RealGM

Good article by Simmons

..you end up like Sacramento, hearing your overleveraged owners pretend that your city can't support basketball, ending up with moments like this and wondering how you got there.

Those things happen when you don't have better revenue sharing, or a hard salary cap, or franchise tags, or shorter guaranteed contracts. If there were a Kevin Durant and Sam Presti to go around for every small-market team, things would be fine. But you're much more likely to get stuck with Tyreke Evans and three Maloofs.

http://sports.espn.go.com/espn/page2/st ... ortCat=nba

You have to get lucky to be a contender. And since there's 30 nba teams not every team can get lucky. Unless the CBA is changed drastically teams are going to continue to lose money.

If there were more revenue sharing and owners stopped giving away long guaranteed contracts to non-superstar players it sure seems to me that the system would take care of itself.

The Kings have the minimum team salary and aren't making ends meet according to that article. Should the other owners help to prop up the Kings at their own expense? If it comes to that being the only way then it might mean contraction.

Big markets get an advantage by having teams in smaller markets because they get exposure in areas that they wouldn't otherwise. They also get an advantage in that those teams are prevented from moving to bigger cities- the league doesn't allow for there to be 4 teams in NYC even though the market could likely support it. So absolutely I do think that the bigger markets should be helping to subsidize the smaller markets.

It's interesting NBA owners want to balance the playing field by limiting salaries to players but don't want to equalize the revenue's earned by owners. It's obvious the owners care only about lowering salaries and don't care anything about a level playing field so small markets can compete against big markets.

You have to get lucky to be a contender. And since there's 30 nba teams not every team can get lucky. Unless the CBA is changed drastically teams are going to continue to lose money.

To some degree you have to get lucky to be a contender in any market. There are 30 teams in the league, and the good ones generally stay good for several years in a row (just from the best players generally being similar year to year). That means that a bunch of other teams will go extended periods of time not contending. If there were only 16 (or so) teams, fewer teams would go long periods between contending (say making the conference finals).

It takes a little more luck in smaller markets (especially if you don't have a multi-billionaire owner running the team for his ego and not for profit).

The Kings have the minimum team salary and aren't making ends meet according to that article. Should the other owners help to prop up the Kings at their own expense? If it comes to that being the only way then it might mean contraction.

It's unclear that the Kings are losing money right now, even with their arena issues (though they likely would be if they had a more competative payroll). What is clear is that the Maloofs are loosing a lot of money in their other investments - especially casinos/Las Vegas real estate. They could solidify their finances by selling the team, but they really like owning an NBA team so instead they're trying to leverage it into extra cash.

Similar things are happening in baseball. The Mets and the Dodgers have major financial problems due to their owners loosing money elsewhere. Their owners could sell the teams to get the cash back and be solvent, but they really like owning a major league team so they very stubbornly borrow against the team and use that cash to cover other problems.

The ineffectual revenue sharing in the NBA is why the Knicks can run a $100M payroll for a 30 win team and turn a big profit, while the Spurs have ranged from breaking even to losing money despite running a perennial contender on around $70M in payroll.

It's stupid. The NFL realized that putting the teams on an equal financial footing would create higher quality games and thus drive the growth of their business a long, long time ago, but somehow the NBA didn't get the memo.

Frankly, one solution is rich owners who can absorb the losses and use them to reduce taxes on their other more profitable ventures. The other solution is to move to a bigger market.

It was the league that elected to expand to 30 teams. When they started to put franchises in cities that wouldn't or couldn't support them, the league took the risk. Yes, the players colluded because more teams means more jobs and more union members. But ultimately it is the owners who made the decisions and the owners who get the upside when franchises are sold. The players have no equity, so don't ask them to share the risk.

I think its the exact opposite. You always have to factor in unintended consequences to new rules. A couple of rules that I think have hurt small markets is the length of contracts and the maxing of contracts.

1. Putting a max on player contracts has hurt players overall money making potential. Suddenly a fringe all-star is making the same as the best player in the league. This forces players to look for other avenues to make more income. To truly make the big money off the court you need to be on a high profile franchise.

