OT: I'm officially lost, economically

[moofs]

http://www.sportsbusinessjournal.com/article/61537

Can anyone help decipher that?

[tisbee]

As a guess,the League is putting it's TV,Merchandising,etc revenues up as collateral for a bunch of teams that are REALLY struggling.
There are several teams that may have been hit so hard by declining ticket sales,loss of ad revenues,Corporations not paying sponsorship fees that they were/are in serious danger of defaulting on salaries,loans,debt repayment,whatever. While the teams prob expected to have enough to carry thru to off-season when merchandising,player escrow funds and esp Lux Tax monies would be available,now they might not. And banks prob weren't willing to make loans to individual teams.
To head off bad publicity of reports that a NO or Sac couldn't get a loan,the League took over and is able to hide really hurting franchises.
There may also be some prepping of the ground for League/Players talks on the next contract.(See how bad teams are hurting?) But I don't think that's a major consideration now-tho it will be used.

(Edit Add) There may also be a competitive angle to this,as was pointed out elsewhere. A team w/bad immediate financial problems won't have to make a bad trade just to dump salary.

[grond]

As a guess,the League is putting it's TV,Merchandising,etc revenues up as collateral for a bunch of teams that are REALLY struggling.

Guess no more!

The money, which will be available to 15 teams, supplements an existing $1.7 billion leaguewide credit facility that uses the NBA’s media contracts as collateral to secure loans for the clubs.

What the article doesn't make apparent is how the already existing 1.7 bill is being utilized and why it is, presumably, insufficient to the extent that they felt they had to go get another 175 mil. As I understand it the terms of the 175 mil are more favorable than those of a billion of the 1.7 bill, so I guess if teams were already using some of that credit they could use the new funds to re-finance their short term debt into the longer term structure provided by the new money. But the article isn't too clear on this ...

[moofs]

Ah, thanks grond, that's exactly what I was wondering about (without actually knowing exactly what I was it was).

There are several teams that may have been hit so hard by declining ticket sales,loss of ad revenues,Corporations not paying sponsorship fees that they were/are in serious danger of defaulting on salaries,loans,debt repayment,whatever. While the teams prob expected to have enough to carry thru to off-season when merchandising,player escrow funds and esp Lux Tax monies would be available,now they might not. And banks prob weren't willing to make loans to individual teams.

Hadn't thought of a few of those, nice, especially in light of lots of teams using loans to underwrite operating costs and with (I think??) several loans being called in early or at higher interest rates (somehow) due to bank restrictions / loan terms.

Just a programmer trying to better wrap his head around finance

[kam_soluusar]

Greed, greed, greed, greed, greed! That's all it is. Seriously, people getting paid Millions of dollars to put a leather ball through a metal ring.

You hear players say how much they "love the game" but ask those same players to take a pay cut to save their team, and most will laugh at you. I know the whole "they're making money off my name thing is the reason they get a fat paycheck (simply put) but here is a serious proposal to fix the leagues cash crisis.

1) Shorter season. (Players aren't playing as much, so they are able to prolong their careers. They aren't playing as much, so they don't deserve as much money.)

2) Less coaching staff, why are so many assistants? This, and B/S jobs for ex players.

3) Do away with the dress code, so that players can explore more sponsorship options.

4) Lower ticket prices, more bums on seats mean more money, so long as overall profit isn't compromised.

5) Goes back to point 1 and also point 4. Less games mean better nights to have the game on, also makes attendance go up.

These are just some ideas, and I am by no means a financial expert.