owners. Jerry Buss can afford to lose a few dollars.Kevork Djansezian/Getty Images

That would be Mikhail Prokhorov, who is worth over $18 billion dollars.

So when the owners talk about losing money (and they are losing money), that would be like you or me talking about losing five dollars in the dryer.

The basic argument between the players and owners is about two things: (1) How to split the money, and (2) The "system issues."

The money issue is where the players have a legitimate gripe.  Under the current system, the players get 57% of all Basketball Related Income (BRI).  That means for every dollar the league generates (around $3.8 billion dollars last year), 57% of that goes to the players, and the remaining 43% goes to the owners (to cover business costs, and to turn a profit).

The owners have pushed hard for a drastic cut, trying to give the players 47% of all BRI.  So for the average player in the NBA, his salary would be reduced from the aforementioned $4.79 million dollars to around $3.95 million dollars.  That is a huge cut, but they are still making almost $4 million dollars per year, right? 

Not so fast.  What if that was your salary?

I am a high school teacher/coach from Missouri.  In 2007, the average teacher in Missouri made $42,246.67.  In 2009, that number increased by 1.19% to $42,750.  So what if my employers told me that I had to take the same kind of pay cut?  What if my new salary starting next year was slashed to just $35,250?

I probably wouldn't like it, and I'd probably throw a fit also.

More recently, the owners have proposed a 50/50 split in BRI.  The players have said they would go as low as 53%.  So the players have agreed to take a pay cut, they just don't want to take a drastic pay cut.

So on the BRI argument, I am going with the players.  Give them 53%, and let's move on to the "system issues."

The system issues mainly revolve around the salary cap system that the NBA uses. Right now, the league uses a soft cap system.  There is a salary cap, but teams are allowed to go over the cap to resign their own players, (the "Bird Exception), or they can spend past that for one veteran player at the average salary of an NBA player (the "mid level exception").

That is the simple version of how teams can spend over the cap.

Of course, when teams do overspend, they have to pay a dollar for dollar luxury tax.  This is supposed to keep teams from spending like the Yankees and Red Sox do in baseball, but it doesn't always work.  The Lakers, Knicks, Mavericks, and Magic are all teams not afraid to go past the "tax threshold" if they need to.

So even with this soft cap system, the NBA is a league of "haves" and "have nots," much like Major League Baseball.

The owners would rather use the hard cap that the NFL uses.

In the NFL, each team gets $120 million dollars to spend, and that's it.  No funny business.  That's all you get.  And every team has to spend at least $108 million dollars, or 90% of the cap.  So unlike baseball and basketball, every team in the NFL is spending within 10% of each other.  The playing field is level. 

A mid market team like Green Bay would never survive in the NBA.
A mid market team like Green Bay would never survive in the NBA.Matt Ludtke/Getty Images

Parity is king in the NFL.

This is why the NFL has strong, vibrant franchises in places like Green Bay, Wisconsin and Pittsburgh, Pennsylvania.  In the NBA, this could never happen.  There are the "major markets," and then there is everybody else. 

The owners are business-minded, and they see how the NFL is a cash cow.  The hard cap is the biggest reason why, because with that hard cap there are also unguaranteed contracts.  In the NFL, if a guy gets hurt or is washed up, the team can just cut him.  In the NBA, players are getting every penny of that contract, and this is what has to change about the NBA.

If a guy goes crazy (Stephon Marbury), why should he get to make $20 million dollars a year?  CUT HIM LOOSE!

If a player signs a big deal, and then gets fat (I'm looking at you Eddy Curry), why should he get to make $10 million plus per year, for two to three more years?  CUT HIM LOOSE!

If a guy comes in the locker room with a gun, and his knees are made of jello, and he can't play anymore (hello Gilbert Arenas), why should he make more money than Kevin Durrant?  CUT HIM LOOSE!

And that is what the players don't seem to understand.  For every guy getting grossly overpaid, there are guys out there like Russell Westbrook, Serge Ibaka, Omar Asik, Dejuan Blair and J.J. Barea who are really underpaid.

How is that system good for the NBA? 

So let's get this deal done: Split the BRI 53/47 in the players' favor, with a hard cap where every team has to spent up to 90%, and non-guaranteed contracts.  The players in the NBA would still be the highest paid athletes, on average, in the world.

The money would just go to players earning their paycheck, and the NBA would be much better off because of it.