Windhorst: "players have no idea about the capwave that's about to hit them"

[jus a fan]

And how long do you want the owners to do that? 1 season? 2? 3? In perpetuity?

They might do it for a season or two but after that if this continues there will be massive decline to players salaries and rightfully so but I also think we will be over corona in 1-2 years and things will recover.

They can afford to do it, yes, in perpetuity. Wanna bet that if owners have to subsidize player contracts, billionaires still continue to line up to own NBA franchises? Because it's crazy profitable, and would continue to be so, even if that margin is cut into a little bit to continue to pay the workers that create all the value in the league.

You do realize if the situation comes where the owners will have to keep the cap artificially high in perpetuity, the league won't be profitable and the values of the franchise will drop as well, so no, what you are saying is objectively not sustainable nor realistic.

So the profit is supposed to be split 50/50 between players and owners. so Owners theoretically making 100 million Profit every year. not sure how much revenue you need to lose to lose 100 million in profit but dont think the teams will be losing that much. Teams should still be able to break even at least and be happy that the value of franchise is definitely higher than when they bought it.

However Billionaires did not become billionaires by being satisfied with small profits they will make the players share the pain to increase there profit

[Duke4life831]

They can afford to do it, yes, in perpetuity. Wanna bet that if owners have to subsidize player contracts, billionaires still continue to line up to own NBA franchises? Because it's crazy profitable, and would continue to be so, even if that margin is cut into a little bit to continue to pay the workers that create all the value in the league.

You do realize if the situation comes where the owners will have to keep the cap artificially high in perpetuity, the league won't be profitable and the values of the franchise will drop as well, so no, what you are saying is objectively not sustainable nor realistic.

So the profit is supposed to be split 50/50 between players and owners. so Owners theoretically making 100 million Profit every year. not sure how much revenue you need to lose to lose 100 million in profit but dont think the teams will be losing that much. Teams should still be able to break even at least and be happy that the value of franchise is definitely higher than when they bought it.

However Billionaires did not become billionaires by being satisfied with small profits they will make the players share the pain to increase there profit

I'm not sure where you're getting the 100 million in profit every year. But it's not a 50/50 profit split between the league and players. It's a 50/50 revenue split. That's a very big difference.

[Jabroni Lames]

You do realize if the situation comes where the owners will have to keep the cap artificially high in perpetuity, the league won't be profitable and the values of the franchise will drop as well, so no, what you are saying is objectively not sustainable nor realistic.

So the profit is supposed to be split 50/50 between players and owners. so Owners theoretically making 100 million Profit every year. not sure how much revenue you need to lose to lose 100 million in profit but dont think the teams will be losing that much. Teams should still be able to break even at least and be happy that the value of franchise is definitely higher than when they bought it.

However Billionaires did not become billionaires by being satisfied with small profits they will make the players share the pain to increase there profit

I'm not sure where you're getting the 100 million in profit every year. But it's not a 50/50 profit split between the league and players. It's a 50/50 revenue split. That's a very big difference.

Yep. The players get paid right off the top line revenue. It’s a sweet deal. The players have zero downside risk .... their outcomes are: (a) being rich or, (b) being filthy rich.

Not only that, the players get extra income from endorsements, of which the owners don’t get a penny.

[vxmike]

love how realgm posters speak with such confidence on what it means to be a billionaire and how there is like "no risk" in owning a team

atlanta hawks, buffalo bills, carolina panthers, and houston rockets were all bought and sold in the past 5 years

if it were easy money, they never would have been sold.

Yup I mean there is always risk in investing money. For example the Nets were just purchased for 2.3 billion dollars in 2019. You think the group that made that purchase arent biting their nails right now. If news breaks that there wont be any fans next year, or even worse the TV ratings dont turn around before the next TV deal. The valuation of that franchise (all the franchises) will have taken a big hit.

Dont get me wrong, Im not saying to have sympathy for these mega rich people. But financially speaking, ya there is billions on the line and that is a major risk.

What do you think Fertitta would get for if the Rockets were up for sale again in the next 36 months? Or if the Nets went up for sale?

Massive loss. The market for assets in the US has probably peaked unless we get severe inflation coming. NBA clubs, tech stocks, housing in many areas, etc are all ridiculous valuations right now detached from reality.

[Raps in 4]

Only big market teams such as the Lakers could survive from the local TV money.

They could replace the season with live footage of Lakers practice sessions and Lebron interviews.

[Ballerhogger]

Probably will see lot smaller deals next 2 years

[ropjhk]

I've seen many fans say they don't care about ratings and the financial health of the league. And they don't care if players are making less because they make so much anyway.

But I'm wondering how fans will feel when their team suddenly has no money for free agents and starts making roster moves simply to cut costs. That doesn't sound super awesome to me.

Some other team will benefit from that teams troubles. On the whole it will balance out. There will be winners and losers, but there will always be basketball featuring the best players in the world.

[Michael Lucky]

you would think that agents would be on top of this and warning their clients already.

[jus a fan]

You do realize if the situation comes where the owners will have to keep the cap artificially high in perpetuity, the league won't be profitable and the values of the franchise will drop as well, so no, what you are saying is objectively not sustainable nor realistic.

So the profit is supposed to be split 50/50 between players and owners. so Owners theoretically making 100 million Profit every year. not sure how much revenue you need to lose to lose 100 million in profit but dont think the teams will be losing that much. Teams should still be able to break even at least and be happy that the value of franchise is definitely higher than when they bought it.

However Billionaires did not become billionaires by being satisfied with small profits they will make the players share the pain to increase there profit

I'm not sure where you're getting the 100 million in profit every year. But it's not a 50/50 profit split between the league and players. It's a 50/50 revenue split. That's a very big difference.

