If you start getting into the weird and convoluted world of NBA finances, you’re going to start running into this acronym. BRI stands for Basketball Related Income. The term references any of the income received by the NBA and is teams that is ‘basketball related’.
It seems like a term that would apply directly to players, but it’s not. It describes the income that teams make from basketball-related activities. It is also often used to reference the league aggregate of that income.
BRI stands as a useful guide post in negotiation and discussion regarding a number of the league’s financial mechanisms. But the details of what constitutes BRI can get very, very, very dry.
The NBA collective Bargaining Agreement (CBA) ties the leagues salary cap to BRI. This means that BRI directly influences team payroll. This means that BRI can bare influence over hundreds of millions of dollars worth of personal income. And so the details become very important.
And important details with financial repercussions almost certainly means… legalese. If you have the patience for legalese, check out the official 30 page definition of BRI that starts on page 131 of the current CBA.
I don’t recommend it. It’s pretty boring. I’ll try and save you some time here with what I hope is a more accessible understanding of the NBA’s Basketball Related Income.
Why is Basketball Related Income important?
BRI can have far-reaching effects in the NBA. But there are two specific effects that are most prominent.
Salary Cap
As prescribed by the CBA, the salary cap and minimum are set as a percentage of BRI. This means that BRI directly influences player salaries.
In practice, growth in BRI is the main driver of salary growth. And with BRI being heavily dependent on media deals, the biggest salary bumps come as a result of media rights negotiations. When you zoom out on league salaries, there’s a clear correlation between lucrative media rights deals and player salary increases.
Revenue Sharing
The NBA employs a profit sharing mechanism across franchises. The details of the arrangement are not public, but we know the basics. Every team dumps about 50% of team BRI into a shared pot that gets divided evenly across the league.
In practice, this means that every team puts in half of their own BRI and gets back an amount very close to the salary cap. Smaller market teams tend to benefit, while larger markets pay in.
Theoretically, the result is a more level playing field. Small market teams get a little subsidy to help encourage the salary expenditure that keeps them in the running for the title.
What Counts as Basketball Related Income?
This is where the proverbial print gets particularly fine. Basketball Related Income can include all or part of any of the following.
- Ticket sales
- Media rights
- Arena concessions
- Licensing and Merchandising
- Facilities naming rights
- In-arena advertising
I say part because in some cases (most notably the rights to naming an arena) only half of the proceeds are considered BRI.
But just because something is not on the list does not mean it’s not BRI. Any venture in which the league or a related entity holds a greater than 50% share can show up as BRI.
What Doesn’t counts as Basketball Related Income?
Teams can sometimes benefit from sources unrelated to basketball. And so it becomes valuable to specify some of the income sources that don’t fall under BRI.
- Real Estate sales
- Owner contributions
- Revenue sharing
- Fines
- Interest
- Expansion grants
As a rule of thumb, if it doesn’t seem fair for it to have an effect on a league-wide salary cap, it’s probably not BRI. It doesn’t make much sense, for example, for fines levied on a team to be shouldered across the league. Thus, fines do not reduce BRI.
Takeaways
It is decidedly unromantic, but there’s no denying that finances are one of the most powerful underlying forces in today’s NBA. Understanding the flow of money in the association has a tendency to make otherwise mind-boggling front office decisions seam perfectly reasonable.
But understanding NBA finances is much easier said than done. Most of the details are laid out in the CBA, a wildly confusing document that spans hundreds of pages and makes the ace dramatists over at Webster look like Stephen King.
If you have the patience to drink from the source, I commend you. But for the rest of us, it’s kinda just better to take the butchers word.