Official CBA/Labour Talks Discussion Thread

[ranger001]

Paul Allen was the league's answer to union hardliner Kevin Garnett. I put my money on Paul.

[ItsDanger]

The problem with the NFL model is that it relies on national TV deals whioch arent comparable to the other sports (aside from the $ amount). Its national vs local.

[Reignman]

The NBA may never get a TV deal like the NFL; however, if the new system can get the majority of fanbases fired up like in the NFL then viewship will increase and the tv deals will also get larger.

[I_Like_Dirt]

The Lakers, Knicks, Dallas and Miami are some of the biggest reasons why the NBA is actually making as much money as it currently is today. Without those teams, the NBA is making a lot less revenue. Turn those teams into .500 teams and some other teams win 55+ games a season. The NBA is a star dominated league. Whoever has Lebron, Kobe, Dirk, etc. is going to win a lot more games than other teams. None of the owners' proposals have really been methods of creating more competitive records in the NBA, other than the franchise player tag, which I'm not a huge fan of in some scenarios (I really don't like forcing a player to play in a place where he actually doesn't want to play for his entire career and never giving him the chance to make his own decision at some point - it allows owners to milk as much profit as they can from a star and just bungle all their other decisions and still make money and keep him around with no incentive torock the boat makign changes.

[J-Roc]

The problem with the NFL model is that it relies on national TV deals whioch arent comparable to the other sports (aside from the $ amount). Its national vs local.

The NFL sells fewer games for more money on national deals. In theory, if the NBA could get people to care enough about basketball, they'd be able to get as much overall money by showing so many weekday games.

The reason people care about the NFL so much is because their little city is put on the same footing as all the larger cities. Everyone is equal.

And then there's the gambling issue, of course

[anj]

The NBA may never get a TV deal like the NFL; however, if the new system can get the majority of fanbases fired up like in the NFL then viewship will increase and the tv deals will also get larger.

That's a huge "if" and a massive assumption. I wouldn't rely on a system - or a bargaining agreement - to get a fanbase fired up. Nor would I rely on that same system to increase the inflation of TV deals.

There really is nothing like the NFL TV deal in regular season pro sports.

[Fairview4Life]

The league's claim was that there was a $300 million cash loss, not paper loss. That's been discussed numerous times by now.

No it hasn't. The players have disputed that. Go over to that thread and read the quotes.

If you have a problem with the numbers, bring it up with Sleepy51. He does actually seem to have some extensive history with financial documents, but you'll have to read more to find out what that is.

[Fairview4Life]

The NBA may never get a TV deal like the NFL; however, if the new system can get the majority of fanbases fired up like in the NFL then viewship will increase and the tv deals will also get larger.

What do you mean by "fired up"? Do you mean like the 2010/11 season?

[BorisDK1]

No it hasn't. The players have disputed that. Go over to that thread and read the quotes.

If you have a problem with the numbers, bring it up with Sleepy51. He does actually seem to have some extensive history with financial documents, but you'll have to read more to find out what that is.

I'm not going to wander into another thread on another board and challenge some other guy: I'm telling you how it is. Perhaps you might want to put your ability to read to the test and look at the fact that there's an actual document called "Statement of Cash Flows". You'll quickly realize that the cash flows are not related at all to operating income. Understanding financial statements isn't that hard, if you're willing to read. Although I'm the son of a C.A., I only took three courses in my life that touched on financial statements (and then, not exhaustively). But they're not that difficult to parse out.

As far as the players "disputing" the NBA's cash losses? They screamed about them at the start of negotiations. The NBA opened its (audited) books to them. They haven't made a peep about it since. What does that tell you? Either they're too disinterested to persue that line of challenge, or they've got nothing to stand on.

[Fairview4Life]

No it hasn't. The players have disputed that. Go over to that thread and read the quotes.

If you have a problem with the numbers, bring it up with Sleepy51. He does actually seem to have some extensive history with financial documents, but you'll have to read more to find out what that is.

I'm not going to wander into another thread on another board and challenge some other guy: I'm telling you how it is. Perhaps you might want to put your ability to read to the test and look at the fact that there's an actual document called "Statement of Cash Flows". You'll quickly realize that the cash flows are not related at all to operating income. Understanding financial statements isn't that hard, if you're willing to read. Although I'm the son of a C.A., I only took three courses in my life that touched on financial statements (and then, not exhaustively). But they're not that difficult to parse out.

As far as the players "disputing" the NBA's cash losses? They screamed about them at the start of negotiations. The NBA opened its (audited) books to them. They haven't made a peep about it since. What does that tell you? Either they're too disinterested to persue that line of challenge, or they've got nothing to stand on.

Yes they have. Billy Hunter specifically disputed something like $250 million of the paper losses the NBA released to them.

