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Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:26 pm
by Deivork
In 2012 the cap was $58M, 10 years later it doubled at $112M (2022). This year we're at $134M.
https://www.spotrac.com/nba/cba/The cap keeps rising steadily.
However, viewership stats are so-so in the same period, LeBron is about to retire and major world economies just suffer(ed) recession recently. How is it that we keep hearing it will keep rising steadily? Why are TV/tech companies willing to pay more and more in the next CBA?
(Maybe i'm wrong hear, is the TV deal also attached to the CBA negotiations?)
I'm no expert in economy and I get that a steady minor increase due to inflation will always happen but this still feels odd to me. What is the explanation here? I get what Jordan brought to the product, but it doesn't feel to me like the NBA popularity has comparatively risen since he retired. Also in relation to other sports. For instance, Damian Lillard was a Top-20 paid athlete in the world last year. He wouldn't crack Top-50 just 10 or 15 years ago, would he?
https://www.foxsports.com.au/more-sports/over-a-billion-dollars-to-just-10-stars-highestpaid-athletes-of-2022-revealed/news-story/9c49693da001963b98889f7ea5a226deIt feels odd to me that the Fred Van Vleets and Jeramy Grants of the world could be making $30M a year as soon as next season. Where's the money coming from?
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:33 pm
by FluLikeSymptoms
So that my TV bill can keep going up. Same reason I live in an NBA city, I want to pay as much as I can.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:34 pm
by Bergmaniac
Live sports is pretty much the only reason to pay expensive cable TV subscription fees these days.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:43 pm
by jasonxxx102
there's more money than ever, the league is more global than ever, tv deals are bigger than ever...
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:46 pm
by pilkoids
Is the US market even the biggest NBA market anymore?
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Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:52 pm
by FluLikeSymptoms
It’s like soccer, locals get hosed because we’ll pay and fans around the world get it cheap becuase they’re trying to grow the game. At least it’s possible to watch every NBA game here, the solution is money(although I’m unfamiliar with the Nuggets situation).
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 12:59 pm
by jefe
It's the NBA's lucrative broadcast rights coupled with collective bargaining providing the players with a relatively high guaranteed % of all basketball related income (not profit, but revenue). When filtered down to the individual player level (via individual contracts between teams within the parameters of the collective bargaining agreement and the salary cap/floor), each team has significantly fewer roster spots than an NFL roster; so while the NFL's broadcast rights dwarf those of the NBA, there are significantly less NBA players, and they earn a bigger piece of a smaller pie so to speak.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 1:09 pm
by KuruptedCav
Deivork wrote:In 2012 the cap was $58M, 10 years later it doubled at $112M (2022). This year we're at $134M.
https://www.spotrac.com/nba/cba/The cap keeps rising steadily.
However, viewership stats are so-so in the same period, LeBron is about to retire and major world economies just suffer(ed) recession recently. How is it that we keep hearing it will keep rising steadily? Why are TV/tech companies willing to pay more and more in the next CBA?
(Maybe i'm wrong hear, is the TV deal also attached to the CBA negotiations?)
I'm no expert in economy and I get that a steady minor increase due to inflation will always happen but this still feels odd to me. What is the explanation here? I get what Jordan brought to the product, but it doesn't feel to me like the NBA popularity has comparatively risen since he retired. Also in relation to other sports. For instance, Damian Lillard was a Top-20 paid athlete in the world last year. He wouldn't crack Top-50 just 10 or 15 years ago, would he?
https://www.foxsports.com.au/more-sports/over-a-billion-dollars-to-just-10-stars-highestpaid-athletes-of-2022-revealed/news-story/9c49693da001963b98889f7ea5a226deIt feels odd to me that the Fred Van Vleets and Jeramy Grants of the world could be making $30M a year as soon as next season. Where's the money coming from?
Revenue drives the salary cap. It goes up $1 for every $2 in increased revenue.
In the past decade inflation as increased prices (decreased the dollar) by 31%.
The rise of cord-cutting and proliferation of streaming has made other TV events less available. Sports (and reality TV) are one of the few things masses of people tune into and are captive live. This means that while there are now more targeted alternatives in the CTV and OTT spaces, if I want a million people to see an ad, I have fewer options and pay the premium that comes with it.