In the past small market teams could pay superstar players even more money to stay. People for years criticized the KG contract. Fact is though KG made Timberwolve basketball relevant. KG in any big market would have received a ton of endorsements.

2. Limiting player contract length. There use to be a time that players would get ridiculous long term deals. I think Magic at one time had a life-time contract. I understand why people want to limit the contract length of the players that don't deserve long term guaranteed contracts. Why is it that a few years ago the Cavs could only sign Lebron for 3 more years. Same with Dwight in Orlando. In baseball players can sign 10 year contracts. I understand the fear of injuries. I understand the fear of a player loosing motivation. Fact is though Lebron, Dwight, Durant or worth so much to those franchises that you could secure your franchise value by signing them to longer deals. Instead of the current system which puts franchises in panic mode every few years.

IMO Franchise tags are a waste of time. Unless you can franchise a player forever. I heard many suggest a 2 year Franchise tag. To me this is just a way to add a 2 year team option on your top players contract. Agents will get by this by negotiating shorter contracts anticipating a potential Franchise tag.

Franchise tag in the NFL is needed because they actually have contract negotiations. Sometimes those negotiations go south. It gives the team a way to keep a player while still trying to sign the player. They don't really use Franchise tags to force a player to stay. The only way Franchise tags make any sense in the NBA is if you eliminate max contracts. Then contract negotiations remain part of the circumstances. Since individual players could make a lot more than the current max teams would have to be smart on who they actually Franchise.

Small market teams are just fine in the current system. There problems, if any, are tied to poor management, not the lack of revenues. They have to draft well, be smart on trades and fair to their fans. If they win, they are fine. If they are stupid, they fail.

Generally, the LT payers have faired poorly in the playoffs, assuming they make them. Dallas usually goes no where and pays the LT. Before Cuban got there, the were a small revenue team. Cuban made it a biggish revenue market. Boston should be a huge market with their history et al, but lousy owners hurt that franchise and they are middling revenue wise. Compare the lakers to the Clippers. Griffin's impact on revenues has moved LAC up the charts.

Sacto is a lousy situation because the Maloof are overextended and have always been overextended. No need to junk a system that works exceeding well because of three bonehead brothers. it takes talent to lose money with a Vegas casino.

If you have over 200 million to invest why would you risk it on an investment where 22 out of 30 people lose money? Lets say the risk is actually overblown and its a 40% chance of losing money, its still a way better investment to buy bonds. The NBA is a big money business, most owners are in it to make money not a personal toy like it is for Cuban.

If all it needed was good management to make money you'd think these billionaire owners and corporations could find 30 GM's who knew what they were doing. There's a lot more to being a GM than just tanking till you draft the next Lebron.

Many businesses loose money. When they sell those teams for big profits I don't see them crying.

You don't have to loose money. Many teams choose to loose money because they are aggressively trying to win.Thats the difference between baseball and basketball. Baseball teams don't try to win. Becoming rare to keep the better players in even mediocre markets. Not having a salary floor allows most teams to make money. You want more teams to make money in the league just eliminate the salary floor.

ranger001 wrote:If you have over 200 million to invest why would you risk it on an investment where 22 out of 30 people lose money? Lets say the risk is actually overblown and its a 40% chance of losing money, its still a way better investment to buy bonds. The NBA is a big money business, most owners are in it to make money not a personal toy like it is for Cuban.

If all it needed was good management to make money you'd think these billionaire owners and corporations could find 30 GM's who knew what they were doing. There's a lot more to being a GM than just tanking till you draft the next Lebron.

Many if not most pro sports team owners do it for ego reasons as much as investment reasons. The Maloofs could solve a lot of their financial problems by selling the Kings, but they really like being NBA owners so they don't. Similar to the Dodgers and Mets.

Most pro sports team owners consider owning a team to be worth $1M/yr, $5M/yr, $10M/yr .. compared to conventional investments - similar to season ticket holders paying a non-trivial chunk of money (for them) just for seats. They just never mention this in CBA or arena negotiations.

