OT: NBA To Borrow $175mil For 15 Teams

[TheBluest]

After initially admitting half the league was profitable Stern tried to clean it up weeks later and said NBA franchises were stable and that he may have embellished the number. No you got it right the first time..... the league is losing major coin and stop trying to save face on any negativity that comes it's way under your watch.


http://www.fannation.com/si_blogs/nba_tracker/posts/50603-nba-to-borrow-175m-for-15-teams?eref=sircrc&eref=fromSI

The NBA is set to borrow $175 million Feb. 26, marking one of the first league financings since the implosion of the credit markets last fall.

The money, which will be available to 15 teams, supplements an existing $1.7 billion leaguewide credit facility that uses the NBA's media contracts as collateral to secure loans for the clubs. The NBA surveyed its teams, and 15 responded they would like to tap into the new borrowing.

While the league said it is pleased to borrow in an extremely illiquid credit market, the deal came at a cost, with interest rates up to 8.27 percent, hammering home the notion that the era of cheap money in sports is over. The 15 teams can use the money for any purpose, but covering operating losses may be high on the list.

"In this economic environment, it's tremendous that the league can place such a facility," said Alex Martins, chief operating officer of the Orlando Magic, which plans to borrow from the new debt. "It certainly helps us bridge the time period between now and when we move into our new events center in 2010. We've been operating at a $15 [million] to $20 million [annual] loss over the past half-dozen years, so it helps us."

Each of the 15 teams can borrow a maximum of $11.66 million from the debt proceeds

[sol537]

the best thing for the league? Shaq in NY in '09 and Lebron in NY in '10

[TKF]

After initially admitting half the league was profitable Stern tried to clean it up weeks later and said NBA franchises were stable and that he may have embellished the number. No you got it right the first time..... the league is losing major coin and stop trying to save face on any negativity that comes it's way under your watch.


http://www.fannation.com/si_blogs/nba_tracker/posts/50603-nba-to-borrow-175m-for-15-teams?eref=sircrc&eref=fromSI

The NBA is set to borrow $175 million Feb. 26, marking one of the first league financings since the implosion of the credit markets last fall.

The money, which will be available to 15 teams, supplements an existing $1.7 billion leaguewide credit facility that uses the NBA's media contracts as collateral to secure loans for the clubs. The NBA surveyed its teams, and 15 responded they would like to tap into the new borrowing.

While the league said it is pleased to borrow in an extremely illiquid credit market, the deal came at a cost, with interest rates up to 8.27 percent, hammering home the notion that the era of cheap money in sports is over. The 15 teams can use the money for any purpose, but covering operating losses may be high on the list.

"In this economic environment, it's tremendous that the league can place such a facility," said Alex Martins, chief operating officer of the Orlando Magic, which plans to borrow from the new debt. "It certainly helps us bridge the time period between now and when we move into our new events center in 2010. We've been operating at a $15 [million] to $20 million [annual] loss over the past half-dozen years, so it helps us."

Each of the 15 teams can borrow a maximum of $11.66 million from the debt proceeds

LOL... stern trying to spin.. good find bro.... too much expansion and salaries out of control... The NBA salaries grew too quick. Just like the crap we saw in the housing market, inflated home pricing, fake appraisals, people scaming money out of equity in homes that had blated values, the risky BS stock porfolios and investments on wallstreet, all of this free money.... This is a problem I have had with the NBA.. when you have scrubs in the league making 7-8 mil a year, then where do you set the market for mid level Allstars, and stars? The salaries if anything are going to destroy the NBA.. Too many big salaries and marginal talent in the NBA.... The guaranteed deals are a friggin joke and they are too long... The NBA will have to restructure it's contract or it is doomed.. the fact that arenas is signed to well over 100 mil after comming off serious knee surgery is just bad business. Now these owners want financial relief to save them from themselves? stern needs to stop spinning things, we see whats going on.. the fans are not stupid... I mean they are going to need the money to cover operating expenses.. LOL.. who would have thought that?

[DevilsAdv]

This is just a sign of the economic times of our country.
And another hate ridden thread started by someone who seems to be so miserable.

