Official CBA/Labour Talks Discussion Thread II

[ranger001]

When 1 owner sells for a loss in 30 years it may be indicative of a problem, however, the sky isn't falling.

Just like in the stock market, the past 5 years is a lot more relevant than the past 25. And its 2 owners that sold for a loss.

[ranger001]

The players are partners. Just like music singers, they are unique, not like a manufacture employees where they are replaceable. LeBron James cannot be replaced like manufacture employees. It doesn't work that way.

If the players were partners they would put up equity, they would cover operating losses and they certainly would not have guaranteed salaries.

The players want to be employees, they certainly do not want to put up equity, take financial risks or have the responsibility of running the business.

[Ponchos]

if it was so risk free, why aren't we able to round up a gang of people to invest in the Kings or Pacers, who may both relocated due to the risks.

If you got together 10,000 people who were all willing to put forward $60,000 each (600 million total) to buy the Pacers or Kings, the NBA would politely say "thanks but no thanks" to your offer.

[YogiStewart]

if it was so risk free, why aren't we able to round up a gang of people to invest in the Kings or Pacers, who may both relocated due to the risks.

If you got together 10,000 people who were all willing to put forward $60,000 each (600 million total) to buy the Pacers or Kings, the NBA would politely say "thanks but no thanks" to your offer.

ok. so let's find players that have made that amount. let them buy the team.
but wait...only 1 player (MJ) has stepped forward to take an ownership role? why is this so?

[ranger001]

if it was so risk free, why aren't we able to round up a gang of people to invest in the Kings or Pacers, who may both relocated due to the risks.

If you got together 10,000 people who were all willing to put forward $60,000 each (600 million total) to buy the Pacers or Kings, the NBA would politely say "thanks but no thanks" to your offer.

There's no freaking way any sane person much less 10,000 would put up 60K and also be on the hook to cover operating losses. Never happen.

[Indeed]

Even Billy Hunter acknowledged that the league was losing around 160 million.

Why aren't you quoting the huge amount of money the league made in twelve years at that rev split? What's wrong with that number? Why isn't more relevant than the worst year of the deal? (A year that was likely cherry picked to hold whatever losses could be pushed into it.)

Neither you nor I have the profit number that the league made. Forbes has been proven to be a guess. We do know that both the owners and the players acknowledge that the league lost at least 160 million last year. That is a fact.

The bobcats sold for a loss. That is also a fact. You can try to spin a loss into a profit but when franchise values go down you know there is a problem. Or should.

We might not have the profit number, but you can use historical data or similar project to do some estimation. Although this is a top-down approach, but this is widely use for similar projects to determine their initial cost.

NHL is a very similar project.

[Ponchos]

if it was so risk free, why aren't we able to round up a gang of people to invest in the Kings or Pacers, who may both relocated due to the risks.

If you got together 10,000 people who were all willing to put forward $60,000 each (600 million total) to buy the Pacers or Kings, the NBA would politely say "thanks but no thanks" to your offer.

ok. so let's find players that have made that amount. let them buy the team.
but wait...only 1 player (MJ) has stepped forward to take an ownership role? why is this so?

Because he's the richest player in the world?

Magic was a minority owner of the Lakers for many years. He recently sold his share for a gigantic profit.

The league doesn't want to sell a team to a group with 1000's of interested, vocal owners. There is a reason they sell to individuals and very small ownership groups.

[Twinkie defense]

Player costs are directly linked with BRI, so if those costs rise, then, obviously, BRI has also risen, meaning, then, owners revenues also increased.

No kidding. That's why they want to reduce that amount, so they won't lose money. Hence, player salaries is the only thing owners can control to any meaningful degree in terms of their costs. They can't control interest rates, they can't control stadium rents/maintenance, or travel costs (to any meaningful degree) but in these CBA negotiations, they have to get control of payroll costs.

In fact, the owners underpaid players last year, necessitating escrow payments to the players to make up for the shortfall.

Um, not quite: the escrow is taken so as to provide a cushion for the league when payroll payments exceed 57% of BRI. The players weren't underpaid, they just had the funds held in escrow returned to them.

Again, where do those $300 million LOSSES come from?

The majority of the costs of an NBA franchise are in payroll - period. End of.

BRI revenues cover payroll costs 100%. Period.

Quit avoiding the question.

Sorry if this has already been hashed and re-hashed, I'm catching up... but I think this is the crux of the misunderstanding here.

