NLRB ready to rule on Union's claim against NBA

[Wizenheimer]

The one thing that you (and others who seem to favor the owners side) seem to want to sweep under the rug is the owner's and league's antiitrust status which gives them huge tax breaks as well as benefits that your average corporation large just doesn't enjoy which is actually a "privileged" status.

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just out of curiosity...I'm not trying to pick a fight...

what are the tax breaks they get that would disappear without a CBA and that other corporations don't receive?

[turk3d]

The one thing that you (and others who seem to favor the owners side) seem to want to sweep under the rug is the owner's and league's antiitrust status which gives them huge tax breaks as well as benefits that your average corporation large just doesn't enjoy which is actually a "privileged" status.

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just out of curiosity...I'm not trying to pick a fight...

what are the tax breaks they get that would disappear without a CBA and that other corporations don't receive?

Not a problem (with a name like Wizenheimer, who would of thunk it, ). I'm not an expert on it, but it's on another thread. I'll get it and post it here for you. We have a guy on the Warriors board who's pretty knowledgeable I believe and has provide some useful insights. Let me say, that I know that this is one of those polarized arguments and I respect other peoples thoughts but I just want to add when I think that maybe both sides aren't given fair representation.

When it comes to things like this whoever has the best "marketing' typically will find a way to make them look better. The biggest problem in all this as I see it, is whether the NBA is giving out the true info on what they're making and what they're really losing and to what extent the losses really are if there are any.

It's known in accounting terms as "cooking the books" or in other words, arranging your books in a way that when presenting them, they look worse than in fact they really are or ie, what you give the IRS is different from what you put in your marketing brochure when trying to sell your franchise.

Whatever the NBA is releasing to the players (if they are) is proprietor and if released to the press or the public the Union (or whoever released it assuming they have it) would be liable. This I am hopeful is what the mediator will get to the bottom of and if not the mediator, then NLRB. There's definitely a controversy over what the league is releasing to the players and how accurate it really is.

Here's a quote I came across which I think explains some of it and a link, if you're interested, we have a 56 age thread on the lockout which has a bunch more stuff in it, lol):

In the case of the NBA, the largest non-cash charge is the roster depreciation allowance.

NBA teams have minimal capital equipment costs. Only 9 teams own their arenas and most of those own the arena through a separate entity. Teams do not manufacture anything and carry literally no inventory. The most significant depreciation line item for NBA teams IS the roster depreciation allowance described in detail previously in this thread. Unlike depreciation for real capital investments and equipment, the roster depreciation charge IS just an accounting trick as I explained already below. There is no accumulation of replacement cost and they are writing down the PURCHASE cost of the franchise, not equipment.

Interest has to be paid, but is also deductible. And interest on equity capital is not a requirement of ownership. If you want to buy something that you can't afford then you have to borrow money. Borrowing money is not required to by an NBA team. Interest is left out of EBITDA because interest expense is taken on at the discretion of current ownership. It is not a permanent feature of cash flows.

Taxes do have to be paid. But only on those Net Profits that don't exists after the accounting tricks eliminate said profts. And, in the case of NBA franchises, the same Roster Depreciation allowance can be carried forward from years with no EBITDA to offest into years where there is EBITDA. This is why NO ONE SHOWS A PROFIT.

This might help as well to help you figure out some of the shenanigans these corporate giants can avail themselves of:
http://www.fool.com/investing/beginning ... tions.aspx

[turk3d]

Here's something that may help you understand how the anti-trust laws work and a couple of excerpts from the article:

http://www.thesportjournal.org/article/ ... erspective

The professional sports industry has evolved into an intriguing social phenomenon. As a means to make a living and to relax the mind and body, the sports industry is both a recreational and economical entity that enjoys “certain privileges and immunities.” Just as the Supreme Court’s interpretation of the Fourteenth Amendment have nationalized rights and liberties, the professional sports industry now appeals to and employs individuals from very diverse background. As time has progressed, there has been an increase in women and minorities in both the player and managerial ranks. As a result, the professional sports industry finds refuge under public policies. As an entity of private ownership in this capitalistic American society, the professional sports industry has become a thriving market.

Definition of Terms
Firstly, what is antitrust law? Simply stated, according to Corley and Reed (1996), antitrust law is used to describe all laws that intend to promote and regulate competition and make our competitive economic system work.