There are too many teams in small markets in the NBA. Five of the 20 largest metropolitan areas in the U.S. have no NBA team but 4 teams are in metropolitan areas outside the top 40.

A lot of posters on realgm want the NFL system because they think it has created parity in the NFL to a greater extent than the NBA. I think it is just the shorter schedule, superstar factor, and single elimination tournament that create the perception of more parity in the NFL. I also think the NFL system is popular with fans because of jealousy a lot of fans have for players. Many people resent star athletes who make millions and still try to control their career. I call these people the STFU and play crowd.

I don’t like the NFL system.

Unguaranteed contracts are unfair because teams can choose to not to honor a contract if they feel the player isn’t performing, but players can’t walk away from the contract if they feel they have over-performed.

The hard cap forces teams to break up their cores in the NFL. This could be devastating in the NBA due to its smaller rosters.

A franchise tag to me is inherently unfair because it treats the player as the property of the team they play for. In the NBA, it would be used to stop superstars from ever reaching free agency. Cleveland would have tagged him forever. I don’t like the idea of superstars being shipwrecked on a team they don’t want to play for.

Under the current rules teams can keep the player they drafted for seven to eight years before they reach free agency. It is very hard for me to accept the idea that a player can’t become an unrestricted free agents after that long of a period of service. Finally, I don’t think the franchise tag can work in the NBA effectively. Basketball players have a lot more power over if their team wins or loses than football players. Hold outs in football are generally annoyances. Hold outs in basketball would be devastating.

Finally, I don’t like the NFL system because it’s goal seems to be to punish well run organizations and reward poorly run ones.

My idea to address superstar movement by thinking of ways to make players want to play in the city that drafted them. I think the simplest thing to do for the NBA would be to get rid of maximum salaries while keeping the soft cap and Bird rights. Under this scenario, Cleveland would have offered Lebron 40 million to stay in Cleveland giving them a huge advantage in free agency that no other team has. Most players under these rules will choose to re-up with the team that signed them. I don’t think anyone should complain about the players who did leave under these rules.

Next is my radical idea. The NBA has too many teams in smaller markets. The NBA myopically moved to smaller cities because they could force those towns to build them stadiums. This is good in the short run but bad for long-term popularity of the league. Metropolitan Seattle is larger and richer than Oklahoma City. It hurts the league to be in these smaller cities.

It also creates major problems with regards to the players. NBA players are extremely talented individuals. Literally they are in the 99.999 percentile of ability in their field. Individuals who are still talented and valuable generally will be able to get what they want. Smaller cities aren’t as attractive to players who would prefer to play in larger markets.

One way to make it more likely that players stay on their home team is to have more large market clubs and less small market clubs. This would never happen but IMO would be better for the league. I found it a fun exercise to realign the league.

Atlantic Division
1. Boston Celtics (4.6 million people)
2. New York Knicks (19 million people)
3. Brooklyn Nets (19 million people)
4. Toronto Raptors (4.6 million people)
5. Montreal Hornets (3.4 million people)

Central Division
1. Chicago Bulls (9.5 million people)
2. Chicago Jazz (9.5 million people)
3. Philadelphia 76ers (5.9 million people)
4. Washington Wizards (5.5 million people)
5. Detroit Pistons (4.4 million people)

SouthEast Division
1. Miami Heat (5.5 million people)
2. Orlando Magic (2 million people)
3. Tampa Bay Cavaliers (2.7 million people)
4. Atlanta Hawks (5.4 million people)
5. Charlotte Bobcats (1.7 million people)

Spreadout Division
1. Vancouver Pacers (2.1 million people)
2. Seattle Supersonics (3.4 million people)
3. Portland Trail Blazers (2.2 million people)
4. Denver Nuggets (2.5 million people)
5. Minn. Timberwolves (3.2 million people)

California Division
1. Los Angeles Lakers (12.8 million people)
2. San Francisco Grizzlies (4.3 million people)
3. Golden State Warriors (4.3 million people)
4. San Diego Kings (3 million people)
5. Los Angeles Clippers 2.0 (12.8 million people) Stearling sells team