[TheBluest]

LOL... stern trying to spin.. good find bro.... too much expansion and salaries out of control... The NBA salaries grew too quick. Just like the crap we saw in the housing market, inflated home pricing, fake appraisals, people scaming money out of equity in homes that had blated values, the risky BS stock porfolios and investments on wallstreet, all of this free money.... This is a problem I have had with the NBA.. when you have scrubs in the league making 7-8 mil a year, then where do you set the market for mid level Allstars, and stars? The salaries if anything are going to destroy the NBA.. Too many big salaries and marginal talent in the NBA.... The guaranteed deals are a friggin joke and they are too long... The NBA will have to restructure it's contract or it is doomed.. the fact that arenas is signed to well over 100 mil after comming off serious knee surgery is just bad business. Now these owners want financial relief to save them from themselves? stern needs to stop spinning things, we see whats going on.. the fans are not stupid... I mean they are going to need the money to cover operating expenses.. LOL.. who would have thought that?

This is another sign planning All-In for 2010 could be very volatile. And a multibillion dollar Global Sport has to borrow money because the owners are allowed to operate their franchises irresponsibly for yrs. I mean the Orlando Magic rep said they've been eating money for a half dozen or more yrs? Who does the book auditing for these franchises? Stern is a Epic Joke of a Commissioner and has been for a very long time now.

There are so many things going wrong and one of them is allowing franchises to arrange ridiculous financial deals to get funding for new Arenas that they know they can't fill to capacity nor afford adequate staffing to accommodate the fans. He also needs to put more pressure on the team's Marketing Departments to sell their franchises to the fans and I'm talking about walking the streets promoting the team. Also don't wait until the sand is out of the hourglass to start lowering ticket prices making them more affordable to the consumers. He might want to consider consultation from MLB and NFL owners on how to be fiscally responsible.

[TKF]

LOL... stern trying to spin.. good find bro.... too much expansion and salaries out of control... The NBA salaries grew too quick. Just like the crap we saw in the housing market, inflated home pricing, fake appraisals, people scaming money out of equity in homes that had blated values, the risky BS stock porfolios and investments on wallstreet, all of this free money.... This is a problem I have had with the NBA.. when you have scrubs in the league making 7-8 mil a year, then where do you set the market for mid level Allstars, and stars? The salaries if anything are going to destroy the NBA.. Too many big salaries and marginal talent in the NBA.... The guaranteed deals are a friggin joke and they are too long... The NBA will have to restructure it's contract or it is doomed.. the fact that arenas is signed to well over 100 mil after comming off serious knee surgery is just bad business. Now these owners want financial relief to save them from themselves? stern needs to stop spinning things, we see whats going on.. the fans are not stupid... I mean they are going to need the money to cover operating expenses.. LOL.. who would have thought that?

This is another sign planning All-In for 2010 could be very volatile. And a multibillion dollar Global Sport has to borrow money because the owners are allowed to operate their franchises irresponsibly for yrs. I mean the Orlando Magic rep said they've been eating money for a half dozen or more yrs? Who does the book auditing for these franchises? Stern is a Epic Joke of a Commissioner and has been for a very long time now.

There are so many things going wrong and one of them is allowing franchises to arrange ridiculous financial deals to get funding for new Arenas that they know they can't fill to capacity nor afford adequate staffing to accommodate the fans. He also needs to put more pressure on the team's Marketing Departments to sell their franchises to the fans and I'm talking about walking the streets promoting the team. Also don't wait until the sand is out of the hourglass to start lowering ticket prices making them more affordable to the consumers. He might want to consider consultation from MLB and NFL owners on how to be fiscally responsible.

very good points. MY wife loves going to the Hawks games, epecially when we had season tickets because it was a real event for her. The celebs were there, she could go there and dress to be seen, it was a real social event and a basketball game... The problem is how expensive these games became... ticket prices are high and a lot of the times you get an inferior product, and that comes back to expansion and the watering down of the league... Not enough good to great teams out there... The ticket prices are high, the NBA league pass is high, anything associated with the NBA is high, too high for families to enjoy, while guys are holding out for 58 million dollar deals and turning their noses up to 52 million dollar deals... LOL..

A lot of these owners are also horrible businessmen, as you said, who is auditing these books, the NBA should force these owners to open their books to audit at least twice a year.. As franchises, it is in the best interest of the NBA for these teams to be run well, every team!!

[StutterStep]

If this is all PHX gets for Amare, then the NBA financial picture is less rosy than Stern wants us to believe. I know Sarver is cheap but come on!

...in deadline trade thread...