Secondly, what is the economic giant known as the professional sports industry? According to the Adams and Brock (1997), professional sports are a textbook example of a bilateral cartel made up of club owners and unionized players engaged in intrastate and interstate commerce. The club owners exercise monopoly power in the product market and monopsony power in the input market, whereas, the players try to countervail that monopsony power. For example, according to Wikipedia, i n economics, a monopsony is a market with only one buyer in the market, often an input market (Wikipedia, 2004). At the same time, this is analogous to the case of a monopoly in which there is only one seller in a market. These cartels confront each other in a love/hate, cooperation/conflict relationship with neither being strong enough to exercise total dominance over the other (Adams & Brock, 1997).

It is from these two definitions of antitrust law and the professional sports industry that the significance of this study, literary review and summary/conclusions will arise.

[Wizenheimer]

Taxes do have to be paid. But only on those Net Profits that don't exists after the accounting tricks eliminate said profts. And, in the case of NBA franchises, the same Roster Depreciation allowance can be carried forward from years with no EBITDA to offest into years where there is EBITDA. This is why NO ONE SHOWS A PROFIT.
This might help as well to help you figure out some of the shenanigans these corporate giants can avail themselves of:
http://www.fool.com/investing/beginning ... tions.aspx

we had a long discussion in another thread about RDA and I'd certainly be willing to consider it a loophole.

But I believe that would be available to any NBA team (or any pro-sports team), whether they were exempt from the anti-trust laws or not. And I was kind of interested in your comment that a team being exempt from anti-trust laws could get tax breaks that other corporations don't get

Honestly, I'm not sure but I don't know that there are any tax breaks just for exempt corporations.

Certainly, there can be creative accounting. As I understand it, any team, whether NBA, NFL,NHL, or MLB can depreciate any out of pocket investment they make in an arena/stadium on a 15 year schedule as well. That's highly accelerated, but again, that's apparently available to all pro sports teams, and I don't think it would change if the union decertified and the NBA became 30 separate businesses

and I know that all corporations can get real creative with their accounting and shelter significant percentages of their profit. And they all have the ability to slide various paper losses from one enterprise to another as well as slide those losses into future years

[turk3d]

The other aspect of antitrust is competitiveness. Basically sports franchises get a free ride so to speak when it comes to their franchises (no competition). Kind of like what happens with major corporations (for example, years ago ATT was forced to break up into smaller companies opening up opportunities for other smaller companies to get in the mix). They were forced to give up certain aspects of their business, Government typically leaves them alone which is why I suspect they may be looking into the goings on at this present time.

Here's a link to a Power Point presentation which has a pretty good explanation of how their anti-trust status benefits them taxwise (quite technical). It's written by a Sports Economist (Rodney Fort who's written several books and may be part of a new one he's writing). You'll have to Powepoint and download it in order to read it.

http://www.google.com/url?sa=t&rct=j&q= ... AvDNoew94A

[Wizenheimer]

The other aspect of antitrust is competitiveness. Basically sports franchises get a free ride so to speak when it comes to their franchises (no competition). Kind of like what happens with major corporations (for example, years ago ATT was forced to break up into smaller companies opening up opportunities for other smaller companies to get in the mix). They were forced to give up certain aspects of their business, Government typically leaves them alone which is why I suspect they may be looking into the goings on at this present time.

Here's a link to a Power Point presentation which has a pretty good explanation of how their anti-trust status benefits them taxwise (quite technical). It's written by a Sports Economist (Rodney Fort who's written several books and may be part of a new one he's writing). You'll have to Powepoint and download it in order to read it.

http://www.google.com/url?sa=t&rct=j&q= ... AvDNoew94A

hey thanks!

but I ain't going to admit to reading it because that would be an extremely geeky-nerdy thing to do while I'm too cool...man

[turk3d]

[DBoys]

Nowhere is it in the rules that companies must overpay their employees while going bankrupt. Each party must prove that they are meeting when called, are trying to work out a deal, are clear about their demands, and can explain their positions. I have yet to see any kind of proof that the owners are not doing that.

the players can complain that the owners have been preparing for a lockout for years, or that the owners are saying that the players have not hurt enough, but they have moved off many of their original demands, have met with the players when requested, and have never refused to talk. The players on the other hand could have a major problem if the NLRB looks into their tactics.
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This ^

One point needs to be made, and is greatly misunderstood. And the fact that the ESPN expert completely avoided this point, makes me think he's not trying to offer an objective or informative evaluation to ESPN readers. (In the NFL situation, he consistently predicted the courts siding with the players and gave the owners little chance of success. In actuality, it was a mixed bag and the owners won far more than he told us would be possible.)

