On Friday, the NBA announced its revenue numbers for the 2010-11 season, with the league racking a record $3.8 billion in basketball-related income. It also released the NBA’s final player salary numbers, which came to $2 billion. Under the now-expired collective bargaining agreement, players were guaranteed to receive exactly 57 percent of league revenue; an escrow system has been in place to ensure that if salaries came in over 57 percent, owners would be refunded the correct amount, and that if salaries came in under 57 percent, players would be compensated.
NBA Owners Forced To Pay Players Addition $26 Million Because Revenue Growth Outpaced Salaries
As it turns out, player salaries came in just under 57 percent for the 2010-11, meaning that owners now have to pony up an addition $26 million to be split between players, reports Ken Berger of CBS Sports.
The news belies the NBA’s assertion that rising player salaries have led to regular and massive losses for the NBA’s 30 teams. It has instead been non-salary expenses which have been rising at a pace greater than revenue.
This is the first time that salaries have fallen below 57 percent, but it indicates that the current salary cap system is working, given that it’s aim is to “cap salary” at 57 percent of revenue. Whether that threshold should be lower is a matter of debate. Players included a decrease to 54.3 percent of revenue in one of their proposals to the league.
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