Possible solution to Europe problem

[Trueblood]

With there being rumors of Lebron or Kobe possibly taking more money to play in Europe, is it possible to modify the current cba to say that an NBA team is "limited to the max for offering contracts UNLESS an offer from outside the NBA is higher, in which case the team holding the player's bird rights can match the offer". I think this would work provided the Euro team would have to offer a legitimate contract to offer. They can't just say that they're gonna offer $100 million per season, have the NBA owner balk and then sign the player for $45 million per. It's got to be in writing and if it's legit, the NBA team would have a week or so to decide if they wanted to match.

[FGump]

Overreaction.

Other than players saying "Of course I'd take their $40 mill a year" there has been absolutely no indication that a European team can (or would want to) spend that kind of money on a top tier NBA player. They just don't have the financial structure to recoup that sort of outlay.

[Three34]

How many NBA starters have signed in Europe? Krstic, maybe, but not the post-injury Krstic.

Doesn't seem like there's a problem when we're looking at little more than hearsay. Fringe players have signed in Europe ever since the NBA began to purge Europe of its best bits. It's the logical order of things. Irt's just that, post-Childress, we're looking a bit harder at it now, and see a problem where there isn't one.

[arenas809]

They just don't have the financial structure to recoup that sort of outlay.

Many of those owners are billionaires so what we don't know yet is whether or not they are willing to make that kind of investment for an NBA superstar because no one has tried (not because they can't). On the other hand, we've never heard of NBA superstars saying they'd even consider playing in Europe so this is a new issue for both sides of the fence.

It has been well documented that these owners do not operate their clubs for the purpose of making profit, so investments made in talent aren't automatically made with regard to the bottom line as they are in the NBA.

[FGump]

1. Many of those owners are billionaires
2. so what we don't know yet is whether or not they are willing to make that kind of investment for an NBA superstar because no one has tried (not because they can't).
3. On the other hand, we've never heard of NBA superstars saying they'd even consider playing in Europe so this is a new issue for both sides of the fence.
4. . It has been well documented that these owners do not operate their clubs for the purpose of making profit,
5. so investments made in talent aren't automatically made with regard to the bottom line as they are in the NBA.

1. Obviously there is money outside the US - that is not the issue ...
2. ...but owners - even when wealthy - don't make "vanity purchases" of employees. They do so with a belief they will get a suitable return on investment in the long run
3. The reason NBA superstars say they'd "consider" playing in Europe is because of the way the questions are being framed for the first time. The questions build in the ASSUMPTION of Europe offering double and triple what the NBA offers, and there's no player who will turn down such theoretical offers. But getting them to become REAL offers? Ah, there's the rub.
4. I disagree completely. If profit didn't matter, there would be no salary cap. While there is a certain "vanity" component to owning a team, the bottom line does matter greatly from what I observe
5. You are making a huge assumptive leap, and it's one that I think does not hold water.

In summary I believe - and I think the future will demonstrate - that the much-ballyhooed Europe option will be not very different from the Japan option in baseball. Japanese teams have billionaire owners. They have a much more stable base as a league than Euro-basketball (which really is no more than an amalgam of minor leagues.) And Japan is not really a threat to sign away US baseball stars - even though in theory they could offer the moon. Every once in a while they sign away a mid-tier player whose agent gets him a better deal than he can get in the US. But the economic base for the US baseball game is much more sizable than it is for Japan so they can support the bigger salary here not there. The same applies to pro basketball.

Media questions have driven the idea of European mega-offers to NBA stars. But those questions are based on an assumption that European owners can and will pony up such money, when the fact is that such an assumption is entirely without any basis. And you don't change your structure as a league to combat theoretical situations that have nothing behind them.

[Dekko1]

1. Many of those owners are billionaires
2. so what we don't know yet is whether or not they are willing to make that kind of investment for an NBA superstar because no one has tried (not because they can't).
3. On the other hand, we've never heard of NBA superstars saying they'd even consider playing in Europe so this is a new issue for both sides of the fence.
4. . It has been well documented that these owners do not operate their clubs for the purpose of making profit,
5. so investments made in talent aren't automatically made with regard to the bottom line as they are in the NBA.

