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The New CBA: BRI Revenue Sharing

John Rohde Published: December 2, 2011

 

The NBA lockout lasted 149 days, robbed us of 16 regular-season games and wiped out the entire preseason schedule. After nearly two years of bickering, players and owners grudgingly agreed to disagree, a new collective bargaining agreement is about to be ratified (hopefully), training camps are set to begin Dec. 9 and opening day appropriately lands on Christmas Day.

Though we are headed for happy holidays, what took so long negotiating the new CBA? Truth be told, I’d love to fully understand all this myself.

The 2011 CBA should help stabilize the monetary strain for ownership. The league claims losses of roughly $1 billion the last three seasons and 22 teams are losing money. The players’ union disputes these figures.

The 2005 CBA allowed players to prosper financially like never before, thanks to lengthy guaranteed contracts and 57-percent BRI revenue sharing, both of which have been reduced in the new deal.

The new CBA is still not complete. Negotiations for so-called “B-List” issues began Friday. The final version still must be written, proofed and re-proofed. The details we will share are based on the last proposals made public.

From now until the Thunder’s first preseason game on Dec. 18 at Dallas, we will share one aspect every day of the new CBA and together we will do our best to better understand the issues that put us through withdrawals for 149 days. This is an attempt to educate us all. Your remarks are welcome. If you’re a lawyer or economist, your insight would be greatly appreciated.

We begin with one of the heavyweight issues:

BRI REVENUE SPLIT

2005 CBA: Players received 57 percent of Basketball Related Income (BRI).

2011 CBA: Players receive 51.15 percent of BRI this season. It then fluctuates from 49 to 51 percent thereafter – 50 percent, plus or minus 60.5 percent of the amount by which BRI exceeds or falls short of projections; 1 percent of BRI from the players’ share is used to fund a new pool for post-career benefits.

Definition: BRI generally is the income received by the NBA, NBA Properties or NBA Media Ventures as a result of basketball operations. This includes: regular-season gate receipts; broadcast rights; exhibition game proceeds; playoff gate receipts; novelty, program and concession sales (at the arena and in team-identified stores within proximity of an NBA arena); parking; proceeds from team sponsorships; proceeds from team promotions; arena club revenues; proceeds from summer camps; proceeds from non-NBA basketball tournaments; proceeds from mascot and dance team appearances; proceeds from beverage sale rights; 40 percent of proceeds from arena signage; 40 percent of proceeds from luxury suites; 45-50 percent of proceeds from arena naming rights; proceeds from other premium seat licenses; proceeds received by NBA Properties, including international television, sponsorships, revenues from NBA Entertainment, the All-Star Game, the McDonald’s Championship and other NBA special events. Specifically not included in BRI are proceeds from the grant of expansion teams, fines, and revenue sharing (e.g. luxury tax).

Winners: Big win for the owners, given the $370 million, $340 million and $300 million losses claimed the previous three years because of the 2005 BRI agreement that was ridiculously tilted in the players’ favor. Each percentage point equates to roughly $40 million, which means at least $240 million in additional revenue each year for the owners compared to the previous deal.

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