SouthWest Division
1. Dallas Mavericks (6.4 million people)
2. Houston Rockets (5.8 million people)
3. Phoenix Suns (4.3 million people)
4. San Antonio Spurs (2.0 million people)
5. St. Louis Bucks (2.8 million people)

The players would love this. A far higher percentage of clubs are now in larger cities and the most popular areas of the country to live are significantly more represented. Southern California, NYC, Chicago, and the Bay Area now have 9 ball clubs instead of 5. I’m not worried about the market saturation issue. A lot of people think that because of the Clippers two teams in one city won’t work. I think the failure of the clippers is solely due to bad management. Baseball shows you can have two teams in one city and have both be successful.

The realignment I’ve proposed also improves the size and quality of the mid-market clubs. I have dramatically reduced the number of cities in the NBA that would be unappealing to NBA players. Vancouver and Montreal are admittedly stretches but I still believe you can make those cities appealing to NBA players once they actually go there. As a result of this realignment, most players will get drafted into the types of larger cities that are appealing to players. My hope is that players would only leave if management stinks which is fine to me. Poorly run teams should lose their superstars.

I think this would be a good deal overall for fans, but I’ll acknowledge it stinks for the cities the NBA would be leaving. Simply put more people would have access to NBA games live.

The league benefits in a lot of ways. The TV deal is better because there are less small markets. I’ve also created more natural rivals. Chicago and NYC would now have true cross city rivalries and so would LA as Stearling no longer owns the team. The Raptors now have a natural rival in the Montreal Hornets. The pacific northwest rivalry is renewed and the California division would have cool state bragging rights.

I tried to accomplish the goal of discouraging superstar movement by making players actually happy to play for the club they got drafted by rather than trying to figure out ways to force unhappy employees to work. Those players that did move probably had good reason to do so.

I don't understand why a hard cap breaking up championship teams is such a bad thing. I think most fans enjoy seeing different teams compete for the championship each year instead of having revolving 3 year+ dynasties. If anything, I think it would put a greater emphasis on good management because you wouldn't be able to just sit on the core you have and only make small tweaks every year. You'd have to be constantly re-tooling and looking at more variables to building a team.

And besides, if you have a good management, those teams should at least be able to manage their cap room ahead of time to find a way to keep their key players down the road.

sp6r=underrated wrote:Under the current rules teams can keep the player they drafted for seven to eight years before they reach free agency. It is very hard for me to accept the idea that a player can’t become an unrestricted free agents after that long of a period of service. Finally, I don’t think the franchise tag can work in the NBA effectively. Basketball players have a lot more power over if their team wins or loses than football players. Hold outs in football are generally annoyances. Hold outs in basketball would be devastating.

Under the present NBA CBA, a player can become an unrestricted free agent 5 seasons after being drafted.


The present system of allowing the "home" team to offer (slightly) more money worked "OK" for a while in keeping superstars with the team that drafted them. But, with LeBron James and Chris Bosh, signing with Miami for (slightly) less money than they could have gotten by staying with the team that drafted them, that strategy is no longer working. Also, other superstars (Anthony, Stoudamire, Deron Williams) have pretty much controlled where they want to play - on "superteams".

The courts have already ruled that no free agency is illegal, so, greatly increasing (say, to ten years or more) the time required for a player to attain free agency probably would not withstand a legal challenge. IMO, the players would never agree to it, anyway.

My suggestion is to allow the "home" team to offer significantly more money to their own player.

After 4 years with the team that drafted them, the player becomes a restricted free agent. The player can then accept the qualifying offer for one year, and then would become an unrestricted FA. Say, for example, the maximum salary for the player would then be $16 million (for the first year).


Other teams could offer the player the maximum ($16 million) for the first year with 8% raises for a maximum contract length of 5 years total.

The "home" team, however, could offer the player double or $32 million for the first year with 10% raises for a maximum contract length of 6 years. The "home" team could offer this contract after 4 years.

Also, the "home" team salary cap hit would be only half of their actual payout.

IMO, most players would take the (about) $200 million from the home team rather than the (about) $80 million from another team.