Out of every dollar in new BRI, 57 cents goes directly to the players. That leaves 43 cents for other things - but there is certainly no guarantee that 43 cents can more than cover the costs of doing business, which I think everyone can agree have increased (for instance - health insurance for players, rising jet fuel prices, new logos, new software and arena technologies, etc. etc.), especially for those teams that are already having the toughest time making a go of it.

Now you can argue how much those additional costs amount to, or whether there should be revenue sharing to pay for them, or if teams should fold, whatever - but just because you have additional revenue, that doesn't mean all that money is just profit to be divided. In fact it is not at all unheard of that the more you sell of something, the more money you lose (which is what we saw with Amazon.com in its early days).

[Rhettmatic]

alanhahn Alan Hahn
And not getting very good feedback. Very few people with credible perspective are expecting a deal.

[ranger001]

5pm deadline has expired with no deal!

[LittleOzzy]

5pm deadline has expired with no deal!

Unless they are still in meetings, could still be talking.

[Rhettmatic]

The NBA reporters are pretty much unanimous that the made-up deadline doesn't matter so long as the sides are still negotiating.

daldridgetnt David Aldridge
Just in case you're worrying...they won't stop talking at 5 if they're still working. Deadline in play only if/when negotiations break off.

[LittleOzzy]

The NBA reporters are pretty much unanimous that the made-up deadline doesn't matter so long as the sides are still negotiating.

daldridgetnt David Aldridge
Just in case you're worrying...they won't stop talking at 5 if they're still working. Deadline in play only if/when negotiations break off.

Yup they could talk all night if it means they can finally agree on a deal.

[douggood]

the cost per game at acc is apx 700000-800000$, that times 45 games a season. There is a crew of apx 1500 staff/crew/security per game. Add travel, marketing, insurance, frontoffice, coaching and countless other expenses. The owners bear a lot of expenses and risks compared to players, its not hard to see why many teams are losing money.

as for the NHL and their expenses, they are headed towards another Armageddon in the next cba, lots of teams losing money and big amounts of it. Teams declaring bankruptcy, can't find owners to sell to.

[plainballing]

the cost per game at acc is apx 700000-800000$, that times 45 games a season. There is a crew of apx 1500 staff/crew/security per game. Add travel, marketing, insurance, frontoffice, coaching and countless other expenses. The owners bear a lot of expenses and risks compared to players, its not hard to see why many teams are losing money.

as for the NHL and their expenses, they are headed towards another Armageddon in the next cba, lots of teams losing money and big amounts of it. Teams declaring bankruptcy, can't find owners to sell to.

So...where did you get those figures?

[floppymoose]

The deadline is irrelevant. It's artificial and no one should pay any attention to it.

[douggood]

the cost per game at acc is apx 700000-800000$, that times 45 games a season. There is a crew of apx 1500 staff/crew/security per game. Add travel, marketing, insurance, frontoffice, coaching and countless other expenses. The owners bear a lot of expenses and risks compared to players, its not hard to see why many teams are losing money.

as for the NHL and their expenses, they are headed towards another Armageddon in the next cba, lots of teams losing money and big amounts of it. Teams declaring bankruptcy, can't find owners to sell to.

So...where did you get those figures?

I don't remember where I read/heard them, but these numbers represent the cost of hosting a major concert event at acc, its not hard to imagine greater costs for a sporting event.

[Courtside]

I don't want to miss the season and really hope something gets done now, so that come December we have a 64 game season (or whatever is left). The system issues aren't that extreme any more, since even just the change in BRI% and increased lux tax payments will limit the ability to implement some of the worst exceptions.

MLE down to $5mil, $4mil for tax teams... MLE for 3 years max
5 years and 6% raises for own players, 4 years and 5% raises for others
Trade matching within 150% for non tax teams, 125% for tax teams
Rookie scale stays intact, but with automatic incentives for minutes played, PPG, etc...
100% guaranteed first year, 80% second year, 60% third year, 40% fourth year, 20% fifth year

What else?

[Maddogfromto]

The deadline is irrelevant. It's artificial and no one should pay any attention to it.

I'm loling at the thought of at 5pm Sterns alarm on his phone goes off, he and the boys close up their books and say sorry, times up

[YogiStewart]

The league doesn't want to sell a team to a group with 1000's of interested, vocal owners. There is a reason they sell to individuals and very small ownership groups.

MLSE, anyone?
owned by the teachers.