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Report: It literally does not make financial sense to cancel games at this point

Oct 9, 2011, 4:30 PM EDT

NBA And Player's Association Meet To Negotiate CBA Getty Images

With the players and owners meeting Sunday, there’s still little hope that a deal gets done. The perception is that they’re still extremely far apart. But here’s the thing. They’re really not.

From Ken Berger of this morning on Twitter:

So here’s where we are: At their previous % of 43, owners would get $13.1B/six years… at 50 pct, they’d get $12.7B …

At 48.5 pct, owners would be $367M/year better off that previous deal, which more than addresses $300M annual loss …

By holding out for 50-50, owners are drawing line in sand over $400M total over six years, half of which they’d lose by canceling 2 weeks.

Similarly, players are holding out for $400m/six years by insisting on 53 pct. vs. 51.5 … they’d also lose half of that in 2 wks.

Also, difference between 53 and 51.5 for players in year 1 is $70 million, which they’d lose in less than a week of canceled games.

So to sum up, if games are canceled tomorrow, it won’t be due to money or common sense. It will be due to ego and stubbornness.

That is the money part, which makes sense. The psychological aspect of negotiations, sometimes, does not.

Sometimes, you have to follow through on your threats to make sure the other side knows you’re serious.

via Ken Berger (kbergcbs) on Twitter.

If you want to boil that down, here you go.

Both sides are willing to have games canceled despite the fact that it would actually cost more than  splitting the difference at 51.5 percent.

It literally does not make financial sense for them to not make a deal.

But neither side wants to go to the middle. They want to win. They want that extra 1.5 percent. That’s where we’re at. 98.5 percent of the way there, and that extra 1.5 percent is the ocean. If it seems like that would indicate we’ll get a deal, don’t get your hopes up. That’s how moronic this whole thing has become. It’s about principle, not common sense. It’s about ego, not business. The numbers are there.

The season is not.

  1. hail2tharedskins - Oct 9, 2011 at 11:17 PM

    Well, Ken Berger’s analysis might be correct for the players since revenue equals net for players since they don’t have expenses to pay. For the owners just looking at the revenue lost for missed games doesn’t take into account the expenses saved from missed games. So, net the owners don’t lose nearly as much as Berger suggests by cancelling games.

  2. lakerfanphilfan - Oct 10, 2011 at 3:42 PM

    This would only make sense if the agreement is only for the next season, but it’s not. It the players, for instance, lose the same amount of money from some cancelled games that they’re trying to get in the agreement, then yes, they wouldn’t gain anything THIS SEASON. But next season, they’d get that amount without missing games, so they’d come out better. And the next season. And the next season. Ken Berger’s analysis overlooks the fact that both sides are trying to get an agreement they are happy with for years to come. They are not just negitiating the 2011-2012 season. Ken Berger made a big mistake with this analysis, and you (Matt Moore) made the same mistake when you reposted it and agreed with it. It’s ok, it happens, but you and Berger are making a major logical error here.

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