1. Obviously there is money outside the US - that is not the issue ...
2. ...but owners - even when wealthy - don't make "vanity purchases" of employees. They do so with a belief they will get a suitable return on investment in the long run
3. The reason NBA superstars say they'd "consider" playing in Europe is because of the way the questions are being framed for the first time. The questions build in the ASSUMPTION of Europe offering double and triple what the NBA offers, and there's no player who will turn down such theoretical offers. But getting them to become REAL offers? Ah, there's the rub.
4. I disagree completely. If profit didn't matter, there would be no salary cap. While there is a certain "vanity" component to owning a team, the bottom line does matter greatly from what I observe

2. How about David Beckham? Some team might want to try to fill the new NBA size arenas being built with a superstar.

4. He was referring to the Euro teams not being run for profit, and there is no salary cap.
Team salaries and arena sizes vary wildly. From players now paid what would equal a 10 mil contract in the NBA to total team saries under 2 million.
While no salary cap seems likely soon Euroleague itself starting next year will be restricted to teams with arenas over 10k seats.

In summary I believe - and I think the future will demonstrate - that the much-ballyhooed Europe option will be not very different from the Japan option in baseball. Japanese teams have billionaire owners. They have a much more stable base as a league than Euro-basketball (which really is no more than an amalgam of minor leagues.) And Japan is not really a threat to sign away US baseball stars - even though in theory they could offer the moon. Every once in a while they sign away a mid-tier player whose agent gets him a better deal than he can get in the US. But the economic base for the US baseball game is much more sizable than it is for Japan so they can support the bigger salary here not there. The same applies to pro basketball.

Media questions have driven the idea of European mega-offers to NBA stars. But those questions are based on an assumption that European owners can and will pony up such money, when the fact is that such an assumption is entirely without any basis. And you don't change your structure as a league to combat theoretical situations that have nothing behind them.

I mostly agree. It may happen once or twice but but is unlikely to become a flood.
However if the teams do start losing a few even low level starters I can see the owners wanting some tweak even if not needed in the long run for the league's health.

[FGump]

1. What is most conducive to "the league's health" - losing a random player here or there, or tossing away the cap rules? I would argue the cap rules are part of the cure, not the problem.

In addition, keep in mind that it wasn't the RULES limiting individual salary that made the offers to middle caliber players like Childress or Krstic go unmatched. The Hawks and Nets could have paid more. But they didn't want to. A rule change wouldn't have altered that financial reality.

2. Would a player like Kobe or Lebron or any major star, who make the kind of money where they live like kings here, embrace
...playing in a minor league
...playing a style that emphasized team and where the rules worked against iso's and such
...being subject to getting stuff thrown at them (like an animal on display) after games - yes that is common, it is said

At some point, when you have all the money you'll ever need, it's about quality of life. Isn't it?

3. Yes we've seen the isolated player defections from an established league to a startup or competitor many times in various sports.

Does it destroy the established league? Not really. Instead, it typically has the "stone thrown in a lake" ripple effect - it makes a splash, then after a bit life just goes on. In fact, rather than leading to a big problem for the established league, it more often has had the effect of killing off the startup, who can't digest the over-payment they make on star salary because they lack the financial infrastructure.

4. Creating the needed financial infrastructure to compete financially with an NBA takes more than bigger arenas. Walk up ticket sales are just one small piece of the NBA's revenues that support the salaries they are paying.

Could Euro basketball be competitive SOMEDAY? Sure. But I don't think it's an issue for now, and by the time we get to that point other issues may change the landscape the other way. (Keep in mind that much of this "crisis" has been facilitated by monetary exchange rates, not by massive rapidly growing legions of Euro basketball fans.)

[Dekko1]

1. What is most conducive to "the league's health" - losing a random player here or there, or tossing away the cap rules? I would argue the cap rules are part of the cure, not the problem.

In addition, keep in mind that it wasn't the RULES limiting individual salary that made the offers to middle caliber players like Childress or Krstic go unmatched. The Hawks and Nets could have paid more. But they didn't want to. A rule change wouldn't have altered that financial reality.

