The plight of NBA small market teams

[transplant]

The old CBA had revenue sharing. The new CBA will have to have more revenue sharing. But revenue sharing alone isn't going to solve the problem of 20+ teams losing money each season... and even if it did, if you own the Knicks why should you give all your profits away to the Hornets and T-Wolves? These are still independently-owned franchises.

How about because NYK gets revenues by competing against someone? If they played 42 home games with the Lakers, fans stop going, and that's bad for everyone's bottom line.

Let me set aside the big market teams advantages of more generous TV contracts and superstars who choose to join big market teams for personal reasons. Let me just focus on gate revenues, and inject a few numbers to demonstate the huge advantage big markets have:

Current numbers are hush hush, but in 2008-09, the Lakers were able to clear over $2 mil in net ticket revenue per game, with tickets averaging $126 each. The Minnesota Timberwolves struggle to price tickets at half that, and even then, can't fill their arena. Their revenues per game? $350,000. Their size? Middle of the NBA.

Now when a team is making six times as much every game, this translates into the roster side as well. Nearly any team in the league would have been forced to let Andrew Bynum go when his rookie contract expired, but the Lakers could afford to give him a near-max deal, even when they are over the lux, simply because they can afford to gamble he'll finally be healthy. In other words, the Lakers can have a $15 mil player sitting in the trainer's room, costing them double, and still afford a team on the floor with salary over the lux.

Unfortunately, team success doesn't negate pricing power. The Hornets George Shinn simply couldn't get the limited number of people in New Orleans to buy tickets at higher prices, even when they were successful and had a superstar like Chris Paul. The successful Utah Jazz struggled to break even for years, even when they were selling out nearly every game -- simply because salt Lake City can't support higher ticket prices.

Now, there is probably nothing that the NBA can do about the demographics here. Fans in NYC and LA are going to spend a lot of money and fill stadiums. However, the Bynum dilemma is a real problem if we believe there is value in having a league with longterm competitive parity. Revenue sharing needs to be a part of this solution.

Very good post.

According to Forbes (http://www.forbes.com/lists/2011/32/basketball-valuations-11_rank.html, gate receipts range from the TWolves at $14mil to the Lakers at $96mil. That's huge and though local TV revenue isn't readily available, the relative spread for local TV is probably similar.

Mid-market NBA teams point to the Thunder, which plays in the NBA's second-smallest market (Utah is smallest) yet had gate receipts of $44mil in '09-10 due to its success on the court as evidence that parity is the answer to the NBA's mid-market problem. This is why a hard cap (or harder soft cap) is attractive to mid-market teams.

Clearly, big-market teams are conflicted when it comes to parity. On the plus side, if all mid-market teams could bring in gate receipts like the Thunder has, many of the league's problems would be solved and there would be much less need for big-market teams to subsidize mid-market teams.

[I_Like_Dirt]

Revenue sharing is going to happen. I'm not sure why the angst and advocacy in this forum, as if it was somehow blocking a deal, since both owners and players seem clearly committed to making it a part of the upcoming NBA landscape. What issues we can see, they also can see, and appear resolved to solving.

Revenue sharing is going to happen, but nobody knows exactly how it's going to happen. It's been obvious for the last decade that the NBA needed increased revenue sharing if they actually wanted parity, and yet the league has chosen to take a hard-line stance that they won't deal with revenue sharing until they get the new CBA deal they want. It would set the financial goalposts a lot more firmly when negotiating a new CBA if a revenue sharing deal was already in place prior to negotiations. I don't think the owners are devils out to wreck the world, but it's pretty obvious that at least one of the key reasons they haven't done anything about it prior to the new CBA is because they want to get as much money as possible from the players. This is clearly about money and not so much about parity, and while small market owners might think that parity means money to them, tell that to the Atlanta Hawks - even a hard cap couldn't save them.

Transplant, if mid-market teams brought in gate receipts like the Thunder, then player salaries would increase proportionally with the BRI, the owners of those small market teams would in turn sell them for increased prices to new owners, adn those new owners would begin the whole process over again in 2022.

[shrink]

One reason the Thunder have had good gates is because they are the new thing in town.

Ask New Orleans what happens in five years, even when you're winning and have a legitimate superstar.