[TheBluest]

LOL... stern trying to spin.. good find bro.... too much expansion and salaries out of control... The NBA salaries grew too quick. Just like the crap we saw in the housing market, inflated home pricing, fake appraisals, people scaming money out of equity in homes that had blated values, the risky BS stock porfolios and investments on wallstreet, all of this free money.... This is a problem I have had with the NBA.. when you have scrubs in the league making 7-8 mil a year, then where do you set the market for mid level Allstars, and stars? The salaries if anything are going to destroy the NBA.. Too many big salaries and marginal talent in the NBA.... The guaranteed deals are a friggin joke and they are too long... The NBA will have to restructure it's contract or it is doomed.. the fact that arenas is signed to well over 100 mil after comming off serious knee surgery is just bad business. Now these owners want financial relief to save them from themselves? stern needs to stop spinning things, we see whats going on.. the fans are not stupid... I mean they are going to need the money to cover operating expenses.. LOL.. who would have thought that?

This is another sign planning All-In for 2010 could be very volatile. And a multibillion dollar Global Sport has to borrow money because the owners are allowed to operate their franchises irresponsibly for yrs. I mean the Orlando Magic rep said they've been eating money for a half dozen or more yrs? Who does the book auditing for these franchises? Stern is a Epic Joke of a Commissioner and has been for a very long time now.

There are so many things going wrong and one of them is allowing franchises to arrange ridiculous financial deals to get funding for new Arenas that they know they can't fill to capacity nor afford adequate staffing to accommodate the fans. He also needs to put more pressure on the team's Marketing Departments to sell their franchises to the fans and I'm talking about walking the streets promoting the team. Also don't wait until the sand is out of the hourglass to start lowering ticket prices making them more affordable to the consumers. He might want to consider consultation from MLB and NFL owners on how to be fiscally responsible.

very good points. MY wife loves going to the Hawks games, epecially when we had season tickets because it was a real event for her. The celebs were there, she could go there and dress to be seen, it was a real social event and a basketball game... The problem is how expensive these games became... ticket prices are high and a lot of the times you get an inferior product, and that comes back to expansion and the watering down of the league... Not enough good to great teams out there... The ticket prices are high, the NBA league pass is high, anything associated with the NBA is high, too high for families to enjoy, while guys are holding out for 58 million dollar deals and turning their noses up to 52 million dollar deals... LOL..

A lot of these owners are also horrible businessmen, as you said, who is auditing these books, the NBA should force these owners to open their books to audit at least twice a year.. As franchises, it is in the best interest of the NBA for these teams to be run well, every team!!

I've had LP since 2001 I believe and it's gone up about $50. With exception to last yr I can recall watching the few Hawks games I caught where Phillips Arena looked like they were having a blackout every game. Nobody would be sitting on the floor seats and no one one was sitting up high just a bunch of hit and misses in the levels in between. Now how many seats does Phillips contain 18,000, 19,000 what 20,000? I was thinking to myself why on earth did they allow this monstrosity to be built when they know this team has been a breath away from contraction for nearly a decade?


How many events are held at Phillips Arena throughout the yr TKF?


What the NBA needs to do if they're going to have new Arenas popping up or renovated have owners consult with the worlds best engineers and build Arenas in a way where every seat in the house seems like it's the best yet have a capacity which reflects actual metropolitan community support.


If you notice in the NFL every stadium doesn't have close to the same capacity. Some stadiums seat 60,000, 70,000, 80,000, 90,0000 but in the NBA almost every Arena is fit for about 17-20,000 which IMO is part of the problem.

[defjux21]

2011 Lockout, here we come.

[TKF]

I've had LP since 2001 I believe and it's gone up about $50. With exception to last yr I can recall watching the few Hawks games I caught where Phillips Arena looked like they were having a blackout every game. Nobody would be sitting on the floor seats and no one one was sitting up high just a bunch of hit and misses in the levels in between. Now how many seats does Phillips contain 18,000, 19,000 what 20,000? I was thinking to myself why on earth did they allow this monstrosity to be built when they know this team has been a breath away from contraction for nearly a decade?


How many events are held at Phillips Arena throughout the yr TKF?


What the NBA needs to do if they're going to have new Arenas popping up or renovated have owners consult with the worlds best engineers and build Arenas in a way where every seat in the house seems like it's the best yet have a capacity which reflects actual metropolitan community support.


If you notice in the NFL every stadium doesn't have close to the same capacity. Some stadiums seat 60,000, 70,000, 80,000, 90,0000 but in the NBA almost every Arena is fit for about 17-20,000 which IMO is part of the problem.