I think they will want a tweak i8f they lose a better player because maybe next time they will not be able to match some non-bird or restricted players.
Which is all I meant.

2. Would a player like Kobe or Lebron or any major star, who make the kind of money where they live like kings here, embrace
...playing in a minor league
...playing a style that emphasized team and where the rules worked against iso's and such
...being subject to getting stuff thrown at them (like an animal on display) after games - yes that is common, it is said.
At some point, when you have all the money you'll ever need, it's about quality of life. Isn't it?

For enough money would Kobe or LeBronn play in Europe?... I say yes.
LBJ's stated goal is to be a billionaire so that is how much he will 'ever need'.
An offer of say 35 million Euros tax paid by the team as normal with all the perks would be equal to the net pay here at 20 million per for 3 years. And the team can pay his agent (I think it is up to 10%) compared to the 4% by the player limit in the NBA. Plkus he might make that again in extra endorsements that would not compete with his US based ones.
Likely would take a back burner to a NBA ring chase first. Nike would likely love to have him play one year in that market.

Kobe would be even more likely perhaps. He was raised in Italy, speaks several languages, respects euroleague as he was raised around it, and is (or was) part owner of a team and said long before he would enjoy playing there.

The bigger detail, as you noted, is no one has actually made any such offer.
I think it is more in the realm of possibility than you do, but even losing one superstar would not start a flood of top level talent for the reasons you stated.

[FGump]

An offer of say 35 million Euros tax paid by the team as normal with all the perks would be equal to the net pay here at 20 million per for 3 years.

"Tax paid by the team" was bandied about after that concept was aired with Childress' deal, but it isn't really what it sounds like. It merely signified that the amount being reported was his net pay after withholding for foreign tax, with the number originating from his agent and the "tax-free" spin doubtless included for PR purposes. But at the end of the day, that full gross income amount (including the amount taken out for foreign taxes) will still be subject to BOTH full federal and local income tax in the US, partly offset with a tax credit for whatever income tax he pays overseas.

[Dekko1]

An offer of say 35 million Euros tax paid by the team as normal with all the perks would be equal to the net pay here at 20 million per for 3 years.

"Tax paid by the team" was bandied about after that concept was aired with Childress' deal, but it isn't really what it sounds like. It merely signified that the amount being reported was his net pay after withholding for foreign tax, with the number originating from his agent and the "tax-free" spin doubtless included for PR purposes.

But at the end of the day, that full gross income amount (including the amount taken out for foreign taxes) will still be subject to BOTH full federal and local income tax in the US, partly offset with a tax credit for whatever income tax he pays overseas.

Which still made an interesting comparison to the gross for the NBA they made last year. And there are some other exemptions and loopholes in IRS tax treaty countries. Such an offer might still be two or three times what they could gross in the NBA for one year when you add in the teams paying their agents, free housing and even free private travel offered.

Now the local taxes would be fun to figure out because of the special laws on state taxes for pro athletes and coaches. They currently pay taxes on a per game basis in the state where the game is played at that state's tax rate. So the players playing for Texas and Florida teams pay the least as they have no state income tax for 41 games and play the most games in those tax free states.
So would the normal expat laws apply or the pro athlete laws? I wonder if they specify US leagues.
They could just "move" to Florida and eliminate state taxes while playing overseas.

[ecuhus1981]

Buyouts. NBA players should have buyouts to go to Europe, just like European players do to come here. If they want to cherrypick our best talent, it'll cost them, and it will give the NBA some control over the situation.

[see4miles]

Hi,

Speaking as a European there's no reason to be afeared of Europe.

Here's why:

Most of these teams are owned by multimillionaires and the local Council. Both of these people will have to make cutbacks. Basketball will probalby be the first victim (particularly) if they have a soccer team already. Some of these people might be bankrupt already and we just don't know it yet.

Nike want this. Nike want that.
Listen if Nike want Kobe or LeBron to do something. They're going to have to pay him like a mofo to do it. ON TOP OF what they are already paying him. Not even Nike can afford it.

