Official CBA/Labour Talks Discussion Thread II

[ranger001]

You have to understand, a casino business, widget business, and etc has nothing to do with the employee. The employee is not the selling point of the business. However, the selling point of the NBA is NOT just the game, but the players. You gonna watch Asia basketball? You think they are the same? No, the product is completely different.

Makes ZERO difference to my point. Let's say the NBA had no CBA. Franchise A makes 100 m in profit not including player salaries. Franchise B makes 40m in profit not including player salaries. All other things being equal does Franchise A have more money to spend on player salaries?

The word "profit" means it includes the deduction of expenses (including salaries). Perhaps you are talking about revenue in your case.

In terms of salaries and profits its applicable. Lets say its casinos. Casino A is making 1m profit/year, Casino B is making 100 million profit/year. All other things being equal can Casino B give more money in salary to its entertainers?

Your original question, no you cannot give more money in salary to its entertainers iff your entertainers are the main business here.

And exactly why can't casino B give more money to its entertainers than casino A???

[Indeed]

Definitely there are other ways to get around it, but the bonus of a player in NBA is limited by his salary in a ratio, so teams cannot cheat on that.

One thing I would suggest is the schedule becomes more like baseball, no rest between games. This will reduce the domination of good players (you cannot have LeBron playing 40mins a game). Thus, you need good bench players, and might have to extend min/max players to 18/20.

Sure, middle class players will get paid less (MLE might be reduced), but there will be more jobs created, better parity in chance of winning.

Honestly, I think that's a terrible idea. That cuts down on the ability for a coach to set up plays (not nearly so necessary in baseball other than with Pitchers, who don't pitch every day) and it sets things up for a lot more injuries, and we already see a lot.

Personally, I haven't seen anybody come up with an argument that worked better than my idea of abolishing max contracts (which includes the potential for player opt-outs of rookie scale contracts just like teams currently have opt-outs). It doesn't completely abolish the possibility of a super team, but I don't mind giving the option of allowing Lebron to choose to be on a super team for $17 million/season or to play for a different team at $50 million/season and force him to make a choice. Even without a hard cap that puts a pretty big stranglehold on a team's ability to load up on talent with the current system. Yeah, some teams will be better than others, but the gap will be a lot less and the incentive to tank is lessened if the ultimate prize is a player that will cost you $25 million/season after a season or two. Cut the margins on both ends and you get more parity. No need for much negotiating, just put all players on the same market.

If the parity the owners want is financial parity rather than competitive parity (which, let's be honest, is really what they're after), then revenue-sharing (even if the form I just described to you) at the very least solves a massive chunk of the problem with no CBA negotiations required. Nobody here knows whether it would or wouldn't solve the entire problem since the owners definitely aren't letting that information out any time soon, but the owners haven't shown any inclination towards being interested in either option.

The difference is, my suggestion does not have to be under a hard cap situation, and doesn't require to be on the CBA to specify on how the game gonna be playyed.
While yours require to remove MLE, BAE, and etc in a hard cap scenario.

The other suggestion from Sleepy is also a good one:

I would love for us to go back to 5 fouls. We could scrap the illegal defense rules and stop all this streetball, but players would have to ration contact. It would also make benches relevant again and reinforce the value of ball movement and team play on both ends.

It is good because it changes the rule, but not the main focus on the CBA.

[Indeed]

Makes ZERO difference to my point. Let's say the NBA had no CBA. Franchise A makes 100 m in profit not including player salaries. Franchise B makes 40m in profit not including player salaries. All other things being equal does Franchise A have more money to spend on player salaries?

The word "profit" means it includes the deduction of expenses (including salaries). Perhaps you are talking about revenue in your case.

In terms of salaries and profits its applicable. Lets say its casinos. Casino A is making 1m profit/year, Casino B is making 100 million profit/year. All other things being equal can Casino B give more money in salary to its entertainers?

Your original question, no you cannot give more money in salary to its entertainers iff your entertainers are the main business here.