Here's the important point - The "failure to negotiate in good faith" charge has no bearing on whether the league makes concessions to what it originally asks for. AS A MATTER OF LAW, neither side has any obligation whatsoever to lower their demands at any point. Instead, "failure to negotiate in good faith" is usually the result of not wanting a deal under any terms.

In addition, if the league feels it can best remain viable by offering 40% of BRI, and can demonstrate why that's a legit demand (their rationale clearly being having to make enough to compensate for years of massive losses), they have no mandate to offer more. I suspect the existence of legit financials showing massive annual losses by the league is going to be awfully difficult for the union to overcome.

[Sark]

Nowhere is it in the rules that companies must overpay their employees while going bankrupt. Each party must prove that they are meeting when called, are trying to work out a deal, are clear about their demands, and can explain their positions. I have yet to see any kind of proof that the owners are not doing that.

the players can complain that the owners have been preparing for a lockout for years, or that the owners are saying that the players have not hurt enough, but they have moved off many of their original demands, have met with the players when requested, and have never refused to talk. The players on the other hand could have a major problem if the NLRB looks into their tactics.
.

This ^

One point needs to be made, and is greatly misunderstood. And the fact that the ESPN expert completely avoided this point, makes me think he's not trying to offer an objective or informative evaluation to ESPN readers. (In the NFL situation, he consistently predicted the courts siding with the players and gave the owners little chance of success. In actuality, it was a mixed bag and the owners won far more than he told us would be possible.)

Here's the important point - The "failure to negotiate in good faith" charge has no bearing on whether the league makes concessions to what it originally asks for. AS A MATTER OF LAW, neither side has any obligation whatsoever to lower their demands at any point. Instead, "failure to negotiate in good faith" is usually the result of not wanting a deal under any terms.

In addition, if the league feels it can best remain viable by offering 40% of BRI, and can demonstrate why that's a legit demand (their rationale clearly being having to make enough to compensate for years of massive losses), they have no mandate to offer more. I suspect the existence of legit financials showing massive annual losses by the league is going to be awfully difficult for the union to overcome.

If the NBA wants to offer 40% and the Players want 53%, and neither side is willing to move, then I guess there won't be pro basketball in this country again until a new league is formed.

[SacKingZZZ]

The other aspect of antitrust is competitiveness. Basically sports franchises get a free ride so to speak when it comes to their franchises (no competition). Kind of like what happens with major corporations (for example, years ago ATT was forced to break up into smaller companies opening up opportunities for other smaller companies to get in the mix). They were forced to give up certain aspects of their business, Government typically leaves them alone which is why I suspect they may be looking into the goings on at this present time.

Here's a link to a Power Point presentation which has a pretty good explanation of how their anti-trust status benefits them taxwise (quite technical). It's written by a Sports Economist (Rodney Fort who's written several books and may be part of a new one he's writing). You'll have to Powepoint and download it in order to read it.

http://www.google.com/url?sa=t&rct=j&q= ... AvDNoew94A

Which is why I think the NBA operates as each individual team, at least I remember hearing that somewhere when the discussion came up before.

Regardless if the question of the NBA being a monopoly were to be raised the end bottom line would hurt the players more, because basketball as a whole wouldn't all of a sudden generate tons more in revenue as a sport, but the pot depending on who you work for would just become smaller. Since the relationship between owners and players in the NBA is based upon revenue split, splitting up that revenue amongst other competing leagues would do nothing but split the potential dollars there are in more directions. A system in that vain would indeed cause an even greater disparity in income level between the top stars and role players.

It's only one of the numerous reasons that if the NLRB comes back and says the lockout is legal the players seriously need to consider the potential gains and losses of continuing this madness.

[SacKingZZZ]

Nowhere is it in the rules that companies must overpay their employees while going bankrupt. Each party must prove that they are meeting when called, are trying to work out a deal, are clear about their demands, and can explain their positions. I have yet to see any kind of proof that the owners are not doing that.

the players can complain that the owners have been preparing for a lockout for years, or that the owners are saying that the players have not hurt enough, but they have moved off many of their original demands, have met with the players when requested, and have never refused to talk. The players on the other hand could have a major problem if the NLRB looks into their tactics.
.

This ^

One point needs to be made, and is greatly misunderstood. And the fact that the ESPN expert completely avoided this point, makes me think he's not trying to offer an objective or informative evaluation to ESPN readers. (In the NFL situation, he consistently predicted the courts siding with the players and gave the owners little chance of success. In actuality, it was a mixed bag and the owners won far more than he told us would be possible.)

