The Goat Pen

¶ There will be a one-time “amnesty” provision that will allow each team to waive a player (with pay) without his salary counting against the salary cap.

¶ There will be a “stretch” exception, available every year, allowing teams to waive players and stretch out their remaining salary over a number of seasons, thus reducing the annual salary-cap hit.

¶ The midlevel exception will be set around $5 million, a decrease of $800,000, but more than double what the owners were seeking.

For the players, the cost of saying “no” can be easily quantified. The owners have offered the players 50 percent of BRI. This season’s BRI is expected to be around $4 billion, so the owners are offering the players a $2 billion slice of the pie. The players are holding out for a 53 percent share, so they’re looking for $2.12 billion.

That’s $120 million that separates them. Of course, that’s just in year one. Over the course of a six-year agreement, assuming four percent growth per year, the total is closer to $796 million.

To say “no” and wait means to suffer the consequences. Those consequences very soon will be cancelled games, meaning revenue will be lost that will never be recouped. The players will be faced with choosing between a 50 percent share of a larger pie, and a 53 percent share of a smaller pie. The longer they hold out, the more the pie will shrink.

If we use the 1998-99 lockout as a guide, a canceled game costs each player 1/82nd of his salary. A full NBA regular season lasts 170 days, so each missed week represents 7/170th of a player’s income. So if a week’s worth of games is cancelled because they say “no” to the owners’ 50 percent offer, the players miss out on $82.4 million.

The players are holding out for an additional $120 million in 2011-12, but holding out costs them $82.4 million per week. They would lose everything they stand to gain this season in less than two weeks. On Monday the league is expected to announce the cancellation of the first two weeks of the season, which will cost the players $164.8 million.

Over a six year agreement, the players would burn through the $796 million in a little under 10 weeks. If they continue to hold out for 53 percent, and the owners hold firm at 50 percent, the players will reach the break-even point around December 16th. If the sides settle for 53 percent past that date, then the players would have been better off by taking the owners’ offer of 50 percent before games were cancelled.

Keep in mind that December 16th represents the point at which the players as a whole will break-even. Each individual player would need to stay in the league for six years to recoup his lost wages. In a league where the average career lasts fewer than five years, that’s going to be a problem.

This is one reason the owners have an advantage in this labor dispute -- they have a longer window of time to recoup their losses. An average player is likely to be out of the league in a few years, but an owner can hang on to his team for decades.

Owlman wrote:The players keep saying the owners are out to break the union. That's just silly. It's the union that gives the owners protection against antitrust violations.

Anyway, the owners aren't trying to break the union, they are pressuring the majority of the union to step up and limit the highest and best talent. It's easy for the top players to say that they are going to sit out a year. But players 6 through 15, this lockout is extremely painful. They will not like it at all to miss a full season.

I think the players are are referring to Spurs owner Peter Holt's comments about they "haven't felt enough pain yet" with regard to missing paycheques.

Owlman wrote:

I think the players are are referring to Spurs owner Peter Holt's comments about they "haven't felt enough pain yet" with regard to missing paycheques.

That's actually my point. The vast majority of the players can't handle a lot of lost games. These aren't the big ticket people, the ones who take big advantage of free agency. These are the people playing for the mid-level exception or less. Their interests are much more concerned with minimum contracts, mid-level exceptions, pensions etc.

Looking out for the best interests of superstars, stars, role players and bench players is extremely complex. The difference between 52 and 50 percent won’t come out of the salaries of LeBron James, Dwyane Wade, Kobe Bryant and Dirk Nowitzki. It’s the bottom 325 players who are going to be squeezed financially.

Earlier this week, I contacted Steve Nash and Grant Hill to talk about the lockout. They are the kind of mature, super-wealthy, thoughtful players who should be at the head of the union.

Bklyn wrote:Fat Boy just ain't that bright. He just likes to be provocative (get the people going).