Official CBA/Labour Talks Discussion Thread II

[Laowai]

What I believe is that you have a problem understanding the purpose of the rules. That's the reason you are not a GM.[/quote]

So you are saying all the GMs there understand the purpose of those rules? They are also expect of basketball game?[/quote]
Yes GMs understand the rules of the CBA. That's why we don't have a freaking season going on right now.[/quote]

I understand the rules, doh.
As I said, you only say things based on your own knowledge, but I read other reference, I learn from other posts.

Have you read the conversation between Fairview, Sleepy and Boris? Do you think they are irrelevant?[/quote]

Post after post doesn't make you right in fact you just don't understand the basics o9f business.
Every company should lose money because it is good for the workers.
See what that logic did for GM.
Even the rich get tired of losing money.

[Fairview4Life]

I understand the rules, doh.
As I said, you only say things based on your own knowledge, but I read other reference, I learn from other posts.

Have you read the conversation between Fairview, Sleepy and Boris? Do you think they are irrelevant?

Yes I read it and as I said before ebitda is NOT net profit. Sleepy admitted that, did you read that? Do you know why ebitda is not net profit? You think taxes don't have to be paid?

I'm not sure what this means. Who said it was net profit, or that "net profit" means anything in the context of that discussion?

[I_Like_Dirt]

Number one on the list is that the NBA wants every team to make a profit. That cannot be done with just revenue sharing since the league lost 300 million, even the players acknowledge that the league lost money, they don't agree with 300 million but they agree that the league lost money. Thats the reason for the BRI change.

Now Arenas is a different issue, the rules need to be changed so that if you take a chance on a guy it doesn't hurt you for 6 years. So lets say its 3 years of guarantees, that means after 3 years you can take a chance on a different guy.

I realize that, but I was only responding to your post. In it, you suggested the league's problems were with the league taking chances and not being able to erase them quickly enough.

In terms of profit, the league still hasn't proven anything regarding that $300 million loss. They've just made that statement and somehow we're supposed to believe them and the burden of proof is on the opposing side? How much of that loss is depreciation? How much of that loss is financial tricks using investment companies? How much of that loss is staged expenses to line up in one year where there was a labour negotiation that won't recur in future years? How much of that loss is paying massive salaries to relatives? How much of that loss is things like Zambonis? The answer to all of that is that nobody can be sure without the NBA offering up a lot more proof than they have.

Also, every team making a profit? Even though the NBA wants it doesn't mean that should be the case. Nobody thought the franchise in Charlotte was a good idea, but the league accepted it anyway because they made money on it in the short term. Moving franchises to OKC and New Orleans were terrible financial moves. Make moves like that and you deserve to lose money at some point. But I can guarantee you that the league also wants every team to make more than $500,000/year profit on average. And if that's what they're after, you can be sure they've got bigger revenue streams that aren't showing in theese negoatiations. BRI doesn't even include a massive portion of luxury box suites and other big money makers.

[ranger001]

Yes I read it and as I said before ebitda is NOT net profit. Sleepy admitted that, did you read that? Do you know why ebitda is not net profit? You think taxes don't have to be paid?

I'm not sure what this means. Who said it was net profit, or that "net profit" means anything in the context of that discussion?

Yes, I know you're not sure what ebitda and net profit means. That's why you dont believe that the league lost 300 million.

I was responding to Indeed not you.

[Indeed]

I understand the rules, doh.
As I said, you only say things based on your own knowledge, but I read other reference, I learn from other posts.

Have you read the conversation between Fairview, Sleepy and Boris? Do you think they are irrelevant?

Yes I read it and as I said before ebitda is NOT net profit. Sleepy admitted that, did you read that? Do you know why ebitda is not net profit? You think taxes don't have to be paid?

It is before EBITA, but did you look at more than it is profit or not? Did you look at what is on their expenses?
http://goingconcern.com/2011/06/who-wan ... tatements/

What is the expense of $25m from the Nets?

The first thing to do is toss out that $25 million loss, says Rodney Fort, a sports economist at the University of Michigan [See correction above.]. That’s not a real loss. That’s house money. The Nets didn’t have to write any checks for $25 million. What that $25 million represents is the amount by which Nets owners reduced their tax obligation under something called a roster depreciation allowance, or RDA.

Does it even matter if it is EBITA, would those tax and other missing pieces can combine more than a $25m claim on the expense?

As Craggs notes, if that loss, which also saved the team about $9 million in taxes, doesn’t exist, you’ve got a $7 million profit (see update above). But since we’re talking about rich owners with the hands in honeypots all over the place, a profit really doesn’t do them any good on an investment like a sports franchise. Particularly one in New Jersey that was in the process of being sold back in 2004.

Really, you read the article?

[ranger001]

Number one on the list is that the NBA wants every team to make a profit. That cannot be done with just revenue sharing since the league lost 300 million, even the players acknowledge that the league lost money, they don't agree with 300 million but they agree that the league lost money. Thats the reason for the BRI change.

