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View Full Version : No Basketball Anymore lockout: it's on!



-jk
06-30-2011, 05:03 PM
It's official - the NBA lockout starts tonight at midnight.

linky (www.bostonherald.com/sports/basketball/other_nba/view/2011_0630nba_lockout_will_begin_tonight/srvc=home&position=also)

Ah, well: More millionaires arguing with billionaires.

-jk

pfrduke
06-30-2011, 08:03 PM
Ah, well: More millionaires arguing with billionaires.

-jk

At least with the NBA lockout there's something legitimate to argue about. This is, I'm sure, a gross oversimplification but the NBA/NFL lockouts seem to be split into the following disputes:

NFL - we're all getting a boatload more money, we just can't agree how to split it up.
NBA - someone's going to get squeezed - either the owners will continue to take losses or the players will get pay cuts - we just can't agree on how to share the pain*

I have a lot more sympathy for the latter.

*pain, of course, being relative in this context.

Duvall
06-30-2011, 08:13 PM
At least with the NBA lockout there's something legitimate to argue about. This is, I'm sure, a gross oversimplification but the NBA/NFL lockouts seem to be split into the following disputes:

NFL - we're all getting a boatload more money, we just can't agree how to split it up.
NBA - someone's going to get squeezed - either the owners will continue to take losses or the players will get pay cuts - we just can't agree on how to share the pain*

I have a lot more sympathy for the latter.

*pain, of course, being relative in this context.

This assumes that the owners are taking real losses, and that they will continue to do so in the future.

darjum
06-30-2011, 09:06 PM
Ah, well: More millionaires arguing with billionaires.


Hard to get excited about a topic that means no basketball!

After such a great NBA season, the prospect of missing the next season is disheartening. The 98-99 season was short, rushed and not much fun.

Makes for a very long off-season from hoops.

uh_no
06-30-2011, 09:19 PM
Hard to get excited about a topic that means no basketball!

After such a great NBA season, the prospect of missing the next season is disheartening. The 98-99 season was short, rushed and not much fun.

Makes for a very long off-season from hoops.

but it means more interest in college ball!

theAlaskanBear
06-30-2011, 10:46 PM
This assumes that the owners are taking real losses, and that they will continue to do so in the future.

And here is the rub. There is no accounting transparency. If the NBA would open its books -- show which teams are losing how much money...there would be a lot more sympathy for the owners...my gut says this is about something deeper though.

I think the owners see the rising popularity of the league and the potential for some serious $$$dough$$$ down the road, and they see this as the chance to "break" the NBA players union (which has always been stronger, closer to the MLB model) into the weaker NFL players union and ensure bad-management-proof profits.

If teams were in such dire straights, why did a team like the Warriors which isn't very good, and isn't in a huge market and has competition with 3 other California teams, sell for a record $450 million this past year? Why did owners break the banks and pay record player salaries this off season if they are hemorrhaging money as they claim?

Owners are looking for excuses to rewrite the system and to make management no-risk high-reward...basically to make it idiot proof. I oppose this on principle, the financial rewards of owning a professional sports franchise should also come with risks. I don't think owners should be entitle to field a teeerrrribble product year after year (Minnesota Timberwolves, anyone?) and expect the fans, players, and league to subsidize poor management.

Now, that said, the league itself shouldn't be operating with losses. If in fact (I am skeptical to the true extent of the NBA losses -- last year Forbes estimated 12 teams in the red...how did that increase to 22 teams this year in an extremely popular year?) the league as a whole is operating with losses -- that should definitely be corrected.

But $300m requires pretty modest adjustments to current CBA to make the league profitable again. The big hangup is the percentage of revenue (basketball related income, or BRI) that goes to player salaries, how you calculate that revenue (currently the owners are allowed to subtract certain/limited expenses from the BRI before it gets divided between team/players -- the owners want more subtractions, basically unlimited expenses taken into account), and whether to structure a hard cap or soft cap.

The other issues are an across-the-board roll-back in player salaries (basically they want a mulligan on their spending splurge the last couple of seasons), and to change the guaranteed-contract system to a football style "we can cut you and not pay as soon as it suits our interests". These last two issues are very unlikely to make it into a new CBA barring a complete meltdown by the NBPA. Ownership pipe dream.

Players have already compromised on their cut of revenue -- proposing a modest 3% drop to 54%. I suspect that number will drop closer to the ownership goal of 50%, with major compromise on the hard/soft cap. My guess is that will still be a soft cap with player exceptions to help teams to keep player continuity, but that they are going to cut a lot of the exceptions and lower the max-contract $$$ and years. You won't see another year like this one where there are teams at $100mil in salary due to use of exceptions while Sacramento brings up the rear at approx $45 mil, which should be better for league competitiveness.

By the way, this site is invaluable:
http://basketball.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=basketball&cdn=sports&tm=23&f=00&tt=29&bt=0&bts=0&zu=http%3A//members.cox.net/lmcoon/salarycap.htm%23Q13

NYC Duke Fan
07-01-2011, 02:21 AM
According to Michael Wilburn , writing on ESPN, there is a good chance that there will not be an NBA season this coming year. Barkley thinks that there is a 75% chance that there also won't be a season.

I wonder if Irving made a mistake. Obviously, his draft position couldn't have been higher and there was a risk of injury, ( could have insured against it), but there is a good chance that he will earn no money this year, play no basketball and could have come back to a fun year at college, playing for a team that arguably could have had one of the best back courts in college basketball history.

It looks like Barnes, Henson and Sullinger made the right choices.

McDougald
07-01-2011, 07:08 AM
Like most in North Carolina, I grew up on a steady diet of ACC Basketball brought to us by Pilot Life Insurance. The pro game didn't exist here and for the most part it still doesn't. Who wants to dilute the best collegiate basketball rivalries in the country with an insignificant pro game?

HCheek37
07-01-2011, 08:41 AM
I am most interested to see which NBA players flock to Europe for some guaranteed money. It will also be a good indicator of how the negotiations are going, considering that a player probably won't sign a full year deal unless they've spoken with player reps and received negative information.

Does everyone think that some Euro teams would gamble on a provisional contract or will they mostly insist on one-year guarantee deals with a penalty for departing?

SupaDave
07-01-2011, 08:55 AM
According to Michael Wilburn , writing on ESPN, there is a good chance that there will not be an NBA season this coming year. Barkley thinks that there is a 75% chance that there also won't be a season.

I wonder if Irving made a mistake. Obviously, his draft position couldn't have been higher and there was a risk of injury, ( could have insured against it), but there is a good chance that he will earn no money this year, play no basketball and could have come back to a fun year at college, playing for a team that arguably could have had one of the best back courts in college basketball history.

It looks like Barnes, Henson and Sullinger made the right choices.

Kyrie will be fine. His agent will handle any lacunae. That's why you make sure you choose an agent wisely. It's also why you don't get an agent if there's little chance of you getting drafted - bc THEN you can go back to school...

HCheek37
07-01-2011, 08:57 AM
The main question with lockouts is, "What is most important to each side?"

Both sides will have to give in on certain things and come to a middle ground on others. Obviously the billionaires can "out-wait" the millionaires so usually the players have to go a little further and tend to give in quicker.

It is believed that the players got the better deal when the CBA was ratified in 2005 so most of the demands are coming from the owners side.

I think the owners want -
Harder salary cap
Shorter and non-guaranteed contracts
Reduction of revenue split (currently 57%-43%)

The Duke side of this is whether a new age limit or college experience limit will be factored into the deal. Stern has been quoted several times saying he wanted an age limit of 20 or a 2 year rule. The other note I've read is that some of the players would like a 2 part draft with 2 college rounds and 1 international round.

Lots of conjecture still to come. There isn't much promise for a 2011-2012 season so college basketball could become even more of a focus during the winter.

_Gary
07-01-2011, 09:44 AM
Yesterday I caught the tale end of an interview on PTI where an NBA analyst (maybe a writer) was making some comments about the lockout. He too thought there was a 75% chance of a complete season loss, and this is probably where Wilbon is coming from because he sounded like he respected this guy.

My question is about the part I missed. As I was tuning in the NBA fellow was saying one of the issues (beyond player salaries) had to do with teams like LA and NY having some kind of unfair advantage and the league needed to work on this. Is he talking about the ability of teams to resign existing players to extensions which can go over the cap? Since I only caught the tail end of that part of the discussion I was wondering what he was talking about. Anyone know why LA and NY would be mentioned, from the owners perspective, as having an unfair advantage? I'm pretty sure it wasn't about media coverage or anything like that.

_Gary
07-01-2011, 10:06 AM
Never mind the LA and NY comment from the PTI interview yesterday. Just went online and listened to it again and those two teams are not mentioned together like I thought. But I could have sworn I heard something yesterday, probably about revenue sharing and/or the soft cap, which allows big market teams, specifically LA and NY, to prosper while smaller market teams simply cannot compete.

theAlaskanBear
07-01-2011, 10:12 AM
Yesterday I caught the tale end of an interview on PTI where an NBA analyst (maybe a writer) was making some comments about the lockout. He too thought there was a 75% chance of a complete season loss, and this is probably where Wilbon is coming from because he sounded like he respected this guy.

My question is about the part I missed. As I was tuning in the NBA fellow was saying one of the issues (beyond player salaries) had to do with teams like LA and NY having some kind of unfair advantage and the league needed to work on this. Is he talking about the ability of teams to resign existing players to extensions which can go over the cap? Since I only caught the tail end of that part of the discussion I was wondering what he was talking about. Anyone know why LA and NY would be mentioned, from the owners perspective, as having an unfair advantage? I'm pretty sure it wasn't about media coverage or anything like that.

The LA/NY advantage has only a little to due with the CBA --- its about "star lifestyles". Kind of like that Yankee thing in baseball -- players get to live and play in cities with tons of musicians, actressess/actors, other sports superstars. There is a reason Melo wanted to be in NYC, LeBron in Miami and not Wade/Bosh to Cleveland and Amare to Denver.

Also, teams like the Lakers, Boston, Chicago have larger revenue streams due to team popularity -- so when they spend over the soft cap they can afford the revenue-sharing taxes...and players get better marketing deals because they are in bigger advertising markets.

fgb
07-01-2011, 10:29 AM
According to Michael Wilburn , writing on ESPN, there is a good chance that there will not be an NBA season this coming year. Barkley thinks that there is a 75% chance that there also won't be a season.

I wonder if Irving made a mistake. Obviously, his draft position couldn't have been higher and there was a risk of injury, ( could have insured against it), but there is a good chance that he will earn no money this year, play no basketball and could have come back to a fun year at college, playing for a team that arguably could have had one of the best back courts in college basketball history.

It looks like Barnes, Henson and Sullinger made the right choices.

irving didn't make a mistake; he was the number one overall pick, and could easily have not been so next season.

it's not like this came out of nowhere. it sucks that kyrie might not play at all next season (though my money says they reach an agreement by the end of the year), but i'm sure he factored this into his decision.

MCFinARL
07-01-2011, 11:55 AM
More than Kyrie, I wonder what the impact of the lockout will be on players like Nolan Smith, who was drafted a bit higher than many people thought he would be, and Kyle Singler, who was drafted in the second round without a guaranteed contract (not that, at this point, even Nolan's contract is meaningfully "guaranteed"--I'm not sure what the impact of the lockout is on the difference between first and second round draftees and would appreciate it if anyone who knows can share that info). If a year is lost and they need to try to make teams next year amid a much larger pool of NBA rookies, how will they fare?

cato
07-01-2011, 12:09 PM
there was a risk of injury, ( could have insured against it)

Really? Are you sure? Even assuming he could "insure against it", what does the insurance cost, what does it cover, and what does it pay out?

Even assuming that he could get an insurance policy and that it provided some sort of reasonable coverage at a reasonable cost, I assume that no insurance policy would insure against the risk that he reinjures his toe, is seen as an injury risk, drops to the end of the first round or even into the second, and never gets a contract like the one he will get as the number one pick.

_Gary
07-01-2011, 12:14 PM
The LA/NY advantage has only a little to due with the CBA --- its about "star lifestyles". Kind of like that Yankee thing in baseball -- players get to live and play in cities with tons of musicians, actressess/actors, other sports superstars. There is a reason Melo wanted to be in NYC, LeBron in Miami and not Wade/Bosh to Cleveland and Amare to Denver.

Also, teams like the Lakers, Boston, Chicago have larger revenue streams due to team popularity -- so when they spend over the soft cap they can afford the revenue-sharing taxes...and players get better marketing deals because they are in bigger advertising markets.

I knew all of that but thought I might have missed something more particular about those markets. I was thinking it might have to do with TV revenue deals or something similar where those teams were making so much more than the other smaller market teams and there was a push for more sharing on that level.

Class of '94
07-01-2011, 02:22 PM
If the NBA lock out drags on and this upcoming season lost, does anyone have an idea on how this would affect the availability of NBA players for the Olympics? I would hate for this mess to spill over into Olympics; and Coach K not being able to use the NBA players for the Summer games.

TampaDuke
07-01-2011, 02:56 PM
And here is the rub. There is no accounting transparency. If the NBA would open its books -- show which teams are losing how much money...there would be a lot more sympathy for the owners...my gut says this is about something deeper though.

If every NBA team opened its books, there would still not be agreement among the parties as to how many failed to make a profit. It's less about the numbers and more about the definition of "profit." The parties will never bridge that difference in opinion, IMO.

budwom
07-01-2011, 03:04 PM
According to Michael Wilburn , writing on ESPN, there is a good chance that there will not be an NBA season this coming year. Barkley thinks that there is a 75% chance that there also won't be a season.

I wonder if Irving made a mistake. Obviously, his draft position couldn't have been higher and there was a risk of injury, ( could have insured against it), but there is a good chance that he will earn no money this year, play no basketball and could have come back to a fun year at college, playing for a team that arguably could have had one of the best back courts in college basketball history.

It looks like Barnes, Henson and Sullinger made the right choices.

Frankly, I don't much care which side wins. If they cancel the season I couldn't care less....however, I was disappointed to see Wilbon swallow the owner's nonsense about so many of them losing money. This is simply untrue.
For years, professional teams have gotten away with depreciating players or rosters.
This is an enormous phantom deduction (allowed by the IRS, of course), and for almost all of the teams that are "losing" money, it takes a strongly profitable income statement into the red. It turns wine into water, if you will. And it involves no cash whatsoever.
It explains why (besides ego) so many people line up to buy pro franchises. Donald Dell explained this to us in a business school seminar decades ago. It's been true for a long, long time. Teams are losing money on paper, but are strongly cash flow positive.
If you Google "nba player depreciation" you can find a good Deadspin article which shows how this works, using the example of the NY Nets and their money "losing" season of 2004 or 2005. I can't vouch for the accuracy of everything they show, but I do know their basic premise is correct.
So the issue is simply that right now the wealthy players are eating something like 57% of the very large NBA pie, and the wealthy owners would like to get a much bigger share of the pie. Don't be deceived by their assertion that they have to do this in order to stay in business.

El_Diablo
07-01-2011, 03:17 PM
This assumes that the owners are taking real losses, and that they will continue to do so in the future.

Very true. It's hard to fathom the economy getting worse than it was for the last couple years...although we could conceivably get a double-whammy from the situation in Greece and a series of cross-defaults from a failure to raise our debt ceiling, so I guess it's possible that the league may have some macroeconomic concerns going forward. But the league is becoming increasingly global, and revenue streams from the rest of world (especially Asia) will only continue to grow.

And even if nearly every team were losing money, it's possible that the league as a whole is still profitable. With the luxury tax, many "losses" are a result of a financial shell game in which money is transferred from a team to the league and reported as a loss. Luxury tax expenditures may be substantial, but they are a product of poor management and entirely avoidable. Looking at some of the decisions teams have made on player salaries, it's almost as if owners wanted to drive down their revenues as much as possibe the last couple years in order to lock in a long-term discounted rate on the revenue sharing. After all, these owners generally didn't become billionaires by making stupid business decisions, and it may be shown to be a shrewd strategy when (not if) it eventually pays off.

El_Diablo
07-01-2011, 03:22 PM
I wonder if Irving made a mistake. Obviously, his draft position couldn't have been higher and there was a risk of injury, ( could have insured against it), but there is a good chance that he will earn no money this year, play no basketball and could have come back to a fun year at college, playing for a team that arguably could have had one of the best back courts in college basketball history.

Nike may have a solution to that problem. ;)

And Supadave also mentioned the fact that his agent can and will ensure that Kyrie is covered. But even if he were somehow to earn no money, it will be the same amount he would have earned by returning to school for another year. Yeah, it's not as much as he would earn without a lockout, but he'll be fine.

El_Diablo
07-01-2011, 03:23 PM
Kyrie will be fine. His agent will handle any lacunae. That's why you make sure you choose an agent wisely. It's also why you don't get an agent if there's little chance of you getting drafted - bc THEN you can go back to school...

I'm pretty sure the NCAA changed that policy last year. Now, if you stay in the draft beyond the withdrawal deadline, your eligibility is forfeited regardless of whether you sign with an agent.

JasonEvans
07-01-2011, 03:30 PM
Really? Are you sure? Even assuming he could "insure against it", what does the insurance cost, what does it cover, and what does it pay out?

Even assuming that he could get an insurance policy and that it provided some sort of reasonable coverage at a reasonable cost, I assume that no insurance policy would insure against the risk that he reinjures his toe, is seen as an injury risk, drops to the end of the first round or even into the second, and never gets a contract like the one he will get as the number one pick.

Actually, it is reasonably common for kids who come back to school instead of going in the draft to get an insurance policy against injury. Some of the "exotic" insurance firms like Lloyds of London offer these kind of policies. It is my understanding that the premium on the policy is paid after the player has been drafted the following year.

I have not read one, but I believe that the insurance contracts are worded so that a player is guaranteed a certain amount if they suffer an injury that causes their draft stock to drop them out of the first round. The specifics and wording of it varies somewhat from case to case.

Here is a web page (http://www.ramblingpoke.com/2011/01/exceptional-student-athlete-disability.html)that talks a bit about the insurance policies offered by the NCAA. These differ from what Lloyds of London would offer, but should give you an idea of how it works.

Of note, and I already said this earlier but it is worth repeating, the premiums are paid AFTER the player signs a pro contract, not while he is still in school.

-Jason "I am sure Harrison Barnes and Sully and others who came back to school have insurance policies like this-- heck, Mason probably does too" Evans

theAlaskanBear
07-01-2011, 03:48 PM
Frankly, I don't much care which side wins. If they cancel the season I couldn't care less....however, I was disappointed to see Wilbon swallow the owner's nonsense about so many of them losing money. This is simply untrue.
For years, professional teams have gotten away with depreciating players or rosters.
This is an enormous phantom deduction (allowed by the IRS, of course), and for almost all of the teams that are "losing" money, it takes a strongly profitable income statement into the red. It turns wine into water, if you will. And it involves no cash whatsoever.
It explains why (besides ego) so many people line up to buy pro franchises. Donald Dell explained this to us in a business school seminar decades ago. It's been true for a long, long time. Teams are losing money on paper, but are strongly cash flow positive.
If you Google "nba player depreciation" you can find a good Deadspin article which shows how this works, using the example of the NY Nets and their money "losing" season of 2004 or 2005. I can't vouch for the accuracy of everything they show, but I do know their basic premise is correct.
So the issue is simply that right now the wealthy players are eating something like 57% of the very large NBA pie, and the wealthy owners would like to get a much bigger share of the pie. Don't be deceived by their assertion that they have to do this in order to stay in business.

Wow, I had no clue about RDA's and that owners allowed to stick the purchase of a team into the yearly balance books. That is pretty crazy.

Here is a link:
http://deadspin.com/5816870/exclusive-how-and-why-an-nba-team-makes-a-7-million-profit-look-like-a-28-million-loss

sagegrouse
07-01-2011, 04:14 PM
Frankly, I don't much care which side wins. If they cancel the season I couldn't care less....however, I was disappointed to see Wilbon swallow the owner's nonsense about so many of them losing money. This is simply untrue.
For years, professional teams have gotten away with depreciating players or rosters.
This is an enormous phantom deduction (allowed by the IRS, of course), and for almost all of the teams that are "losing" money, it takes a strongly profitable income statement into the red. It turns wine into water, if you will. And it involves no cash whatsoever.
It explains why (besides ego) so many people line up to buy pro franchises. Donald Dell explained this to us in a business school seminar decades ago. It's been true for a long, long time. Teams are losing money on paper, but are strongly cash flow positive.
If you Google "nba player depreciation" you can find a good Deadspin article which shows how this works, using the example of the NY Nets and their money "losing" season of 2004 or 2005. I can't vouch for the accuracy of everything they show, but I do know their basic premise is correct.
So the issue is simply that right now the wealthy players are eating something like 57% of the very large NBA pie, and the wealthy owners would like to get a much bigger share of the pie. Don't be deceived by their assertion that they have to do this in order to stay in business.

