When the NBA owners have locked out the players to negotiate more favorable terms under a new collecting bargaining agreement in the past, they have typically had an unfair leverage advantage the longer those talks dragged on.
Players stopped receiving paychecks for the new season on Nov. 15 in the absence of an agreement, and since many hadn’t planned for this contingency, the personal financial squeeze was enough for them to cave to a new, less favorable deal, perhaps prematurely.
In an effort to prepare for a potential work-stoppage following the 2017 season, when both players and owners will have the right to opt out of the current deal to form a new one, the union is advising players who are free agents this summer to consider taking payments over a longer schedule when structuring their new contracts.
National Basketball Association free agents, including All-StarsLeBron James and Carmelo Anthony, are being advised by their union to take paychecks over 18 months instead of the usual six or 12 as a way of preparing for a possible lockout.
Owners and players can opt out of the existing labor contract after the 2016-17 season.
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.
This is bad financial advice, obviously, because in theory one would want to receive the most money possible at the earliest possible moment, in order to maximize the opportunity to invest those funds to gain even the most modest of returns.
Kobe Bryant, for example, receives 80 percent of his annual salary in a lump sum payment at the beginning of each season.
But the reality is that there are plenty of players who struggle to properly manage their finances, and have monthly expenses that would quickly cut into any savings if those paychecks were to cease for an extended period of time. For that reason, the NBPA believes it’s making the smart move by advising its players to make sure the cash keeps coming in when (not if) the next work stoppage takes place.