The players got to keep free agency and share in the National Basketball Association's revenues. The owners got a ceiling on payrolls they wanted and a form of revenue sharing among themselves that should keep troubled franchises going.
Thus, it seems nearly everybody is happy about the NBA's new collective bargaining agreement, which both sides proclaim a landmark settlement.
Basically, the agreement, reached Thursday in New York, has the potential to make the NBA the most competitively balanced league in professional sports.
Every sport wants competitive balance, but there is only one sure way to get it--disperse the talent fairly and evenly and then limit how much each team can spend. The NBA has done the second part with this contract and taken a giant step toward achieving the first.
By establishing guaranteed minimum team payroll levels, the league is forcing teams to become competitive. By establishing a cap on salaries, it is preventing the rich teams from monopolizing the sport as they have in the past.
When players like Kevin McHale, Larry Bird, Kelly Tripucka and Sidney Moncrief become free agents in the next two years, the Indiana Pacers, or Utah Jazz or Washington Bullets--teams that usually wouldn't dream of bidding for them in the past--will have to now.
Under the new contract, the Pacers, with a payroll of $1.1 million, will be required in 1984 to spend three times that much for talent.
"Teams that were one player away will really become competitive now," said Bullets Coach Gene Shue. "We may be in that category. If everything is like they say it is, this whole thing seems to help everybody."
The most bitter battles of the 10-month negotiations didn't take place between the owners and players; they occurred among the owners themselves. To make an Indiana, a Utah, a Cleveland or even a Washington franchise spend dollars it doesn't have is a complicated business.
To help those teams, a form of profit sharing was devised by which there will be a pool of money any team can draw on to bring its payroll to the guaranteed minimums.
Sam Schulman of Seattle was the only owner who did not accept the contract. He said he didn't want to share his substantial cable television money with other teams.
The players say they welcome the potential competitive balance. "We believe that the only way Indiana, for example, could be competitive with Philadelphia would be for it to have equal funds to spend, as well as the obligation to spend them and to sign quality players," said Milwaukee center Bob Lanier, president of the NBA Players Association.
"We are, in essence, going to have to subsidize some teams to a certain point," added David Stern, the NBA's general counsel. "We can't force teams to spend money that isn't there, so we'll have to have some sort of procedure to determine just how much they can pay and how much they'll have to be subsidized."
The owners, by paying the players 53 percent of the gross revenues and with some sort of revenue sharing, will make money. The players, with an average salary this season of $246,000, will improve that over the course of the four-year contract.
Gross revenues this season are expected to be approximately $140 million, with a 10 percent increase each year. So if the guaranteed compensation plan were in effect this year, 53 percent of the $140 million would equal $74.2 million going to the players. Divided by the 23 teams, that would equal $3.2 million each team would spend on salary and benefits. Divided by 12 players per team, that equals $266,600 to each player.
As revenues increase, so will salaries. A 10 percent increase next year will mean a gross of about $155 million, which will mean about $82 million will go to the players. That figure, divided by 23, is about $3.6 million a team, the cap set by the new contract period for the '84-85 season. That is an average salary and benefits of $300,000 a player.