Bud Wom -- Even though you are a good guy and apparently named after one of my former Duke roommates, I don't buy what you are saying (although it would probably help if I read the Deadspin article). The depreciability of contracts is triggered by the purchase of a team. What is the new owner paying for? Well, much of it is the contracts of the players. Whatever amount was determined was then depreciated over 3-4 years. The owners would then use those losses to offset income in other business interests. This was the plague of baseball in the '50s and '60s, when the top individual tax rate was 70% (even higher at times) -- franchises HAD to change hands every three or four years.

But, in addition to lower tax rates today, most of the owners have been around the NBA for more than 3-4 years and the depreciation triggered by the acquisition of the team has disappeared. Now there may be some other scam going on, but I can't imagine the IRS would fall for anything that said a $40 million contract over four years [sigh] led to deductions greater than $40 million.

sagegrouse

Dukeface88
07-01-2011, 04:23 PM
Really? Are you sure? Even assuming he could "insure against it", what does the insurance cost, what does it cover, and what does it pay out?

Even assuming that he could get an insurance policy and that it provided some sort of reasonable coverage at a reasonable cost, I assume that no insurance policy would insure against the risk that he reinjures his toe, is seen as an injury risk, drops to the end of the first round or even into the second, and never gets a contract like the one he will get as the number one pick.

Lloyd's of London is the go-to place for unusual insurance needs. According to the repository (http://en.wikipedia.org/wiki/Lloyd%27s_of_London#Types_of_policies), they've insured mustaches, eyes, and (most relevant to this situation) legs. I'd imagine that a toe wouldn't be overly difficult, although I'd also imagine the policies are quite expensive.

Edit: Doh, didn't realize there was a second page to the thread.

theAlaskanBear
07-01-2011, 05:01 PM
Bud Wom -- Even though you are a good guy and apparently named after one of my former Duke roommates, I don't buy what you are saying (although it would probably help if I read the Deadspin article). The depreciability of contracts is triggered by the purchase of a team. What is the new owner paying for? Well, much of it is the contracts of the players. Whatever amount was determined was then depreciated over 3-4 years. The owners would then use those losses to offset income in other business interests. This was the plague of baseball in the '50s and '60s, when the top individual tax rate was 70% (even higher at times) -- franchises HAD to change hands every three or four years.

But, in addition to lower tax rates today, most of the owners have been around the NBA for more than 3-4 years and the depreciation triggered by the acquisition of the team has disappeared. Now there may be some other scam going on, but I can't imagine the IRS would fall for anything that said a $40 million contract over four years [sigh] led to deductions greater than $40 million.

sagegrouse

Maybe you can explain this to me a bit, because I am sort of confused.

How exactly do players depreciate after they sign a contract?

hq2
07-01-2011, 05:16 PM
If every NBA team opened its books, there would still not be agreement among the parties as to how many failed to make a profit. It's less about the numbers and more about the definition of "profit." The parties will never bridge that difference in opinion, IMO.

Fine. Who cares? You just saw the end of an era last year anyway. A bunch of hall of famers: Shaq, KG, Kobe, Ray Allen, Paul Pierce, Duncan, Jason Kidd, Nowitzki, and Steve Nash are done or almost done, and the whole bunch of the rest are way overpaid. I'd like to see a lockout with player salaries cut at least in half, and even that wouldn't be enough. I won't cry if there's no season next year.

jimsumner
07-01-2011, 06:42 PM
Nike may have a solution to that problem. ;)

And Supadave also mentioned the fact that his agent can and will ensure that Kyrie is covered. But even if he were somehow to earn no money, it will be the same amount he would have earned by returning to school for another year. Yeah, it's not as much as he would earn without a lockout, but he'll be fine.

But at Duke he would have his room and board covered. Now, he's going to have to find a job at a Subway or something. :)

sagegrouse
07-01-2011, 07:05 PM
Maybe you can explain this to me a bit, because I am sort of confused.

How exactly do players depreciate after they sign a contract?

If you pay, for example, $300 million for a team. You do not own the arena, and you rents offices and other things. One could argue that of the $300 mil., say, $100 million is the value of the "franchise" in the NBA and $200 million is the value of the players contracts, which is the "excess value" over what you will actually pay the player. (It would be normal for a player to be worth more to the team than the value of his contract).

Then you create an asset on the balance sheet called "Player Contracts" wtih a value of $200 million. Then you work a depreciation schedule over the life of the contracts. Suppose they all expire exactly four years from the time you buy the franchise. Then you would have a "charge" (cost) of $50 million per year. This charge is in addition to the cash salaries paid to the player and the current costs of operating a team.

At the end of four years, there is no more Player Contract asset value to depreciate, so the "profit" (whether negative or positive) for tax purposes bumps up by $50 million. Meanwhile the "losses" are probably distributed to the owners who use them to offset income at which they pay the max rate of about 35% plus state taxes. Of course, through depreciation, the "tax basis" of the franchise will have gone down (in our modern-day example) by $200 million. If the franchise sold for $300 million again, then the owner would pay only a capital gains tax (what? 15%?) on the $200 million gain, plus have the use of all that money ad interim.

The point about baseball franchises back in the 1950s and 1960s is that owners were using these paper "losses" to reduce their taxes back in the day when the top federal rate was 70%. So the owners then flipped the team to some other "needy" businessman and went back to their trucking company (like the evil Bob Short, owner of the old Washington Senators, who took the team to Texas before selling it).

You know, I don't know if I am less comfortable masqerading as an accountant than masquerading as a lawyer (which I am not).

sagegrouse

theAlaskanBear
07-01-2011, 07:09 PM
But at Duke he would have his room and board covered. Now, he's going to have to find a job at a Subway or something. :)

Actually, that could be a great PR by Kyrie.

Imagine that he contacts some local Cleveland businesses and says, hey, I want to work at your shop/restaurant to meet and serve the local population during the lockout. Spend a couple of hours a day -- store gets great pub, Kyrie gets to meet his fanbase.

theAlaskanBear
07-01-2011, 10:17 PM
If you pay, for example, $300 million for a team. You do not own the arena, and you rents offices and other things. One could argue that of the $300 mil., say, $100 million is the value of the "franchise" in the NBA and $200 million is the value of the players contracts, which is the "excess value" over what you will actually pay the player. (It would be normal for a player to be worth more to the team than the value of his contract).

Then you create an asset on the balance sheet called "Player Contracts" wtih a value of $200 million. Then you work a depreciation schedule over the life of the contracts. Suppose they all expire exactly four years from the time you buy the franchise. Then you would have a "charge" (cost) of $50 million per year. This charge is in addition to the cash salaries paid to the player and the current costs of operating a team.

At the end of four years, there is no more Player Contract asset value to depreciate, so the "profit" (whether negative or positive) for tax purposes bumps up by $50 million. Meanwhile the "losses" are probably distributed to the owners who use them to offset income at which they pay the max rate of about 35% plus state taxes. Of course, through depreciation, the "tax basis" of the franchise will have gone down (in our modern-day example) by $200 million. If the franchise sold for $300 million again, then the owner would pay only a capital gains tax (what? 15%?) on the $200 million gain, plus have the use of all that money ad interim.

The point about baseball franchises back in the 1950s and 1960s is that owners were using these paper "losses" to reduce their taxes back in the day when the top federal rate was 70%. So the owners then flipped the team to some other "needy" businessman and went back to their trucking company (like the evil Bob Short, owner of the old Washington Senators, who took the team to Texas before selling it).

You know, I don't know if I am less comfortable masqerading as an accountant than masquerading as a lawyer (which I am not).

sagegrouse

Ok, let me try this in laymans terms. Most of the value of the franchise is in the player contracts currently the franchise holds. Because they don't hold those contracts in perpetuity, without additional contracts the value of the franchise will decline whenever a player contract is up.

In order to account for the costs of acquiring new contracts, they take a depreciation of the expiring contract. It makes sense when you think of players as assets, less so when you think of them as players.

To me it is still weird though, because in effect you are counting a player's salary twice! It makes way more sense to think of it in terms of needing future contracts than existing depreciation.

Does this sound right?

MCFinARL
07-01-2011, 10:49 PM
If you pay, for example, $300 million for a team. You do not own the arena, and you rents offices and other things. One could argue that of the $300 mil., say, $100 million is the value of the "franchise" in the NBA and $200 million is the value of the players contracts, which is the "excess value" over what you will actually pay the player. (It would be normal for a player to be worth more to the team than the value of his contract).

Then you create an asset on the balance sheet called "Player Contracts" wtih a value of $200 million. Then you work a depreciation schedule over the life of the contracts. Suppose they all expire exactly four years from the time you buy the franchise. Then you would have a "charge" (cost) of $50 million per year. This charge is in addition to the cash salaries paid to the player and the current costs of operating a team.

At the end of four years, there is no more Player Contract asset value to depreciate, so the "profit" (whether negative or positive) for tax purposes bumps up by $50 million. Meanwhile the "losses" are probably distributed to the owners who use them to offset income at which they pay the max rate of about 35% plus state taxes. Of course, through depreciation, the "tax basis" of the franchise will have gone down (in our modern-day example) by $200 million. If the franchise sold for $300 million again, then the owner would pay only a capital gains tax (what? 15%?) on the $200 million gain, plus have the use of all that money ad interim.

The point about baseball franchises back in the 1950s and 1960s is that owners were using these paper "losses" to reduce their taxes back in the day when the top federal rate was 70%. So the owners then flipped the team to some other "needy" businessman and went back to their trucking company (like the evil Bob Short, owner of the old Washington Senators, who took the team to Texas before selling it).

You know, I don't know if I am less comfortable masqerading as an accountant than masquerading as a lawyer (which I am not).

sagegrouse

Not a lawyer, or not masquerading?

sagegrouse
07-02-2011, 01:33 AM
Ok, let me try this in laymans terms. Most of the value of the franchise is in the player contracts currently the franchise holds. Because they don't hold those contracts in perpetuity, without additional contracts the value of the franchise will decline whenever a player contract is up.

In order to account for the costs of acquiring new contracts, they take a depreciation of the expiring contract. It makes sense when you think of players as assets, less so when you think of them as players.

To me it is still weird though, because in effect you are counting a player's salary twice! It makes way more sense to think of it in terms of needing future contracts than existing depreciation.

Does this sound right?

A simpler and maybe clearer example. A person buys an NBA franchise for $300 million and gets NO tangible assets (no arena, no office building, no corporate jet). What is the $300 million for? Well, (a) the franchise from the NBA that lets the team play other teams and charge admission and share revenues and (b) 12-15 player contracts. In the interest of minimizing taxes (which -- unhappily -- is the objective of much accounting), it is better to put a high value on a depreciable asset. So, maybe the new owner says the franchise is worth $100 mil. and the "excess value" of the player contracts is $200 mil. The latter is not unreasonable if you -- for instance -- had Dwyane, Lebron & Co. under contract.

Depreciation, by itself, doesn't change the cash flow of the company -- it is a "book transaction;" no money changes hands. EXCEPT in one respect: Reported income is lower for tax purposes and, therefore, the team or the owner (there is often a pass-through) pays less federal and state income tax. So, in that respect, there is more money left at the end of the year.

The logic I just went over is clear to me because I have been in business for a long time. OTOH if you were to explain the meaning of the first eight lines of "Paradise Lost" to me, I would be totally lost.

sagegrouse

NYC Duke Fan
07-02-2011, 02:31 AM
Nike may have a solution to that problem. ;)

And Supadave also mentioned the fact that his agent can and will ensure that Kyrie is covered. But even if he were somehow to earn no money, it will be the same amount he would have earned by returning to school for another year. Yeah, it's not as much as he would earn without a lockout, but he'll be fine.

You are probably correct. It seems by reading now that everyone who was basketball savy knew that there was no way that a new CBA was going to happen and that there was going to be a lockout.

I am sure that Coach K with all his basketball connections also knew this.

If there wasn't any threat of no pro basketball this coming year than Irving made the right decision. However, if he knew or should have known than coming back might have been a better decision. I am assuming that he liked school and was enjoying his time at Duke.If that were not the case than no matter what he should have left.

Every excellent college player who decides to return to school takes the risk of injury. Life is a risk. Nolan and Kyle took the risk, Henson, Barnes and Sullinger are taking the risk.

I am not saying that Irving made the wrong decision by not coming back because I am an ardent Duke fan, and the thought of him playing another year would have insured a championship run. Not the case. Even if he did come back, in my opinion, UNC, Kentucky and Ohio State are still probably better, at least on paper.

I just think that knowing that he might not be playing pro basketball this year might have changed his mind. He could go to Europe and earn some money there but there is a risk of injury there also.

gep
07-02-2011, 02:46 AM
... I am not saying that Irving made the wrong decision by not coming back because I am an ardent Duke fan, and the thought of him playing another year would have insured a championship run. Not the case. Even if he did come back, in my opinion, UNC, Kentucky and Ohio State are still probably better, at least on paper. ...

I think this is the best part. Especially looking at the 2010 NC Duke TEAM. No one ever knows, no matter how much "better" the chances are with certain players. As Coach K says... "look through the windshield, not the rear-view mirror"... :cool:

budwom
07-02-2011, 09:17 AM
Bud Wom -- Even though you are a good guy and apparently named after one of my former Duke roommates, I don't buy what you are saying (although it would probably help if I read the Deadspin article). The depreciability of contracts is triggered by the purchase of a team. What is the new owner paying for? Well, much of it is the contracts of the players. Whatever amount was determined was then depreciated over 3-4 years. The owners would then use those losses to offset income in other business interests. This was the plague of baseball in the '50s and '60s, when the top individual tax rate was 70% (even higher at times) -- franchises HAD to change hands every three or four years.

But, in addition to lower tax rates today, most of the owners have been around the NBA for more than 3-4 years and the depreciation triggered by the acquisition of the team has disappeared. Now there may be some other scam going on, but I can't imagine the IRS would fall for anything that said a $40 million contract over four years [sigh] led to deductions greater than $40 million.

sagegrouse

1) No, I'm not named after one of your roommates. Have no idea who he is, Sage.
2) Yes, you would do well to read the Deadspin article. The teams already get to deduct player salaries. Getting to depreciate rosters is completely unnecessary. As some people have pointed out, while some players may be "depreciating" at a point in time, others are clearly "appreciating".....a good example would be Gerald Henderon in Charlotte.
When a large corporation does its accounting, they get to deduct workers' salaries....but they don't also get to depreciate the workers. Yes, as you point out, all of this was concocted (by Bill Veeck?) in the 1950s to offset high marginal tax rates.
Frankly, I don't much care what the owners do, except when they whine about losing money will remaining highly cash flow positive, I think it's worth calling them on their BS.

moonpie23
07-02-2011, 09:52 AM
But at Duke he would have his room and board covered. Now, he's going to have to find a job at a Subway or something. :)

sorry....the unc peeps have those locked up....

budwom
07-02-2011, 09:53 AM
Ok, let me try this in laymans terms. Most of the value of the franchise is in the player contracts currently the franchise holds. Because they don't hold those contracts in perpetuity, without additional contracts the value of the franchise will decline whenever a player contract is up.

In order to account for the costs of acquiring new contracts, they take a depreciation of the expiring contract. It makes sense when you think of players as assets, less so when you think of them as players.

To me it is still weird though, because in effect you are counting a player's salary twice! It makes way more sense to think of it in terms of needing future contracts than existing depreciation.

Does this sound right?

Yup, that's right, they get to count the player's salary twice essentially, which is what makes it so absurd.

As in any business, when someone buys it it's largely because of the human talent (unless it's a big manufacturing company). The business gets to deduct the talent's salaries. It does NOT get to depreciate the talent. Not one bit.

This explains what seem to (initially) be the inexplicable: why do people line up to buy businesses which "lose money." Aside from the go issue, it's mostly because these businesses don't really lose money. Depreciation is a non-cash expense. So year after year the owner can pull out lots of cash, while showing a paper loss which has the benefit of providing a tax loss for other profitable businesses.

The notion of genuine depreciation in business is pretty clear: when you buy an asset which has a presumed life of a number of years, (let's say you buy a huge truck for $200,000) you generally can't deduct the total cost of the truck in one year; you deduct $40k/year for five years, for example.

But when you sign a player for $10 million a year for five years, you get to deduct the full ten million each year. To further allow an additional depreciation expense makes zero sense whatsoever.

JasonEvans
07-02-2011, 04:34 PM
I'd like to see a lockout with player salaries cut at least in half, and even that wouldn't be enough.

I am interested in knowing why you feel this way? I am guessing you think the players are grossly overpaid. But, their "work" brings in hundreds of millions of dollars every year for their teams and the owners of those teams. If we were to cut player salaries in half, we would turn owning an NBA team into a license to print money -- every team would make huge profits every year. You would rather the 30 or so owners make an extra $30 or $40 million each a year rather than the 400 or so players (whose careers generally last less than 5 years) make a million or so more?

No one held a gun to the owner's heads and forced them to pay the players this much. The players are going for a fair market value. Actually, I take that back. They are most assuredly not receiving fair market value. If they were, I can guarantee you that Lebron James would be paid much, much, much more than Joe Johnson and Chris Bosh and several other players who are at the max or darn close to it. In fact, professional sports are perhaps the only place in society that I can think of where workers do not get paid fair market value.

Lets look at it like this. Lets say there was a guy who was a brilliant programmer. He is such a good programmer, that Apple/MSFT/Google know they can make tens of millions off of him every year. They would have a bidding war for him and he would end up making the most he could from them.

But, if he was a brilliant basketball player (or football or baseball and so on) instead of a programmer, he cannot make the most for his wares. There are rules in place set up by the monopolies that control professional sports which restrict the amount teams can pay him. Basketball is actually worse than any of the other sports as it has a specific stated maximum that players can earn.

Look, I understand why pro sports has these rules. It is to preserve some kind of competition in the sports. Without some kind of payroll rule, smaller market teams would never have a chance. Still, the notion that the players are somehow bad guys for making what they make and that they should be forced to take giant pay cuts so the owners can make huge profits just seems unfair to me.

-Jason "no logic can explain Joe Johnson making more than Lebron... none!" Evans

J.Blink
07-02-2011, 04:51 PM
I'm speaking only for myself, but yes, I do believe that many professional athletes (and owners) are horribly overpaid. I'm not against people making money--even obscene amounts of money--but when the teams and owners beg for huge amounts of money for new stadiums with the threat of heading elsewhere if cities don't pay hanging overhead, I don't have a lot of sympathy for asking millionaire owners and players to take a haircut. The Vikings for instance are planning a 1 billion dollar stadium, and there have been rumblings about leaving Minnesota if they don't get what they want.

If organizations were to start paying for their own stadiums, I think things would start to make a lot more sense.

theAlaskanBear
07-02-2011, 06:11 PM
I'm speaking only for myself, but yes, I do believe that many professional athletes (and owners) are horribly overpaid. I'm not against people making money--even obscene amounts of money--but when the teams and owners beg for huge amounts of money for new stadiums with the threat of heading elsewhere if cities don't pay hanging overhead, I don't have a lot of sympathy for asking millionaire owners and players to take a haircut. The Vikings for instance are planning a 1 billion dollar stadium, and there have been rumblings about leaving Minnesota if they don't get what they want.

If organizations were to start paying for their own stadiums, I think things would start to make a lot more sense.

I agree with you. But it's not the owners and players taking a haircut. It is the owners forcing the players into a haircut. The amount the NBA takes in isn't going to change based on the player salaries -- the owners aren't going to lower ticket prices and concession prices...its simply who gets what piece of the pie.

hq2
07-03-2011, 01:09 PM
I am interested in knowing why you feel this way? I am guessing you think the players are grossly overpaid. But, their "work" brings in hundreds of millions of dollars every year for their teams and the owners of those teams. If we were to cut player salaries in half, we would turn owning an NBA team into a license to print money -- every team would make huge profits every year. You would rather the 30 or so owners make an extra $30 or $40 million each a year rather than the 400 or so players (whose careers generally last less than 5 years) make a million or so more?

