UPDATE 8/12/14 -The NBA says Steve Ballmer's purchase of the Los Angeles Clippers from the much maligned Donald Sterling is complete. Ballmer piad a record $2 billion for the franchise. Ballmer, in a statement released after the sale was completed, said in part "I am humbled and honored to be the new owner of the Los Angeles Clippers...I will be hard core in giving the team, our great coach, staff and players the support they need to do their best work on the court."
The post below originally appeared on Yahoo Finance on July 29th after a California judge ruled against now former owner Donald Sterling who was attempting to block the sale of his team.
A California judge has told the embattled former owner of the Los Angeles Clippers, Donald Sterling, that his former team is clear to be sold despite his protests. Lost in all this is the fact that the deal could be a real winner for the players. Sterling’s wife Rochelle now controls the team's fate and had accepted an offer from former Microsoft (MSFT) CEO Steve Ballmer to buy the team for a whopping two billion dollars. Now that such a Goliath deal seems to be proceeding, just how is it a win for players?
Yahoo Finance asked Yahoo Sports’ Marc Spears to weigh in:
When the players see [the expensive sale] they’re looking back at the last collective bargaining agreement asking themselves ‘so why did we have to take a pay cut?’...It just adds to their feeling that they’ve been bamboozled. That the NBA was never really losing money, the teams were never really losing money, that it was accounting tricks.
In other words, a deal like this would give players one enormous bargaining chip when it comes time to renegotiate their next deal with the owners in 2017. The problem is, says Spears, “they’re on a rudderless ship right now. They don’t have an executive director, they don’t have any game plan and I know the NBA and the owners have been game-planning for the next collective bargaining agreement as soon as the last one was signed.”
The last time around the players agreed to take a large cut in their share of league revenues, slicing their piece of the pie from 57% to 50%. “I’m sure when this next collective bargaining agreement is up, when you see a team being bought...They’re certainly gonna want either the same pie that they used to have or more,” Spears notes.
Still, there’s another wrinkle to the story when it comes to players and their deals: TV revenue. The current deal for the rights to air NBA games will expire after the 2015-2016 season. Given the growth of the league in popularity and the availability of games across multiple platforms (TV, mobile, desktop etc), it stands to reason the NBA is about to come into a LOT more money. Players will want a piece of that as well.
Take LeBron James. When he decided to return home to Cleveland earlier this month he signed a contract that allowed him to opt out after just two years. The escape hatch is not so he can leave Cleveland again, Spears says, but rather so he can renegotiate after the TV money starts rolling in.
It’s not just LeBron either. Spears notes that there have been “a lot of short deals this free agency with players keeping in mind that there’s gonna be a bigger pay day to come.”