And exactly why can't casino B give more money to its entertainers than casino A???

Sorry if I am not clear, I mean the other way around. Casino B can give more money in salary to ites entertainers as if there is no limit (without soft cap nor hard cap).

[floppymoose]

Look up profit-sharing and gain-sharing. Welcome to the 21st century. Also look up pay for performance salary plans.

The owners are not proposing to cut the players in on those future profits when they sell the team. They are taking the money, and not giving it back.

[ranger001]

Sorry if I am not clear, I mean the other way around. Casino B can give more money in salary to ites entertainers as if there is no limit (without soft cap nor hard cap).

The question is can Casino B give more money to its entertainers than Casino A? Assume that both casinos are instructed not to pay so much that they go into a loss.

[TiKusDom]

The owners are not proposing to cut the players in on those future profits when they sell the team. They are taking the money, and not giving it back.

Is there any business in this world that offers to give its employees a share of the profits when a company in sold?

[Sleepy51]

Account receivable ? You mean payable. Receivable is how much a company is set to collect, payable is how how much they have to pay out. Yes your debt is a good measure of how well your business is running.

Why shouldn't investment in new media affect players' salaries ? Curious for your reasoning. Owners invest in marketing their players, who reap the rewards by becoming more marketable and receive more endorsements

No, I mean accounts receivable. When you are starting from Net Income an increase in accounts receivable shows as a negative on a statement of cash flows. If your AR account has increased then your net sales are increasing more than net cash. You don't have actual cash collected to reflect those sales, so to balance the account it must be deducted in order to balance out to net income. It's counter-intuitive, but that's how it works and that's why accountants are looneys.

re: New Media: the players are not investors. They don't have an equity stake in that entity, and they will not participate in gain on that equity when franchises are sold. Owners get to keep all of their gains so I don't agree that players should take a lower share of BRI based on the cost of "capital improvements" to the league (assuming that is what that was.)

[Indeed]

Sorry if I am not clear, I mean the other way around. Casino B can give more money in salary to ites entertainers as if there is no limit (without soft cap nor hard cap).

The question is can Casino B give more money to its entertainers than Casino A? Assume that both casinos are instructed not to pay so much that they go into a loss.

They can always not to pay so much nor ensure they wisely spend their money, so that they go into a loss even without being instructed.

Not sure why you are arguing this point, there is no proof of player salaries are causing owners to lose money (again, read the conversation between Fairveiw, Sleepy and Boris).

[floppymoose]

The owners are not proposing to cut the players in on those future profits when they sell the team. They are taking the money, and not giving it back.

Is there any business in this world that offers to give its employees a share of the profits when a company in sold?

Yes. Any company offering stock optons, RSU's, etc, are basically trading on ownership. That is typically what is meant by profit sharing, which is the case you brought up.

[Indeed]

The owners are not proposing to cut the players in on those future profits when they sell the team. They are taking the money, and not giving it back.

Is there any business in this world that offers to give its employees a share of the profits when a company in sold?

Yes, some CEO and executives are provided with stock options, and they gain when a company is being sold. Yes, they became the owner as their position is strongly influencing the revenue of the company.

[Indeed]

The owners are not proposing to cut the players in on those future profits when they sell the team. They are taking the money, and not giving it back.

Is there any business in this world that offers to give its employees a share of the profits when a company in sold?

Yes. Any company offering stock optons, RSU's, etc, are basically trading on ownership.

You beat me to it

[Indeed]

Look up profit-sharing and gain-sharing. Welcome to the 21st century. Also look up pay for performance salary plans.

The owners are not proposing to cut the players in on those future profits when they sell the team. They are taking the money, and not giving it back.

And neither they promised the cut will make them make a profit. Perhaps even at 5% of RBI, the owners can still claim they are losing money, largely not because of player expenses/salary, but their own decisions.