No one held a gun to the owner's heads and forced them to pay the players this much. The players are going for a fair market value. Actually, I take that back. They are most assuredly not receiving fair market value. If they were, I can guarantee you that Lebron James would be paid much, much, much more than Joe Johnson and Chris Bosh and several other players who are at the max or darn close to it. In fact, professional sports are perhaps the only place in society that I can think of where workers do not get paid fair market value.

No doubt about it. I totally understand your perspective. It's why brilliant CEOS make millions, as does Coach K; how much more revenue does he bring into the university than someone else would? However, I simply don't share the value system of the people who believe that these players are worth that kind of money. For years, I paid $10 to sit up in the third deck and watch teams with ex Duke players. That's how much they're worth to me. My own opinion is that they aren't worth the kind of money they're getting, period, nor do the owners deserve the kind of profits they (think) they'll get. My view isn't shared by a number of people, but I'd say after a lockout year, there will be a lot more who do.

budwom
07-03-2011, 03:46 PM
No doubt about it. I totally understand your perspective. It's why brilliant CEOS make millions, as does Coach K; how much more revenue does he bring into the university than someone else would? However, I simply don't share the value system of the people who believe that these players are worth that kind of money. For years, I paid $10 to sit up in the third deck and watch teams with ex Duke players. That's how much they're worth to me. My own opinion is that they aren't worth the kind of money they're getting, period, nor do the owners deserve the kind of profits they (think) they'll get. My view isn't shared by a number of people, but I'd say after a lockout year, there will be a lot more who do.

Not to get too involved in a subject I don't really care that much about, but I'm a bit confused by your logic. Barring some huge change in TV contracts, the negotiation between the players and owners is pretty much a zero sum game. You seem to think that neither side deserves the bigger piece of the pie.....so why take money from the players and give it to the (in your reasonable opinion) equally undeserving owners? Just doesn't make much sense to me.
On the other hand, if you thought the players should give up a big chunk of money in order to lower ticket prices, that would be somewhat logical, though of course it's never going to happen.

hq2
07-04-2011, 11:15 AM
On the other hand, if you thought the players should give up a big chunk of money in order to lower ticket prices, that would be somewhat logical, though of course it's never going to happen.

Not so sure about that. After a year of not seeing it, most people will realize how little they miss it, and won't be prepared to shell out the big bucks to see it once it's over. That by itself will bring revenues (and salaries) down to more reasonable levels. And that's fine with me.

JMarley50
07-04-2011, 03:13 PM
I just came across this. I apologize if it has already been posted.

http://www.slamonline.com/online/nba/2011/06/shane-battier-wants-billy-hunters-salary-to-be-1-during-nba-lockout/

uh_no
07-04-2011, 09:55 PM
The notion of genuine depreciation in business is pretty clear: when you buy an asset which has a presumed life of a number of years, (let's say you buy a huge truck for $200,000) you generally can't deduct the total cost of the truck in one year; you deduct $40k/year for five years, for example.

This is an example of the matching principle, and not really the type of depreciation we are concerned with here. From an accounting standpoint, what the owners do is perfectly understandable.

At the beginning of a, say 10 million/10 yr contract, the team has an asset worth 10 million dollars. Presumably the player is worth 0$ at the end of the contract. On the teams balance sheet, they have payed the player 1 million in the first year. This is a simple salary expense. The value of their asset also decreased by 1 million dollars. Thus, from the owners perspective, his team is worth 1 million fewer dollars because the player is not as good as he was a year ago (whether the regression is linear or not, you can depreciate the full value pretty much however you want). It's not a simple concept, for sure, but since they are viewing the players as assets, they are added to the balance sheet at full value at the time the contract is signed. So for our player, when he is signed, 10 million would be added to the asset account. Thus after 10 years, the 10 million of depreciation has "cancelled" the asset....because it is "worthless" Aside from this, the team is also out 10 million from the salary....so in the end the team is 10 million to the worse....its not really "double counting"

UrinalCake
07-04-2011, 10:27 PM
But, if he was a brilliant basketball player (or football or baseball and so on) instead of a programmer, he cannot make the most for his wares. There are rules in place set up by the monopolies that control professional sports which restrict the amount teams can pay him. Basketball is actually worse than any of the other sports as it has a specific stated maximum that players can earn.


I've always found it interesting how most people feel that athletes are overpaid, but nobody seems to have a problem with actors and actresses making millions of dollars per movie. Ticket prices at the movie theater are increasing at at least the same rate as sporting events, yet I've never heard anyone say "George Clooney should take a pay cut in his next movie so that the average Joe can afford to go to the theater." IMO if the amount of money these guys are generating is worth the salary they're paid, then why should there be anything wrong with it?

My theory FWIW is that most people don't like acting or public speaking, so they're fine paying other people to do it. But most people also feel like they could be athletes themselves, so they sort of resent the professionals for being paid to do what seems easy/fun.

The other issue is that professional athletes have a limited career lifespan. Most people don't have a lot of sympathy for players whose careers are over and don't have anything to fall back on. But their skills are inherently short-lived so the money they're making isn't really as exorbitant as it may seem.

diveonthefloor
07-04-2011, 11:08 PM
Stern and Hunter look pretty bad from a P.R. perspective.

Goodell and DeMaurice Smith both agreed to cut their salaries to $1 during the NFL lockout. Yeah, this was mostly for P.R., but it means something, especially to the fans.

Stern and Hunter look like greedy shysters for not doing this. Battier's question was appropriate, and Hunter missed a great opportunity to achieve the high ground.

tommy
07-05-2011, 12:16 AM
It's frustrating to see a veteran 3rd string power forward making 6 or 8 million dollars a year, or even more. That seems like the guy can't possibly be "worth it." But in a market-based system, or even a quasi-market based system like sports, isn't he by definition "worth it" if the owner is willing to pay it, or if the system set up in the league provides for that level of salary?

If the owner didn't think it was worthwhile and in his financial best interest to offer the contract to the veteran 3rd string power forward, he wouldn't offer it. If he thinks his TV ratings will be just as good, his sales of jerseys and hats just as good, his attendance just as good, and his chance of winning just as good (we're not talking Donald Sterling here) with a minimum wage rookie as with the aging vet with the big salary number, he'll hire the rookie. But they don't believe that. In consultation with their basketball people, they think all those numbers will be bigger, in particular the chances of winning which drive a lot of those other numbers, will be greater with the veteran player, and the revenue to be derived from winning more and driving all those other numbers higher exceeds the expenditure they make for the veteran. At least that's the way I have to assume they're thinking, as rational and highly successful businessmen. Which they all are, again excluding the Donald.

If folks want to bring down both player salaries and owner profits, the only way to do it is to make the overall pie smaller. And the only real way to do that is to force down the size of the TV contracts. The size of the TV contract is ultimately driven, of course, by what the networks calculate that advertisers will pay for each spot over the course of the proposed contract. What the advertisers will pay for their spots in turn is driven by what they calculate the increases in sales and revenue will be resuting from those ads running. So if you don't want their sales and revenue to increase, make a conscious effort to not buy the products you see advertised during NBA games. And hope the rest of the country, or even the world, joins you.

77devil
07-05-2011, 01:28 AM
Bud Wom -- Even though you are a good guy and apparently named after one of my former Duke roommates, I don't buy what you are saying (although it would probably help if I read the Deadspin article). The depreciability of contracts is triggered by the purchase of a team. What is the new owner paying for? Well, much of it is the contracts of the players. Whatever amount was determined was then depreciated over 3-4 years. The owners would then use those losses to offset income in other business interests. This was the plague of baseball in the '50s and '60s, when the top individual tax rate was 70% (even higher at times) -- franchises HAD to change hands every three or four years.

But, in addition to lower tax rates today, most of the owners have been around the NBA for more than 3-4 years and the depreciation triggered by the acquisition of the team has disappeared. Now there may be some other scam going on, but I can't imagine the IRS would fall for anything that said a $40 million contract over four years [sigh] led to deductions greater than $40 million.

sagegrouse

Budworm is correct. Real(economic) business value is based on cash flow not the mythic values on the balance sheet and income statement. Nowhere is this more evident than sports franchise financial statements. I've seen a few.

J.Blink
07-05-2011, 02:02 AM
If folks want to bring down both player salaries and owner profits, the only way to do it is to make the overall pie smaller.

Or (as I said before), you could make organizations actually pay for their own stadiums. Take away literally billions in dollars of taxpayer subsidies and the pie will be quite a bit smaller. In Charlotte, a referendum on building a new stadium was soundly voted down due to the huge costs. Of course the city found a way to make it happen without voter approval.


I've always found it interesting how most people feel that athletes are overpaid, but nobody seems to have a problem with actors and actresses making millions of dollars per movie. Ticket prices at the movie theater are increasing at at least the same rate as sporting events, yet I've never heard anyone say "George Clooney should take a pay cut in his next movie so that the average Joe can afford to go to the theater." IMO if the amount of money these guys are generating is worth the salary they're paid, then why should there be anything wrong with it?

What's wrong with it? Taxpayer subsidies.

Why don't people complain about moviestars? I think because the film industry is less reliant on taxpayer subsidies (though of course states -- NC especially included -- do give tax breaks and incentives to get films in NC). If film companies were going around asking for hundreds of millions of dollars in every major city in the US, I do believe there would be some hostility about that!

Secondly, anybody can watch any movie in a theater for what? Max $20 (and probably closer to 10-15 average)? Buy it on DVD for $10-$15? Rent it for next to nothing ($8 at netflix for multiple rentals?). What professional sporting event will $8 get you into? $8 probably won't even get you a slice of pizza at a pro stadium!

budwom
07-05-2011, 08:22 AM
This is an example of the matching principle, and not really the type of depreciation we are concerned with here. From an accounting standpoint, what the owners do is perfectly understandable.

At the beginning of a, say 10 million/10 yr contract, the team has an asset worth 10 million dollars. Presumably the player is worth 0$ at the end of the contract. On the teams balance sheet, they have payed the player 1 million in the first year. This is a simple salary expense. The value of their asset also decreased by 1 million dollars. Thus, from the owners perspective, his team is worth 1 million fewer dollars because the player is not as good as he was a year ago (whether the regression is linear or not, you can depreciate the full value pretty much however you want). It's not a simple concept, for sure, but since they are viewing the players as assets, they are added to the balance sheet at full value at the time the contract is signed. So for our player, when he is signed, 10 million would be added to the asset account. Thus after 10 years, the 10 million of depreciation has "cancelled" the asset....because it is "worthless" Aside from this, the team is also out 10 million from the salary....so in the end the team is 10 million to the worse....its not really "double counting"

I just can't buy your reasoning. All types of companies whose major asset is people (e.g. consulting companies) would love to double count their expense this way, but they can't, even if they have contracts with their talent.
Like everyone else, hoop teams hire talent and expense their salaries each year. They never had to "buy" this asset. Any expense taken beyond this basic salary reduction is double counting. Sure, I understand why they want to do it, but that doesn't make it accurate accounting.

phaedrus
07-05-2011, 10:31 AM
Or (as I said before), you could make organizations actually pay for their own stadiums. Take away literally billions in dollars of taxpayer subsidies and the pie will be quite a bit smaller. In Charlotte, a referendum on building a new stadium was soundly voted down due to the huge costs. Of course the city found a way to make it happen without voter approval.



What's wrong with it? Taxpayer subsidies.


I share your general discomfort with these taxpayer subsidies when the owners are bringing in millions. But I do think, on occasion, a partially subsidized stadium can be a beneficial public investment in infrastructure and revitalization. Look no further than the Durham Bulls Athletic Park, which has done so much to bring people to downtown Durham (granted, I have no idea how the stadium was funded).

On the other hand, funding a football stadium in a far-flung St. Paul suburb smells less like smart investment and more like acquiescence to extortion.

fh84
07-05-2011, 11:18 AM
I will just let this speak for itself:
http://fivethirtyeight.blogs.nytimes.com/2011/07/05/calling-foul-on-n-b-a-s-claims-of-financial-distress/

JasonEvans
07-05-2011, 12:49 PM
I will just let this speak for itself:
http://fivethirtyeight.blogs.nytimes.com/2011/07/05/calling-foul-on-n-b-a-s-claims-of-financial-distress/

When Nate Silver speaks, we should all listen.

That is an amazing article, full of facts and charts and the such to explain the exact financial situation in pro basketball. The notion that the teams are awash in red ink is laid bare by Nate's numbers. He makes it clear -- they are making money, but they want to make a lot, lot, lot more of it.

-Jason "really great reporting by Nate-- as always" Evans

Kedsy
07-05-2011, 01:46 PM
My theory FWIW is that most people don't like acting or public speaking, so they're fine paying other people to do it. But most people also feel like they could be athletes themselves, so they sort of resent the professionals for being paid to do what seems easy/fun.

Really? I don't know anybody who wouldn't want to be an actor.


I will just let this speak for itself:
http://fivethirtyeight.blogs.nytimes.com/2011/07/05/calling-foul-on-n-b-a-s-claims-of-financial-distress/

To me, the most interesting tidbit in that article is that the Knicks, Bulls, and Lakers combine to make more than 80% of the League's profit. That, alone, says the current system is broken.

superdave
07-05-2011, 05:06 PM
To me, the most interesting tidbit in that article is that the Knicks, Bulls, and Lakers combine to make more than 80% of the League's profit. That, alone, says the current system is broken.

I think this is the most important point. How are Milwaukee and Charlotte going to compete with the LA and NYC in the long run? You will either have to have strong revenue-sharing, a hard cap or a few teams just get ridiculously lucky with the draft (OKC with Durant, Westbrook, Harden, Ibaka). Otherwise the league will be the Haves signing the best players away from the Have-Nots every season the same way the Yankees do in MLB with weaker revenue sharing rules.

TampaDuke
07-05-2011, 10:17 PM
I think this is the most important point. How are Milwaukee and Charlotte going to compete with the LA and NYC in the long run? You will either have to have strong revenue-sharing, a hard cap or a few teams just get ridiculously lucky with the draft (OKC with Durant, Westbrook, Harden, Ibaka). Otherwise the league will be the Haves signing the best players away from the Have-Nots every season the same way the Yankees do in MLB with weaker revenue sharing rules.

I agree. Look no further than the English Premier League or any of the major European soccer leagues for a glimpse of how this plays out in major sports where measures are not put in place to promote parity.

Or maybe the NBA should just come up with numerous cup and inter-league competitions (or relegation battles) to keep fan interest up league-wide after the first month of the season.:rolleyes:

superdave
07-13-2011, 12:57 PM
If an ongoing lockout screws up the US Olympic team, I will be poooooed off! In the Katz article from the main DBR page it mentions a couple of things. First, 75% of the Olympic team staff are NBA employees from medical to administrative. Second, NBA coaches would not be allowed to have contact with locked out players.

Seriously? I understand the union will likely cave in before too long, but still!

If the players and league cannot manage to find a way to get the best American players on the court next summer because of on-going labor disputes, then they deserve no more respect or $ from fans. They have to find a way to put the Olympics over and above the money issues they are having. There's simply no excuse for letting it spill over.

Lord Ash
07-13-2011, 01:06 PM
Interesting. Think the Duke staff would be interested in taking over the coaching and support role?:)

94duke
07-13-2011, 02:26 PM
Bill Simmons on how he would fix things...

http://www.grantland.com/story/_/id/6749669/if-ruled-nba-world

superdave
07-13-2011, 05:08 PM
Interesting. Think the Duke staff would be interested in taking over the coaching and support role?:)

I thought the same thing. Scale back the size of the operation, let Duke handle it and get re-paid by jersey sales.

Nate James could handle security.

Newton_14
07-13-2011, 09:38 PM
I thought the same thing. Scale back the size of the operation, let Duke handle it and get re-paid by jersey sales.

Nate James could handle security.

Patrick Davidson could handle everything else. :cool:

COYS
07-13-2011, 10:13 PM
I agree. Look no further than the English Premier League or any of the major European soccer leagues for a glimpse of how this plays out in major sports where measures are not put in place to promote parity.

Or maybe the NBA should just come up with numerous cup and inter-league competitions (or relegation battles) to keep fan interest up league-wide after the first month of the season.:rolleyes:

European soccer is vastly different (actually, WAS vastly different as the owners have tried to institute a cap unilaterally), however, in that there is no limit to the size of the roster nor is there a limit to the size and number of academies the various teams can set up. FC Barcelona can pay Karim Benzema to sit on the bench and still have 4-5 other forwards on the roster without harm as long as they abide by La Liga's requirements regarding the ratio of international to Spanish players. Similarly, they can sign kids to their academies and, if they want to sign more kids, create more academies. Baseball is another sport that doesn't have a hard cap, and while some teams have the financial ability to all but ensure their competitiveness (Yankees), there have been many teams with small payrolls who have also been successful. The 2003 Marlins (1997 Marlins were a big budget team), the 2002 Angels, and the 2010 Giants were all lower budget teams. The big reason these teams can be successful is because no matter how much money the bigger teams have to spend, they can only have 25 on the roster. There are other rules regarding free agency and minor league options that prevent big teams from holding onto more players than other teams. Similarly, a team controls their homegrown players for a substantial amount of time before free agency hits. Even then, the big teams can't sign all the free agents because they have limited space. This opens the door for smaller budget teams to make a run. European soccer does not have a fixed number for how many players can be on a roster or in the organization as a whole.

Starter
07-15-2011, 01:59 AM
What a disaster today, on a human interest front, with the bloodletting of 11% of the NBA's workforce. I make my living in a different sport, one with a far more positive labor situation, and yet I often think about this exact situation and what it would mean for me and my coworkers. This is not the best economy to suddenly be out of work in a specialized field. Here's hoping a decent amount of them land on their feet. The players and owners will come back from the lockout whenever it ends; these staffers -- cut to "save money" -- will not. Despite that I believe the owners are the main driving forces behind this, I tend to think it's difficult to take anyone's side except the people who work hard and are at the whims of a bunch of billionaires.

superdave
08-15-2011, 03:18 PM
Bill Simmons' mailbag proposes a special lockout ppv. The first part would be the NBA Jam style 2-on-2 tournament. Next would be a game between Duke alums and UNC alums (http://www.grantland.com/story/_/id/6855994/revenge):

Event no. 2: Duke alumni vs. UNC alumni (full court, game to 60). Obviously we're being a little loose with the word "alums," but are you really nitpicking about a game that features Kyrie Irving, Shane Battier, Elton Brand, Carlos Boozer, Mike Dunleavy Jr., J.J. Redick, Josh McRoberts, Grant Hill and Corey Maggette playing Vince Carter, Antwan Jamison, Brendan Haywood, Ty Lawson, Ed Davis, Ray Felton, Tyler Hansbrough, Marvin Williams and Rasheed Wallace (coming out of retirement!). I have the Duke guys favored by four.

Lawson vs. Irving would be pretty awesome to watch. I think the best UNC guys might be too old to really swing this their way.

CameronBornAndBred
08-15-2011, 03:33 PM
Bill Simmons' mailbag proposes a special lockout ppv. The first part would be the NBA Jam style 2-on-2 tournament. Next would be a game between Duke alums and UNC alums (http://www.grantland.com/story/_/id/6855994/revenge):

Event no. 2: Duke alumni vs. UNC alumni (full court, game to 60). Obviously we're being a little loose with the word "alums," but are you really nitpicking about a game that features Kyrie Irving, Shane Battier, Elton Brand, Carlos Boozer, Mike Dunleavy Jr., J.J. Redick, Josh McRoberts, Grant Hill and Corey Maggette playing Vince Carter, Antwan Jamison, Brendan Haywood, Ty Lawson, Ed Davis, Ray Felton, Tyler Hansbrough, Marvin Williams and Rasheed Wallace (coming out of retirement!). I have the Duke guys favored by four.

Lawson vs. Irving would be pretty awesome to watch. I think the best UNC guys might be too old to really swing this their way.
That's a great idea; I love it all except this part.
That reminds me, here's my dream Lockout Pay-Per-View to raise money for NBA players during the lockout. We'll charge $74.99 for Hoopapalooza and make a killing.

Phlltttt. But they could make it an annual summer event for charity, that would be awesome.

