Monday, October 10, 2011

NBA Lockout: What is Basketball Related Income and Will Lockout End Soon?

We are hearing today that the NBA will cancel the first two weeks of the season if an agreement is not reached today.

Having backed down from insisting on what amounted to a hard cap, the owners continue to push for a 50-50 share of basketball related income - or BRI. Players are saying no - they want a 53% share.

What is BRI? It's money generated from the majority of revenue streams in the NBA. It includes things such as regular season gate receipts, broadcast rights, exhibition game proceeds, playoff gate receipts, parking, money from team sponsorships, proceeds from team promotions, arena club revenues, proceeds from beverage sale rights, 40% of proceeds from arena signage and 45% to 50% of proceeds from arena naming rights.

It does not include expansion fees, fines and the luxury tax proceeds that comes in to the league.

Larry Coon has a great article entitled Salary Cap FAQs. If you like this kind of stuff, the article is for you.

As for the threat of missing games, it seems likely that games will be cancelled. However, areas of compromise have emerged and I would be surprised to see an entire season missed. Perhaps the sides will ultimately agree on an incremental share of revenue or just on a compromise (51% or something close to it). Whatever the deal, there are numbers to play with. The sides will balance out a revenue sharing arrangement with a cap that works for both sides.

My expectation is that we will see NBA basketball this season.

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