NBPA: Free agents should negotiate contracts over 18 months instead of 12 to prepare for 2017 lockout

http://sports.yahoo.com/blogs/nba-ball-dont-lie/nbpa-advises-free-agents-take-salaries-over-18-months--not-12--to-prepare-for-2017-lockout-021939472.html


NBPA advises free agents take salaries over 18 months, not 12, to prepare for 2017 lockout


Eric Freeman By Eric Freeman
20 hours ago


On Tuesday, dozens of NBA players officially became free agents. Many, like Carmelo Anthony and LeBron James, will soon sign what is just the latest of many lucrative deals; others will sign their first big contract; still more will just be trying to lock down employment for the coming season or two. No matter the player's status, it's clear that each is making a major decision for his future, both financially and personally.

This offseason, however, the players' union wants them to think about potential interruptions to that NBA future. The current collective bargaining agreement includes an opt-out clause that allows both the NBA's Board of Governors and the NBPA to choose to negotiate a new deal after the completion of the 2016-17 season.

Given recent history, it's likely that the owners will want to extract more concessions from players. So, the union is advising free agents to opt to take their new salaries over 18 months rather than the customary 12 in preparation for an upcoming lockout. From Scott Soshnick for Bloomberg (via PBT):

An 18-month payment schedule would allow a player to continue receiving paychecks through the 2017-18 season, even if games aren’t played because of a work stoppage, according to an e-mail sent to players and agents by acting union Executive Director Ron Klempner, a copy of which was obtained by Bloomberg News.

“As we have learned in the past, the owners have made provisions with the TV networks to continue to receive rights fees throughout a work stoppage, and there is no reason the players should not make every effort to take the same precaution,” the e-mail said. The e-mail suggests players use the 18-month provision in any multiyear contract, though it highlights the 2016-17 season.

Klempner in a telephone interview said the agents are “very receptive” to the idea. “Every chance the owners have had they’ve opted out of an agreement,” Klempner said. “We can’t control what they’re going to do. All we’re going to do is prepare ourselves.”

All things equal, it's usually best to receive money earlier rather than later, because that allows the recipient to invest and build up a nest egg. However, that process can often be less assuring than receiving regular checks, and NBA players are not typical millionaires. For many reasons — making money at a very early age, needing to support several generations of family members, garden-variety irresponsibility, etc. — many athletes have trouble dealing with receiving vast sums at once. The certainty of a regular paycheck can be reassuring and help avoid major problems.

It's easy to see why the union prefers this method in the event of a lockout. If the majority of players receive regular paychecks through a work stoppage, then it's more likely that members will avoid capitulating to demands due to a lack of sufficient funds. A union thrives on solidarity, and it's much easier to achieve unity of purpose when everyone has a certain degree of financial solvency.

Plus, on a more general level, the union is sending a message to owners that the players will be better organized than they were during the 2011 lockout, when the league won considerable gains without overwhelming evidence that franchises were in financial distress (itself debatable) due to rising player salaries. The lack of regular paychecks may have made some players more likely to accede to demands than others, but the NBPA's biggest problem was a lack of communication and basic coherency across the board. Although the NBPA does not currently employ a permanent executive director, Klempner's advice suggests that the union is beginning to prepare for a more organized labor battle.


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Another lockout so soon? What are the odds?

KJ

KJ,

I think BobH posted the same info. It seems only prudent on their part. A lot of these guys don't manage their money well, and IF a work stoppage occurs, they don't want to be forced to give in to the owners' demands because a bunch of players didn't put money aside.

Seems like a smart move by basically forcing players to protect themselves.  As usual, the winner from a lockout will be the media, who will possibly have untold months of "easy news" served up to them.

Sam

Sam,

Don't forget the lawyers. They always win.

Outside,

Right you are.

Sam