pb-ceo wrote:Novocaine wrote:pb-ceo wrote: so they are on the rise, as the chart clearly shows, and that was before a gargantuan jump in the salary cap and an escalation in revenue and costs.
This doesn't make any sense. Ticket prices aren't indexed to any escalation in revenue and costs - the escalation in revenue only means ticket prices are a smaller share of the income. There is no escalation in costs for the NBA except in players salaries. But those are fixed percentage of income, so if income goes down, so will salaries. The CBA provisions function like an automatic stabilizer for the NBA. And there's nothing wrong with escalating revenue and costs, that's what happens when a business scales up.
pb-ceo wrote:it's something to note the the nba is cyclical. there have been down periods. it would be a grave mistake to extrapolate what is happening today out into the future too far. things can change fast. today money is free flowing and easy. interest rates are rock bottom. asset prices are sky high. advertising revenue and sports rights revenue is off the charts. this can all change. right now the nba is riding a global boom in demand. that demand will be operative as long as the product continues to be entertaining, and the US and global economy continues to move forward.
the future is uncertain. Let me offer the perspective of someone who has been watching business and economics for a long time. what is going on in the NBA is unsustainable and has implications for any business (think espn) dependent on the boom in sports revenue, but especially the NBA.
Stringing together a bunch of clichés isn't enough to support a bombastic assertion like the NBA is unsustainable.
Do you think you truly understand the economics of the NBA? From what The CBA, as currently constructed, means the NBA has different mechanisms than most other businesses and from what you've written I don't think you're aware of that. If there's an economic downturn, the NBA will be more resilient than most businesses because such a large percentage of their operating costs are variable in function of the revenue. Next year, will all these gigantic contracts kicking in, the NBA will still only be spending roughly 50% of their basketball related income in players salaries, just like this past season or five years ago or ten years ago.
i tried to make it simple for you but you will never get it. you don't' understand supply demand or boom bust cycles, basic economics. I can't dumb it down for one board member any more. your neediness require too much of my valuable energy.
Good lord. For someone who complained about how harsh my tone was because I wrote "absolute nonsense" that's quite the tirade.
I never said the NBA is unsustainable. you don't read carefully. I said what is going on NOW in the nba is unsustainable.
And I've explained why you are wrong. What is going on NOW is not any different than what was going on exactly one year ago. The labor costs of the NBA haven't increased.
You tried to fool everybody by going back 10 years, which included a great recession) and ignored what has been going on in recent years. that's a common ploy used to lie with statistics, and to confuse and misdirect. your own chart shows ticket prices on the rise and that's before this gargantuan increase in the cap. what do you think owners are going to do now, reduce ticket prices? by your logic they will. because revenue is higher.
Huh? I presented the numbers for that last 10 years - obviously including the recent years as, surprisingly enough, those are part of the last 10. How did I ignore the recent years, they were right there. And the fact there was a recession is why prices stayed flat; the economy picked up and obviously ticket prices increased. It happened the same with other sports league and most entertainment.
I'm not sure how you still haven't understood the gargantuan increase in the cap has nothing to do with ticket prices, but it is what it is.
And ticket prices will vary according to the demand for them. Not because of the cap increases. I'll explain one last time: the NBA salary cap is set as a fraction of the revenue. The cap increased because of a revenue increase that is already mostly basked in. Even if there is some economic catastrophe, there is a self-correcting mechanisms that allows teams to only pay that fixed amount of their revenue in salaries. It's highly unusual for a corporation to have most of their labor costs tied to their operating income, but that's the case for the NBA. One of the reasons NBA franchises are so expensive.
Keep believing that the NBA as an economic model is some glorious free enterprise nirvana that is going to spit out increasing amounts of cash for all constituents till kingdom come. I also have a bridge to sell you.
Again, all those clichés and strawman don't make an argument. The NBA doesn't need to "spit out increasing amounts of cash". If the NBA revenues decline, so will these contracts.