NSDukeFan
08-15-2011, 03:50 PM
Bill Simmons' mailbag proposes a special lockout ppv. The first part would be the NBA Jam style 2-on-2 tournament. Next would be a game between Duke alums and UNC alums (http://www.grantland.com/story/_/id/6855994/revenge):

Event no. 2: Duke alumni vs. UNC alumni (full court, game to 60). Obviously we're being a little loose with the word "alums," but are you really nitpicking about a game that features Kyrie Irving, Shane Battier, Elton Brand, Carlos Boozer, Mike Dunleavy Jr., J.J. Redick, Josh McRoberts, Grant Hill and Corey Maggette playing Vince Carter, Antwan Jamison, Brendan Haywood, Ty Lawson, Ed Davis, Ray Felton, Tyler Hansbrough, Marvin Williams and Rasheed Wallace (coming out of retirement!). I have the Duke guys favored by four.

Lawson vs. Irving would be pretty awesome to watch. I think the best UNC guys might be too old to really swing this their way.


That's a great idea; I love it all except this part.
Phlltttt.

That reminds me, here's my dream Lockout Pay-Per-View to raise money for NBA players during the lockout. We'll charge $74.99 for Hoopapalooza and make a killing.

But they could make it an annual summer event for charity, that would be awesome.

But it would be for charity. I believe it would go to the "We might make a lot of money but, we also spend a lot of money" charity that Patrick Ewing started when he was involved with the player's association.

superdave
08-15-2011, 04:07 PM
But it would be for charity. I believe it would go to the "We might make a lot of money but, we also spend a lot of money" charity that Patrick Ewing started when he was involved with the player's association.

I bet David Stern had an intern get that quote printed up and posted above the door in the league offices about 6 weeks ago.

UrinalCake
08-16-2011, 11:31 AM
So here are my starting lineups:

PG: Irving vs. Lawson
SG: Redick vs. Carter
SF: Battier vs. Marvin Williams
PF: Brand vs. Hansbrough
C: Boozer vs. Haywood

Duke bench: Dunleavy, McRoberts, Hill, Maggette (Simmons left out Dahntae Jones, Duhon, Deng, Henderson, and Shelden Williams)

UNC bench: Jamison, Davis, Felton, Wallace (Simmons left out Ellington, Danny Green, Sean May, and Brendan Wright, some of whom I can't believe are still in the league...)

Deng might even push for a starting nod over Battier. The lineups were tough because both schools seem to have too many power forwards. Anyways, I see us as having an advantage at every position except perhaps PG, as Lawson has more experience. Irving's talent could very well make up the difference though. Redick would have a tough time guarding Carter but as we saw in the playoffs a couple years ago, JJ's numbers indicate he can be every bit as productive.

Class of '94
08-16-2011, 12:48 PM
So here are my starting lineups:

PG: Irving vs. Lawson
SG: Redick vs. Carter
SF: Battier vs. Marvin Williams
PF: Brand vs. Hansbrough
C: Boozer vs. Haywood

Duke bench: Dunleavy, McRoberts, Hill, Maggette (Simmons left out Dahntae Jones, Duhon, Deng, Henderson, and Shelden Williams)

UNC bench: Jamison, Davis, Felton, Wallace (Simmons left out Ellington, Danny Green, Sean May, and Brendan Wright, some of whom I can't believe are still in the league...)

Deng might even push for a starting nod over Battier. The lineups were tough because both schools seem to have too many power forwards. Anyways, I see us as having an advantage at every position except perhaps PG, as Lawson has more experience. Irving's talent could very well make up the difference though. Redick would have a tough time guarding Carter but as we saw in the playoffs a couple years ago, JJ's numbers indicate he can be every bit as productive.

Personally, I would start either Grant or Luol over Shane. While Shane might be the better 3point shooter of the three, I think Grant and Luol are better all around players and athletes than Shane. And that's not a put down on Shane; I think all three (including Grant at age 38) are very good small forwards.

licc85
08-16-2011, 10:42 PM
Personally, I would start either Grant or Luol over Shane. While Shane might be the better 3point shooter of the three, I think Grant and Luol are better all around players and athletes than Shane. And that's not a put down on Shane; I think all three (including Grant at age 38) are very good small forwards.

Move Shane over to the 2 spot to cover Vince and have Luol start at the 3. With Kyrie guarding the ball and Luol and Shane's long arms on the wings, nobody, not even Ty Lawson is getting in the paint. I love J.J., he's my boy, but he's better off coming off the bench as the 6th man.

sporthenry
09-01-2011, 02:48 PM
http://www.hoopsworld.com/warrick-wants-philly-v-balitmore-game/

I think if the players got any kind of sense, they should try to make this summer league some type of viable business. They could create a mini-NBA to start and the TV proceeds to start would be ridiculous. I like how the players are either from the city or are very apart of the city like Kobe is to LA and I think it would create even more fans b/c bragging rights would be very real. It would almost be like college basketball where you would actually have a connection to these kids as opposed to a random draft or free agency. You could create a nice 10-12 team league with the likes of Philly, NY, DC, Chicago, NC, LA and some other hotbeds for basketball.

superdave
09-02-2011, 01:29 PM
http://www.hoopsworld.com/warrick-wants-philly-v-balitmore-game/

I think if the players got any kind of sense, they should try to make this summer league some type of viable business. They could create a mini-NBA to start and the TV proceeds to start would be ridiculous. I like how the players are either from the city or are very apart of the city like Kobe is to LA and I think it would create even more fans b/c bragging rights would be very real. It would almost be like college basketball where you would actually have a connection to these kids as opposed to a random draft or free agency. You could create a nice 10-12 team league with the likes of Philly, NY, DC, Chicago, NC, LA and some other hotbeds for basketball.

I would think a barnstorming tour would be the way to go. Durant and company played at Trinity here in DC two weeks ago: sold out. Imagine if they had a rookies vs sophomores game to start, then a couple of all-star games after that. 20 minute halves, dunk contests in between games, etc. I'd shell out $20 bucks to see that at good arena.

jv001
09-02-2011, 03:57 PM
Move Shane over to the 2 spot to cover Vince and have Luol start at the 3. With Kyrie guarding the ball and Luol and Shane's long arms on the wings, nobody, not even Ty Lawson is getting in the paint. I love J.J., he's my boy, but he's better off coming off the bench as the 6th man.

I don't care how old he is, but I would have Christian on my team any day. Probably have Nate as well. He(Nate) could could put a scare in the holes. GoDuke!

El_Diablo
09-30-2011, 12:01 PM
Apparently Kobe Bryant is closing a deal to play forty days (about ten games) in Italy for $3 million.

http://espn.go.com/los-angeles/nba/story/_/id/7038120/kobe-bryant-deal-95-percent-done-italian-team-says-los-angeles-lakers-star

Billy Dat
10-21-2011, 04:48 PM
Do we think Doc Rivers is happy that the lockout is continuing so that he can watch more of Austin's games in person? Unlike the players, he's collecting his $5MM+/year.

That isn't really a serious question, just a reason to observe that no one on this board has cared to write about the lockout for weeks, which supports the general fan apathy toward the league right now. With the recent marathon talks breaking off, this baby looks like it may keep going on and on. I think a season cancellation is a real possibility.

Class of '94
10-21-2011, 06:01 PM
Do we think Doc Rivers is happy that the lockout is continuing so that he can watch more of Austin's games in person? Unlike the players, he's collecting his $5MM+/year.

That isn't really a serious question, just a reason to observe that no one on this board has cared to write about the lockout for weeks, which supports the general fan apathy toward the league right now. With the recent marathon talks breaking off, this baby looks like it may keep going on and on. I think a season cancellation is a real possibility.

And there is no deal made, I wonder how that will basketball for the Olympics next year. Would the NBA players still play for USA even if no agreement with the NBA is in place? I sure hope so because I think that you could be a publicity nightmare for the US players, especially if the foreign NBA players decide to play for their respective countries in the Olympics.

hq2
10-21-2011, 06:15 PM
Yeah, no one seems to be too concerned about it all. I'm certainly not. I mean, for years, I got to see a lot of games for $10 under the old collective
bargaining agreement. I got to see lots of ex-Duke players play for very cheap (add in commuter rail ticket and beer, and I could do the whole evening for
$25! What a deal!)Since I'm sure that they'll all eliminate that, I probably won't bother to go to games any more any way. And, after, all, since a lot of
mid-late 90s hall of famers are on their last legs or done, the league won't be that good next year anyway; kind of like the dropoff that occurred in the 90s
after Bird and Magic left. So, let 'em slug it out for a season. Once it's all done, and both sides have lost millions of fans, we'll see who shows up to
see them next year.

gep
10-22-2011, 12:51 AM
As far as the Olympics 2012 goes... if the lockout cancels the whole season, maybe the NBA stars will look at the Olympics as an opportunity to get together for a "real-world" championship. If no NBA championship for 2012 is available, maybe a "real world" championship will be enticing. After all, a lot of them are looking for competitive games while the wait.

Also, I'm following Shane Battier on Twitter... he occasionally has comments on the NBA lockout....

Billy Dat
10-22-2011, 07:44 AM
As far as the Olympics 2012 goes... if the lockout cancels the whole season, maybe the NBA stars will look at the Olympics as an opportunity to get together for a "real-world" championship. If no NBA championship for 2012 is available, maybe a "real world" championship will be enticing. After all, a lot of them are looking for competitive games while the wait.

Also, I'm following Shane Battier on Twitter... he occasionally has comments on the NBA lockout....

Here's a brief article from a few days ago getting K's views on the lockout and the Olympics:
http://www.usatoday.com/sports/basketball/nba/story/2011-10-19/NBA-lockout-could-impact-US-Olympic-team/50822580/1

BD80
10-22-2011, 08:45 PM
Do we think Doc Rivers is happy that the lockout is continuing so that he can watch more of Austin's games in person? Unlike the players, he's collecting his $5MM+/year.

That isn't really a serious question, just a reason to observe that no one on this board has cared to write about the lockout for weeks, which supports the general fan apathy toward the league right now. With the recent marathon talks breaking off, this baby looks like it may keep going on and on. I think a season cancellation is a real possibility.

The owners have little incentive to settle until they are on the brink of losing the entire season. Losing half of the season or so is to the owners' benefit. Let's say there is a 40 game season - the owners would avoid 1/2 of the player salaries and yet get 1/2 of the regular season games PLUS all the playoff games. The playoffs are where the real profit is, and players get a fixed amount for playoff games. Regular season attendance is better as long as a team is still in contention, so there will be less "dog" games with teams playing just for "pride." I would suggest the Cavaliers would be fine with washing out the entire season - placing them back on top in the lottery. A team like the Pistons doesn't mind washing out most of the season as it is burdened with awful contracts like RIP Hamilton's.

UrinalCake
10-22-2011, 11:11 PM
I think for some of the older, veteran superstars - guys like Kobe, Wade, Lebron, etc. - losing half of the season could actually be kind of good for them too. A shorter season would mean less wear on their bodies and they'd enter the playoffs fresher. Losing half a season of salary would hurt but they can afford it. For everyone else it would suck. Unfortunately for them, it's the older guys who are leading the negotiations.

BD80
10-23-2011, 10:25 AM
I think for some of the older, veteran superstars - guys like Kobe, Wade, Lebron, etc. - losing half of the season could actually be kind of good for them too. A shorter season would mean less wear on their bodies and they'd enter the playoffs fresher. Losing half a season of salary would hurt but they can afford it. For everyone else it would suck. Unfortunately for them, it's the older guys who are leading the negotiations.

I think it was Jason Whitlock who recently made the observation that the superstars walking into the boardroom to get involved in the negotiations is like David Stern walking out onto the court to check into an NBA game. They may be millionaires, they aren't businessmen, certainly not of Sterns' ilk.

94duke
10-26-2011, 11:19 AM
I think it was Jason Whitlock who recently made the observation that the superstars walking into the boardroom to get involved in the negotiations is like David Stern walking out onto the court to check into an NBA game. They may be millionaires, they aren't businessmen, certainly not of Sterns' ilk.

Speaking of whitlock, he has a new article on "owners' hypocrisy" with some quotes from Grant Hill.
http://msn.foxsports.com/nba/story/nba-lockout-steve-nash-grant-hill-right-wing-conservatives-owners-are-hypocrites-want-wall-street-bailout-from-players-102611

Billy Dat
10-26-2011, 05:33 PM
Signs are starting to point to the two sides reaching an agreement...we'll see how today's session closes, and whether or not they meet again tomorrow, but word is that the BRI split may be settled at 51.5 for the players which likely means the owners will go a little softer on their hard cap demands. The primary hurdle to everything may likely be lack of owner consensus on big market/small market revenue sharing. Paul Allen seems to be a real monkey wrench.

Players like LBJ, Melo, D.Rose and others started pulling out of the big "World Tour" events starting last night and into today...hopefully because they'll be in training camp. If they get the outline of a deal squared this week, maybe their playing by Thanksgiving. Reading the tweet leaves, I am feeling optimistic.

heyman25
10-26-2011, 08:35 PM
Jason Whitlock angle is an intellectual version of Bryant Gumbel's pro player bias. I agree with some of the points, but making the owners the villains is a cheap shot.It takes a compromise to make the NBA get back to business. The owners are just trying to preserve their capital.They gave guys like Rashard Lewis too much money and have made many mistakes in overpaying for players in free agency. However they should still be allowed to increase their share of the revenues.The NFL figured it out. History proves strikes always make it difficult to ever get that income back.I may be in a minority, but I think Derek Fisher and Billy Hunter are the villains in these negotiations.Kevin Garnett and Dwayne Wade's out bursts behind close doors shows a lack of class. Why not be professionals off and on the court.

UrinalCake
10-26-2011, 11:09 PM
The primary hurdle to everything may likely be lack of owner consensus on big market/small market revenue sharing.

Serious question here... why is revenue sharing even an item of discussion right now? Shouldn't that be something for the owners to figure out amongst themselves? The players don't really have anything to do with it.

Billy Dat
10-26-2011, 11:15 PM
Serious question here... why is revenue sharing even an item of discussion right now? Shouldn't that be something for the owners to figure out amongst themselves? The players don't really have anything to do with it.

I think the issue is that if revenue sharing doesn't happen, then those small market owners won't be willing to make concessions on the other lockout issues like share of basketball related income, etc.

theAlaskanBear
10-27-2011, 02:05 PM
Jason Whitlock angle is an intellectual version of Bryant Gumbel's pro player bias. I agree with some of the points, but making the owners the villains is a cheap shot.It takes a compromise to make the NBA get back to business. The owners are just trying to preserve their capital.They gave guys like Rashard Lewis too much money and have made many mistakes in overpaying for players in free agency. However they should still be allowed to increase their share of the revenues.The NFL figured it out. History proves strikes always make it difficult to ever get that income back.I may be in a minority, but I think Derek Fisher and Billy Hunter are the villains in these negotiations.Kevin Garnett and Dwayne Wade's out bursts behind close doors shows a lack of class. Why not be professionals off and on the court.

I'm sorry, I don't understand your logic behind the bolded statements.

If, as you stated, the owners make many mistakes overpaying for players...why should the players themselves be responsible? Whatever happened to accountability? Whay are the owners gauranteed profits when it is their mismanagement that is causing them to lose money?

There are some issues with the structure of basketball -- mostly the disparity between large and small markets. But as has been mentioned, thats an issue between owners...they just want to use this opportunity to soak the players.

When you talk about Rashard Lewis -- its not like its a huge surprise how bad his contract is. When he was signed by the ORL Magic to his huge deal...so many basketball people knew it was a mistake going in. The poster child for this next bad contract is going to be Joe Johnson. No surprise there either. Have some self restraint!

toooskies
10-27-2011, 03:16 PM
My understanding is that when the owner signs a player to a contract, that the contract isn't worth exactly that dollar amount; instead it goes up or down based on revenues. So the owners pay 57% regardless under the old system. The exorbitant contracts aren't upsetting the player/owner split; rather, it's the 57/43 split that was negotiated at the last lockout. Individual bad contracts can limit an individual team's competitiveness and profit, but not the league's. Collective payouts should remain the same.

MCFinARL
10-28-2011, 09:10 AM
Whatever happened to accountability? Whay are the owners gauranteed profits when it is their mismanagement that is causing them to lose money?


Maybe the owners are just jealous that corporate CEOs get to run their companies into the ground and then collect multimillions in severance pay from their buddies on the clubby boards of directors--they want the same insulation from their own bad decisions! :D

Another question--as someone noted above, there are now signs that a deal will be reached soon. If so, what will happen to Kyrie Irving's semester? Will Duke profs be flexible about granting incompletes and/or allowing him to schedule exams and final papers around his practice schedule in Cleveland? (I hope so--doesn't seem like a situation that will come up often enough to worry about setting bad precedents.)

TampaDuke
10-28-2011, 10:23 AM
If, as you stated, the owners make many mistakes overpaying for players...why should the players themselves be responsible? Whatever happened to accountability? Whay are the owners gauranteed profits when it is their mismanagement that is causing them to lose money?


While I tend to agree with you on accountability and don't waste much of my concern for businesses that fail due to bad decisions, the NBA is a little different than the typical business. In particular, an unprofitable franchise can't just keep losing money and go out of business without having huge consequences on the league as a whole, including the profitable teams.

Do we really want a system that has franchises going out of business or, more likely, either continuously being sold (and possibly relocated) or being operated on such a shoe string budget required to be profitable that they can't regularly compete with the better-endowed teams?

It seems to me that if you really want every team to operate on a conventional business model, then a large percentage of the teams will need to operate with a budget that precludes them from regularly competing on the court.

Bottom line, at least as it appears to me, is that the owners and players are in it together and both have to compromise to ensure that all teams are profitable while also competitive. As to how that is accomplished, I have no idea.:)

sagegrouse
10-28-2011, 11:09 AM
While I tend to agree with you on accountability and don't waste much of my concern for businesses that fail due to bad decisions, the NBA is a little different than the typical business. In particular, an unprofitable franchise can't just keep losing money and go out of business without having huge consequences on the league as a whole, including the profitable teams.

Do we really want a system that has franchises going out of business or, more likely, either continuously being sold (and possibly relocated) or being operated on such a shoe string budget required to be profitable that they can't regularly compete with the better-endowed teams?

It seems to me that if you really want every team to operate on a conventional business model, then a large percentage of the teams will need to operate with a budget that precludes them from regularly competing on the court.

Bottom line, at least as it appears to me, is that the owners and players are in it together and both have to compromise to ensure that all teams are profitable while also competitive. As to how that is accomplished, I have no idea.:)

Simple business principles do apply to the NBA, but it's like an advance math class -- you need to spend an hour or so defining the terms so the "simple business principles" are obvious. Here are a couple of observations --

The owners are in a death-grip with each other as both business partners and competitors. As a result, they have implemented a bunch of rules to "organize" the internal NBA market -- i.e., "restrict competition for players." These include (a) the NBA draft, (b) restrictions on trades and free agents, and (c) salary caps and rookie pay scales. Needless to say, because the internal rules affect what teams are able and willing to pay players, the players' union, the NBAPA, has an intense interest in such rules, as well as in the apportionment of "basketball-related income" (BRI) between teams and players, which determines the total dollars available.

Also, while the NBA has many "factors of production," including arenas (rented or owned), media contracts, and PR, the primary factors are the players. The NBA has made the problem worse (or, more intense) in terms of labor relations by "selling the stars" of the league and not the teams on the jerseys. In the NFL and Major League Baseball, it is a lot more on the team ("the Packers," "the Red Sox," "the Yankees," etc.).

As the #3 sports league, the NBA business model is not as advantageous as the NFL's. Therefore, some teams are apparently losing money. The fact that national TV contracts are only a small part of revenue (as opposed to in the NFL) also skews the league towards haves and have-nots as opposed to financial and competitive balance, as in the NFL.

Anyway, the NBA has a strong monopoly power in the product market, as a major supplier of basketball entertainment. And a reasonably strong monopoly power (actually, monopsony) as the major and wealthiest buyer of basketball player services in the world. And there is strong monopoly power with the union, as the source of the valued assets of the league. Notice you haven't heard anything about the NBA using "replacement players," but you have heard a bit about players going out on their own to play games and earn some bucks.

This situation just calls for a lengthy negotiation and a serious dispute between players and owners. It sounds like this one is working itself out. I would not have been surprised to see the season canceled. Many of the NBA owners also own hockey franchises in the NHL. That league became a lot more profitable when the NHL canceled the season in 2004-2005 and essentially broke the union.

sagegrouse
'I hope nobody thinks I know what I am writing about'

JasonEvans
10-28-2011, 08:53 PM
So, I want to know what goes on when the two sides spend 10+ hours meeting and spend almost all the time talking about the revenue split. I mean, is it like this?