[Krapinsky]

One reason the Thunder have had good gates is because they are the new thing in town.

Ask New Orleans what happens in five years, even when you're winning and have a legitimate superstar.

But the Thunder are the only thing in town. New Orleans has a lot more to offer for entertainment dollars.

[shrink]

One reason the Thunder have had good gates is because they are the new thing in town.

Ask New Orleans what happens in five years, even when you're winning and have a legitimate superstar.

But the Thunder are the only thing in town. New Orleans has a lot more to offer for entertainment dollars.

Maybe. Seems to work in Salt Lake City, not so much in Memphis.

I will tell you what I know. Gates are good when a new franchise begins in a town, and they start to dwindle after the novelty wears off. Will this affect OKC? We will see in 5 years or so. But it is certainly one reason OKC is doing well now, and they shouldn't be pointed to as an example of success until we have more data.

[JordanL]

Small market teams should collectively demand equal TV money as large market teams or small market teams should defect from the NBA and start their own league. The new small market league would crush the NBA in no time. The small markets could sell new franchises in the large markets and split the revenues from the sale. Investors would lineup to buy the new franchises. The NBA would never be able to regain their small markets and the lost revenues.

The owners will completely alienate the players before it even occurs to them to break ranks in such a way.

But yes, that would be the nuclear option of "fixing" the NBA from the owner's perspective.

[Warspite]

One reason the Thunder have had good gates is because they are the new thing in town.

Ask New Orleans what happens in five years, even when you're winning and have a legitimate superstar.

But the Thunder are the only thing in town. New Orleans has a lot more to offer for entertainment dollars.

Maybe. Seems to work in Salt Lake City, not so much in Memphis.

I will tell you what I know. Gates are good when a new franchise begins in a town, and they start to dwindle after the novelty wears off. Will this affect OKC? We will see in 5 years or so. But it is certainly one reason OKC is doing well now, and they shouldn't be pointed to as an example of success until we have more data.

OKC is a very wealthy city. Its one of the worlds centers for petroleum production. Dont let the cowboy boots and pick up trucks fool you. High School kids instead of flipping burgers for min wage get to work in the fields and make more money in a summer than there teachers make in a yr.

[HartfordWhalers]

OKC is a very wealthy city. Its one of the worlds centers for petroleum production. Dont let the cowboy boots and pick up trucks fool you. High School kids instead of flipping burgers for min wage get to work in the fields and make more money in a summer than there teachers make in a yr.

OKC proper itself had a Median family income of 42k, with 13.4% of families in poverty out of 530k population. Which puts it ~20% below the median US income, and ~35% above the poverty rate. And it looks worse when looking at the more general MSA:

OKC MSA: 1,083,346pop $36,797 median family income

In contrast with other NBA markets:

Salt Lake City MSA: 1,333,914pop $48,594 median family income
Charlotte–Gastonia–Rock Hill, NC–SC MSA 1,499,293pop $46,119 median income
Memphis MSA: 1,135,614pop $40,201 median family income
Milwaukee Racine CMSA: 1,689,572pop $46,132 median family income
New Orleans MSA: 1,337,726pop $35,317 median family income
Phoenix MSA: 3,251,876pop $44,752 median income
Sacramento-Yulu CMSA: 1,796,857pop $46,106 median income

OKC is the bottom of the income spectrum for an nba team market (along with New Orleans), and bottom of population spectrum. I think the long term gate there would show different trends then we see now, when they have a new team and arguably the most promising (maybe non-heat) future in the league. That team is easily top 3 on my list of opposing teams to see each year, and apparently I'm not far off from the casual fan as the team was 6th inroad attendance last season, behind only the star teams of the Heat, Lakers, Celtics, Bulls, and Knicks.


The reason there is a team there is there was a wealthy owner from there, not because the market jumped out as a logical NBA market.

And just for contrast, I think the demographics are considerably more favorable in all of the following potential nba markets that have been rumored at one point or another:

Vegas CSA: 1,563,282pop $42,468 median income
Seattle: 3,554,760 pop $50,733 median income
St Louis: 2,603,607 pop $44,437 median income
Kansas City: 1,776,062 $46,193 median income

[DBoys]

Easy solution. No caps, no drafts. Two team league, LA vs NY. Fold the rest of the teams, and fire the rest of the players. Agreed?