The league says it has provided full financial data to the players association to substantiate its losses. "We've given [them] our certified financial statements," Stern said. "We've provided access to our tax returns, and if there's more needed, they'll get more."

"We're very comfortable because we've given the players association more financial information than has ever been done in the history of sport," he said.

But the union disagrees with the story the numbers tell.

"There has been ongoing debate and disagreement regarding the numbers, and we do not agree that the stated loss figures reflect an accurate portrayal of the financial health of the league," Hunter said in a statement released during the All-Star break.

The players association contends that a significant portion of the losses is merely an accounting artifact, and doesn't reflect an actual operating loss.

"There might not be any losses at all. It depends on what accounting procedure is used," Hunter said. "If you decide you don't count interest and depreciation, you already lop off 250 [million] of the 370 million dollars."

Here is Billy Hunter, after receiving the audited books from the owners, disputing the numbers and saying they include accounting artifacts like depreciation.

[BorisDK1]

Here is Billy Hunter, after receiving the audited books from the owners, disputing the numbers and saying they include accounting artifacts like depreciation.

It might just be that you don't bother including links to anything, but the reposting of things that are months old and that have already been refuted.

For the last - read: very last - time: depreciation does not count into the NBA's reported losses. It never did.

From the NBA's CFO:

We did not include purchase price amortization in the financial data that we gave to the players and all of the net loss numbers we have used both with the players union and disclosed publicly do not include purchase price amortization. Put simply, none of the Nets’ losses or the league losses previously disclosed are related to team purchase accounting.

Source.

That's from the CFO of a huge business. Do you know the penalties involved in deceiving people on these issues in the USA right now? Suffice it to say that with the public scrutiny involved here, and the transparency the NBA has shown, there is no reason to doubt the above statements.

[Fairview4Life]

Here is Billy Hunter, after receiving the audited books from the owners, disputing the numbers and saying they include accounting artifacts like depreciation.

It might just be that you don't bother including links to anything, but the reposting of things that are months old and that have already been refuted.

For the last - read: very last - time: depreciation does not count into the NBA's reported losses. It never did.

From the NBA's CFO:

We did not include purchase price amortization in the financial data that we gave to the players and all of the net loss numbers we have used both with the players union and disclosed publicly do not include purchase price amortization. Put simply, none of the Nets’ losses or the league losses previously disclosed are related to team purchase accounting.

Source.

That's from the CFO of a huge business. Do you know the penalties involved in deceiving people on these issues in the USA right now? Suffice it to say that with the public scrutiny involved here, and the transparency the NBA has shown, there is no reason to doubt the above statements.

Yeah, I have already included the link several times in various places. It's from a Larry Coon article on July 12th, long after the players saw the documents. They disputed the numbers, despite you saying they didn't. The NBA's CFO disagreed. Until the NBA lets other people see their books, it's he said/she said. I am not sure what you think would happen to her if she deceived a reporter about private books the NBA has released only to their players. You don't go to jail for that. There are no fines. She says those accounting artifacts aren't included. Billy Hunter and the players said they were. All of the financial reports that have been leaked to the public included those accounting artifacts. You are just taking the NBA's word for it that they prepared a new set of books for the players that stripped out prichase price amortization and depreciation for some reason. There are no consequences if she's lying, or bending the truth at all when dealing with the media, as far as I know. These are private books the public has no right to see, she can tell reporters whatever she wants. In fact, it seems likely she is narrowly referring to the goodwill portion of purchase price amortization/depreciation and not the roster depreciation allowance, since I believe that would line up with the Hornets and Nets financial statements that were released.

[Sleepy51]

Here is Billy Hunter, after receiving the audited books from the owners, disputing the numbers and saying they include accounting artifacts like depreciation.

It might just be that you don't bother including links to anything, but the reposting of things that are months old and that have already been refuted.

For the last - read: very last - time: depreciation does not count into the NBA's reported losses. It never did.

From the NBA's CFO:

We did not include purchase price amortization in the financial data that we gave to the players and all of the net loss numbers we have used both with the players union and disclosed publicly do not include purchase price amortization. Put simply, none of the Nets’ losses or the league losses previously disclosed are related to team purchase accounting.

Source.

That's from the CFO of a huge business. Do you know the penalties involved in deceiving people on these issues in the USA right now? Suffice it to say that with the public scrutiny involved here, and the transparency the NBA has shown, there is no reason to doubt the above statements.

The NBA franchises are privately held corporations. They are not required to disclose their financial information to the public and they have not. They have said that they have provided their audited financial statements and tax returns to the players. That is transparency, but transparency doesn't mean that you take the other guy's word for it about the the information being disclosed. The players association has not made any specific comment on the owners financial condition, likely because they are bound by confidentiality agreement in exchange for the access that the league has provided.

