Stern changes position on 09-10 cap again: decline coming

[FGump]

Larry, so if I am reading you correctly, "projected BRI" is nothing more than "last year plus" rather than an actual analysis and attempt to accurately guess in advance. Yes?

If so, then the concept that the cap is based on projected revenues is deceptive; instead, they would be mostly based on past revenues which are then plugged into a formula. Right?

[Dunkenstein]

I think you're reading Larry correctly, and I think that's why Stern and Silver are warning about tax and cap numbers for 2010, after what they seem to believe will be a financially poor 09-10 season.

[FGump]

That makes for an odd situation, one in which they see their actual projections showing a big drop in revenue, yet they are being forced to use "Projected BRI" numbers that show a healthy rise.

[d-train]

Larry, so if I am reading you correctly, "projected BRI" is nothing more than "last year plus" rather than an actual analysis and attempt to accurately guess in advance. Yes?

If so, then the concept that the cap is based on projected revenues is deceptive; instead, they would be mostly based on past revenues which are then plugged into a formula. Right?

In order for the CBA to be an agreement, the parties have to agree on a clearly defined method of calculating the BRI for each year the agreement covers. You can't just say this is the number this year and we will do an analysis to determine the number next year. That wouldn't be an agreement on next year’s BRI. As difficult as it is to predict the future, you don't have an agreement until the parties nail down an absolute method of doing just that.

[d-train]

There might be more business than normal for the parties to conduct during this upcoming moratorium period. I can see why the owners and players might want to review the automatic 4.5% increase this year. However, there are mechanisms that guaranty the proper split of revenues between owners and players that are not affected by these projections. So, it really is no big deal if the CBA is executed as previously agreed. The hardships are really manufactured by the luxury tax system, which is the owners dividing their share of owner profits among each other. I can also see the NBPA saying that isn't their problem.

[LarryCoon]

Larry, so if I am reading you correctly, "projected BRI" is nothing more than "last year plus" rather than an actual analysis and attempt to accurately guess in advance. Yes?

Correct. See Article VII, Section 2(d)(1).

If so, then the concept that the cap is based on projected revenues is deceptive; instead, they would be mostly based on past revenues which are then plugged into a formula. Right?

Correct.

[LarryCoon]

In order for the CBA to be an agreement, the parties have to agree on a clearly defined method of calculating the BRI for each year the agreement covers. You can't just say this is the number this year and we will do an analysis to determine the number next year. That wouldn't be an agreement on next year’s BRI. As difficult as it is to predict the future, you don't have an agreement until the parties nail down an absolute method of doing just that.

They certainly can do that. They could have chosen methods like:

1) The percentage increase or decrease from last season to this season will be used to project next season's BRI.

2) An independent expert (such as the league's auditors) can be identified, and they will use a defined method (audit results, trends, economic forecasts) to project BRI for next season.

3) A weighted average of multiple previous seasons.

4) Other forms of trend analysis.

Instead they chose to assume a 4.5% increase every year.

[d-train]

In order for the CBA to be an agreement, the parties have to agree on a clearly defined method of calculating the BRI for each year the agreement covers. You can't just say this is the number this year and we will do an analysis to determine the number next year. That wouldn't be an agreement on next year’s BRI. As difficult as it is to predict the future, you don't have an agreement until the parties nail down an absolute method of doing just that.

They certainly can do that. They could have chosen methods like:

1) The percentage increase or decrease from last season to this season will be used to project next season's BRI.

2) An independent expert (such as the league's auditors) can be identified, and they will use a defined method (audit results, trends, economic forecasts) to project BRI for next season.

3) A weighted average of multiple previous seasons.

4) Other forms of trend analysis.

Instead they chose to assume a 4.5% increase every year.

I think you need to reread my post. I didn't say the parties have to pick a specific number such as 4.5%. They do have to; in unambiguous terms define the method and formula to arrive at a definitive result. The parties can't just say there is too many unknown variables to agree now so we will agree later. If they did, it wouldn’t be an agreement. I presume the 4.5% number was arrived at after extensive analysis and compromise.

[FGump]

I can see why the owners and players might want to review the automatic 4.5% increase this year.

I don't see any such "review" being envisioned. Their agreement is already in place and the 4.5% is part of it, as LCoon said. And all of the NBA's predictions are in accord with the idea of them using the 4.5% that is already in place.

[d-train]

I can see why the owners and players might want to review the automatic 4.5% increase this year.

I don't see any such "review" being envisioned. Their agreement is already in place and the 4.5% is part of it, as LCoon said. And all of the NBA's predictions are in accord with the idea of them using the 4.5% that is already in place.

You are probably correct. When the NBA and NBPA agreed on 4.5%, I'm sure they didn't expect that actual growth was going to happen every year. That wouldn't be realistic anymore than it would be realistic to think the growth would never be more than 4.5%.