[TiKusDom]

No, I mean accounts receivable. An increase in accounts receivable shows as a negative on a statement of cash flows. If your AR account has increased then your net sales are increasing more than net cash. You don't have actual cash collected to reflect those sales, so to balance the account it must be deducted in order to balance out to net income. It's counter-intuitive, but that's how it works and that's why accountants are looneys.

re: New Media: the players are not investors. They don't have an equity stake in that entity, and they will not participate in gain on that equity when franchises are sold. Owners get to keep all of their gains so I don't agree that players should take a lower share of BRI based on the cost of "capital improvements" to the league (assuming that is what that was.)

What you are assuming is that the accountants hired by the NBPL dont have the aptitude to point out that cash flow statements do not state how well a company is doing? I do not think anyone is using cash flow statements as the sole criteria for league health.

If a company is sold for profits, the employees are never given compensated. This is standard corporate practice. When are employees ever given the gains for this? Capital improvements to the league can be a new scoreboard, heavy marketing campaigns ( which benefit the players directly by improving their marketability and endorsement revenue ). I am pretty sure the players receive indirect benefits from capital investments one way or another.

[Indeed]

No, I mean accounts receivable. An increase in accounts receivable shows as a negative on a statement of cash flows. If your AR account has increased then your net sales are increasing more than net cash. You don't have actual cash collected to reflect those sales, so to balance the account it must be deducted in order to balance out to net income. It's counter-intuitive, but that's how it works and that's why accountants are looneys.

re: New Media: the players are not investors. They don't have an equity stake in that entity, and they will not participate in gain on that equity when franchises are sold. Owners get to keep all of their gains so I don't agree that players should take a lower share of BRI based on the cost of "capital improvements" to the league (assuming that is what that was.)

What you are assuming is that the accountants hired by the NBPL dont have the aptitude to point out that cash flow statements do not state how well a company is doing? I do not think anyone is using cash flow statements as the sole criteria for league health.

If a company is sold for profits, the employees are never given compensated. This is standard corporate practice. When are employees ever given the gains for this? Capital improvements to the league can be a new scoreboard, heavy marketing campaigns ( which benefit the players directly by improving their marketability and endorsement revenue ). I am pretty sure the players receive indirect benefits from capital investments one way or another.

True, but on the other hand, players also promote their own teams.
Cleveland Cavs are well known team in China because of LeBron. Chris Paul, Kobe and etc. Is it because of the team's marketing strategy? Or is it because Kobe knows Spanish his own?

I think both gain benefits from each other, but asking players to pay the arena is not fair from my perspective. The arena should be provided by the owner as a representative of the team, and the benefit of owning the arena is the owner along (the land value, tax return, and etc.)

[TiKusDom]

Yes. Any company offering stock optons, RSU's, etc, are basically trading on ownership. That is typically what is meant by profit sharing, which is the case you brought up.

No , you are misunderstanding. I am saying when is a company is sold to another company , I am not talking about stock options. Most companies are not even traded or have stock options. No profit sharing is not the same. Profit sharing can come from simply having more sales and agreeing to give a chunk of that to your employees. Stock options are only a small part of profit sharing plans.

Since when is any private company sold, (pretend its not public so you dont have to worry about stocks since that seems to confuse you ) obliged to provide its profits to its employees? It doesn't.

[ranger001]

Sorry if I am not clear, I mean the other way around. Casino B can give more money in salary to ites entertainers as if there is no limit (without soft cap nor hard cap).

The question is can Casino B give more money to its entertainers than Casino A? Assume that both casinos are instructed not to pay so much that they go into a loss.

They can always not to pay so much nor ensure they wisely spend their money, so that they go into a loss even without being instructed.

Not sure why you are arguing this point, there is no proof of player salaries are causing owners to lose money (again, read the conversation between Fairveiw, Sleepy and Boris).

Over half the owners are losing money due to player salaries. The proof is the cancelled games. That proves more than you saying there is no proof. By your logic there was no proof when the NHL lost a season either.