Stern: "We'll give you 50%."
Hunter: "Sorry, we can't do that. The best we can offer is 52%."
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"

Yawn. I guess every so often someone asks about whether the cap is hard or if there will be luxury tax penalties. Perhaps every hour or so they talk a bit about the salary structure of the draft or if teams will be allowed to go over the cap for the mid-level exception or to retain a player with Bird rights, but isn't the vast, vast majority of the time just two old enemies staring each other down and saying --

50%
No, 52%

-Jason "at what point will the NBA realize that folks don't really miss it all that much and that they have killed all the good will they had after the finals?" Evans

theAlaskanBear
10-28-2011, 09:27 PM
So, I want to know what goes on when the two sides spend 10+ hours meeting and spend almost all the time talking about the revenue split. I mean, is it like this?


Stern: "We'll give you 50%."
Hunter: "Sorry, we can't do that. The best we can offer is 52%."
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"
Stern: "50%"
Hunter: "No, 52%"

Yawn. I guess every so often someone asks about whether the cap is hard or if there will be luxury tax penalties. Perhaps every hour or so they talk a bit about the salary structure of the draft or if teams will be allowed to go over the cap for the mid-level exception or to retain a player with Bird rights, but isn't the vast, vast majority of the time just two old enemies staring each other down and saying --

50%
No, 52%

-Jason "at what point will the NBA realize that folks don't really miss it all that much and that they have killed all the good will they had after the finals?" Evans

Well, from what I was reading on the ESPN site, the owners actually threw a wrench in Friday's negotiation by going back to the 53/47 owner/player split, and then at the end of the day proposed a 50/50 split again. Stern cancelled games until Nov. 30th, and now says that the owners may go even more hardline to recoup the $$$ loses from cancelled games.

The players have gone almost halfway (52.5) to the owners starting point of 47%. Really disappointing they couldnt get it done this weekend.

The difference from the players proposal and the owners 50/50 split is worth about $200 million, yet every cancelled week of basketball costs the league about $100 million dollars? What is the owners end-game here? To wreck their brand and cause hundreds of millions of dollars of losses, that dwarfs any gain they make in the BRI percentage? Anyone else have a perspective?

JasonEvans
10-28-2011, 10:51 PM
Well, from what I was reading on the ESPN site, the owners actually threw a wrench in Friday's negotiation by going back to the 53/47 owner/player split, and then at the end of the day proposed a 50/50 split again. Stern cancelled games until Nov. 30th, and now says that the owners may go even more hardline to recoup the $$$ loses from cancelled games.

The players have gone almost halfway (52.5) to the owners starting point of 47%. Really disappointing they couldnt get it done this weekend.

The difference from the players proposal and the owners 50/50 split is worth about $200 million, yet every cancelled week of basketball costs the league about $100 million dollars? What is the owners end-game here? To wreck their brand and cause hundreds of millions of dollars of losses, that dwarfs any gain they make in the BRI percentage? Anyone else have a perspective?

Here is the stupid thing-- if you believe David Stern's constant whining about the terrible old system (one which he designed, by the way) then you have to believe that the vast majority of basketball teams lose money during the season. So, shortening the season is actually a good thing for all these clubs. Rather than go more hard-line, the owners should have more money to spend the longer the lockout goes on. At least that is what you should think if you believe the stuff Stern has been saying for the past year (which I do not, but that is another story).

There is little question that the players, whose primary source of income is the NBA and whose careers generally last about half a decade or so, have more to lose in a long-term lockout than the owners, most of whom have many other money-making ventures and who are all richer than the players anyway. So, it would seem logical that a really long-term lockout would break the players.

But, the wild card in all this is how much the prolonged labor impasse is affecting the league's overall popularity. That is what must really concern the owners. Once a deal is done, if the fans stay away and the TV ratings are bad, that severely affects the owner's bottom line, perhaps in ways that make a few hundred million dollars of salary seems small.

I suspect they will get a deal done -- probably in a couple more weeks. They will likely end up with a compromise number, like 51 or 51.5%. Heck, the owners might even go to 52% if the players give on how hard the cap will be. Frankly, I think the best thing to do would be a really punitive soft cap that forces teams to pay a large luxury tax if they are over a certain threshold. Then, you give that luxury tax money to the lower revenue teams to help them afford a higher payroll. Set the luxury tax at a lower threshold than baseball and it can be a good way of revenue sharing as well as an actual disincentive to teams going over the cap.

-Jason "I can't decide if I care or not... I think I sorta care, but the league is doing little to make me really pine away for it" Evans

UrinalCake
10-29-2011, 02:34 AM
Owning an NBA team is an investment. The year-to-year profits or losses aren't as significant as the overall value of the franchise. The owners should be less worried about how much they're losing from two weeks of canceled games and more worried about fans turning away from the NBA for good. Historically speaking though, for all the outrage and disgust that fans voice during a labor dispute, they tend to come back after a couple of years.

UrinalCake
10-29-2011, 02:36 AM
Here is the stupid thing-- if you believe David Stern's constant whining about the terrible old system (one which he designed, by the way) then you have to believe that the vast majority of basketball teams lose money during the season. So, shortening the season is actually a good thing for all these clubs. Rather than go more hard-line, the owners should have more money to spend the longer the lockout goes on. At least that is what you should think if you believe the stuff Stern has been saying for the past year (which I do not, but that is another story).

Yeah, except there are sunk costs like stadium leases that they don't get back when games are canceled. But I agree that there is somewhat of a contradiction by Stern. I personally don't believe they're losing money either, at least not as an overall investment.

JasonEvans
10-29-2011, 12:56 PM
Yeah, except there are sunk costs like stadium leases that they don't get back when games are canceled. But I agree that there is somewhat of a contradiction by Stern. I personally don't believe they're losing money either, at least not as an overall investment.

I have not looked into it to see, but I don't think I have heard of any team NBA being sold for less than the owner's original purchase price. Perhaps it has happened with teams that were only owned for a few seasons, but if you own one of these things for a decade, you are making a LOT of money off it.

For example, the lousy Atlanta Spirit ownership group bought the Hawks, Thrashers, and Philips Arena in 2004 for $250 million. The Thrashers were sold for $170 million and the Spirit are selling 80% of the Hawks and Philips for $300 million (though a lot of that deal is assumption of debt, not straight cash). Anyway, from a $250 mil investment, the Spirit are getting around $470 mil (and they will still own a chunk of the Hawks/Philips) after 6+ years of ownership.

Of course, it is worth noting that the Spirit owners reportedly had to give cash injections to the two teams a couple times over the years, because the Hawks and especially the Thrashers were money-losers -- still, all-in-all it seems like a pretty good investment.

-Jason "not much research -- I could be wrong" Evans

BD80
10-29-2011, 02:55 PM
... I suspect they will get a deal done -- probably in a couple more weeks. They will likely end up with a compromise number, like 51 or 51.5%. Heck, the owners might even go to 52% if the players give on how hard the cap will be. Frankly, I think the best thing to do would be a really punitive soft cap that forces teams to pay a large luxury tax if they are over a certain threshold. Then, you give that luxury tax money to the lower revenue teams to help them afford a higher payroll. Set the luxury tax at a lower threshold than baseball and it can be a good way of revenue sharing as well as an actual disincentive to teams going over the cap.

-Jason "I can't decide if I care or not... I think I sorta care, but the league is doing little to make me really pine away for it" Evans

Why do the players care about the hard cap as long as they have a guaranteed %? Doesn't the "split" override the cap with respect to what the players get? Don't they adjust the player salaries to reach the exact % for total player salaries? Therefore, a hard cap only prevents the big market teams from overly skewing the actual salaries.

I'm not sure I agree about the soft but punitive cap. It would skew competitiveness toward the big markets, so there would still need to be some limit (hard cap). There would also need to be a hard salary floor so teams couldn't just live off the big market teams without even attempting to be competitve. But it would help distribute revenue.

Basketball is too easily dominated by a few players because there are only 5 players on the court at a time, and starters play a vast majority of minutes. Allowing a few teams to stockpile superstars gives those teams too great an advatage and disadvantages other teams by reducing the pool of superstars they can sign. The competitiveness is a greater selling point to me than the "star" factor. That is why the league is so far superior to the "barnstorming" all-star games.



Yeah, except there are sunk costs like stadium leases that they don't get back when games are canceled. But I agree that there is somewhat of a contradiction by Stern. I personally don't believe they're losing money either, at least not as an overall investment.

I would imagine that many teams have leases that adjust if games are canceled. I can see Stern testifying that his decisions should be considered "acts of God."

theAlaskanBear
10-30-2011, 07:09 PM
http://hangtime.blogs.nba.com/2011/10/29/labor-talks-as-the-lockout-turns/#more-20094

a couple of links about the ridiculousness of the failed bargaining session this week. apparently they are just $80 million dollars apart.

Billy Dat
10-31-2011, 04:09 PM
There are a few aspects of the BRI split that I haven't seen discussed on this thread so I thought I'd throw them out there out of interest:

-Part of the players' hard line is simple negotiating. They had 57% BRI under the old system and don't want to give up too much, regardless of the owner's profitability statements.

-There are two major future considerations with the BRI split. Regardless of what is happening within the US, the popularity of basketball is exploding outside the US. The players don't want to give too much on the BRI because they fear that they'll be losing more than the current projections as international TV rights sales boom in the coming decades. At the same time, the owners are legitimately afraid that selling tickets is going to be harder and harder. Bill Simmons had a great podcast last week with the CEO of Live Nation/Ticketmaster talking about this phenomenon - that the experience at the game is competing with huge HD TVs in everyone's living room and the laptop or handheld feeding them stats, tweets, status updates and the like (e.g. DBR in game chats). The economy doesn't help, either. It's much harder to sell season tickets for the above reasons, and because flooded after market services like StubHub and its dozens of competitors creates a fractured market...there seems to be overpriced ticket inventory all over the place...and the CEO said that a huge majority of those tickets never get sold the second time. So you might have the absurd scenario of a "sellout" where all the tickets have been sold but thousands of empty seats because the career ticket brokers, and armchair competitors, just throw them in the garbage when they can't move them. The owners count on every sold ticket leading to sold merchandise, concessions, parking, you name it. It's a huge problem. It'll be interesting to see what the solution is...will an NBA team go radical and build a 10,000 seat band box to drive up demand and make the in-game experience that much more compelling?

-The hard cap is to save owners from themselves, but also to eliminate all the exceptions that seem to provide advantages to the bigger markets - such as Bird rights, the mid level exception, etc. One owner who goes crazy sets the market for everyone else. Like Joe Johnson - it's no good that the market for a sometimes All-Star 3 to be $20MM per year. The owners push seems to be for shorter contracts with less guaranteed money. Simmons talked with Billy Hunter in a different podcast about pushing for a structure where the best guys could get paid more, but where the mediocre guys would make less...Hunter pointed out that would be tough to figure out because past success doesn't predict future success (kind of a nice way to say, for most players, all bets are off except for the final year of a deal when they are playing for that next salary).

-I'd be shocked if they players don't blink first. The majority of them will be loathe to miss a full year salary that could represent 20% of their lifetime earnings.

hq2
10-31-2011, 04:27 PM
The hard cap is to save owners from themselves, but also to eliminate all the exceptions that seem to provide advantages to the bigger markets - such as Bird rights, the mid level exception, etc. One owner who goes crazy sets the market for everyone else. Like Joe Johnson - it's no good that the market for a sometimes All-Star 3 to be $20MM per year. The owners push seems to be for shorter contracts with less guaranteed mone

I'd say the hard cap is the toughest negotiating point. However, looking at the kind of competitive imbalance you had last year,
I'd say they'll have to have one; otherwise, the big market teams will simply buy out all the best players, and people will
stop following the small market teams. Gonna be tough to get the players to accept it, though.

Dev11
10-31-2011, 06:30 PM
Bill Simmons had a great podcast last week with the CEO of Live Nation/Ticketmaster talking about this phenomenon

Just wanted to emphasize that this podcast was extremely interesting, and the interviewee was very open about current business practices and state of the ticket industry. Check it out:

http://espn.go.com/espnradio/play?id=7126430

BD80
10-31-2011, 09:21 PM
The current status:


the league will “give” the players 50 percent of basketball-related income if the players agree to a system in which tax-paying teams do not get to use the mid-level exception and other means through which teams over the cap can nonetheless keeping spending. If the union really wants those exceptions to remain in place for all teams, then the league is going to demand a 53 percent share of basketball-related income, Aldridge reports. The difference — three percentage points — amounts to about $125 million per year going to owners instead of players.

http://nba-point-forward.si.com/2011/10/31/report-owners-offered-union-two-choices/?sct=hp_t2_a10&eref=sihp

If I read that correctly, the owners are attempting to bargain the players down to AT BEST 50% - if they agree to get rid of the exceptions (Bird rights, mid-level and veterans minimum), otherwise down to 47%. Down from the current 57%.

El_Diablo
11-04-2011, 09:38 AM
The players appear to be seriously looking at the decertification option:

http://espn.go.com/nba/story/_/id/7185628/nba-players-working-decertification-sources-say

This is a significant source of leverage for the players because it could undermine the owners' reliance on the nonstatutory labor exemption to the antitrust laws and open the door to player-initiated antitrust lawsuits.

El_Diablo
11-04-2011, 09:47 AM
ESPN also has an explanation of the decertification option:

http://espn.go.com/nba/story/_/page/decertification-111104/nba-decertification-threat-strong-message

It's not completely accurate, but it's a pretty good summary of the general issues and implications.

MartyClark
11-04-2011, 10:24 AM
The players appear to be seriously looking at the decertification option:

http://espn.go.com/nba/story/_/id/7185628/nba-players-working-decertification-sources-say

This is a significant source of leverage for the players because it could undermine the owners' reliance on the nonstatutory labor exemption to the antitrust laws and open the door to player-initiated antitrust lawsuits.

This move would have been much more effective for the players if it was done last summer, rather than this late in the process. Decertification would blow up the current negotiations and, with the various legal delays, effectively end this season before it begins. I'm not saying that's a bad thing.

Class of '94
11-04-2011, 11:03 AM
This move would have been much more effective for the players if it was done last summer, rather than this late in the process. Decertification would blow up the current negotiations and, with the various legal delays, effectively end this season before it begins. I'm not saying that's a bad thing.

Right now, I've read that there are only about 50 players looking at this and they would need about an additional 150+ players to decertify. I don't think these 50 players could convince a majority to decertify if it down between decertifying and losing this season or agreeing to 50-51 percent split in favor of the players and having a season.

El_Diablo
11-04-2011, 02:14 PM
This move would have been much more effective for the players if it was done last summer, rather than this late in the process. Decertification would blow up the current negotiations and, with the various legal delays, effectively end this season before it begins. I'm not saying that's a bad thing.

I completely disagree.

For the decertification to mean anything legally, it must represent the end of the collective bargaining relationship, which is ultimately a judicial determination based on the circumstances. Were the players to decertify very early in the process, it would be much more likely to be treated by the court as a sham done purely for the effect on the negotiations, and the court would be much more likely to find that the relationship was still in effect (and thus a completely ineffective move that removes the players' strongest source of leverage). It would also be more likely to be treated as an unfair labor practice by the NLRB if the players had immediately decertified without letting the negotiations play out, whereas if it is done after months of stalemate, it can be better justified as a response to impasse.

To be honest, even a decertification now may be too early in the process to be treated as the end of the collective bargaining relationship. But if they do indeed decertify soon, and nothing else happens on the negotiation side, then as time passes it would get harder and harder to show that there is any collective bargaining relationship still in place. This then opens the door for antitrust challenges.

cspan37421
11-04-2011, 02:28 PM
if you own one of these things for a decade, you are making a LOT of money off it.

For example, the lousy Atlanta Spirit ownership group bought the Hawks, Thrashers, and Philips Arena in 2004 for $250 million. The Thrashers were sold for $170 million and the Spirit are selling 80% of the Hawks and Philips for $300 million (though a lot of that deal is assumption of debt, not straight cash). Anyway, from a $250 mil investment, the Spirit are getting around $470 mil (and they will still own a chunk of the Hawks/Philips) after 6+ years of ownership.

Of course, it is worth noting that the Spirit owners reportedly had to give cash injections to the two teams a couple times over the years, because the Hawks and especially the Thrashers were money-losers -- still, all-in-all it seems like a pretty good investment.

-Jason "not much research -- I could be wrong" Evans

If I understand your figures correctly:

For 6 years even, that's only* 11% per year, less what the cash injections were, +/- all the other factors. Sounds like at least 4 cash injections (2 teams a couple of times). I'm not sure how much those would be. If it was $10m a pop (SWAG here), spread out in years 2-5, and no other factors (like blowing through surplus/WC) then it's maybe 9%/year. While that's a good return, 9-11%/yr is not really that great for private equity, esp. from a 2004 (not 2011) perspective. JMO.

* I think most of us would be pleased with 11% per year today.

sagegrouse
11-04-2011, 03:09 PM
If I understand your figures correctly:

For 6 years even, that's only* 11% per year, less what the cash injections were, +/- all the other factors. Sounds like at least 4 cash injections (2 teams a couple of times). I'm not sure how much those would be. If it was $10m a pop (SWAG here), spread out in years 2-5, and no other factors (like blowing through surplus/WC) then it's maybe 9%/year. While that's a good return, 9-11%/yr is not really that great for private equity, esp. from a 2004 (not 2011) perspective. JMO.

* I think most of us would be pleased with 11% per year today.

Your logic is impeccable, but I wonder whether the original owners put up $250 million in their own money. Surely their investment was leveraged.

sagegrouse

JasonEvans
11-04-2011, 05:32 PM
Your logic is impeccable, but I wonder whether the original owners put up $250 million in their own money. Surely their investment was leveraged.

It was very leveraged. I heard they put only about 10 or 15% down in cash on the team. The same thing is supposedly happening with the new owner, which is one reason the deal is being held up by the NBA -- not enough cash is changing hands here. A lot of what is happening is rich guys trading debt with each other.

-Jason

MartyClark
11-04-2011, 06:08 PM
I completely disagree.

For the decertification to mean anything legally, it must represent the end of the collective bargaining relationship, which is ultimately a judicial determination based on the circumstances. Were the players to decertify very early in the process, it would be much more likely to be treated by the court as a sham done purely for the effect on the negotiations, and the court would be much more likely to find that the relationship was still in effect (and thus a completely ineffective move that removes the players' strongest source of leverage). It would also be more likely to be treated as an unfair labor practice by the NLRB if the players had immediately decertified without letting the negotiations play out, whereas if it is done after months of stalemate, it can be better justified as a response to impasse.

To be honest, even a decertification now may be too early in the process to be treated as the end of the collective bargaining relationship. But if they do indeed decertify soon, and nothing else happens on the negotiation side, then as time passes it would get harder and harder to show that there is any collective bargaining relationship still in place. This then opens the door for antitrust challenges.

How does this differ from the NFL decertification? The NFLPA began discussing decertification in September of 2010. They decertified in early March of 2011, six months before the start of the regular season. Correct me if I'm wrong, but I don't think any court declared the decertification a sham or that the NLRB treated it as an unfair labor practice. I'm not a labor lawyer, from your "complete disagreement", I suspect you may be.

cspan37421
11-04-2011, 07:49 PM
It was very leveraged. I heard they put only about 10 or 15% down in cash on the team.
-Jason

Well, that does make a significant difference. I think the technical term is "ginormous".

Wheat/"/"/"
11-04-2011, 08:13 PM
These guys (owners/players) better get their act together soon or they will do some major damage to the NBA as a brand and it will take a long time to climb out of the hole they are creating.

I was talking to someone very high up in the sports publishing world last night and asked the question if the lockout was hurting the advertisers who use the NBA as their vehicle and the response was..."Nah, nobody seems to care".

I thought that was very telling...those dollars are going to go somewhere else and it will be hard to get them back for the NBA when they do.

JasonEvans
11-05-2011, 09:33 AM
Here is a scary article (http://sports.yahoo.com/nba/blog/ball_dont_lie/post/Hardline-owners-led-by-Michael-Jordan-could-se;_ylt=ApiiUiVgIKMi4VoaxsB6LtE5nYcB?urn=nba-wp10234) from Yahoo. It talks about a group of 14 hard-line owners who were talking about only offering the players 37% of basketball income and who are threatening to vote down even a 50-50 deal. The group is led by Michael Jordan, who owns the Bobcats and who has become the Players biggest enemy since becoming an owner.