I am also in favor of limiting the maximum cap space allowable for any team in any given year, say, to 30% (or so) of the salary cap for that year. If the salary cap was %60 million, the maximum cap space would then be $18 million. This would reduce the chance of any one team signing multiple superstars in an offseason.

sp6r=underrated wrote:Unguaranteed contracts are unfair because teams can choose to not to honor a contract if they feel the player isn’t performing, but players can’t walk away from the contract if they feel they have over-performed.

I think the NFL contract system, where you have a guaranteed portion paid up front and an unguaranteed portion paid over time, is a pretty good balance between player and team interests. Players that are extremely underpaid generally have success with a holdout, although there have been a couple notable teams that took a hard line stance that ended up damaging both their interest and the player's interest.

I would like to replace holdouts with some ability for the player to buyout his remaining contract and become a restricted free agent. I think this would be a better balance between team and player interests than either the current NBA or NFL model.

sp6r=underrated wrote:The hard cap forces teams to break up their cores in the NFL. This could be devastating in the NBA due to its smaller rosters.

This is a bigger producer of parity in the NFL than any of the other effects you cite. Bad NFL teams have access to far more talented players in free agency than bad NBA teams.

sp6r=underrated wrote:A franchise tag to me is inherently unfair because it treats the player as the property of the team they play for. In the NBA, it would be used to stop superstars from ever reaching free agency. Cleveland would have tagged him forever. I don’t like the idea of superstars being shipwrecked on a team they don’t want to play for.

Agreed. NFL franchise tags work because you can only use 1 a year and you have a 53 man roster. The NFL system would be completely broken for the NBA.

sp6r=underrated wrote:Finally, I don’t like the NFL system because it’s goal seems to be to punish well run organizations and reward poorly run ones.

You'll have to explain this one. The NFL system results in well-run organizations like New England and Pittsburgh consistently fielding good rosters and poorly run organizations like Washington and Oakland consistently fielding lousy rosters.

I feel like it's the NBA system that results in well run organizations like Utah and Denver finding obstacles to competition that have nothing to do with how well their management executes.

sp6r=underrated wrote:Spreadout Division

Quoted for hilarity.

ranger001 wrote:If you have over 200 million to invest why would you risk it on an investment where 22 out of 30 people lose money? Lets say the risk is actually overblown and its a 40% chance of losing money, its still a way better investment to buy bonds. The NBA is a big money business, most owners are in it to make money not a personal toy like it is for Cuban.

If all it needed was good management to make money you'd think these billionaire owners and corporations could find 30 GM's who knew what they were doing. There's a lot more to being a GM than just tanking till you draft the next Lebron.

The cost of an NBA franchise is overinflated and should be lower. The NBA is actively attempting to prop up the value of small market franchises by taking ownership of them rather than allowing them to be sold at fair market value.

The NBA is in a crisis of its own making. They want the revenues from having teams in small markets but the demographics don't support those teams unless they first divide the big markets by adding more teams in those markets. An alternative to adding more teams in the big markets is revenue sharing.

d-train wrote: An alternative to adding more teams in the big markets is revenue sharing.

However, the need for revenue sharing is not an angle the union can force. Revenue sharing depends on the idea that the league's revenues simply need to be reallocated - but to do so, they are asserting single entity status for the league, and that's a direction they don't want to travel. Absent that argument, the 22-23 owners losing money have no right to the revenues of the 7-8 making money, which means there needs to be a change to the system where all 30 can make money and still compete.

[quote="DBoys"][quote="d-train"] An alternative to adding more teams in the big markets is revenue sharing.[/quote]

However, the need for revenue sharing is not an angle the union can force. Revenue sharing depends on the idea that the league's revenues simply need to be reallocated - but to do so, they are asserting single entity status for the league, and that's a direction they don't want to travel. Absent that argument, the 22-23 owners losing money have no right to the revenues of the 7-8 making money, which means there needs to be a change to the system where all 30 can make money and still compete.[/quote]
I didn't suggest NBA owners should be forced to share revenues. I just pointed out there is an alternative to some teams losing money because of economic disadvantages.