[HartfordWhalers]

Easy solution. No caps, no drafts. Two team league, LA vs NY. Fold the rest of the teams, and fire the rest of the players. Agreed?

Sweet, the discussion just got serious.

[scoutshonor]

There are too many teams in small markets in the NBA. Five of the 20 largest metropolitan areas in the U.S. have no NBA team but 4 teams are in metropolitan areas outside the top 40.

A lot of posters on realgm want the NFL system because they think it has created parity in the NFL to a greater extent than the NBA. I think it is just the shorter schedule, superstar factor, and single elimination tournament that create the perception of more parity in the NFL. I also think the NFL system is popular with fans because of jealousy a lot of fans have for players. Many people resent star athletes who make millions and still try to control their career. I call these people the STFU and play crowd.

I don’t like the NFL system.

Unguaranteed contracts are unfair because teams can choose to not to honor a contract if they feel the player isn’t performing, but players can’t walk away from the contract if they feel they have over-performed.

The hard cap forces teams to break up their cores in the NFL. This could be devastating in the NBA due to its smaller rosters.

A franchise tag to me is inherently unfair because it treats the player as the property of the team they play for. In the NBA, it would be used to stop superstars from ever reaching free agency. Cleveland would have tagged him forever. I don’t like the idea of superstars being shipwrecked on a team they don’t want to play for.

Under the current rules teams can keep the player they drafted for seven to eight years before they reach free agency. It is very hard for me to accept the idea that a player can’t become an unrestricted free agents after that long of a period of service. Finally, I don’t think the franchise tag can work in the NBA effectively. Basketball players have a lot more power over if their team wins or loses than football players. Hold outs in football are generally annoyances. Hold outs in basketball would be devastating.

Finally, I don’t like the NFL system because it’s goal seems to be to punish well run organizations and reward poorly run ones.

My idea to address superstar movement by thinking of ways to make players want to play in the city that drafted them. I think the simplest thing to do for the NBA would be to get rid of maximum salaries while keeping the soft cap and Bird rights. Under this scenario, Cleveland would have offered Lebron 40 million to stay in Cleveland giving them a huge advantage in free agency that no other team has. Most players under these rules will choose to re-up with the team that signed them. I don’t think anyone should complain about the players who did leave under these rules.

Next is my radical idea. The NBA has too many teams in smaller markets. The NBA myopically moved to smaller cities because they could force those towns to build them stadiums. This is good in the short run but bad for long-term popularity of the league. Metropolitan Seattle is larger and richer than Oklahoma City. It hurts the league to be in these smaller cities.

It also creates major problems with regards to the players. NBA players are extremely talented individuals. Literally they are in the 99.999 percentile of ability in their field. Individuals who are still talented and valuable generally will be able to get what they want. Smaller cities aren’t as attractive to players who would prefer to play in larger markets.

One way to make it more likely that players stay on their home team is to have more large market clubs and less small market clubs. This would never happen but IMO would be better for the league. I found it a fun exercise to realign the league.

Atlantic Division
1. Boston Celtics (4.6 million people)
2. New York Knicks (19 million people)
3. Brooklyn Nets (19 million people)
4. Toronto Raptors (4.6 million people)
5. Montreal Hornets (3.4 million people)

Central Division
1. Chicago Bulls (9.5 million people)
2. Chicago Jazz (9.5 million people)
3. Philadelphia 76ers (5.9 million people)
4. Washington Wizards (5.5 million people)
5. Detroit Pistons (4.4 million people)

SouthEast Division
1. Miami Heat (5.5 million people)
2. Orlando Magic (2 million people)
3. Tampa Bay Cavaliers (2.7 million people)
4. Atlanta Hawks (5.4 million people)
5. Charlotte Bobcats (1.7 million people)

Spreadout Division
1. Vancouver Pacers (2.1 million people)
2. Seattle Supersonics (3.4 million people)
3. Portland Trail Blazers (2.2 million people)
4. Denver Nuggets (2.5 million people)
5. Minn. Timberwolves (3.2 million people)