We’ve had a period of relatively sustained long-term growth. Not a perfect proxy, but the DJIA has increased by 158% over the past decade. Basically, the same number of relative eyeballs are now worth more as consumers and advertisers are willing to pay more to reach them.
In short, there is a low supply of captive audiences, and increasing value of eyeballs, and a demand for them is high; meaning the value of the TV rights are outpacing and will continue to do so until the market corrects.
The NBA has increased its average ticket price from $51 to $92 over the past decade; concessions and amenities have likewise grown alongside them.
The league is flush with money and half goes to the players. It’s also why we, the taxpayers, shouldn’t be financing arenas.
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Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 1:10 pm
by Pythagoras
TV viewership is a dying medium, and the NBA has been steadily growing in popularity for years, with significant gains in the US, and massive gains globally. The NBA has surpassed the MLB for the title of the second most popular major sports association in the US, and it dwarfs the NFL and MLB outside the US (I say this as a huge NFL fan).
In the 90s, the NBA pivoted away from trying to appeal to the older generation of fans and focused on growing their product with younger fans, the MTV/gen X generation, and also starting growing their business internationally. While many criticized that decision, the NBA held firm and pretty much doubled down, making the sport more and more accessible to younger and international fans. Now, here we are a little over two decades later and the NBA is reaping the rewards of those decisions. If you notice, the NFL has been trying to copy the NBA's model for some time, looking to appeal to younger and younger fans and trying to grow globally.
It honestly wouldn't surprise me if the cap could actually be raised higher to what it's being raised to, but last time the cap jumped too high too quickly it lead to the formation of a super duper team, and the NBA likely doesn't want that again.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 1:20 pm
by axeman23
Ferraris and baby mamas are expensive, bro...
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 1:42 pm
by Scuall
Cost of living adjustments. You have to remember that the teams are concentrated in high cost of living areas that are constantly fluctuating upwards. If the NBA allowed the move to more rural areas, or better yet allowed for more remote work by players, the cap would gradually decrease.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 1:45 pm
by FluLikeSymptoms
Pythagoras wrote:TV viewership is a dying medium, and the NBA has been steadily growing in popularity for years, with significant gains in the US, and massive gains globally. The NBA has surpassed the MLB for the title of the second most popular major sports association in the US, and it dwarfs the NFL and MLB outside the US (I say this as a huge NFL fan).
In the 90s, the NBA pivoted away from trying to appeal to the older generation of fans and focused on growing their product with younger fans, the MTV/gen X generation, and also starting growing their business internationally. While many criticized that decision, the NBA held firm and pretty much doubled down, making the sport more and more accessible to younger and international fans. Now, here we are a little over two decades later and the NBA is reaping the rewards of those decisions. If you notice, the NFL has been trying to copy the NBA's model for some time, looking to appeal to younger and younger fans and trying to grow globally.
It honestly wouldn't surprise me if the cap could actually be raised higher to what it's being raised to, but last time the cap jumped too high too quickly it lead to the formation of a super duper team, and the NBA likely doesn't want that again.
TV is dying outside of sports and these deals are what keeps TV around and relevant, running the money through TV companies makes it more palatable somehow. If the NBA/players wanted the same BR income they get now by including every game on league pass, they’d have to charge like $100 per month minimum and everyone would squawk, but they run it through the TV companies so it looks like they’re not the bad guys.
I get that players deserve a fair split of the money, there’s just no reason for there to be so much damn money. We’re paying it, the money comes us right? How about I pay $50 per month for everything on LP and supermax guys make $25M per instead of $50M or $60M. Will that be enough to keep them in the US? Will the teams have enough money to keep the doors open? Will buying a team still be foolproof investment? I sure hope so!
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 2:44 pm
by prophet_of_rage
FluLikeSymptoms wrote:Pythagoras wrote:TV viewership is a dying medium, and the NBA has been steadily growing in popularity for years, with significant gains in the US, and massive gains globally. The NBA has surpassed the MLB for the title of the second most popular major sports association in the US, and it dwarfs the NFL and MLB outside the US (I say this as a huge NFL fan).
In the 90s, the NBA pivoted away from trying to appeal to the older generation of fans and focused on growing their product with younger fans, the MTV/gen X generation, and also starting growing their business internationally. While many criticized that decision, the NBA held firm and pretty much doubled down, making the sport more and more accessible to younger and international fans. Now, here we are a little over two decades later and the NBA is reaping the rewards of those decisions. If you notice, the NFL has been trying to copy the NBA's model for some time, looking to appeal to younger and younger fans and trying to grow globally.