I had league pass since 96 I think, I rememer when you could just the package of the team you wanted to follow... Now the league pass is 189 bucks... wow... yea 50 bucks over 8 years may not seem bad, but with the technological advances, and efficiency in the ways games can be broadcast, I am suprised the NBA hasn't made these game cheaper with different package choices at a more competitive price, but anyway to phillips arena..

It holds around 18-19k... other than the hawks, they have the thrashers, and they hold events , concerts, the circus will be here all week from the 13-22, it is a great arena, what bothers me, is that they tore down the omni and built this thing, and the omni compared to the Garden was brand new.. LOL.. since I moved here to Atlanta, they tore down the Omni built phillips, built the GA dome, and tore down Fulton county stadium and built Turner field... All my years In NY, I don't remember one arena or stadium being built... LOL...

What the NBA needs to do if they're going to have new Arenas popping up or renovated have owners consult with the worlds best engineers and build Arenas in a way where every seat in the house seems like it's the best yet have a capacity which reflects actual metropolitan community support

excellent point... since we had those floor seats, my wife won't sit anywhere else in an arena.. Forget nosebleed section, if it is more than 10 rows off the floor, she stays home.. LOL... we had seats right behind the backboard.. great seats and I had to deal with the food and drink servers walking down my ailse all frigging game.. It was horrible.... I feel you, a lot of the "real" fans are working and lower class and they can't really get the chance to enjoy a good view. I would love to see better seating... for sure..

[Teen Girl Squad]

As much as I tend to support players making money, bottom line is that NBA contracts are too high, which is ironic as they we're too low in the 90s. What needs to happens mutlifold. Some teams need to move (NO, Charlotte, Memphis) to markets like Seattle, Vegas, Kansas that will in general support their teams more in bad times. Other teams need to actually hire good personnel people that can scout, coach and manage well with financial restraints like SA and Detroit. The last thing, and hardest, is that the CBA needs to be renegotiated to be more favorable to the owners than they are now. Lower % of revenue guaranteed to players, fewer trade restrictions, easier ways of losing bad contracts (perhaps via a larger allowance of incentive based contracts).

[TKF]

As much as I tend to support players making money, bottom line is that NBA contracts are too high, which is ironic as they we're too low in the 90s. What needs to happens mutlifold. Some teams need to move (NO, Charlotte, Memphis) to markets like Seattle, Vegas, Kansas that will in general support their teams more in bad times. Other teams need to actually hire good personnel people that can scout, coach and manage well with financial restraints like SA and Detroit. The last thing, and hardest, is that the CBA needs to be renegotiated to be more favorable to the owners than they are now. Lower % of revenue guaranteed to players, fewer trade restrictions, easier ways of losing bad contracts (perhaps via a larger allowance of incentive based contracts).

I always said the length of contracts are too long.. 5 and 6 year deals are ridiculous... Most of these deals outlast GM's and coaches and then they become the headache of the Next GM and coach, and often times, too much of a headache to overcome.. I would like to see a 4 year max with team options... And as you said, make the contracts easier to get out of. This will keep the guy on a 5 year deal, content riding the bench as a way of protesting the coach or the organazation... Guys in the NBA have way too much leverage... Play me, let me do what I want, or I won't conform.. either way you will have to pay me.. sort of the crap we are getting with marbury.. In the NFL, if you are a problem, you and your contract can be ghost.. It raises the level of competition, if you ask me..

[Knicksick]

I think there should be an obligatory team option in any contract after the third season or so. Or some sort of option where a team can buy out the player after three years for 50% of his remaining salary or something. There has to be some sort of arrangement where a team can get out of a bad situation without having to wait 5-6 years. Injuries can happen or sitations where a combination just doesn't work out. It'd also keep players from becoming lazy. The current system DEFINITELY needs some changes.

[kosmovitelli]

The snippet is deceiving, I suggest people to read the full article from the Sports Journal. There's nothing alarming with the Debt and it's not really an indication that the NBA is struggling.

The private-placement deal was arranged by JPMorgan Chase and Bank of America. In a private placement, non-banking lenders such as pension funds and insurers extend the cash, commonly at fixed rates for five- to seven-year terms and at rates higher than what banks offer for floating-rate loans.