California Division
1. Los Angeles Lakers (12.8 million people)
2. San Francisco Grizzlies (4.3 million people)
3. Golden State Warriors (4.3 million people)
4. San Diego Kings (3 million people)
5. Los Angeles Clippers 2.0 (12.8 million people) Stearling sells team

SouthWest Division
1. Dallas Mavericks (6.4 million people)
2. Houston Rockets (5.8 million people)
3. Phoenix Suns (4.3 million people)
4. San Antonio Spurs (2.0 million people)
5. St. Louis Bucks (2.8 million people)

The players would love this. A far higher percentage of clubs are now in larger cities and the most popular areas of the country to live are significantly more represented. Southern California, NYC, Chicago, and the Bay Area now have 9 ball clubs instead of 5. I’m not worried about the market saturation issue. A lot of people think that because of the Clippers two teams in one city won’t work. I think the failure of the clippers is solely due to bad management. Baseball shows you can have two teams in one city and have both be successful.

The realignment I’ve proposed also improves the size and quality of the mid-market clubs. I have dramatically reduced the number of cities in the NBA that would be unappealing to NBA players. Vancouver and Montreal are admittedly stretches but I still believe you can make those cities appealing to NBA players once they actually go there. As a result of this realignment, most players will get drafted into the types of larger cities that are appealing to players. My hope is that players would only leave if management stinks which is fine to me. Poorly run teams should lose their superstars.

I think this would be a good deal overall for fans, but I’ll acknowledge it stinks for the cities the NBA would be leaving. Simply put more people would have access to NBA games live.

The league benefits in a lot of ways. The TV deal is better because there are less small markets. I’ve also created more natural rivals. Chicago and NYC would now have true cross city rivalries and so would LA as Stearling no longer owns the team. The Raptors now have a natural rival in the Montreal Hornets. The pacific northwest rivalry is renewed and the California division would have cool state bragging rights.

I tried to accomplish the goal of discouraging superstar movement by making players actually happy to play for the club they got drafted by rather than trying to figure out ways to force unhappy employees to work. Those players that did move probably had good reason to do so.

You are essentially a "champion of the little guy" if you want to call millionaire basketball players little guys. You also seem to completely disregard the fact the owners "own" the NBA. Its their business, their toy. And they collectively but not in complete unity have decided to take back some control of their league and want to make it easier for smaller market teams to show a profit. If the owners were incomplete unity to take back 100% of their league in order to show more profits and have a better product and create a better sense of parity and get everyone under contract to play with a sense of urgency and listen to their coaches...even on a 20-62 team, the owners would set it up something like this:

1. SET Salary slots!! with a soft cap and a devastating luxury tax just above the soft cap. Set the soft cap up where its at now...around 55 million.

Stiff lux tax at $3 to $1 starting at 65 million. then hits 4-1 after 75 million

salary slots would be
1 player at 15 million (or less but more than 10 million specifically assigned to this slot)
1 player at 10 million (or less but more the 7 million specifically designed to this slot)
1 at 7 (same as above)
1 at 5
1 at 3
1 at 2
4 at 1
5 at a new vet min of 750,000 and a new player min at 250,000

This is 15 players to get to approximately 50 million...a starting point...soft cap is at 55 million...minimum cap is 50 million.

4 rounds of NBA draft where the league could stock pile 18-20 year olds overseas, not pay them, but have them be in a minor league and be tradeable commodities.

** if a free agent wanted to change teams he would have to take a 30% hit on this salary slot system..eg for Miami this past year. a 15 million dollar player like Lebron would have to sign in the 10 million dollar slot assuming Wade was in the 15...then Bosh in the 7 million.

** all contracts non guaranteed...any waived player can NOT resign with another team for more than half of his current salary for 3 years!!
this will make players listen to their coaches and do what is asked. anyone faking an injury or dogging it or becoming a distraction take a huge hit financially.


**max 4 years with own team, 3 years with new team.

**own team can give 5% raises annually, new team only 1%

**rookie scale as it is now but starts around 2 million for #1 overall and quickly dwindles to 500,000 by the end of the first round.