Kelley Dwyer, the author of the article, makes it clear at the end that he thinks the players are being raked over the coals and that the owners are dead wrong in this. It is clear to anyone watching that the players are being asked to give up waaaay too much. It is sad.

What is to stop some other rich dudes from coming around and starting their own league? The opportunity is there. It is a pity Mark Cuban is already part of the NBA's ownership group because he is just the kind of guy who could pull this off.

-Jason "I've always wanted to own a team... it is my time!!" Evans

El_Diablo
11-05-2011, 10:56 AM
Correct me if I'm wrong, but I don't think any court declared the decertification a sham or that the NLRB treated it as an unfair labor practice.

I am not sure if the issue was ever actually litigated in the NFL's case...the court battles centered on the NFL's TV deals being evidence of the owners' bad faith lockout of the players. But the NLRB is a different story. Here is the complaint the NFL filed: http://www.usatoday.com/sports/football/nfl-nflpa-nlrb-complaint.pdf

The NLRB has not yet issued a ruling on this (at least that I could find in a quick search), but it looks like it preferred to have the parties settle it themselves ( http://www.nfl.com/news/story/09000d5d820324cf/article/nlrb-wraps-up-initial-investigation-of-nflnflpa-case), so it may never issue a ruling.

jimsumner
11-05-2011, 11:42 AM
For the first time, I believe losing the entire season is a real possibility.

And yes, I would miss the NBA.

-bdbd
11-09-2011, 04:20 PM
Interesting link on the front of the CNN/SI website with 20 "Classic Pictures of Coah K."


http://sportsillustrated.cnn.com/multimedia/photo_gallery/1111/mike-krzyzewski-classic-photos/content.1.html?eref=sihp&sct=hp_bf4_a3


The third one in shows him posing with King James and Kobe Bryant before the ast Olympics run. The caption reads:


Kobe Bryant and LeBron James pose with their Olympic coach before the 2008 Summer Olympics, where U.S. basketball earned a gold medal. Bryant verbally committed to play for Krzyzewski at Duke before bypassing college basketball to go directly from high school to the NBA. Read more: http://sportsillustrated.cnn.com/multimedia/photo_gallery/1111/mike-krzyzewski-classic-photos/content.3.html#ixzz1dFBroraO


Is that true? I was aware at the time that we were recruiting Kobe out of the Philly area (Ardmore), and we were down to his top-5, but I hadn't seen it said that he verbally committed to K before this. I did a quick google search and the closest I could come was this: "At the top of his list were Duke, North Carolina, Villanova and Michigan." Can you just imagine how different things might've been with Kobe at Duke circa 1996-1999...



If anyone is interested, here's the rest of the bio part on his late-highschool and college recruitment from jockbio.com :
But when Chicago schoolboy Kevin Garnett went in the first round of the NBA Draft in June of 1995, Kobe began seriously considering moving directly to the pros. That summer, Joe arranged for his son to work out with members of the 76ers, and Kobe was awesome. He also made a big impression on scouts at the ABCD All-America Camp at Fairleigh Dickinson University in New Jersey.

...Kobe’s sparkling play put Lower Merion on the high-school basketball map. The Aces posted a 32-3 record and captured their first state title in 42 years. ...college coaches filled the stands for every game, and coach Downer received invitations to several prestigious tournaments. Kobe finished the year with a scoring average of 30.8 points, pushing his four-year points total to 2,883, which shattered the Pennsylvania schoolboy record set four decades earlier by Wilt Chamberlain.

The recruiting craziness accelerated after the season ended. When an Italian League team approached Joe about becoming its coach, management insisted that his son be part of the deal. Meanwhile, along with several other top high school seniors—including Tim Thomas of New Jersey, Lester Earl of Louisiana, and Jermaine O’Neal of South Carolina—Kobe was thinking about following Garnett’s path to the NBA.

With rumors that Kobe would bypass college becoming more prevalent, he did nothing to squelch them. As various experts rendered their opinions on his pro prospects, a consensus was building that Kobe was indeed NBA material. The 17-year-old added fuel to the fire when he wowed the scouts at the 1996 Beach Ball Classic in South Carolina. Kobe ended the speculation that spring at a press conference in the Lower Merion gym. Before dozens of reporters and camera crews—and with friends from the group Boyz II Men nearby—he announced that he had decided to take his talents to the NBA. A short time later he signed on with the William Morris Agency, then inked multi-year endorsement deals with Adidas and Sprite....

Mtn.Devil.91.92.01.10.15
11-09-2011, 04:29 PM
Interesting link on the front of the CNN/SI website with 20 "Classic Pictures of Coah K."


http://sportsillustrated.cnn.com/multimedia/photo_gallery/1111/mike-krzyzewski-classic-photos/content.1.html?eref=sihp&sct=hp_bf4_a3


The third one in shows him posing with King James and Kobe Bryant before the ast Olympics run. The caption reads:


Kobe Bryant and LeBron James pose with their Olympic coach before the 2008 Summer Olympics, where U.S. basketball earned a gold medal. Bryant verbally committed to play for Krzyzewski at Duke before bypassing college basketball to go directly from high school to the NBA. Read more: http://sportsillustrated.cnn.com/multimedia/photo_gallery/1111/mike-krzyzewski-classic-photos/content.3.html#ixzz1dFBroraO

Is that true? I was aware at the time that we were recruiting Kobe out of the Philly area, and we were down to his top-5, but I hadn't seen it said that he verbally committed to K before this. I did a quick google search and the closest I could come was this: "At the top of his list were Duke, North Carolina, Villanova and Michigan." Can you just imagine how different things might've been with Kobe at Duke circa 1996-1999...

As I recall, Kobe was widely expected to choose Duke, but never made an official commitment. That was part of what made K's time as Olympic coach even more intriguing. Kobe - for all of his talent and ego - has seemed to be a rather "coachable" kid. I think that he might have helped things bounce back more quickly after the K-less season.

/Doesn't care about the NBA
//Hopes more people watch college ball while NBA is on hiatus
///Ready for tip off!

BD80
11-14-2011, 12:28 PM
Frankly, I think the owners are the bad guys (a feeling confirmed when MJ stepped to the front - and yet again not called for traveling) - but the players are such fools in the way it is being handled. Player and agent egos simply cannot be controlled to portray a consistent message to the public. OTOH Stern is brilliant, making the greedy seem reasonable by offering an even more outrageous proposal and using MJ as the bad guy.

You have to love the state of negotiations where the term "asshattery" can accurately be invoked.


"By some combination of mendacity and greed, the agents who are looking out for themselves rather than their clients are trying to scuttle the deal," Stern said.

(Mendacity isn't the same thing as asshattery, but it's close. Google says it is the act of being untruthful.)


http://ken-berger.blogs.cbssports.com/mcc/blogs/entry/11838893/33307247

It is sad that the author feels compelled to define mendacity to his readers.

Bluedog
11-14-2011, 02:40 PM
Well, doesn't look like there's going to be an NBA season....

http://sports.yahoo.com/nba/news;_ylt=Au6BIBOc4a.McZjUej_Uolo5nYcB?slug=ap-nbalabor

JasonEvans
11-14-2011, 03:02 PM
The NBA season is almost certainly lost.

The players have rejected (http://sports.yahoo.com/nba/news;_ylt=AiGMYi8b1RMzV2uWTsxfdPa8vLYF?slug=ap-nbalabor) the owner's latest offer, are disbanding the Union, and are going to take the Owners to court.

Derek Fisher said the decision was unanimous, but earlier today Chris Duhon, player rep for the Magic, said his players had voted to accept the deal. Still, the sense from folks close to the talks was always that the players would reject this deal as it required huge, huge compromises on their part.

This is a difficult situation for the players. They have few options left against a united ownership group that is dead set on strangling the players as much as they can. I doubt most players see Europe as a viable option and the money there is nowhere near what thy made in the US -- plus, there simply are not enough jobs for NBA-level players to absorb all the NBA guys.

This is a sad day. I suspect we won't see pro basketball again until late in 2012.

-Jason "I really feel for the guys who were making the minimum -- the guys at the end of the bench who only have a 3 or 4 year career -- losing a year is a big deal to them" Evans

Duvall
11-14-2011, 03:11 PM
2012 U.S. Olympic Team starting lineup: Marshall, Rivers, Barnes, Davis and Sullinger?

J4Kop99
11-14-2011, 03:14 PM
I mean, there is a reason that the Owners are trying to make such a drastic change to the CBA... the old one was in major favor of the Players and the owners want to change that. They have the right and they have the ability to do so.

Basing this off of past antitrust suits, it does not seem like the NBAPA has much of a chance to get a better deal. With that said, it makes me wonder why the NBAPA would do this at all, let alone wait until now.

Duvall
11-14-2011, 03:15 PM
I mean, there is a reason that the Owners are trying to make such a drastic change to the CBA... the old one was in major favor of the Players and the owners want to change that. They have the right and they have the ability to do so.

Basing this off of past antitrust suits, it does not seem like the NBAPA has much of a chance to get a better deal. With that said, it makes me wonder why the NBAPA would do this at all, let alone wait until now.

Because they have the right and they have the ability to do so?

Cameron
11-14-2011, 03:20 PM
I think the NBA players decertifying and rejecting the League's offer of a 50/50 revenue split is the only logical thing the players could do. Demanding half a billion dollars for 40 minutes of work three days a week is entirely justifiable. It's not like they're out there playing a game pin dodge ball. This is something much different.

Now I understand that there are more intricate components to this NBA lockout, but, in the grand scheme of things -- at least to a fan of the game from the outside looking in -- the whole thing is beyond obnoxious. The NBA is already falling short big time in terms of popularity, television ratings and arena ticket sales -- a recent Yahoo! Sports report (http://www.thepostgame.com/blog/dish/201111/nba-no-longer-3rd-best-attended-us-sports-league) states that the NBA has been surpassed by Major League Soccer as the third most-watched professional sport in America -- and, if there is no season at all in 2011-12, when it does return, the NBA might as well as actually be playing pin dodge ball. At that point, nobody outside of NBA employees and die-hard fans, will care.

AZLA
11-14-2011, 03:20 PM
Dang, was hoping to see Grant add another good NBA season to his great career...

I think NBA players should officially start an underground basketball league. Small venue tourneys. 3 on 3. Play at Rucker Park, Jackson Park, Venice Beach, on any aircraft carrier, in an Indiana barn, on a helicopter landing pad at the top of the Burj al Arab Hotel in Dubai... Tweet the venues one hour before matches...

J4Kop99
11-14-2011, 03:22 PM
Because they have the right and they have the ability to do so?

Then why wait until now? And looking at recent professional sports antitrust suits, the players rarely, if ever get a ruling in their favor. What does the NBAPA know that they believe this court decision will be any different?

It seems, to me at least, that the players are making their decision with their heart and basing it off of pride... rather that using their brain. The NBAPA seems like an absolute mess with no actual leadership. You have guys like Duhon making claims earlier today that completely contradict what Derek Fisher, Billy Hunter, and others are saying.

Compare the NBAPA to Stern and you can see that Stern is light years ahead in terms of his ability to handle the media and the PR aspect. Stern knows what to say and it seems like all of his guys are on board, no matter what the media has been saying. As for the NBAPA you hear all sorts of different things.

J4Kop99
11-14-2011, 03:30 PM
Turn on NBA TV right now if you have the opportunity and watch the NBAPA press conference. It's a complete mess. They have about 100 players jammed into the room.

BD80
11-14-2011, 03:34 PM
My opinion is that those considered the "hard-line" owners in the negotiations, ie the small market owners, were really the pawns in the negotiations. To keep the league competitive, the league needs better sharing of revenue between big and small market teams, but the small market teams believed it to be easier getting money from the players than from the big market owners.

I still don't believe the teams will wash out a whole season. The court permitted the NFLPA to negotiate even after it was decertified. I think "negotiations" will continue here.

SCMatt33
11-14-2011, 03:45 PM
Frankly, my first thought is more Mike Breen for us.

J4Kop99
11-14-2011, 04:07 PM
Frankly, my first thought is more Mike Breen for us.

Do we know who is announcing tomorrow? I know they were saying RMK will be there... but I wonder who else. The dream team of Knight on P-B-P, Vitale on Color and Raftery on... "Onions!" and "mantoman"

Duvall
11-14-2011, 04:10 PM
Do we know who is announcing tomorrow? I know they were saying RMK will be there... but I wonder who else. The dream team of Knight on P-B-P, Vitale on Color and Raftery on... "Onions!" and "mantoman"

Shulman/Knight/Bilas (http://www.goduke.com/ViewArticle.dbml?SPSID=22724&SPID=1845&DB_LANG=C&ATCLID=205333046&DB_OEM_ID=4200).

JasonEvans
11-14-2011, 04:22 PM
Demanding half a billion dollars for 40 minutes of work three days a week is entirely justifiable. It's not like they're out there playing a game pin dodge ball. This is something much different.


Whaaaat? Did you just imply that an NBA job consists of only 40 minutes of work three days a week? Come on, you can't be nearly that naive.

I think the players were overpaid, a bit, under the old deal. The new deal -- if they had agreed to it -- would have paid then players too little and would have really guaranteed the owners a financial windfall on their team's.

-Jason "I wonder what it would take for the owners to use replacement players? Try to break the union the way the NFL did back in the 80s" Evans

Cameron
11-14-2011, 04:34 PM
Whaaaat? Did you just imply that an NBA job consists of only 40 minutes of work three days a week? Come on, you can't be nearly that naive.


Obviously I don't believe that NBA players only work 120 minutes a week. I was more or less just pointing out -- no matter whose side you are on -- the absurdity of the entire situation via sarcasm. (That should have been pretty obvious.) It just hurts the game. But, I also understand that money runs the game, and that's just the way it is.

As I said, I think both the players and the league office will bitterly regret this day in the future. Fans are sick of it, and the NBA's plummeting numbers prove it. The employees at the arenas -- ticket window clerks, concessions, vendors, janitorial and other office personnel -- are the real losers.

Dukehky
11-14-2011, 05:22 PM
I don't think the owners are going to regret their stance here at all. While I agree their product will lose its momentum, it will come back with a vengeance if there is not a season, the owners are going to get a better deal, and probably most importantly, the owners do not stand to lose nearly as much money via this decision as the players. Sure they want to play the games, that's why they own these teams, but the NBA players were the envy of every professional athlete with the deal they previously had, and it just wasn't made to last.

Also, the owners were prepared for this, the players were not. First and foremost, decertification, if that was there ultimate decision, should have started months ago, similar to the NFL. Also, I don't understand how negotiations could have possibly gone well for the players when many of the player reps did not even go to college, let alone graduate. Sure if every team had a Grant Hill, then this could have been a fair and level headed negotiation, but not every team has a Grant Hill who is able to see both sides of the NBA vs. Players and Star Players vs. regulars. Kobe Bryant graduated from high school and it was perceived to be a big deal for him to enter the negotiation. Likely because he's such a big star, but he's not going to add anything to the argument. He's going to play in the NBA when the NBA has a season, owners shouldn't care that much if their players leave, that was a stupid argument. Suggesting "OH NO, Deron Williams is going to Europe, we need to get a deal so he comes back and doesn't get too happy there!" is ridiculous.

I'm going to miss the NBA highlights on sportscenter, but that's about it until playoff time comes around. I don't think it will be good for college basketball, but then again I don't really care about that, because college basketball is always good for me. Go Devils.

JasonEvans
11-14-2011, 05:30 PM
As I said, I think both the players and the league office will bitterly regret this day in the future. Fans are sick of it, and the NBA's plummeting numbers prove it. The employees at the arenas -- ticket window clerks, concessions, vendors, janitorial and other office personnel -- are the real losers.

Ahhh, I understand better now. I thought you were specifically targeting the players.

I do agree that the little people who make a living on the fringes of the NBA are the ones who are the real losers here. In addition to the folks at the arenas, plenty of NBA teams are laying off secretaries and other low-level people in their organizations. I wonder, do the coaches and GMs get paid full salary at a time like this? I would imagine so.

It is sad how many people are affected by the millionaires and billionaires fighting over how many millions and billions they each are going to make.

-Jason "replacement players... it is gonna happen and the player's union will cave" Evans

Bluedog
11-14-2011, 05:34 PM
Also, I don't understand how negotiations could have possibly gone well for the players when many of the player reps did not even go to college, let alone graduate. Sure if every team had a Grant Hill, then this could have been a fair and level headed negotiation, but not every team has a Grant Hill who is able to see both sides of the NBA vs. Players and Star Players vs. regulars. Kobe Bryant graduated from high school and it was perceived to be a big deal for him to enter the negotiation. Likely because he's such a big star, but he's not going to add anything to the argument.

I don't think it's necessarily a requirement to graduate college to show your intelligence when you're one of the best basketball players on the planet. By all accounts I've heard, Kobe is actually quite a smart guy; he got good grades and test scores in high school and speaks Italian pretty well. He could have easily attended the university of his choice, but obviously had an amazing basketball ability at a young age. Having said that, obviously there are some players who may not understand the intricacies or be the greatest negotiators, but I think it's still good for them to at least get involved. Kobe obviously has an amazing brand and I would argue he's done a fair amount personally to create and market that brand - as such, he must be a decent businessman and certainly I'd think he might have something to bring to the conversation.

SoCalDukeFan
11-14-2011, 05:43 PM
The NBA season is almost certainly lost.

The players have rejected (http://sports.yahoo.com/nba/news;_ylt=AiGMYi8b1RMzV2uWTsxfdPa8vLYF?slug=ap-nbalabor) the owner's latest offer, are disbanding the Union, and are going to take the Owners to court.

Derek Fisher said the decision was unanimous, but earlier today Chris Duhon, player rep for the Magic, said his players had voted to accept the deal. Still, the sense from folks close to the talks was always that the players would reject this deal as it required huge, huge compromises on their part.

This is a difficult situation for the players. They have few options left against a united ownership group that is dead set on strangling the players as much as they can. I doubt most players see Europe as a viable option and the money there is nowhere near what thy made in the US -- plus, there simply are not enough jobs for NBA-level players to absorb all the NBA guys.

This is a sad day. I suspect we won't see pro basketball again until late in 2012.

-Jason "I really feel for the guys who were making the minimum -- the guys at the end of the bench who only have a 3 or 4 year career -- losing a year is a big deal to them" Evans

I am not sad at all.

I feel for the ancillary people. My son has friend who produces the post game show for an NBA team and he gets paid by the game. No season no pay. Same for many others, parking attendants, etc etc.

The guys at the end of the bench with 1 year experience got $762,000 last year. I don't feel for them at all. With 6 years experience they got a million. They probably averaged less than 5 minutes a game. Great work if you can get it.

In my opinion the NBA is basically a nightmare that needs major fixing. Most of the regular season games are not worth watching. The players can collude and try to form a super team (see Miami) when the GMs can not talk to them. Many of the teams lose money. I imagine some of the owners will do better without a season than with one so its easy to see why they have a hard line.

One or two players can transform a team. So owners overpay hoping to catch lightning in a bottle. The smarter owners have to compete against dumber owners who overpay.

I realize that the players have only been paid what someone was willing to pay them. However the current system promotes overpaying and money losing teams, which in the long run is a disaster.

It will be easy for me to satisfy my need for sports and watch college basketball, pro and college football, then baseball and forget the NBA.

SoCal

MartyClark
11-14-2011, 05:58 PM
I'm trying to think this through.

1. The players' union no longer exists so;

2. There is no entity for the NBA to enter into a collective bargaining agreement but;

3. The individual player contracts with their teams (excluding free agents and rookies) are still in place so;

Don't the teams have to honor the contracts with their players who, presumably, are willing to play at this point?

Somebody enlighten me.

A-Tex Devil
11-14-2011, 06:00 PM
At least with respect to the 2011-2012 season. The owners put up an unacceptable offer to the players, and the players responded by firing the first nuke (decertification) which will likely lead the owners to retaliate by pulling the current deal for the Jordan deal and eventually killing the season.

I get why people are ticked at both sides, but someone above had it right -- this is all about the small market teams being forced to fold, or to extract the money they need from the players, as opposed to beginning an NFL type revenue sharing system. Although I disagree, and I think the players are the pawns to an extent here. Not that I feel sorry for them, but the owners are trying to bolster the small markets out of the players' coffers, not the large markets' coffers.