Harvey Benjamin, the NBA’s executive counsel for business and finance, said it’s important not to compare the rates with what the NBA had been paying before the credit market collapse — about 200 to 300 interest points less for similar debt, sources said — but rather, what borrowers of similar standing are paying in today’s environment. In that light, he said, the 8.27 percent the NBA will pay on $100 million of the debt, and the 7.45 percent on the remaining $75 million, is favorable.

“It shows how the NBA is viewed by the credit markets,” he said.

Rob Tilliss, a former JPMorgan Chase sports banker who runs his own sports boutique, Inner Circle Sports, agreed that given the market conditions, the NBA’s rates are hardly extreme.

“That is an outstanding execution,” he said.

The NBA was not looking to borrow at this time, Benjamin said, but JPMorgan and Bank of America came to the league several weeks ago to say there was an opportunity to do so. The league, after polling its teams and finding a need, agreed to the deal in part because of the lack of borrowing opportunities since the fall. Benjamin would not reveal which teams plan to borrow from the placement.

Tilliss said that over the last few weeks there has been a slight opening in the credit market for investment-grade borrowers like the NBA.

The NBA deal comes in the context of a changing landscape for the leaguewide credit facilities. Once cheap sources of loans, the banks that manage the loan pools have soured on them and have been unwilling to renew at the old terms. The NFL and MLB were both unable to renew their deals late last year and termed out. That means the debt automatically converted into a fixed-rate loan and triggered amortization and slightly higher rates.

There is a salary cap but also a debt cap in the NBA. The current NBA policy allows each team to carry up to $150 million in debt. The league is an association so wether it's insurance or loans, the NBA negotiate on behalf of the teams in order to get better deals. Nothing really unusual with this $175M loan. I can't see why people are so quick to bash Stern or Orlando. Teams are allowed to borrow $11M with this new deal. It's the worth of a two year MLE contract ! LOL
If teams were really struggling that much, they would have asked for more than that. Wether the economy is good or not, some small market teams always lose money so there's nothing really unusual here.

About Orlando, they lost $20M in 2006 but they've been profitable in 2007 and 2008. Their debt structure is solid, their debt deteriorated (although their revenues increased) simply because of their new arena. Although the new arena is taxpayer funded, in order to secure the deal with the city or Orlando, the Magic agreed to build five community gymnasiums and assume some of the costs of the new arena. The arena cost was more than $480M and the Magic are supposed to have a $100M debt because of the new arena. It's expansive but it's worth it long term because as it is, the Magic generate less than $2 million a year from luxury suites and club seating at Amway (their current arena), compared to $20 million for the typical NBA team.


You guys are really reading too much into this $175M loan ! The NBA has problems just like the rest of the economy but thanks to the salary cap and the debt cap, from an economic standpoint, the NBA is in better shape than other pro sports. Kudos to Stern for negotiating the $7.4 billion 8yr extension to the current TV deal in 2007. Now the league is protected until 2016 and there was no way the NBA could have gotten a deal as good as that right now.

[TKF]

The snippet is deceiving, I suggest people to read the full article from the Sports Journal. There's nothing alarming with the Debt and it's not really an indication that the NBA is struggling.

The private-placement deal was arranged by JPMorgan Chase and Bank of America. In a private placement, non-banking lenders such as pension funds and insurers extend the cash, commonly at fixed rates for five- to seven-year terms and at rates higher than what banks offer for floating-rate loans.

Harvey Benjamin, the NBA’s executive counsel for business and finance, said it’s important not to compare the rates with what the NBA had been paying before the credit market collapse — about 200 to 300 interest points less for similar debt, sources said — but rather, what borrowers of similar standing are paying in today’s environment. In that light, he said, the 8.27 percent the NBA will pay on $100 million of the debt, and the 7.45 percent on the remaining $75 million, is favorable.

“It shows how the NBA is viewed by the credit markets,” he said.

Rob Tilliss, a former JPMorgan Chase sports banker who runs his own sports boutique, Inner Circle Sports, agreed that given the market conditions, the NBA’s rates are hardly extreme.

“That is an outstanding execution,” he said.

The NBA was not looking to borrow at this time, Benjamin said, but JPMorgan and Bank of America came to the league several weeks ago to say there was an opportunity to do so. The league, after polling its teams and finding a need, agreed to the deal in part because of the lack of borrowing opportunities since the fall. Benjamin would not reveal which teams plan to borrow from the placement.

Tilliss said that over the last few weeks there has been a slight opening in the credit market for investment-grade borrowers like the NBA.