***completely remove sign and trade clause.

*** The most important thing to do is to remove the matching of salaries when trading players...

this is the biggest hurdle in allowing good team become great teams by adding that one key piece and rebuilding teams can not trade their over paid talent with 2-3 years left at 10 million plus and pick up cheap young players...so a team like Miami, LA, Dallas, NY could still "trade for" multiple $15 million dollar slot players...or 10 million slot, 7 million slot etc...but they would face a harsh lux tax after being over 65 million. But any rich owner that likes to lose money with his toy can do so and any wealthy team like NY, LA, Chicago (frugal owners would not do it) could do so as well for a season or 2 while chasing a ring.

4 rounds of NBA draft allows teams to stockpile euro, south american, and chinese talent to make these trades possible...player like Rip and prince this past year could have been dealt for guy over seas...it would allow detroit to rebuild faster...lower their payroll...and a team like chicago to pick up a SG for a year or 2 and Miami could have gone after a Brad Miller. dallas Tayshawn Prince. All 3 teams would get killed by the lux tax but the interest in the NBA would increase dramatically...houston and detroit would be "rebuilding faster" which would keep their fans more entertained. and the lux tax monney would be a much better revenue sharing system where the bottom dweller teams could still exist, keep their pay roll below 55 million and then share the lux tax money only the teams under 55 million.

In a system like this...the owners and GM would take back nearly 95% of the control of their league...

it keeps the top talent in the NBA cuz NBA would still end up with guys making 20 million plus in their 8-12 years (if they stay with their original team).

it makes players hustle more and listen to their coaching staff via non guaranteed. it makes guys waive( able) purely for salary reasons to allow teams to stay under the cap..or if a player acts like a clown and shoots someone...waive him!

It makes every single year more interesting...in any year a roster could completely change shape and form..a team stacked with wings could more easily trade for back court help if it needed it etc.

The players % of BRI would still be at or near 48-51% if the owners allowed them to be...I dont see that as the problem...the real problem the NBA faces is apathy in town like Detroit and Sacramento in rebuilding years which take far too long especially if a front office mis-steps with one bad contract. Give those fans hope! Allow front offices the freedom to get more done...many fans the realgm crowd enjoy fornt office activity almost as much as what the actual team does on the court...anything to discuss or create a buzz will put more fans in front of the TV or warm butts in the seats.

A salary slotted structure is the way...it also eliminates player collusion...picking their own teams to play for as their is 1 alpha slot, 1 sidekick slot, 1 good player but after thought slot...teams wont be able to out bid in free agency because too much is in place to really change teams that way...Front office will be forced to trade for guys and will have to give up something "good" to get something good.

Also players like Lebron likely be happier in their hometown because the front office will be able to waive a Larry hughes early on after they see he was a bad fit and go get another player to surround lebron. Now if a Lebron still wanted to change teams to be in Miami...no biggy...here is your 7 million dollar salary slot waiting for you right there...20 million in cleveland or 7 million in Miami?...lets see how bad you really want it. the heart wants what it wants. Right now that choice is around 20 million per year or 17 million per year...just not enough to help a team keeps it palyers.

[Warspite]

OKC is a very wealthy city. Its one of the worlds centers for petroleum production. Dont let the cowboy boots and pick up trucks fool you. High School kids instead of flipping burgers for min wage get to work in the fields and make more money in a summer than there teachers make in a yr.

OKC proper itself had a Median family income of 42k, with 13.4% of families in poverty out of 530k population. Which puts it ~20% below the median US income, and ~35% above the poverty rate. And it looks worse when looking at the more general MSA:

OKC MSA: 1,083,346pop $36,797 median family income

In contrast with other NBA markets:

Salt Lake City MSA: 1,333,914pop $48,594 median family income
Charlotte–Gastonia–Rock Hill, NC–SC MSA 1,499,293pop $46,119 median income
Memphis MSA: 1,135,614pop $40,201 median family income
Milwaukee Racine CMSA: 1,689,572pop $46,132 median family income
New Orleans MSA: 1,337,726pop $35,317 median family income
Phoenix MSA: 3,251,876pop $44,752 median income
Sacramento-Yulu CMSA: 1,796,857pop $46,106 median income

OKC is the bottom of the income spectrum for an nba team market (along with New Orleans), and bottom of population spectrum. I think the long term gate there would show different trends then we see now, when they have a new team and arguably the most promising (maybe non-heat) future in the league. That team is easily top 3 on my list of opposing teams to see each year, and apparently I'm not far off from the casual fan as the team was 6th inroad attendance last season, behind only the star teams of the Heat, Lakers, Celtics, Bulls, and Knicks.


