Unprofitable NBA Looks To Cut Player Salaries
(WSCR) - In an attempt to make the NBA profitable, NBA commissioner David Stern wants to cut player salaries by $750 million to $800 million. A source also said the NBA had looked at the possibility of reducing the number of teams.
NBA commissioner David Stern said Thursday there was no quantifiable progress in collective bargaining talks over the summer, and the league revealed it is seeking a reduction in player salary costs by about one-third.
Stern said the league wants player costs to drop by $750 million to $800 million. Stern told CBSSports.com on Thursday that the league currently spends about $2.3 billion on player salaries and benefits.
"We would like to get profitable, have a return on investment," Stern said. "There's a swing of somewhere in the neighborhood of $750 [million] to $800 million that we would like to change. That's our story and we're sticking with it."
In another staggering development, CBSSports.com learned that salaries may not be the only area cut as the NBA tries to gets its financial books up to speed with the explosion in popularity the league will experience this season. A person with knowledge of the owners' discussions said the league "will continue to be open to contraction" as a possible mechanism for restoring the league to profitability.
The owners' ongoing talks about competitive balance, profitability and revenue sharing have included the notion of whether teams are operating in "the best available markets," the person said, and whether reducing the number of teams from the current 30 would help improve the product and the bottom line.
Stern and deputy commissioner Adam Silver spoke after completing two days of meetings with league owners, who are seeking major changes to the current CBA that expires June 30. Silver said the league has told the union that owners are in a "diseconomic situation," with projected losses of about $340 million to $350 million this season.
Even though season ticket sales are up, both insisted that no matter how well the league does at the box office, it won't change the fact that an overhaul is necessary.
"There's no chance we can change the fundamental economics regardless of our success because it just costs us too much money to generate those sales," Silver said.
The league and union began meeting last summer, and Stern said the sides had their most recent discussion in a small group this week. But they remain far apart on talks toward a new CBA, raising fears of a lockout next summer.
"I couldn't give you any listing numerically or in word form of progress," Stern said. "But there seems to be a mutual determination to push and probe and do and discuss, because there's an increasing understanding on both sides of what the risk of not making a deal entails, and that this is actually palpable, but not quantifiable. So we're very much engaged in it."
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