The NBA deal comes in the context of a changing landscape for the leaguewide credit facilities. Once cheap sources of loans, the banks that manage the loan pools have soured on them and have been unwilling to renew at the old terms. The NFL and MLB were both unable to renew their deals late last year and termed out. That means the debt automatically converted into a fixed-rate loan and triggered amortization and slightly higher rates.

There is a salary cap but also a debt cap in the NBA. The current NBA policy allows each team to carry up to $150 million in debt. The league is an association so wether it's insurance or loans, the NBA negotiate on behalf of the teams in order to get better deals. Nothing really unusual with this $175M loan. I can't see why people are so quick to bash Stern or Orlando. Teams are allowed to borrow $11M with this new deal. It's the worth of a two year MLE contract ! LOL
If teams were really struggling that much, they would have asked for more than that. Wether the economy is good or not, some small market teams always lose money so there's nothing really unusual here.

About Orlando, they lost $20M in 2006 but they've been profitable in 2007 and 2008. Their debt structure is solid, their debt deteriorated (although their revenues increased) simply because of their new arena. Although the new arena is taxpayer funded, in order to secure the deal with the city or Orlando, the Magic agreed to build five community gymnasiums and assume some of the costs of the new arena. The arena cost was more than $480M and the Magic are supposed to have a $100M debt because of the new arena. It's expansive but it's worth it long term because as it is, the Magic generate less than $2 million a year from luxury suites and club seating at Amway (their current arena), compared to $20 million for the typical NBA team.


You guys are really reading too much into this $175M loan ! The NBA has problems just like the rest of the economy but thanks to the salary cap and the debt cap, from an economic standpoint, the NBA is in better shape than other pro sports. Kudos to Stern for negotiating the $7.4 billion 8yr extension to the current TV deal in 2007. Now the league is protected until 2016 and there was no way the NBA could have gotten a deal as good as that right now.

YOU MAKE some very good points kos, but I think the NBA is not doing as well as stern is letting on... the fact that teams with 100+ million dollar revenues are having time turning profit is a concern.. the fact that they have to take this loan out despite the fact that with the TV deals and numerous deals the NBA is basically printing money is still something to keep and eye on... Stern has done a great job Marketing the league, but I go to a lot of games, have been to several stadiums and there are a lot of empty seats...

[TheBluest]

I'm going to splice articles and quotes into quotes in relation to Kos' Lawyerific response

From the NBA Finance deal

marking one of the first league financings since the implosion of the credit markets last fall.

Orlando Magic Exec

We've been operating at a $15 [million] to $20 million [annual] loss over the past half-dozen years, so it helps us."

Ken Berger noted Stern predicted that the NBA will see "slightly better gate revenue, citing a plan to stem potential losses from lower season-ticket renewals with a league-wide program of 1,000 or more seats at NBA games selling for $10 or less." Stern said of sponsorship renewals, "We're pretty optimistic that this will be a season that will be better in our industry than it will be in some other industries." But a team exec Thursday said that the owners "are worried about the economic downturn and might be inclined to let the current [CBA] with the [NBPA] lapse after the 2010-11 season rather than extend it one more year."

The exec added that "only 'five to seven' NBA teams are profitable

The Indiana Pacers have lost money in 25 of the last 27 years,

including nine of the last 10 seasons in Conseco Fieldhouse

, said Pacers Sports & Entertainment President Jim Morris. The losses, he added, are much higher than recently published estimates of more than $6 million annually.

While Pacers officials have not officially asked to renegotiate the franchise's Fieldhouse lease, they began providing city officials with team financial information before the 2007-2008 season as a precursor to potential renegotiations.

What's ironic about the Pacers losses is... one it's rich in basketball tradition. It's a huge basketball town although not a huge market(population wise). And The Pacers were an Elite Teams from about 1999-2005 and they had at the time a New Arena.

So the Pacers were still experiencing losses after 2 CBA deals were renegotiated and during at least 1 T.V deal?

So Stern uses T.V. deals which is really like a bail out Stimulus package to cover past, present, and future losses across the league. Nice. No wonder LP prices keep going higher and higher.

The NFL has a 70% league revenue sharing program the NBA has a 30% program. If Stern was working his magic so well with the T.V deals the owners wouldn't be crying over higher league revenue sharing and lower payroll knowing they have a "$150mil don't worry I got your back sort of cushion".