As far as the league's denial. You have to read carefully. The league said the provided the players with their tax returns and audited financial statements. Both tax accounting and GAAP (Generally Accepted Accounting Procedures) adhered to for business financial reporting include depreciation and amortization above net expenses. The spokesman's specific words were "do not include purchase price amortization." He may have been lying, parsing or misinformed, but I have viewed the leaked financial statements for NBA teams and on page 3 of the 2005 & 2006 income statements for the New Jersey nets you will see a $40MM line item for depreciation and amortization. The Nets do not own their arena. There's no hard asset asset on the balance sheet on the preceeding page that could spin off that size depreciation expense. The largest asset listed is a $300MM "intangible asset." That's the roster depreciation allowance remaining after the amount depreciated in the income statement.
http://goingconcern.com/2011/06/who-wan ... tements/3/

This IS an audited financial statement. The Auditors letter is included.

Great explanation of the roster depreciation allowance tax break here:
http://econ.la.psu.edu/~ecoulson/veeck.pdf

Forbes has been providing EBITDA data on NBA teams that they claim has come from NBA league office sources for at least 6 years that I've been reading their "business of basketball" column. The NBA has never disputed Forbes data before this collective bargaining negotiation.

http://www.forbes.com/lists/2011/32/bas ... _land.html

Here is a brief accessible article on the rationale for using EBITDA instead of earnings (GAAP) for certain approaches to business valuation.

http://www.fool.com/investing/beginning ... tions.aspx


You can either beleive the league or not. I can't make up your mind for you but as an educated person who works with corporate valuations fairly regularly, I am telling you that there is ample reason to question the league's stance on losses.

[BorisDK1]

Yeah, I have already included the link several times in various places. It's from a Larry Coon article on July 12th, long after the players saw the documents. They disputed the numbers, despite you saying they didn't. The NBA's CFO disagreed. Until the NBA lets other people see their books, it's he said/she said. I am not sure what you think would happen to her if she deceived a reporter about private books the NBA has released only to their players. You don't go to jail for that. There are no fines. She says those accounting artifacts aren't included. Billy Hunter and the players said they were. All of the financial reports that have been leaked to the public, including tax returns the owners said they showed the players, included those accounting artifacts. You are just taking the NBA's word for it that they prepared a new set of books for the players that stripped out prichase price amortization and depreciation for some reason. There are no consequences if she's lying, or bending the truth at all when dealing with the media, as far as I know. These are private books the public has no right to see, she can tell reporters whatever she wants. In fact, it seems likely she is narrowly referring to the goodwill portion of purchase price amortization/depreciation and not the roster depreciation allowance, since I believe that would line up with the Hornets and Nets financial statements that were released.

Party A says: "You, Party B, are deceiving me when you say x."
Party B says: "Here is the documentation supporting my claim of x."
Party A says: [nothing]

Guess who most people are going to side with at that point? And that's what the NBPA has done. They have not responded to the refutation of their point - which, interestingly, is no longer their point. They're not contesting it, they're not disputing it: only you are. You are raising ideas of massive conspiracy and dishonesty on the part of the NBA, that they're presenting cooked books. The NBA did NOT "prepare a new set of books": they simply used the most cogent data in the existing books upon which to base the negotiations. Do you really think that's the case? That financial statements prepared by third-party auditors were altered after the fact for the purpose of a CBA negotiation? And yes: there are HUGE penalties in the US for deception viz. financial statements. As in, considerable jail time - not to mention having whatever professional designation as an accountant that you may have being revoked. "No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or ... any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.(5) ... liable to a fine in the discretion of the court or to imprisonment for a term not exceeding five years or to both; or (b) on summary conviction, to a fine not exceeding $200,000 or to imprisonment for a term not exceeding one year, or to both." Competition Act, Sec 54. And that's Canadian law, which isn't as punitive as US regulation ATM in regards to corporate malfeasance - or so I'm led to believe.

And let's be clear on the timeline: Billy Hunter alleged that a lot of the losses could be dismissed as being interest and depreciation (why he thinks interest isn't a cash expense is beyond anybody who's thinking about the topic). After that, the NBA responded. Mr. Hunter hasn't said a peep about the subject since. That is telling.

[Sleepy51]

I'll also add that there is a 2004 Nets financial statement floating around out there. The 2004 financial statement did not show the roster depreciation tax break. That was because prior owner Bruce Ratner had already used up his depreciation allowance under the pre-2005 5year/50% rule. Neither the $40MM Depreciation line item, nor the $300MM "intangible asset" appear on the 2004 statement. When Russian Mark Cuban bought the team, he was allotted a new Roster Depreciation allowance under the new 15 year/100% rules.

[LittleOzzy]

Please continue the discussion here: viewtopic.php?f=32&t=1134836#p29027879