The bad PR. he stays for one season and achieves nothing. That ain't good. That's a factor in it. Not to mention the effect on (hushed tones) their legacy.

There's only 2 leagues they can go to. Spain and Greece. Not big sneakers markets. Many countries in Europe that are strong in Euroleague are not recommended for Americans to visit. 'Hey guys.. I'm just gonna sit this one out... I'll be cheering you on from my couch..." The rest of his stay will be hellish. And rightly so.

The wife, the children... etc. etc.

Now China is a different matter but they should ask Yao about how a Chhines team traisn even if the player has just come back from serious injury....

---------------------------------------------
Coupla things about Beckham.
Q> What's the name of the next most famous person who followed Beckham to the US
A. I don't know. Only players at the end of their careers have followed Beckham.
(Beckham's wife AN ENGLISH SPEKER barely lasted 6 months in Spain and spent most of her time shuttling home)

Re this:
In summary I believe - and I think the future will demonstrate - that the much-ballyhooed Europe option will be not very different from the Japan option in baseball. Japanese teams have billionaire owners. They have a much more stable base as a league than Euro-basketball (which really is no more than an amalgam of minor leagues.) And Japan is not really a threat to sign away US baseball stars - even though in theory they could offer the moon. Every once in a while they sign away a mid-tier player whose agent gets him a better deal than he can get in the US. But the economic base for the US baseball game is much more sizable than it is for Japan so they can support the bigger salary here not there. The same applies to pro basketball

Japanese basketball is the most cabalistic monolith outside of Microsoft circa 1995/ Teamsters arounfd the time of Hoffa. They don't sign big stars but it will upset the apple cart.

Europe will merely take a few fringe players and I think that'll be good for the NBA and good for world basketball. Those fringe players will get better and better though but will never be more important than say the 5th best person on the current Spurs team.

[shrink]

I am more concerned on the other end of the salary structure, with a strangulation of young foreign prospects coming to the NBA rather than the loss of big time stars.

I haven't researched this issue, but I seem to recall Rudy Fernandez taking a pay cut to join the Blazers, and MIN used the first pick in the second round on Pekovic, who's talent would have made him a top 15 pick, but he carried too much risk of staying in Europe, and teams didn't want to get Fran Vazquezed.

I'm curious what the opinions are on posters who have looked more closely at this issue, particularly our international posters.

[FGump]

David Stern's attitude is about like mine - ie, the "problem" has been greatly exaggerated.

NBA Commissioner David Stern is confident that his best players will remain in the league and not jump to Europe....He downplayed the concern that more players will follow the route of Josh Childress, who signed a three-year deal worth $20 million with the Greek club Olympiakos.

"I guess if they want to induce NBA players at salaries that exceed the budget of the team to play in games that 1,000 to 5,000 people will go to, they're free to do that, and there will be one or two players that will benefit greatly from it," said Stern.

"And it's good if you're a player to know that that option exists," he added.

The financial superstructure that currently exists for Euro hoops isn't even big enough to support Childress' deal. Much less the silly ideas of $40M a year to Kobe, Lebron, and so on.

[Three34]

Doesn't look so problematic now, does it? What have we lost exactly? Earl Boykins and Josh Childress? Ooooh.

So, which NBA team does Childress sign with next summer?

[coyotes_geek]

I am more concerned on the other end of the salary structure, with a strangulation of young foreign prospects coming to the NBA rather than the loss of big time stars.

As a Spurs fan, the Tiago Splitter situation is applicable here, and very dear to my heart. One would think that since Stern is marketing the NBA globally he wants to see the best players in the world on NBA teams. Obviously star money in europe isn't anything close to star money in the NBA, but star money in europe is certainly better than rookie scale for mid to late 1st round draft picks. The problem is how do you keep rookie scale, yet still find a way to allow teams who draft foreign guys to offer competitive contracts while keeping domestic players on the existing system?

I guess before that gets answered I should ask does the league even see this as a problem?

[Three34]

It didn't stop Rudy Fernandez, so it's not a problem as of now.