[Sleepy51]

No, I mean accounts receivable. An increase in accounts receivable shows as a negative on a statement of cash flows. If your AR account has increased then your net sales are increasing more than net cash. You don't have actual cash collected to reflect those sales, so to balance the account it must be deducted in order to balance out to net income. It's counter-intuitive, but that's how it works and that's why accountants are looneys.

re: New Media: the players are not investors. They don't have an equity stake in that entity, and they will not participate in gain on that equity when franchises are sold. Owners get to keep all of their gains so I don't agree that players should take a lower share of BRI based on the cost of "capital improvements" to the league (assuming that is what that was.)

What you are assuming is that the accountants hired by the NBPL dont have the aptitude to point out that cash flow statements do not state how well a company is doing? I do not think anyone is using cash flow statements as the sole criteria for league health.

No that is not what I am assuming. I am assuming that in the players repeated comments stating that they reject the extent of the league's loss claims, that they are seeing a lot of the same thing's I am seeing.

If a company is sold for profits, the employees are never given compensated. This is standard corporate practice. When are employees ever given the gains for this?

When employees are equity owners. This is not the case for the NBA. I neither expect players to participate in the profits of a capital gain, nor in the costs of capital investment.

When my partners and I made a decision to stop renting space and purchase a building it never occurred to us to reduce our producers compensation packages to offset the cpst of that investment. Maybe we're doing it wrong.

[Sleepy51]

Over half the owners are losing money due to player salaries. The proof is the cancelled games. That proves more than you saying there is no proof. By your logic there was no proof when the NHL lost a season either.

The league's CLAIM is that over half the owners are losing money due to players salaries. The players have acknowledged that SOME teams are losing money. They have rejected the extent of the owners claims.

The cancellation of games is most certainly not proof that over half the owners are losing money. The cancellation of games simple demonstrates that the owners believe they stand to benefit from improving the terms of the CBA.

Whether that improvement will take a loss and turn it into future profits is not demonstrated simply by their willingess to cancel games. There is certainly a level of change to the CBA that would justify missing a certain portion of games EVEN IF THOSE GAMES ARE profitable, as an investment in even greater future profits.

[TiKusDom]

No that is not what I am assuming. I am assuming that in the players repeated comments stating that they reject the extent of the league's loss claims, that they are seeing a lot of the same thing's I am seeing.

I dont assume players are accountants. They have their own reasons and motivations to reject business expenses incurred by the owners so they can get more money.

When employees are equity owners. This is not the case for the NBA. I neither expect players to participate in the profits of a capital gain, nor in the costs of capital investment.

When my partners and I made a decision to stop renting space and purchase a building it never occurred to us to reduce our producers compensation packages to offset the cpst of that investment. Maybe we're doing it wrong.

When a company decides to buy new equipment and machinery to improve the productivity of employees , while having a profit sharing system set into place , then the ability to earn by your employees is increased by your investment into a better infrastructure. Your employees make a gain , as do you. When an owner invests into marketing campaigns, players sell more jerseys or products. When an owner renovates the building and makes it state of the art, more people come to the games, increasing BRI and improving jersey or other item sales. One affects the other.

[floppymoose]

No , you are misunderstanding. I am saying when is a company is sold to another company , I am not talking about stock options. Most companies are not even traded or have stock options. No profit sharing is not the same. Profit sharing can come from simply having more sales and agreeing to give a chunk of that to your employees. Stock options are only a small part of profit sharing plans.

Since when is any private company sold, (pretend its not public so you dont have to worry about stocks since that seems to confuse you ) obliged to provide its profits to its employees? It doesn't.

So your point is what, that the owners don't currently (and are unlikely in the future) to share team sale profits with the players? I agree! That's the whole issue. They aren't going to share that, so they should not ask the players to pay for their ownership financing.

It's the same thing as when I rent my house out. The people renting it don't care what my mortgage is or how much I owe on the house. The rental market pricing for my kind of house is unaffected by that. If I try to charge them more because I have an expensive mortgage, they'll go rent the identical house down the street.