Now Arenas is a different issue, the rules need to be changed so that if you take a chance on a guy it doesn't hurt you for 6 years. So lets say its 3 years of guarantees, that means after 3 years you can take a chance on a different guy.

I realize that, but I was only responding to your post. In it, you suggested the league's problems were with the league taking chances and not being able to erase them quickly enough.

In terms of profit, the league still hasn't proven anything regarding that $300 million loss. They've just made that statement and somehow we're supposed to believe them and the burden of proof is on the opposing side? How much of that loss is depreciation? How much of that loss is financial tricks using investment companies? How much of that loss is staged expenses to line up in one year where there was a labour negotiation that won't recur in future years? How much of that loss is paying massive salaries to relatives? How much of that loss is things like Zambonis? The answer to all of that is that nobody can be sure without the NBA offering up a lot more proof than they have.

The players believe the owners lost money. Why dont you?

Also, every team making a profit? Even though the NBA wants it doesn't mean that should be the case. Nobody thought the franchise in Charlotte was a good idea, but the league accepted it anyway because they made money on it in the short term. Moving franchises to OKC and New Orleans were terrible financial moves. Make moves like that and you deserve to lose money at some point. But I can guarantee you that the league also wants every team to make more than $500,000/year profit on average. And if that's what they're after, you can be sure they've got bigger revenue streams that aren't showing in theese negoatiations. BRI doesn't even include a massive portion of luxury box suites and other big money makers.

Its not up to you to decide which owners should make a profit and which owners deserve to lose money. If the hornets of the world can make a profit then the nba has a few more markets to expand in.

[Fairview4Life]

The deadspin article was wrong about the 25 million in 04, that was Dikembe's buyout, but there was about 83 million in 05 and 06 attributed to depreciation (and not of scoreboards).

[Indeed]

Post after post doesn't make you right in fact you just don't understand the basics o9f business.
Every company should lose money because it is good for the workers.
See what that logic did for GM.
Even the rich get tired of losing money.

Thanks for coming out from no where when you think the other guy knows better.
Are they really losing money?

[Indeed]

The deadspin article was wrong about the 25 million, but there was about 83 million in 05 and 06 attributed to depreciation (and not of scoreboards).

Thanks for correcting me, but I have a lot of questions for the claim that the owners have over losing tons of money. And question some of the direct or indirect benefits to their other businesses.

Just like LeBron and Kobe, they make more outside of their NBA salary, a pay cut is not the worst thing for them.

[ranger001]

I understand the rules, doh.
As I said, you only say things based on your own knowledge, but I read other reference, I learn from other posts.

Have you read the conversation between Fairview, Sleepy and Boris? Do you think they are irrelevant?

Yes I read it and as I said before ebitda is NOT net profit. Sleepy admitted that, did you read that? Do you know why ebitda is not net profit? You think taxes don't have to be paid?

It is before EBITA, but did you look at more than it is profit or not? Did you look at what is on their expenses?
http://goingconcern.com/2011/06/who-wan ... tatements/

What is the expense of $25m from the Nets?

The first thing to do is toss out that $25 million loss, says Rodney Fort, a sports economist at the University of Michigan [See correction above.]. That’s not a real loss. That’s house money. The Nets didn’t have to write any checks for $25 million. What that $25 million represents is the amount by which Nets owners reduced their tax obligation under something called a roster depreciation allowance, or RDA.

Does it even matter if it is EBITA, would those tax and other missing pieces can combine more than a $25m claim on the expense?

As Craggs notes, if that loss, which also saved the team about $9 million in taxes, doesn’t exist, you’ve got a $7 million profit (see update above). But since we’re talking about rich owners with the hands in honeypots all over the place, a profit really doesn’t do them any good on an investment like a sports franchise. Particularly one in New Jersey that was in the process of being sold back in 2004.

Really, you read the article?

I dont know why I keep arguing with you. Deadspin retracted their freaking statement.

Deadspin has updated their post to state that the initial analysis of the RDA was incorrect. That is, the $25.1 million was not RDA but rather the loss the team took on a player contract in that fiscal year

The nets lost 100 million over 2 years. Even if there was some kind of RDA it wont turn that 100 million loss into a profit. I said it before and I will repeat it till I get an answer from you.

THE PLAYERS ADMIT THAT TEAMS LOST MONEY LAST YEAR. Why do you know more than the players?

[I_Like_Dirt]

The real question that I think requires more proof from the owners is that the NHL is paying out 57% of BRI currently and the league is running fine despite revenues of $2.9 billion. The NBA is hemoraging money, according to the owners, despite the same % for salaries and revenues of $4 billion. So the NHL can run a league and turn profits on $1.247 billion despite having more players/staff to move around while the NBA can't on $1.72 billion. What gives? That means the NBA is somehow spending at least $800 million more than the NHL on expenses if you accept that $300 million loss figure. What kind of expenses does the NBA have that the NHL doesn't that would warrant such a huge disparity in expenses?