The reason there is a team there is there was a wealthy owner from there, not because the market jumped out as a logical NBA market.

And just for contrast, I think the demographics are considerably more favorable in all of the following potential nba markets that have been rumored at one point or another:

Vegas CSA: 1,563,282pop $42,468 median income
Seattle: 3,554,760 pop $50,733 median income
St Louis: 2,603,607 pop $44,437 median income
Kansas City: 1,776,062 $46,193 median income

Median realy has no bearing here. You wouldnt look at those stats to determine if your building a new country club or not. It doesnt matter what the avg joe makes. What your looking for is the size of your professional and mgmt population. Furthermore your forgeting cost of living. What costs you $1000 in Seattle might only be a few hundred in OKC.

I have been to OKC a few times. A person making 100K in OKC for the most part lives like a millionare in many other NBA cities. I recall buying a new set of tires for $80 in OKC when they cost almost double in Chicago. Same tire, same store.

[HartfordWhalers]

OKC is a very wealthy city. Its one of the worlds centers for petroleum production. Dont let the cowboy boots and pick up trucks fool you. High School kids instead of flipping burgers for min wage get to work in the fields and make more money in a summer than there teachers make in a yr.

OKC proper itself had a Median family income of 42k, with 13.4% of families in poverty out of 530k population. Which puts it ~20% below the median US income, and ~35% above the poverty rate. And it looks worse when looking at the more general MSA:

OKC MSA: 1,083,346pop $36,797 median family income

In contrast with other NBA markets:

Salt Lake City MSA: 1,333,914pop $48,594 median family income
Charlotte–Gastonia–Rock Hill, NC–SC MSA 1,499,293pop $46,119 median income
Memphis MSA: 1,135,614pop $40,201 median family income
Milwaukee Racine CMSA: 1,689,572pop $46,132 median family income
New Orleans MSA: 1,337,726pop $35,317 median family income
Phoenix MSA: 3,251,876pop $44,752 median income
Sacramento-Yulu CMSA: 1,796,857pop $46,106 median income

OKC is the bottom of the income spectrum for an nba team market (along with New Orleans), and bottom of population spectrum. I think the long term gate there would show different trends then we see now, when they have a new team and arguably the most promising (maybe non-heat) future in the league. That team is easily top 3 on my list of opposing teams to see each year, and apparently I'm not far off from the casual fan as the team was 6th inroad attendance last season, behind only the star teams of the Heat, Lakers, Celtics, Bulls, and Knicks.


The reason there is a team there is there was a wealthy owner from there, not because the market jumped out as a logical NBA market.

And just for contrast, I think the demographics are considerably more favorable in all of the following potential nba markets that have been rumored at one point or another:

Vegas CSA: 1,563,282pop $42,468 median income
Seattle: 3,554,760 pop $50,733 median income
St Louis: 2,603,607 pop $44,437 median income
Kansas City: 1,776,062 $46,193 median income

Median realy has no bearing here. You wouldnt look at those stats to determine if your building a new country club or not. It doesnt matter what the avg joe makes. What your looking for is the size of your professional and mgmt population. Furthermore your forgeting cost of living. What costs you $1000 in Seattle might only be a few hundred in OKC.

I have been to OKC a few times. A person making 100K in OKC for the most part lives like a millionare in many other NBA cities. I recall buying a new set of tires for $80 in OKC when they cost almost double in Chicago. Same tire, same store.

Adding COL to the debate strikes me as a big Huh at best. The tires may be cheaper there, but that doesn't mean that the team can make more money. In fact, when a huge proportion of expenses are tied to out of region expenses, it is terrible. The cheap tire store must spend enough advertising to make up for the players staying in expense out of town hotels, etc.