It honestly wouldn't surprise me if the cap could actually be raised higher to what it's being raised to, but last time the cap jumped too high too quickly it lead to the formation of a super duper team, and the NBA likely doesn't want that again.
TV is dying outside of sports and these deals are what keeps TV around and relevant, running the money through TV companies makes it more palatable somehow. If the NBA/players wanted the same BR income they get now by including every game on league pass, they’d have to charge like $100 per month minimum and everyone would squawk, but they run it through the TV companies so it looks like they’re not the bad guys.
I get that players deserve a fair split of the money, there’s just no reason for there to be so much damn money. We’re paying it, the money comes us right? How about I pay $50 per month for everything on LP and supermax guys make $25M per instead of $50M or $60M. Will that be enough to keep them in the US? Will the teams have enough money to keep the doors open? Will buying a team still be foolproof investment? I sure hope so!
Next complain about Amazon!
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RealGM mobile app
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 2:53 pm
by FluLikeSymptoms
prophet_of_rage wrote:FluLikeSymptoms wrote:Pythagoras wrote:TV viewership is a dying medium, and the NBA has been steadily growing in popularity for years, with significant gains in the US, and massive gains globally. The NBA has surpassed the MLB for the title of the second most popular major sports association in the US, and it dwarfs the NFL and MLB outside the US (I say this as a huge NFL fan).
In the 90s, the NBA pivoted away from trying to appeal to the older generation of fans and focused on growing their product with younger fans, the MTV/gen X generation, and also starting growing their business internationally. While many criticized that decision, the NBA held firm and pretty much doubled down, making the sport more and more accessible to younger and international fans. Now, here we are a little over two decades later and the NBA is reaping the rewards of those decisions. If you notice, the NFL has been trying to copy the NBA's model for some time, looking to appeal to younger and younger fans and trying to grow globally.
It honestly wouldn't surprise me if the cap could actually be raised higher to what it's being raised to, but last time the cap jumped too high too quickly it lead to the formation of a super duper team, and the NBA likely doesn't want that again.
TV is dying outside of sports and these deals are what keeps TV around and relevant, running the money through TV companies makes it more palatable somehow. If the NBA/players wanted the same BR income they get now by including every game on league pass, they’d have to charge like $100 per month minimum and everyone would squawk, but they run it through the TV companies so it looks like they’re not the bad guys.
I get that players deserve a fair split of the money, there’s just no reason for there to be so much damn money. We’re paying it, the money comes us right? How about I pay $50 per month for everything on LP and supermax guys make $25M per instead of $50M or $60M. Will that be enough to keep them in the US? Will the teams have enough money to keep the doors open? Will buying a team still be foolproof investment? I sure hope so!
Next complain about Amazon!
Sent from my SM-S9080 using
RealGM mobile app
No, I can just buy local. I have a legal option.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 2:56 pm
by Meat
Deivork wrote:In 2012 the cap was $58M, 10 years later it doubled at $112M (2022). This year we're at $134M.
https://www.spotrac.com/nba/cba/The cap keeps rising steadily.
However, viewership stats are so-so in the same period, LeBron is about to retire and major world economies just suffer(ed) recession recently. How is it that we keep hearing it will keep rising steadily? Why are TV/tech companies willing to pay more and more in the next CBA?
(Maybe i'm wrong hear, is the TV deal also attached to the CBA negotiations?)
I'm no expert in economy and I get that a steady minor increase due to inflation will always happen but this still feels odd to me. What is the explanation here? I get what Jordan brought to the product, but it doesn't feel to me like the NBA popularity has comparatively risen since he retired. Also in relation to other sports. For instance, Damian Lillard was a Top-20 paid athlete in the world last year. He wouldn't crack Top-50 just 10 or 15 years ago, would he?
https://www.foxsports.com.au/more-sports/over-a-billion-dollars-to-just-10-stars-highestpaid-athletes-of-2022-revealed/news-story/9c49693da001963b98889f7ea5a226deIt feels odd to me that the Fred Van Vleets and Jeramy Grants of the world could be making $30M a year as soon as next season. Where's the money coming from?
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 6:24 pm
by Deivork
KuruptedCav wrote:
In short, there is a low supply of captive audiences, and increasing value of eyeballs, and a demand for them is high; meaning the value of the TV rights are outpacing and will continue to do so until the market corrects.
