Tuesday, July 26, 2011
It's not the spending; it's the negotiating
By Zach Harper
Tim Donahue of the TrueHoop Network Pacers blog (Eight Points, Nine Seconds) has been doing incredible work analyzing and explaining the problems and issues surrounding the collective bargaining agreement throughout this lockout process.
Today, he took on the system and what it guarantees for the players and the state of the teams' finances while showing that bad contracts themselves aren't necessarily the problem.
In 2010-2011, negotiated salaries totaled about $2.02 billion. If my lists above are reasonable, about 37% of that sum was tied up in bad or under-performing contracts. If you assume that only half of that 37% can be considere “wasted” money (because those players of course did offer some production), it means the owners threw away about $375 million in salaries.
Yet, they still had to write a check for $26 million to reach their 57% promise to the players. What this means is that if the owners had made none of their myriad mistakes, they would have realized a savings of … wait for it …
Had the owners been as smart and efficient as they possibly could have been when signing players it would not have provided any savings whatsoever. It merely would have resulted in a larger check being written to the players — even after the escrow payout — to fulfill the 57% of BRI that players are guaranteed under the system currently in place.
Would that check have been for $100 million? $200 million? $400 million?
There is a lot of good information in this article. He does a great job of breaking down what could be considered waste contracts and how it doubles the number of subjective bargain contracts that end up being mandated by the system itself.
So while the system (capped contracts and rookie scale) finds a way to give the owners more bang for their buck, they're still on the hook for the 57% of the BRI, no matter how they're spending their payroll dollars. Even if they're fiscally conservative and "not hurting themselves" with new deals each free agency period, it seems impossible for them to actually save money at the end of the season when the BRI is paid out.