The owners negotiating strategy has been quite indefensible IMHO opinion as well (for those paying attention and seeing through Stern's scolding of the NBAPA reps). I read an article several weeks ago which explained how David Stern was talking about all the things the owners were giving/conceding on, and each one of those items were things that they were trying to force down the players' gullets in the first place. Essentially they put a half dozen new items on the table during the summer that the players would never agree too (and the owners knew it). This allowed the owners to then concede them and cry about how they are the only ones negotiating in good faith. If you tell me that I have to eat a pile of excrement AND take a huge paycut, then complain to the public that I am not negotiating fairly when you kindly take the pile of excrement off the table, I'm sorry, but I'm not going to sympathize, Mr. Stern.

If the players give on this deal now, then when the next CBA comes up and you have 6-12 small market teams still struggling, what's to stop them from reducing the players' pie even more? It's clear that the Charlottes, Sacramentos and Milwaukees of the league would prefer not to have a season then to even meet in the middle with the players. Things aren't going to start moving until the NYs, Boston's and LA Lakers start feeling the hurt of this lockout. I guess that will happen around the new year. But once the season is cancelled, the current sense of urgency goes away, and we'll probably be doing this all over again in ten months or so.

-jk
11-14-2011, 06:30 PM
I'm trying to think this through.

1. The players' union no longer exists so;

2. There is no entity for the NBA to enter into a collective bargaining agreement but;

3. The individual player contracts with their teams (excluding free agents and rookies) are still in place so;

Don't the teams have to honor the contracts with their players who, presumably, are willing to play at this point?

Somebody enlighten me.

According to the AP, the owners are arguing the opposite, actually. They claim that the existing contracts were negotiated and agreed to under the auspices of the NBPA and CBA, and wthout them, the contracts are void.

Free agency for all?

This is more fun than watching the actual games.

-jk

El_Diablo
11-14-2011, 06:32 PM
Then why wait until now?

Had they decertified immediately, before negotiating in good faith, they would be less likely to be successful in challenging the lockout in court on antitrust grounds, since antitrust laws do not apply to the extent that the collective bargaining relationship still exists. A collective bargaining relationship continues at least up to the point of impasse, so an early decertification would be less effective in achieving their ultimate goal (forcing the owners to settle rather than risk the financial disaster that antitrust violations would bring).


And looking at recent professional sports antitrust suits, the players rarely, if ever get a ruling in their favor. What does the NBAPA know that they believe this court decision will be any different?

Without the labor exemption, it's pretty clear that the lockout itself is an antitrust violation under the Sherman Act (since it's a conspiracy in restraint of trade and amounts to a boycott). It's only a question of whether the labor exemption still applies after decertification--a question that has never been answered. With that uncertainty in play, the players need not know that they will be successful in the end. How can they know? But even a 20% chance of success is a powerful weapon here, because a 20% chance of complete financial disaster puts a lot of pressure on the owners to settle rather than roll the dice in court. Antitrust suits put a lot of leverage on the players' side because of the relative risks involved--if the owners win, they are back to the current state of affairs and still have to figure out a way to reach a deal with the players, but if the owners lose, they are literally out billions of dollars (since antitrust damages can be tripled). It's basically a no-win for the owners. The results are either neutral or a gigantic loss. So even if the owners are pretty sure they will not be subject to antitrust damages, do they want to risk everything on it? Do they even want to pay the legal fees for that type of battle? Or would they rather simply agree to a 52% share for the players and move on with their businesses?

Remember, as in the NFL lockout, the two sides can continue negotiating as the lawsuits play out in court. This just gives the owners a greater incentive to reach a deal.

El_Diablo
11-14-2011, 06:39 PM
According to the AP, the owners are arguing the opposite, actually. They claim that the existing contracts were negotiated and agreed to under the auspices of the NBPA and CBA, and wthout them, the contracts are void.

Yes, all contracts were negotiated under and governed by the CBA, which had a provision that keeps them in effect through the negotiating process for a new CBA. If the owners want to get frisky here, they can argue that the decertification nullifies the contracts. This is why they refer to decertification as the nuclear option.

Turk
11-14-2011, 06:52 PM
This is a Grantland post a couple weeks back from a couple of economists that boils the numbers down as simply as possible.

http://www.grantland.com/blog/the-triangle/post/_/id/8300/two-economists-explain-the-nba-lockout

I haven't seen anything that changes the fact that time and money are both on the owners' side. Moving to decertify and trying the anti-trust move means more delays and weakening of the players' position. Only lawyers will hold court, not ballplayers. Here's another assessment from Grantland, although to me this link is more legal than economic.

http://www.grantland.com/blog/the-triangle/post/_/id/9699/an-economics-professor-explains-the-nbpa-and-the-lockout#more

I think decertification was the last-ditch option, and the players will implode sooner or later. The only question is how much collateral damage will be done to the league, and how many years will it take to recover (five or six seems like the right number to me, as of this minute...)

hq2
11-14-2011, 08:09 PM
It's clear that the Charlottes, Sacramentos and Milwaukees of the league would prefer not to have a season then to even meet in the middle with the players. ,

That kind of gets it right. I mean, from their point of view, why bother? The object of a team is to make money, so what's the point in
going to the trouble to put out a team if you're just going to lose it? I'd say the season's not going to happen. Both sides are
so dug in at this point that there won't be a compromise this year at all. Oh well; guess we'll just have to watch Duke instead!

TheItinerantSon
11-14-2011, 08:37 PM
.
The players can collude and try to form a super team (see Miami) when the GMs can not talk to them.
Many of the teams lose money.

Aren't both of those very true about college basketball?

jipops
11-14-2011, 09:41 PM
If the players give on this deal now, then when the next CBA comes up and you have 6-12 small market teams still struggling, what's to stop them from reducing the players' pie even more? It's clear that the Charlottes, Sacramentos and Milwaukees of the league would prefer not to have a season then to even meet in the middle with the players. Things aren't going to start moving until the NYs, Boston's and LA Lakers start feeling the hurt of this lockout. I guess that will happen around the new year. But once the season is cancelled, the current sense of urgency goes away, and we'll probably be doing this all over again in ten months or so.

Which make a UNC repeat that much more likely. Yuck

JasonEvans
11-14-2011, 09:56 PM
Not sure this is really all that relevant, but I figured you all might find this info interesting.

I wanted to see how the NBA players salaries compare to other pro sports leagues. It took a bit of digging.

According to this article (http://www.ehow.com/info_8286300_percentage-professional-ball-players-owners.htmlttp://www.sportsbusinessdaily.com/Journal/Issues/2008/03/20080303/This-Weeks-News/Prime-Cut-Goes-To-NFL-Players.aspx):


NFL players got 54% of league revenues... prior to their latest deal over the summer. The new deal is a bit complicated as the players get a big percentage of TV huge rights (55%) but smaller percentages of merchandising (45%) and ticket sales (40%). It is tough to figure out exactly how much they are getting now, but it is probably in the low-50s overall.

MLB players get between 51% and 63% of revenues. Because that sport does not have a salary cap and lacks some of the structures other sports have, the revenues of the players fluctuate somewhat wildly... perhaps depending on whether the Yankees and Red Sox get into a bidding war on a player ;)

NHL players get a different percentage depending on how successful the league is, which is kinda cool. The lowest percentage they can get is 54% but if the league's revenues top $2.7 bil the player's percentage share rises to 57%.


It is clear to me that the 50% that the NBA owners tried to shove down the player's throats was the lowest percentage in sports. Of course, the other part of the equation is how hard or soft the salary cap is. In the NFL is is pretty darn hard. I think it is in hockey too. Baseball has no cap and many teams violate its luxury tax with impunity -- of course, some others pay next to nothing.

One key part of the NBA deal was how hard the new cap would be. My impression is that the players were most upset about the provisions that owners wanted to put in that would make it hard for teams to go above the cap.

-Jason "the NBA is a star driven league, moreso than other leagues, so for those players to take less than any other sport's does not make sense" Evans

-jk
11-14-2011, 10:25 PM
Not sure this is really all that relevant, but I figured you all might find this info interesting.

I wanted to see how the NBA players salaries compare to other pro sports leagues. It took a bit of digging.

According to this article (http://www.ehow.com/info_8286300_percentage-professional-ball-players-owners.htmlttp://www.sportsbusinessdaily.com/Journal/Issues/2008/03/20080303/This-Weeks-News/Prime-Cut-Goes-To-NFL-Players.aspx):


NFL players got 54% of league revenues... prior to their latest deal over the summer. The new deal is a bit complicated as the players get a big percentage of TV huge rights (55%) but smaller percentages of merchandising (45%) and ticket sales (40%). It is tough to figure out exactly how much they are getting now, but it is probably in the low-50s overall.

MLB players get between 51% and 63% of revenues. Because that sport does not have a salary cap and lacks some of the structures other sports have, the revenues of the players fluctuate somewhat wildly... perhaps depending on whether the Yankees and Red Sox get into a bidding war on a player ;)

NHL players get a different percentage depending on how successful the league is, which is kinda cool. The lowest percentage they can get is 54% but if the league's revenues top $2.7 bil the player's percentage share rises to 57%.


It is clear to me that the 50% that the NBA owners tried to shove down the player's throats was the lowest percentage in sports. Of course, the other part of the equation is how hard or soft the salary cap is. In the NFL is is pretty darn hard. I think it is in hockey too. Baseball has no cap and many teams violate its luxury tax with impunity -- of course, some others pay next to nothing.

One key part of the NBA deal was how hard the new cap would be. My impression is that the players were most upset about the provisions that owners wanted to put in that would make it hard for teams to go above the cap.

-Jason "the NBA is a star driven league, moreso than other leagues, so for those players to take less than any other sport's does not make sense" Evans

Just a couple notes on these comparisons. First, the roster in the NBA is dramatically smaller than the NFL, somewhat smaller than the NHL, and somewhere in between them compared to MLB.

Also, the NFL doesn't guarantee contracts, just signing bonuses, so I'm not sure how they allocate the percentage. And I have no idea how MLB or the NHL deal with guarantees.

-jk

ChillinDuke
11-14-2011, 10:51 PM
Just a couple notes on these comparisons. First, the roster in the NBA is dramatically smaller than the NFL, somewhat smaller than the NHL, and somewhere in between compared to MLB.

Also, the NFL doesn't guarantee contracts, just signing bonuses, so I'm not sure how they allocate the percentage. And I have no idea how MLB or the NHL deal with guarantees.

-jk

Not sure what you mean here, as the MLB has 25 players on the roster, moving up to 40 after September 1st.

Can someone explain to me what this % of revenue means? If a player is signed for, say, $10 million per year, how does 50% or 52% or Any% of BRI affect his pay? This has always been unclear to me.

Thanks in advance.

- Chillin

Kedsy
11-14-2011, 11:42 PM
Which make a UNC repeat that much more likely. Yuck

Repeat of what? I'm thinking a Sweet 16 exit.

throatybeard
11-15-2011, 12:13 AM
Which make a UNC repeat that much more likely. Yuck

For them to repeat, they'd have to peat in the first place, which they have not yet done.

BD80
11-15-2011, 12:29 AM
...
NFL players got 54% of league revenues... now, ... probably in the low-50s overall.

MLB players get between 51% and 63% of revenues. ...
NHL players get ... 54% but if the league's revenues top $2.7 bil the player's percentage share rises to 57%.


It is clear to me that the 50% that the NBA owners tried to shove down the player's throats was the lowest percentage in sports. ...
-Jason "the NBA is a star driven league, moreso than other leagues, so for those players to take less than any other sport's does not make sense" Evans

The NBA has rosters of 15 players, 12 active, and no minor league. Guaranteed salaries. 5 on 5, 2-3 reserves necessary.

MLB has 25 man roster, up to 40 w/ DL etc, as well as 3 or 4 minor league teams. Guaranteed salaries. 9 on 9, pinch hitters, starting rotation, bullpen, 162 games.

NFL has a 53 man roster plus practice squad. Salaries NOT guaranteed. 11 on 11, high injury rate, special teams.

NHL has a 23 man roster not counting IR, plus minor leagues. 6 on 6, need 3 skating lines, at least extra d rotation, injury rate high.

There is a lot that goes into the equation, TV rights, arena/stadium size, ticket prices, merchandizing, etc, but the NBA owners are investing a whole lot more into each player per revenue. This isn't like signing a performer for a 3-night stand, where one can predict the revenue. Teams that miss the playoffs are not likely to turn a big profit on their own. I think the NBA players deserve the smallest piece of the pie. It may be fair for a few players to get the lion's share of the players' portion.

I understand the argument of comparing the % of revenue that goes to the "talent" versus the promoter, but I would suggest that it is the competitive aspect that is most important to the merchandizing of the product.

Duvall
11-15-2011, 05:24 AM
Which make a UNC repeat that much more likely. Yuck

They just beat UNC-Asheville by 16, man. How many championships are you going to give them?

JasonEvans
11-15-2011, 08:25 AM
Can someone explain to me what this % of revenue means? If a player is signed for, say, $10 million per year, how does 50% or 52% or Any% of BRI affect his pay? This has always been unclear to me.

The % figure is comparing total player salaries to total league revenues. So, if the NBA were to bring in, for example, $100 mill in ticket sales, TV/radio rights, and merchandising and had agreed to pay players 52% of BRI, then the salary cap would be set at a level of %52 million (divided by the number of teams in the league).

Does that help? In theory no individual player's salary is affected by this but, obviously, if a team is paying one player a lot then it restricts their ability to pay other players and fit their entire team under the cap.

-Jason "of course, in every league there are creative ways of getting around the cap" Evans

JasonEvans
11-15-2011, 08:33 AM
The NBA has rosters of 15 players, 12 active, and no minor league. Guaranteed salaries. 5 on 5, 2-3 reserves necessary.

MLB has 25 man roster, up to 40 w/ DL etc, as well as 3 or 4 minor league teams. Guaranteed salaries. 9 on 9, pinch hitters, starting rotation, bullpen, 162 games.

NFL has a 53 man roster plus practice squad. Salaries NOT guaranteed. 11 on 11, high injury rate, special teams.

NHL has a 23 man roster not counting IR, plus minor leagues. 6 on 6, need 3 skating lines, at least extra d rotation, injury rate high.

There is a lot that goes into the equation, TV rights, arena/stadium size, ticket prices, merchandizing, etc, but the NBA owners are investing a whole lot more into each player per revenue. This isn't like signing a performer for a 3-night stand, where one can predict the revenue. Teams that miss the playoffs are not likely to turn a big profit on their own. I think the NBA players deserve the smallest piece of the pie. It may be fair for a few players to get the lion's share of the players' portion.

I understand the argument of comparing the % of revenue that goes to the "talent" versus the promoter, but I would suggest that it is the competitive aspect that is most important to the merchandizing of the product.

I think NBA players actually deserve more than players in any other sport because it is such a small game and individual players make such a tremendous difference. Is there any other sport where you can take one player and transform a team overnight into a major championship contender? **

Look at the Cavs with Lebron (most wins in the league) and without Lebron (perhaps the worst team in basketball). Out Aaron Rodgers on the Colts or Dolphins and those teams are still pretty darn awful, I suspect. Albert Pujhols on the Royals won't make them a playoff contender.

But it is not just Lebron and the elite. In basketball a meaningful upgrade of any of your top 6-7 players can make a tremendous difference in the quality of a team. I suppose the same kind of thing can happen a little bit in baseball, especially if you make a major upgrade in starting pitching, but I would argue that basketball is the most individual dependent sport out there... and I think its players should be rewarded as such.

-Jason "JMO, your mileage may vary" Evans

**- Note- I don't see Peyton Manning and the decline of the Colts without him as an example of this as most people agree the Colts were on the way down before Manning got hurt. Even with him this year I suspect they are no more than a 6-8 win team.

ChillinDuke
11-15-2011, 09:50 AM
The % figure is comparing total player salaries to total league revenues. So, if the NBA were to bring in, for example, $100 mill in ticket sales, TV/radio rights, and merchandising and had agreed to pay players 52% of BRI, then the salary cap would be set at a level of %52 million (divided by the number of teams in the league).

Does that help? In theory no individual player's salary is affected by this but, obviously, if a team is paying one player a lot then it restricts their ability to pay other players and fit their entire team under the cap.

-Jason "of course, in every league there are creative ways of getting around the cap" Evans

Thanks for this. Makes cents now. (Pun!)

- Chillin

BD80
11-15-2011, 10:27 AM
I think NBA players actually deserve more than players in any other sport because it is such a small game and individual players make such a tremendous difference. Is there any other sport where you can take one player and transform a team overnight into a major championship contender? **

Look at the Cavs with Lebron (most wins in the league) and without Lebron (perhaps the worst team in basketball). Out Aaron Rodgers on the Colts or Dolphins and those teams are still pretty darn awful, I suspect. Albert Pujhols on the Royals won't make them a playoff contender.

But it is not just Lebron and the elite. In basketball a meaningful upgrade of any of your top 6-7 players can make a tremendous difference in the quality of a team. I suppose the same kind of thing can happen a little bit in baseball, especially if you make a major upgrade in starting pitching, but I would argue that basketball is the most individual dependent sport out there... and I think its players should be rewarded as such.

-Jason "JMO, your mileage may vary" Evans

**- Note- I don't see Peyton Manning and the decline of the Colts without him as an example of this as most people agree the Colts were on the way down before Manning got hurt. Even with him this year I suspect they are no more than a 6-8 win team.

Your argument is valid to the extent your conclusion is that the players on a team deserve different levels of compensation. That it is OK to spend half your salary cap on one player and give 8 guys minimum salary.

My point is that the team's entire labor force collectively deserves less in the NBA, because less is required for competitiveness. Further, due to injury, the other pro players risk more for their income each time they play. Lastly, the guaranteed contracts and their length in the NBA greatly shift the risk to the owners, which should shift the profit to the owners as well.

sagegrouse
11-15-2011, 10:52 AM
I think NBA players actually deserve more than players in any other sport because it is such a small game and individual players make such a tremendous difference. Is there any other sport where you can take one player and transform a team overnight into a major championship contender? **

Look at the Cavs with Lebron (most wins in the league) and without Lebron (perhaps the worst team in basketball). Out Aaron Rodgers on the Colts or Dolphins and those teams are still pretty darn awful, I suspect. Albert Pujhols on the Royals won't make them a playoff contender.

But it is not just Lebron and the elite. In basketball a meaningful upgrade of any of your top 6-7 players can make a tremendous difference in the quality of a team. I suppose the same kind of thing can happen a little bit in baseball, especially if you make a major upgrade in starting pitching, but I would argue that basketball is the most individual dependent sport out there... and I think its players should be rewarded as such.

-Jason "JMO, your mileage may vary" Evans

**- Note- I don't see Peyton Manning and the decline of the Colts without him as an example of this as most people agree the Colts were on the way down before Manning got hurt. Even with him this year I suspect they are no more than a 6-8 win team.

Putting on my scholar's [dunce] cap, let's agree that the star players in the NBA a have a greater impact on the game (and the selling of the game) than in the other sports.

(a) That may mean a higher level of absolute compensation if the demand for the sport is the same, but not necessarily if the demands differ. The NBA is third in revenue among the major sports.

(b) Higher pay for stars is not the same as higher pay for everyone.

(c) Higher absolute compensation is not the same as a higher percentage of revenue. That will depend on the other costs of the sport and the natural monopolies that certain franchise have in attractive markets (which build in a level of profits). Actually, in basketball the costs appear to be much lower than in the NFL and MLB -- smaller squads, no farm teams, less equipment, and lower logistics expenses.

Hmm.... there's a PhD dissertation in here, isn't there?

sagegrouse

TampaDuke
11-15-2011, 10:55 AM
The owners negotiating strategy has been quite indefensible IMHO opinion as well (for those paying attention and seeing through Stern's scolding of the NBAPA reps). I read an article several weeks ago which explained how David Stern was talking about all the things the owners were giving/conceding on, and each one of those items were things that they were trying to force down the players' gullets in the first place. Essentially they put a half dozen new items on the table during the summer that the players would never agree too (and the owners knew it). This allowed the owners to then concede them and cry about how they are the only ones negotiating in good faith. If you tell me that I have to eat a pile of excrement AND take a huge paycut, then complain to the public that I am not negotiating fairly when you kindly take the pile of excrement off the table, I'm sorry, but I'm not going to sympathize, Mr. Stern.