The NBA has increased its average ticket price from $51 to $92 over the past decade; concessions and amenities have likewise grown alongside them.
The league is flush with money and half goes to the players. It’s also why we, the taxpayers, shouldn’t be financing arenas.
Sent from my iPhone using Tapatalk
Thank you KuruptedCav!
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 6:30 pm
by ThunderBolt
It's the fault of whatever political party you hate. Kidding. Carry on.
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 6:30 pm
by jokeboy86
Meat wrote:Deivork wrote:In 2012 the cap was $58M, 10 years later it doubled at $112M (2022). This year we're at $134M.
https://www.spotrac.com/nba/cba/The cap keeps rising steadily.
However, viewership stats are so-so in the same period, LeBron is about to retire and major world economies just suffer(ed) recession recently. How is it that we keep hearing it will keep rising steadily? Why are TV/tech companies willing to pay more and more in the next CBA?
(Maybe i'm wrong hear, is the TV deal also attached to the CBA negotiations?)
I'm no expert in economy and I get that a steady minor increase due to inflation will always happen but this still feels odd to me. What is the explanation here? I get what Jordan brought to the product, but it doesn't feel to me like the NBA popularity has comparatively risen since he retired. Also in relation to other sports. For instance, Damian Lillard was a Top-20 paid athlete in the world last year. He wouldn't crack Top-50 just 10 or 15 years ago, would he?
https://www.foxsports.com.au/more-sports/over-a-billion-dollars-to-just-10-stars-highestpaid-athletes-of-2022-revealed/news-story/9c49693da001963b98889f7ea5a226deIt feels odd to me that the Fred Van Vleets and Jeramy Grants of the world could be making $30M a year as soon as next season. Where's the money coming from?
Imaginary players aint been coached right....
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 7:25 pm
by JonFromVA
Re: Why does the cap keep rising so much?
Posted: Wed Feb 22, 2023 7:42 pm
by old skool
Teams used to rely almost entirely on locally generated revenue, mostly tickets and broadcasting. Today the national broadcast deals are increasingly more significant, as well as an explosion globally.
Teams have expanded their revenue opportunities. Streaming and video clips give the public access to games, highlights and interviews that didn't exist a decade ago. Teams are gaining more control over parking and hospitality surrounding NBA arenas. Naming rights and sponsor opportunities for arenas and practice facilities are more widespread. Arenas have become revenue generators with mall-like shopping and pricey food and beverage outlets. In game entertainment and promotions generate revenue, with sponsors for dance teams, drum groups, baby races, acrobats, dunk squads, t-shirt cannons, and more. Jumbotrons have evolved from highlight replay monitors to sponsor billboards that captivate spectators with non-stop content. Fans are attending games outside of arenas in festival-like atmospheres, replete with video screens, food and beverage concessions and live radio and TV broadcasts. Sports betting provides a new income category coming out of the shadows. Uniform patches add new revenue that is growing as the practice achieves wider acceptance. Every team has a half dozen or so uniform styles, some of which turn over after a few months. A broader acceptance of previously taboo sponsor categories like liquor and gambling have been added to evolving businesses like dot coms and crypto that expand sponsor lists. Summer League has been elevated from a minor off-season oddity to a nationally reported and televised event. The G-League promotes fringe players coming to an arena near you. The All-Star Game has expanded into a three day reality TV carnival that adds eyeballs and new gimmicky events featuring red carpet celebrities and bball legends. Broadcast interest and advertising opportunities explode with more focus on the draft lottery, the draft itself, free agency, the trade deadline and the buy out market. Hype sells. The NBA has its own streaming service, its own cable TV network and its own satellite radio station. The NBA and all 30 teams have their own app, all generating new income. The Play-In tournament keeps more fan bases engaged deeper into the season and generates added national TV games. More attention and hype is directed at individual accomplishments via player/rookie/coach of the week or month. Trophies and acclaim for All-Rookie, All-Defense, All-Star, Rising-Star, All-NBA, Coach of the Year, Exec of the Year and associated news events as voting updates are provided, nominees are announced and winners are congratulated and celebrated. Every team achieves some sort of special status: lottery team participant, play-in team, playoff team, conference finalist, Finals team, Champion - all tied to sponsorships and media rights. More revenue, higher salary cap.