As for the applicability of the median. It might not be the best, but it certainly paints the picture that your description of OKC is far off. Thus the lower COL. An NBA team isn't a country club with a few hundred people; it has a stadium with 18k in seats that need filling. A low median income and a low population are not good; no two ways about it.

Even with the rich tail of the population isn't extraordinary in any way. In fact, it is below average. Top 20% households in the US are above 100k income. OKC has 13% above 100k. While you might have had a great time there, your description of the area doesn't match its stats. Right now the team is one of the most exciting in the nba, and it should draw well. I'm going to be very upset when the lockout cancels my chance to see them. But it is a bottom 3 markets for an nba team, by population, wealth, etc, with two of the teams biggest sponsors the teams owners' company.

[Warspite]

Just a few points

1. NBA arena income is 70/30 What that means is that 30% of the fans spend 70% of the money and 70% of the fans spend 30%. The upper deck avg joe fan for the most part brings in almost nothing to the team. Its the lower bowl country club members and the box seeating country club owners that generate the money for a team. The upper bowl stores have 30% more customers and do about 25% of the total business. At least thats how it works in phx. When I look at the crowd of a suns game the avg fan is about 60yrs old and they drive a european sedan.


2. OKC is dependant on oil so as the oil market goes so does OKC. When the prices fall or govt regulation stranggles the economy looks weak. When oil prices boom its a much differant place with much more disposable income. The Thunder also have the adv of being the only game in town and they have alot less to compete against than many other cities.

3. I still contend that as a NBA owner you care about
A. Local companies to buy adds/suites
B. Professionals to buy lower lvl seats
C. local TV market size


You could care less about the median income person and wiether they will attend a game or 2 ina given season. Its just not important. Teams realy dont care about upper deck fans because they are not $$$$ makers.

I do agree that OKC is not as well off as other NBA cities but its not a dump and its a viable market. Certainly OKC has as much or more entertainment dollars for basketball than metro Detroit which also has 3 other major league teams to divide the $$$

[Twinkie defense]

OKC has the primary advantage of getting super lucky and landing Kevin Durant - I don't think it has much to do at all with the city itself or how sharp their management may be.

I don't know why the players need to insist on getting the details of revenue sharing worked out in advance - there will be revenue sharing, but no amount of revenue sharing can make up a $300 mil League-wide loss. That would need to be made up by reducing the percentage of BRI allocated to players (the easiest way) or by reducing other costs (e.g., free arenas) and/or increasing revenues (e.g., better TV deals, higher attendance, greater luxury box sales).

[HartfordWhalers]

Just a few points

1. NBA arena income is 70/30 What that means is that 30% of the fans spend 70% of the money and 70% of the fans spend 30%. The upper deck avg joe fan for the most part brings in almost nothing to the team. Its the lower bowl country club members and the box seeating country club owners that generate the money for a team. The upper bowl stores have 30% more customers and do about 25% of the total business. At least thats how it works in phx. When I look at the crowd of a suns game the avg fan is about 60yrs old and they drive a european sedan.


2. OKC is dependant on oil so as the oil market goes so does OKC. When the prices fall or govt regulation stranggles the economy looks weak. When oil prices boom its a much differant place with much more disposable income. The Thunder also have the adv of being the only game in town and they have alot less to compete against than many other cities.

3. I still contend that as a NBA owner you care about
A. Local companies to buy adds/suites
B. Professionals to buy lower lvl seats
C. local TV market size


You could care less about the median income person and wiether they will attend a game or 2 ina given season. Its just not important. Teams realy dont care about upper deck fans because they are not $$$$ makers.

I do agree that OKC is not as well off as other NBA cities but its not a dump and its a viable market. Certainly OKC has as much or more entertainment dollars for basketball than metro Detroit which also has 3 other major league teams to divide the $$$

Again, there is considerably less of that top 30% in OKC then elsewhere, and that top 30% has less in OKC then elsewhere, on average. The Detroit MSA has 5.5 million people. Which is about 4.5 million more then OKC's MSA. I think you will find considerably more people that can spend money and be in that profit driving demographic there, even if they choose to live outside the city proper (for whatever crazy reason).