Yup you right i had it wrong thanks for clearing it up

[Nate505]

If it means players can't go form their own teams, I hope this is true

[jimmy keys]

Yup I mean there is always risk in investing money. For example the Nets were just purchased for 2.3 billion dollars in 2019. You think the group that made that purchase arent biting their nails right now. If news breaks that there wont be any fans next year, or even worse the TV ratings dont turn around before the next TV deal. The valuation of that franchise (all the franchises) will have taken a big hit.

Dont get me wrong, Im not saying to have sympathy for these mega rich people. But financially speaking, ya there is billions on the line and that is a major risk.

What do you think Fertitta would get for if the Rockets were up for sale again in the next 36 months? Or if the Nets went up for sale?

Massive loss. The market for assets in the US has probably peaked unless we get severe inflation coming. NBA clubs, tech stocks, housing in many areas, etc are all ridiculous valuations right now detached from reality.

Couldn't agree more with you. Someone's got to buy the top though.

[Zeno]

Here are my predictions for this..

1. The cap will kept at artificially high levels for the next two years. Since arena revenue is 40% of total and players get 50% of that, this will be done by increasing escrow from 10% to 30%. But more than that, to maximize the contract values signed this offseason and next, players will agree to a 35% escrow so that the 2021,2022 cap can be set in line with previous projections of 115 and 125 million respectively. This also allows a large number of teams to avoid paying luxury tax after planning for those numbers. Essentially players will be agreeing to a temporary paycut but trying to maintain longterm contract values.

2. While players don't want to return to bubbles, I predict that at least for the first half of next season, there will be bubbles in markets with no state tax to maximize player earning(and of course b/c of covid), but they will be shorter in duration. Teams will have a schedule of like 6 weeks in bubble, 2 weeks off rather than one super long bubble. The teams being bubbled at a given time will rotate in such a way that play is continuous.

[Zeno]

If it means players can't go form their own teams, I hope this is true

Players are going to go where they want regardless. If the cap drops to 90 million and a guy like Gallo is looking at a minimum contract wherever he goes, where do you think he's going?

[Pharmcat]

All I can is nba and nbapa have a fantastic relationship (unlike mlb and nfl and their unions). I think both sides will work something out that isn't too radical

[Pharmcat]

Probably will see lot smaller deals next 2 years

Yep might as well take 1+1 deals until cap comes back up

[Midw35t]

I personally think they should just let it ride out, and let the cap drop. Do we really care that owners and players will "lose money"? This is millionaires vs. billionaires. Let the cap go down, but they should keep the lux tax where it is.

As a Bulls fan, I am just bummed (but understand) if we don't see NBA ball again until March or April.

NBA owners care if they lose money, and there’s no guarantee we get NBA ball in March or April. There’s no guarantee we get a 2021 season. Players don’t want to do a bubble and lots of owners can’t afford to pay the salaries with no revenue from ticket sales. COVID-19 spreads worse in the winter and as cases get better we loosen restrictions and then cases get worse.

You've lived through Covid-19 in the winter?

People just should accept that it is not as bad as you have been told.

[Texas Chuck]

Why is it that I always imagine Windhorst being out of breath when he types?

because you are an **** who fat shames people probably.

[fianchetto]

Ratings have nothing to do with the cap. It would only matter if the league contract was up and networks were not willing to pay as much. But so far nothing indicates networks won't pay billions for live sports rights.

I’m honestly not in the know about this but if the contracts are all signed I guess you’d be right. But I don’t know if they are.

Ratings matter a lot for syndication though and the NBA probably leaves room for more of that. Also, contracts can be contingent on things like ratings. It’s not always black and white.

But again, all speculation. Don’t know the facts.

actually i remember reading somewhere that the next contract was gonna be even more $$$ even with decreased ratings. Live sports are becoming more and more important for networks that are competing with streaming services.

that's an interesting point. I guess they'll start to care about market share at this point over pure ratings as they are losing it more and more rapidly.

[NZB2323]

I personally think they should just let it ride out, and let the cap drop. Do we really care that owners and players will "lose money"? This is millionaires vs. billionaires. Let the cap go down, but they should keep the lux tax where it is.

As a Bulls fan, I am just bummed (but understand) if we don't see NBA ball again until March or April.

NBA owners care if they lose money, and there’s no guarantee we get NBA ball in March or April. There’s no guarantee we get a 2021 season. Players don’t want to do a bubble and lots of owners can’t afford to pay the salaries with no revenue from ticket sales. COVID-19 spreads worse in the winter and as cases get better we loosen restrictions and then cases get worse.

You've lived through Covid-19 in the winter?

People just should accept that it is not as bad as you have been told.

https://www.google.com/amp/s/www.technologyreview.com/2020/10/08/1009650/winter-will-make-the-pandemic-worse/amp/

There’s lots of things I haven’t lived through, but I can still post about. I post about the NBA even though I’ve never played in the NBA.

Are you an expert in viruses?

[grindtime22]

Here are my predictions for this..

1. The cap will kept at artificially high levels for the next two years. Since arena revenue is 40% of total and players get 50% of that, this will be done by increasing escrow from 10% to 30%. But more than that, to maximize the contract values signed this offseason and next, players will agree to a 35% escrow so that the 2021,2022 cap can be set in line with previous projections of 115 and 125 million respectively. This also allows a large number of teams to avoid paying luxury tax after planning for those numbers. Essentially players will be agreeing to a temporary paycut but trying to maintain longterm contract values..

Based on most of the comments in this thread, I don't think the majority of this thread has any idea what you are talking about


The artificially higher cap doesn't mean the owners take the entire hit people. The agreed upon revenue split still applies from what I understand. They are just going to withhold more salary than they usually do to balance it out in the end. It doesn't matter if the cap is 90 or 109, the total amount given to players will be the same.