We'll Meet Again, Don't Know Where, Don't Know When (CBA/Lockout) XXVII
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11-13-2012, 11:15 AM
Join Date: Nov 2010
Originally Posted by
These threads are great, but is there like a legend or a dummy users guide? WTH is delinking? What is the deal with contracts? Can someone explain how this 50/50 split works and how revenue sharing among teams and individual players works?
If you aren't in here daily, it's certainly hard to keep up with everything so I don't blame you for feeling lost.
Delinking is when salaries are untied from actual revenues earned. The league wants to pay the players share from a percentage out of the league revenues earned (linked). Players want a fixed percentage independent of league revenues (delinked).
The PA has increased their request for revenue sharing since their original proposing, now calling for 260M in revenue sharing. The league has agreed to 220M (I've heard reports of it being higher but I'll stick with the lowest figure). In addition, the league has dropped all (or most) restrictions from revenue sharing so now more teams that are bottom 15 in league revenues are able to qualify for revenue sharing. Previously due to restrictions in place, revenue sharing contributed by the top 10 teams would often be given back to the teams because several of the bottom teams couldn't qualify for RS. With no restrictions (or less restrictions), more teams will qualify and receive a RS paycheque.
The league has proposed an immediate 50/50 split. The salary lost in years 1 and 2 will be deferred to year 3+ and be paid with 2% interest (with 5% growth it's expected that player salaries will be back to 1.8B by year 3). The deferred salary will be paid out of the owners pockets. I've seen varying math and have tried it myself and the money the league is commiting to deferred salaries don't cover every penny of the contracts but if I'm not mistaken, it comes quite close. The fact that it doesn't cover every cent is a contentious issue for the PA. The PA proposes a 50/50 split where it's based on expected revenue growth. PA gets fixed raises and coupled with revenue growth, the league can expect a 50/50 split by year 3 at 7% growth and by year 5 at 5% growth (though this suggestions actually puts the split closer to 51% for the players). So the league continues to use the framework of linked salaries while the PA continues to use the framework of delinked salaries.
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