Being a single pro team I think certainly helps, and right now OKC looks like a great market with the support they are giving that team, but it is bottom of the spectrum for NBA markets in most measures and the team owners' other companies are their own biggest sponsors. If the league were picking where to put an expansion franchise, I think there are at least 5 if not 10 cities that would be more compelling.

That said, it isn't an out of the question place for a team. And having owners willing to believe, and spend, is probably better then the difference in market demographics, so OKC is a great market.

[I_Like_Dirt]

Easy solution. No caps, no drafts. Two team league, LA vs NY. Fold the rest of the teams, and fire the rest of the players. Agreed?

Even simpler solution. Move the teams in worse markets to LA and New York. Take Charlotte and Indiana to LA and New Orleans and Sacramento to New York along with the Nets. You can probably send another team to Chicago as well, and maybe even Toronto, although that starts getting more borderline and moving a franchise to Vancouver might make more sense. Those markets can easily support other franchises without breaking a sweat. Of course, it comes at the potential profits of the owners of the Lakers and Knicks, but hey, no revenue sharing, then you don't get to protect your markets in quite the same way you otherwise would.

[Warspite]

Easy solution. No caps, no drafts. Two team league, LA vs NY. Fold the rest of the teams, and fire the rest of the players. Agreed?

Even simpler solution. Move the teams in worse markets to LA and New York. Take Charlotte and Indiana to LA and New Orleans and Sacramento to New York along with the Nets. You can probably send another team to Chicago as well, and maybe even Toronto, although that starts getting more borderline and moving a franchise to Vancouver might make more sense. Those markets can easily support other franchises without breaking a sweat. Of course, it comes at the potential profits of the owners of the Lakers and Knicks, but hey, no revenue sharing, then you don't get to protect your markets in quite the same way you otherwise would.

Back in the 60s every team played about 6 home games in Madison Square Garden. You want to go back to double headers with 4 teams playing in MSG every Friday night? Im just not interested in watching the Pistons vs Hornets in New York.

[I_Like_Dirt]

Who's saying I want to go back to that. I'm saying that there is a certain level of responsibility that needs to be shouldered by the owners in this situation. They've moved teams to worse markets from better ones. The okay-ed the sale of teams to questionable ownership groups in questionable markets. They've okay-ed the say of teams to ownership groups who buy the team on signficant amounts of credit who can't actually pay for things in the normal ebb-and-flow from season to season if they hit a down-turn. They've got other revenue streams not counted towards BRI that exist entirely because of their NBA team, and they have a certain amount of questionable expenses lumped into their $300 million loss figure, and even they tacitly admit it through their actions in the fact that what little they've given in negotiations suggests they're willing to accept an amount of money for the players that would result, by their own figures, in the average team not making any money, which I just can't see them agreeing to if they were actually as poor as they are trying to make themselves out to be.

In the end, I'm for bit bigger of a speard of teams from market to market, however I do think there should be some ownership responsibility on how that is put into practice. They're the owners after all, and if they can't accept lower profits or even losses for one season if they don't make the smartest business decisions, then they're basically asking for protection from themselves in the already controlled but supposedly free market. What risks are they exactly assuming as owners in these circumstances?

The league is dieing for increased controls of various ownership. They need to police themselves quite a bit better. Enough of Her Kohl taking out money under the name of the Bucks and transferring it to his own private investment fund. Enough bailing out owners like George Shinn and allowing him to move the team when he clearly isn't doing the league any good and then buying his teamand bailing him out after the damange is done.

Also, why should owners agree to revenue sharing? Because if they aren't competing against each other (they aren't), then there should be any protection of territory, at least not to the extent that there is. If it's good for the league that there's a team in Wisconsin rather than another team in New York, fine, but then do something to level the playing field so that the New York team can't crush the Milwaukee team in terms of revenues. Make no mistake, it's the profits of the big teams that are the problem for competitive balance. Take away their ability to spend it on players and They'll start buying all the best coahces, scouts, etc - the transition has already begun, by the way - and other teams will be sold for big profits once that tax writeoff is due and the new owner of the small market team will be in exactly the same situatino the current NBA is, crying poor after they paid hundres of millions for an NBA franchise.

[HartfordWhalers]

FWIW on city income and nba team locations:
http://wagesofwins.net/2011/10/31/could ... good-home/