Also, it's all well and good to want every team to turn a profit all the time, but that's really only something that the NFL has been able to pull off. The NFL is the exception for a whole host of reasons. They have massive revenues that dwarf anything the NBA could possibly aspire to. Football is way bigger in the US than anything. They face absolutely no competition because the only other country that is remotely interested in football is Canada, who is right beside them in the same time zone and doesn't have the market size or the fanatical following of the same magnitude the NFL has to compete directly on its own. Trying to be like the NFL is one thing. Every league would love to be like that. Expecting to be like that and holding out until you can guarantee yourself that setup is another one entirely because nobody else is going to get that kind of setup besides the NFL.

[Rhettmatic]

Ken Berger has a typically thorough update on CBA talks here:

http://www.cbssports.com/nba/story/1585 ... n-prevails

[mintsa]

Jonesy on the fan just said from what he's already heard about todays talks (that started at 12pm today). That a new proposal is in the works and he wouldnt be surprised for a deal to be made and a full 82 game season starting on Dec 1st.

I know it's Paul Jones.......but just saying......

[Rhettmatic]

This piece is a pretty good read, especially for those still crowing that correcting the disparity in payroll will lead to competitive balance:

http://espn.go.com/blog/truehoop/post/_ ... lance-myth

What we’re seeing is a strong tie between drafting efficiency and win percentage, but not so much for winning and payroll. In fact, draft efficiency alone explains 34 percent of the variability in a team’s record over the past decade. How much does payroll explain?

Just 7 percent -- a tiny amount in comparison.

Many economists have studied the issue of payroll and competitive balance. Andrew Zimbalist, an economist at Smith College who has written several books on sports economics, recently told the New York Times, “The statistical correlation between payroll and win percentage is practically nonexistent.” That 7 percent is what he’s talking about.

This image hammers home the importance of drafting vs. payroll (and also is yet another example of how godawful the Raptors are at everything!):

[ATLTimekeeper]

This piece is a pretty good read, especially for those still crowing that correcting the disparity in payroll will lead to competitive balance:

http://espn.go.com/blog/truehoop/post/_ ... lance-myth

What we’re seeing is a strong tie between drafting efficiency and win percentage, but not so much for winning and payroll. In fact, draft efficiency alone explains 34 percent of the variability in a team’s record over the past decade. How much does payroll explain?

Just 7 percent -- a tiny amount in comparison.

Many economists have studied the issue of payroll and competitive balance. Andrew Zimbalist, an economist at Smith College who has written several books on sports economics, recently told the New York Times, “The statistical correlation between payroll and win percentage is practically nonexistent.” That 7 percent is what he’s talking about.

This image hammers home the importance of drafting vs. payroll (and also is yet another example of how godawful the Raptors are at everything!):

Zimbalist is a consultant for the PA. His work has already had some holes poked in it on the general board, when his stuff first circulated a few weeks ago. Personally I'm not interested in anything ESPN has to say about the labour dispute, because they have a vested interest in the biggest markets getting the best players.

It's too difficult to make a study based on payroll and winning percentage. Some teams don't want to win.

[Fairview4Life]

I assume Lebron single handedly got Cleveland that 3rd draft ranking?

[Rhettmatic]

Zimbalist is a consultant for the PA. His work has already had some holes poked in it on the general board, when his stuff first circulated a few weeks ago.

The article isn't based around his arguments, though -- that line is the only reference to his work in the story. So I don't see how his presence there discredits Haberstroh's analysis. It's not like Zimbalist supplied the numbers, or even contextualized them -- they didn't even interview him directly for the story. So is the fact that his name is dropped all that relevant?

Personally I'm not interested in anything ESPN has to say about the labour dispute, because they have a vested interest in the biggest markets getting the best players.

That may be true, but I have a hard time believing that there's really an organizational mandate for people writing for ESPN's website to prop up the players' cause so that good players go to big markets and higher ratings ensue. That seems a bit paranoid for me.

It's too difficult to make a study based on payroll and winning percentage. Some teams don't want to win.

I do see your point here.

[Fairview4Life]

It's too difficult to make a study based on payroll and winning percentage. Some teams don't want to win.

Some more links from people who have tried.

http://wagesofwins.net/2011/08/10/nba-o ... e-balance/

http://www.jeremyscheff.com/2011/07/the ... d-by-team/

http://wagesofwins.net/2011/09/23/nba-p ... mpossible/

http://espn.go.com/espn/commentary/stor ... gic-flawed

[J-Roc]

Moral of the ESPN story is that tanking is the way to build a contender. Whatever system created that should go.

[theonlyeastcoastrapsfan]

Hopefully, things move closer to a resolution today. I have a feeling they will.