As NBA contracts escalate they eat deeply into a Franchises' profit margin to the point it creates major team debt. New Arena deals help maybe within the first 5yrs to recoup the losses but then back to reality.


Sonics, Grizz, Hornets, Bucks, New Jersey, Kings, Hawks all need some help Kos

[TKF]

I'm going to splice articles and quotes into quotes in relation to Kos' Lawyerific response

From the NBA Finance deal

marking one of the first league financings since the implosion of the credit markets last fall.

Orlando Magic Exec

We've been operating at a $15 [million] to $20 million [annual] loss over the past half-dozen years, so it helps us."

Ken Berger noted Stern predicted that the NBA will see "slightly better gate revenue, citing a plan to stem potential losses from lower season-ticket renewals with a league-wide program of 1,000 or more seats at NBA games selling for $10 or less." Stern said of sponsorship renewals, "We're pretty optimistic that this will be a season that will be better in our industry than it will be in some other industries." But a team exec Thursday said that the owners "are worried about the economic downturn and might be inclined to let the current [CBA] with the [NBPA] lapse after the 2010-11 season rather than extend it one more year."

The exec added that "only 'five to seven' NBA teams are profitable

The Indiana Pacers have lost money in 25 of the last 27 years,

including nine of the last 10 seasons in Conseco Fieldhouse

, said Pacers Sports & Entertainment President Jim Morris. The losses, he added, are much higher than recently published estimates of more than $6 million annually.

While Pacers officials have not officially asked to renegotiate the franchise's Fieldhouse lease, they began providing city officials with team financial information before the 2007-2008 season as a precursor to potential renegotiations.

What's ironic about the Pacers losses is... one it's rich in basketball tradition. It's a huge basketball town although not a huge market(population wise). And The Pacers were an Elite Teams from about 1999-2005 and they had at the time a New Arena.

So the Pacers were still experiencing losses after 2 CBA deals were renegotiated and during at least 1 T.V deal?

So Stern uses T.V. deals which is really like a bail out Stimulus package to cover past, present, and future losses across the league. Nice. No wonder LP prices keep going higher and higher.

The NFL has a 70% league revenue sharing program the NBA has a 30% program. If Stern was working his magic so well with the T.V deals the owners wouldn't be crying over higher league revenue sharing and lower payroll knowing they have a "$150mil don't worry I got your back sort of cushion".

As NBA contracts escalate they eat deeply into a Franchises' profit margin to the point it creates major team debt. New Arena deals help maybe within the first 5yrs to recoup the losses but then back to reality.


Sonics, Grizz, Hornets, Bucks, New Jersey, Kings, Hawks all need some help Kos

And that is why I made the comment that the NBA with it's TV deals is almost like printing money..with those lucrative deals they should have no problem covering "operating" costs.. the fact is, they don't sell enough tickets and merchandise to cover these costs, and don't buy these reported attendance numbers.. that is fluff.. they have the hawks this year averageing 16,000 per game, so far this year... ROFL.... What? that place sometimes is like a ice cream parlor on a 10 below zero winter day!!!!

The TV revenue should be gravy, I just can't understand why so many teams are struggling..

[EricAnderson]

The league eneds to cotnract theres too many teams that spread the talent outt hin

Plus franchises like memphis and Charlotte will enver be relevant nationally or where they play,it makes n sense for those teasm to even exist..

[TheBluest]

And that is why I made the comment that the NBA with it's TV deals is almost like printing money..with those lucrative deals they should have no problem covering "operating" costs.. the fact is, they don't sell enough tickets and merchandise to cover these costs, and don't buy these reported attendance numbers.. that is fluff.. they have the hawks this year averageing 16,000 per game, so far this year... ROFL.... What? that place sometimes is like a ice cream parlor on a 10 below zero winter day!!!!

The TV revenue should be gravy, I just can't understand why so many teams are struggling..

I left out several quotes from the Simon brothers but the article I was referencing mentioned they would lose anywhere from $1-20 over those 9yrs, each yr. They lost $7mil one yr, $1mil another yr, $12mil another yr. Like I said they were a perennial playoff team. Teams who advance in the playoffs make several extra millions per round. Get this from what it sounds like and I can be stood corrected this is even after teams get the kickbacks from the Escrow as teams over the cap contribute extra towards. I mean how much funding do these franchises truly need?

A team like the Pacers considering all things stated above in this post and the previous one shouldn't be losing money almost 10yrs consecutively. How many times has the league borrowed $175mil to assist the franchises?