Here's the important point - The "failure to negotiate in good faith" charge has no bearing on whether the league makes concessions to what it originally asks for. AS A MATTER OF LAW, neither side has any obligation whatsoever to lower their demands at any point. Instead, "failure to negotiate in good faith" is usually the result of not wanting a deal under any terms.

In addition, if the league feels it can best remain viable by offering 40% of BRI, and can demonstrate why that's a legit demand (their rationale clearly being having to make enough to compensate for years of massive losses), they have no mandate to offer more. I suspect the existence of legit financials showing massive annual losses by the league is going to be awfully difficult for the union to overcome.

If the NBA wants to offer 40% and the Players want 53%, and neither side is willing to move, then I guess there won't be pro basketball in this country again until a new league is formed.

Which is why the owners are offering 50% and no court of law is going to decide against it on the basis of fairness and in particular with the intention of the NBA attempting to drag themselves out of a financial hole.

[Iman Shumpert]

If the NBA wants to offer 40% and the Players want 53%, and neither side is willing to move, then I guess there won't be pro basketball in this country again until a new league is formed.

Don't worry. The players will fold. Whether it's now or later, they will fold. No other basketball league can offer them even half what the NBA gives them.

[floppymoose]

In my dreams the players form a new league and the nba goes with scabs, and the players league slowly crushes the nba over the course of few years and displaces it, leaving the current owners with nothing. Financial carnage all around, but for the owners it's terminal.

[Thugger HBC]

In my dreams the players form a new league and the nba goes with scabs, and the players league slowly crushes the nba over the course of few years and displaces it, leaving the current owners with nothing. Financial carnage all around, but for the owners it's terminal.

Good dream, seriously doubt if it came true.

[Iman Shumpert]

In my dreams the players form a new league and the nba goes with scabs, and the players league slowly crushes the nba over the course of few years and displaces it, leaving the current owners with nothing. Financial carnage all around, but for the owners it's terminal.

Better chance of seeing LeBron hoist up Finals MVP #8.

[UGA Hayes]

In my dreams the players form a new league and the nba goes with scabs, and the players league slowly crushes the nba over the course of few years and displaces it, leaving the current owners with nothing. Financial carnage all around, but for the owners it's terminal.

ITs weird how unfathomable that is to everyone now when it wasn't that long ago that both football and basketball had competing league. Now especially in basketball talking about starting up a second league is laughed off. Of course if there were a competing league the owners wouldn't dream of asking for the thing they ask for because players would bolt.

[Ditchweed]

In my dreams the players form a new league and the nba goes with scabs, and the players league slowly crushes the nba over the course of few years and displaces it, leaving the current owners with nothing. Financial carnage all around, but for the owners it's terminal.

And who would throw the ton of money needed to bring about the infrastructure and support a players league? Nobody with any decent amount of money and in their right mind would since the players could shaft them as well. As such, even if a players league could get started, the players would be making ABA wages. It would be lucky if it even got off the ground.

Meanwhile, the existing owners with their infrastructure and scab players, would get all the new college players since they could afford to pay higher, plus have more European and foreign players, and would be able to replace the quality of the existing players within a few years. Besides, at least half if not more of the existing NBA players would cave and return. Fans would return to their known teams, just the names of some of the players would be changed.

A new league by the players overtaking the owners is about as much of a possibility as building a ladder to the moon, easy in concept but just not be able to be achieved.

[Thugger HBC]

In my dreams the players form a new league and the nba goes with scabs, and the players league slowly crushes the nba over the course of few years and displaces it, leaving the current owners with nothing. Financial carnage all around, but for the owners it's terminal.

ITs weird how unfathomable that is to everyone now when it wasn't that long ago that both football and basketball had competing league. Now especially in basketball talking about starting up a second league is laughed off. Of course if there were a competing league the owners wouldn't dream of asking for the thing they ask for because players would bolt.

It isn't impossible, it's just costly.

All you need is sponsors, venues , fans to support it.

A little luck as well.

[Sark]

If the NBA wants to offer 40% and the Players want 53%, and neither side is willing to move, then I guess there won't be pro basketball in this country again until a new league is formed.

Don't worry. The players will fold. Whether it's now or later, they will fold. No other basketball league can offer them even half what the NBA gives them.

If the NBA were to fold, and the ABA rose up and had all the star players, you don't think it would be able to produce $4 billion within a few years?

[Thugger HBC]

Just to kick the idea around.......

http://www.grantland.com/story/_/id/7058281/we-need-renegade-basketball-league