I don't much like the way Stern carries himself. He comes off as arrogant to me. That said, these negotiations were almost destined to look like the owners were forcing things down the players' throats. It's almost inherent in any collective bargaining scenario where management is having to negotiate "give backs." This problem was created when the owners apparently miscalculated and gave the players too good a deal in the past. As your post indicates and as is natural for nearly every employee, employees view their current pay and benefits as an entitlement and don't willingly give back any of it. Still, Stern could have used a different tone as opposed to an ultimatum/threat.


Without the labor exemption, it's pretty clear that the lockout itself is an antitrust violation under the Sherman Act (since it's a conspiracy in restraint of trade and amounts to a boycott). It's only a question of whether the labor exemption still applies after decertification--a question that has never been answered. With that uncertainty in play, the players need not know that they will be successful in the end. How can they know? But even a 20% chance of success is a powerful weapon here, because a 20% chance of complete financial disaster puts a lot of pressure on the owners to settle rather than roll the dice in court. Antitrust suits put a lot of leverage on the players' side because of the relative risks involved--if the owners win, they are back to the current state of affairs and still have to figure out a way to reach a deal with the players, but if the owners lose, they are literally out billions of dollars (since antitrust damages can be tripled). It's basically a no-win for the owners. The results are either neutral or a gigantic loss. So even if the owners are pretty sure they will not be subject to antitrust damages, do they want to risk everything on it? Do they even want to pay the legal fees for that type of battle? Or would they rather simply agree to a 52% share for the players and move on with their businesses?

While I agree with much of what you say here, my initial reaction to the players' disclaimer of the union is that it smacks of desperation. For the antitrust lawsuit to work and for the players to reap damages, it would necessarily mean that the season was cancelled (and likely next season, too, given the time-consuming appeals sure to follow). The case would likely wind up before a split, but conservative, Supreme Court which is not likely to be labor-friendly. Then, after reaping damages, the union would have to re-certify and negotiate a new contract in which the owners do not re-take their losses by offsetting future wages and benefits. Won't happen. A lawsuit won't make the pie get bigger. The players might get a bigger piece of the pie from a lawsuit, but the owners will just cut them a smaller piece in the future.



Remember, as in the NFL lockout, the two sides can continue negotiating as the lawsuits play out in court. This just gives the owners a greater incentive to reach a deal.

This is what the players are banking on. It's also what makes this move seem desperate to me. Now everyone knows that they've laid all of their cards on the table. The only question is do they let it play out and cancel the next couple of seasons or do they negotiate. The owners have been well aware of the de-certification threat and, while I could be wrong, I doubt that their strategies did not foresee this possible scenario, such that they are now suddenly willing to negotiate more so than before. If the parties cooperate to reach a deal, I think it will have less to do with the possibility of damages and more to do with one side convincing the other that it is truly willing to lose the season (and then hoping that such a result is not palatable to the other side). Assuming the consensus is that a season could be saved up until the end of 2011, the players' move at this point seems like a blink to me. They should have held strong and rejected the owner's latest proposal and dared Stern to cancel the season.

Also, while the parties can continue to negotiate during legal proceedings, that is not itself without risk. Continued negotiations between owners and union reps will lend some credence to the owners' argument that the disclaimer of interest by the union is merely a sham meant to be a negotiating tactic. As it stands right now, there is theoretically no entity for the owners to negotiate with. It could well be an antitrust violation, and likely a labor law violation, for the owners to bargain with a non-representative entity to fix wages. Of course, that's all hogwash and the "disclaimed union" is still very much in the picture calling the shots on their side -- hence the owners' defense to the antitrust allegation.

TampaDuke
11-15-2011, 11:04 AM
I think NBA players actually deserve more than players in any other sport because it is such a small game and individual players make such a tremendous difference. Is there any other sport where you can take one player and transform a team overnight into a major championship contender? **


I don't dispute your contention, but the flip side is also true. A team which locks up a higher percentage of its resources in one or a few players exposes itself to tremendous risk.

The risk could certainly manifest itself through dumb decisions by owners overpaying marginal stars with long term contracts that doom the team to mediocrity for a decade or more (Knicks?). But it could equally manifest itself in scenarios where the team/owner is not at fault, such as where a #1 or #2 draft pick suffers career-ending or career-limiting injuries (a la the Trailblazers and Bulls) or when a star player suffers such an injury (a la Yao).

My only point is that the dynamic you describe also translates into increased risk to the owners. And most businesses seek to limit risk if possible and to price in a premium for it if not.

jipops
11-15-2011, 12:03 PM
They just beat UNC-Asheville by 16, man. How many championships are you going to give them?

Just the Helms one.

Matches
11-16-2011, 10:47 AM
-Jason "I wonder what it would take for the owners to use replacement players? Try to break the union the way the NFL did back in the 80s" Evans

It would take a strike. Replacement players aren't really an option in a lockout, because it's the owners who have stopped play. If the owners stage a season, they're contractually obligated to pay the salaries of the players under contract.

The legal ramifications of all this are fascinating to me. Questionable whether the union will really be able to decertify, but supposing they do... does that mean that each player just negotiates his own deal with the owners? Would someone like Kyrie be able to negotiate whatever deal the market commands with the Cavs, without worrying about a rookie wage scale? Would later first round picks like Nolan suddenly find themselves without guaranteed deals? There's some suggestion that, if the union does decertify, the owners may take the position that all existing contracts are void. Everyone in the league becomes a free agent.

The NBA can hold a draft next summer even if the lockout persists. How would they determine the draft order? Cavs get #1 again?

Obviously these are all armageddon/ absurd scenarios, and one would think cooler heads will prevail before they come to pass. But one would have thought cooler heads would already have prevailed.

A-Tex Devil
11-16-2011, 01:03 PM
It would take a strike. Replacement players aren't really an option in a lockout, because it's the owners who have stopped play. If the owners stage a season, they're contractually obligated to pay the salaries of the players under contract.

The legal ramifications of all this are fascinating to me. Questionable whether the union will really be able to decertify, but supposing they do... does that mean that each player just negotiates his own deal with the owners? Would someone like Kyrie be able to negotiate whatever deal the market commands with the Cavs, without worrying about a rookie wage scale? Would later first round picks like Nolan suddenly find themselves without guaranteed deals? There's some suggestion that, if the union does decertify, the owners may take the position that all existing contracts are void. Everyone in the league becomes a free agent.

The NBA can hold a draft next summer even if the lockout persists. How would they determine the draft order? Cavs get #1 again?

Obviously these are all armageddon/ absurd scenarios, and one would think cooler heads will prevail before they come to pass. But one would have thought cooler heads would already have prevailed.

What did the NHL do in its draft after a missed season? This is lining up to be just like that work stoppage, almost to a T.

Edited to add --- if I am the owners, I look to void the 2011 draft and draft all eligible players in same team order in 2012. Not sure if this is possible, but it saves them additional money. Would really suck for guys drafted in back half of first round this past year.

dcdevil2009
11-16-2011, 01:12 PM
The legal ramifications of all this are fascinating to me. Questionable whether the union will really be able to decertify, but supposing they do... does that mean that each player just negotiates his own deal with the owners? Would someone like Kyrie be able to negotiate whatever deal the market commands with the Cavs, without worrying about a rookie wage scale? Would later first round picks like Nolan suddenly find themselves without guaranteed deals? There's some suggestion that, if the union does decertify, the owners may take the position that all existing contracts are void. Everyone in the league becomes a free agent.

The NBA can hold a draft next summer even if the lockout persists. How would they determine the draft order? Cavs get #1 again?

I'm not positive, but I think one of the decertification/antitrust implications is that a draft would be illegal. If owners can't collide to set maximum salaries, one would think they couldn't collude and assign a player's rights to a particular team. Also, does anyone know whether Kyrie or any of the other rookies have signed their deals yet? I remember there was only a 7-day window between the draft and the lockout. If anyone hasn't are they still members of the players union?

Matches
11-16-2011, 02:54 PM
I'm not positive, but I think one of the decertification/antitrust implications is that a draft would be illegal. If owners can't collide to set maximum salaries, one would think they couldn't collude and assign a player's rights to a particular team. Also, does anyone know whether Kyrie or any of the other rookies have signed their deals yet? I remember there was only a 7-day window between the draft and the lockout. If anyone hasn't are they still members of the players union?

None of the rookies have signed contracts AFAIK, but in theory the union represents all current and future players. So I believe they are all considered members of the union.

Good point about the draft. That's even more chaotic a scenario - rookies could just sign with the teams of their choice. With no CBA, there's no salary cap either, so the Knicks, Bulls, Lakers, & Mavs could buy up all the new talent they wanted.

uh_no
11-16-2011, 11:04 PM
None of the rookies have signed contracts AFAIK, but in theory the union represents all current and future players. So I believe they are all considered members of the union.


You must realize the "union" doesn't exist anymore. so thus cannot represent any players, much less future players. Furthermore, there is no obligation for a player to be a member of the union (Michael jordan was never a member)

SoCalDukeFan
11-16-2011, 11:18 PM
In the NBA the inmates ran the asylum.

A grossly overpaid lousy player was valuable if he had an expiring contract.
This is a league were Pau Gasol was traded for Kwame Brown and late first round draft picks.

About 75% of the regular season games were a boring waste of time.

Many or most of the teams were losing money.

Blow it up and start over.

SoCal

TampaDuke
11-16-2011, 11:33 PM
None of the rookies have signed contracts AFAIK, but in theory the union represents all current and future players. So I believe they are all considered members of the union.

Good point about the draft. That's even more chaotic a scenario - rookies could just sign with the teams of their choice. With no CBA, there's no salary cap either, so the Knicks, Bulls, Lakers, & Mavs could buy up all the new talent they wanted.

In the event the courts ultimately hold that the antitrust laws apply to each NBA franchise (and efforts to get Congress to intercede prove unavailing), my guess is you'd see a significant number of small market teams voluntarily go out of business rather than attempt to "compete" in an unregulated league. In short, the league would die, which makes me think that Congress would step in and restore at least some limited antitrust protection.

UrinalCake
11-16-2011, 11:35 PM
The % figure is comparing total player salaries to total league revenues. So, if the NBA were to bring in, for example, $100 mill in ticket sales, TV/radio rights, and merchandising and had agreed to pay players 52% of BRI, then the salary cap would be set at a level of %52 million (divided by the number of teams in the league).

BRI is used to calculate the salary cap, but I think there's also a direct payout that happens. If a team's total salaries from all of its players is under the salary cap, then it is still obligated to pay out its percentage of BRI. And if the league has a really good year and its BRI is above the salary cap, then it pays out extra money to each of its players on top of the already-negotiated salaries to make up the difference. In a way it's kind of like a company giving its employees stock options - in theory this will motivate them to work harder so the company will be more profitable and the employees will get a piece of the money.

One of the confusing factors is that the percentage is based on gross revenue, not profit. So if a team spends $1 million on a new scoreboard, and that creates ad revenue that brings in $1.5 million, they have to pay the players 57% of that $1.5 million. Which means they've lost money on the deal. At least this is the argument that Stern uses for why the current system doesn't work.

dcdevil2009
11-16-2011, 11:45 PM
The % figure is comparing total player salaries to total league revenues. So, if the NBA were to bring in, for example, $100 mill in ticket sales, TV/radio rights, and merchandising and had agreed to pay players 52% of BRI, then the salary cap would be set at a level of %52 million (divided by the number of teams in the league).

Does that help? In theory no individual player's salary is affected by this but, obviously, if a team is paying one player a lot then it restricts their ability to pay other players and fit their entire team under the cap.

-Jason "of course, in every league there are creative ways of getting around the cap" Evans

Isn't this where most of the problem arises? The salary cap is based on league BRI, not team BRI. Since each team also owns its tv rights and there is no revenue sharing, different teams are capped at different percentages of their own BRI. For example, the Lakers generate significantly more revenue per year than the Bucks, but the Bucks don't see any of that revenue, yet they both have the same cap number. It could mean that $75 million would be 50% of the Lakers BRI, but might be 70% of the Bucks'. I think it's part of the reason the small market teams are clearly losing money, while the as a whole is closer to the black.

UrinalCake
11-17-2011, 12:17 AM
Great point dcdevil. I heard a pretty good commentary somewhere on ESPN where they said the issue here is not owners versus players, the issue is big-market teams versus small-market teams. The owners are trying to squeeze more money out of the players in order to make the small-market teams profitable too, but what they really need is better revenue sharing.

UrinalCake
11-17-2011, 12:32 AM
The owners negotiating strategy has been quite indefensible IMHO opinion as well (for those paying attention and seeing through Stern's scolding of the NBAPA reps). I read an article several weeks ago which explained how David Stern was talking about all the things the owners were giving/conceding on, and each one of those items were things that they were trying to force down the players' gullets in the first place. Essentially they put a half dozen new items on the table during the summer that the players would never agree too (and the owners knew it). This allowed the owners to then concede them and cry about how they are the only ones negotiating in good faith. If you tell me that I have to eat a pile of excrement AND take a huge paycut, then complain to the public that I am not negotiating fairly when you kindly take the pile of excrement off the table, I'm sorry, but I'm not going to sympathize, Mr. Stern.


The baseball owners did the same thing in 1994. Several months prior to the end of the CBA, the owners out of nowhere started claiming they were going to contract the Expos. Then during the negotiations they were like, okay we won't contract the Expos if you concede on these points.... It's a pretty shrewd maneuver if you're able to manipulate the public opinion, which billionaire owners are much better at doing than players.

Matches
11-17-2011, 08:07 AM
You must realize the "union" doesn't exist anymore. so thus cannot represent any players, much less future players. Furthermore, there is no obligation for a player to be a member of the union (Michael jordan was never a member)

Well, it still exists unless and until it successfully decertifies. I expect the league to oppose decertification on the grounds that it's a sham - the union fully intends to re-form as soon as the current labor issues are resolved. It's a procedural move designed to get leverage by allowing the filing of anti-trust litigation.

El_Diablo
11-17-2011, 08:55 AM
You must realize the "union" doesn't exist anymore. so thus cannot represent any players, much less future players. Furthermore, there is no obligation for a player to be a member of the union (Michael jordan was never a member)

The NBPA still exists. It has not disbanded, nor will it. It isn't even technically decertifying (although I've been guilty of using the term to describe what's going on). The NBPA is simply "disclaiming interest" in serving as a collective bargaining unit, which is faster than going through some drawn out decertification process as a precursor to the real fight--the antitrust issue (and whether the labor exemption still applies). Disclaiming interest allows the players to immediately file the antitrust suits, and it lets them reconstitute quickly in the event that Stern lets Hunter know that a better offer is on the table.

The NBPA is now a trade association and can assist the players in asserting legal claims on all non-labor (cough cough antitrust) issues. It can also negotiate on behalf of its members for things like IP licensing rights or special appearances.

BigZ
11-17-2011, 11:44 AM
It has been a week or so sense I have heard anything about the Pro Game against UNC's Pro Players. The game was supposed to be today, is it still being played?

ikiru36
11-18-2011, 05:51 PM
People seem to have a lot of conflicting feelings about Bill Simmons' and the quality of various writings on Grantland. Not sure I agree with everything he says here (http://www.grantland.com/story/_/id/7250994/business-vs-personal), but a very well written, long (as usual), and insightful piece of sports "literature" about the current standoff between the Owners and Players (and Agents...oh my).

Some Pavement lyrics come to mind:
"Pigs, they tend to wiggle when they walk
the infrastructure rots
and the owners hate the jocks
with their agents and their dates

if the signatures are checked
you'll just have to wait

and we're counting up the instants that we save
tired nation so depraved
from the cheap seats see us
wave to the camera
it took a giant ramrod
to raze the demon settlement"

El_Diablo
11-19-2011, 07:23 PM
The Duke-UNC Alumni Game was postponed, but with no NBA season on the horizon, a number of current and former NBA players (including a Blue Devil) will be participating in the "Obama Classic."

https://donate.barackobama.com/page/contribute/o2012-decemberobamaclassic

Quite a collection of talent already lined up there...and supposedly more to come. As the lockout continues, I assume we will see more of these types of exhibitions set up.

UrinalCake
11-19-2011, 10:52 PM
As the lockout continues, I assume we will see more of these types of exhibitions set up.

Yeah, and then the question becomes, will fans eventually get tired of these meaningless exhibitions and stop buying tickets?

JasonEvans
11-20-2011, 01:36 PM
Yeah, and then the question becomes, will fans eventually get tired of these meaningless exhibitions and stop buying tickets?

It does not really matter -- I don't think the players could ever stage enough exhibitions to provide a meaningful source of income to a meaningful percentage of the player's association. I mean, the NBA stages more than hundred games a month with almost all of them televised in some fashion.

Sure, the 20 or 30 best NBA stars could hold some exhibitions and make money, but what about each team's 6th, 7th, and 8th men? Heck, what about the 9th, 10th, 11th and 12th men? Is anyone buying tickets to or televising the exhibition game featuring Pape Sy, Hilton Armstrong, Avery Bradley, Dante Cunningham, Dominick Brown, Alonzo Gee, Manny Harris, Ian Mahinmi, Gary Forbes, Jonas Jerebko, Terrico White, Jeff Adrien, and others?

The faces we constantly see in the negotiations, the big stars, certainly matter. But, this impasse affects scores of players getting paid the minimum or just slightly above it. These are the guys living well, but living paycheck to paycheck. They are the ones who feel the pressure to cave the most.

-Jason "of course, the guys who are affected most by the proposed salary cuts are the stars, not the guys making the minimum-- the minimum (I think) stays the same under the proposed deals" Evans

dcdevil2009
11-20-2011, 01:53 PM
Jason "of course, the guys who are affected most by the proposed salary cuts are the stars, not the guys making the minimum-- the minimum (I think) stays the same under the proposed deals" Evans

I think it's actually the midlevel guys who are the most affected, not the stars. Lebron, Kobe, et al will continue to make the max, which might be slightly lower, but owners are really trying to cut down spending for mid-level guys. From a business standpoint, the owners would prefer to pay the stars more because people actually pay to see them and then have everyone else make the minimum. Obviously, that would never happen, but one of the owners' biggest problems is overpaying middle class players.

jimsumner
11-20-2011, 02:54 PM
It does not really matter -- I don't think the players could ever stage enough exhibitions to provide a meaningful source of income to a meaningful percentage of the player's association. I mean, the NBA stages more than hundred games a month with almost all of them televised in some fashion.

Sure, the 20 or 30 best NBA stars could hold some exhibitions and make money, but what about each team's 6th, 7th, and 8th men? Heck, what about the 9th, 10th, 11th and 12th men? Is anyone buying tickets to or televising the exhibition game featuring Pape Sy, Hilton Armstrong, Avery Bradley, Dante Cunningham, Dominick Brown, Alonzo Gee, Manny Harris, Ian Mahinmi, Gary Forbes, Jonas Jerebko, Terrico White, Jeff Adrien, and others?

The faces we constantly see in the negotiations, the big stars, certainly matter. But, this impasse affects scores of players getting paid the minimum or just slightly above it. These are the guys living well, but living paycheck to paycheck. They are the ones who feel the pressure to cave the most.

-Jason "of course, the guys who are affected most by the proposed salary cuts are the stars, not the guys making the minimum-- the minimum (I think) stays the same under the proposed deals" Evans

It's not just that. I'm not a labor lawyer but I strongly suspect that if one of these guys tears up an ankle or a knee in one of these games, they're pretty much on their own. A bit of a disincentive, IMO.

Indoor66
11-20-2011, 04:55 PM
It's not just that. I'm not a labor lawyer but I strongly suspect that if one of these guys tears up an ankle or a knee in one of these games, they're pretty much on their own. A bit of a disincentive, IMO.

I'm not a labor lawyer either, but what effect would decertification have on health clauses, generally, in existing contracts?

JasonEvans
11-20-2011, 05:46 PM
I'm not a labor lawyer either, but what effect would decertification have on health clauses, generally, in existing contracts?

I think that existing contracts have various clauses that prohibit certain activities. If you get hurt sky diving, for example, I think the team goes all Cee Lo Green on you and does not pay you anything. On the other hand, I doubt a basketball contract would consider playing basketball to be a dangerous activity, so I would think the contract would be honored if one of these guys got hurt in an exhibition game.

Now, the issue of how the labor impasse affects that is a tough one to figure out. Whenever a new deal is struck, if ever, the status of existing contracts will have to be addressed. It is possible the NBA would say that injuries that occurred during the lock out would allow teams to terminate contracts without any payout, but I sorta doubt they will take that path. It is bad PR and seems awfully callous.

-Jason "we've already seen some exhibitions during the lockout-- I suspect we see more" Evans