Which thing that markdash said do you think he’s not correct about? Because his post reads like a summary of the article you linked–the only difference being that markdash doesn’t see why the NBA should release its full financials publicly, and the author of the article thinks they should. Which is an opinion (in both cases), not a fact, I’d say …
Do you factor team value into your anti player rhetoric? The owner buys a team for 75 million and sells it for 400 mill. Should the players see any of that loot? Forbes List Directory Here is a Forbes rundown for your reading pleasure.
I’m not necessarily anti-player. The problem with factoring in team value to CBA negotiations is there are a number of owners who have purchased recently who would probably have some difficulty selling their teams for a profit. It hasn’t happened yet but it stands to reason that team values can’t outstrip the general economic growth of the sport, and that growth has an upper limit as well. So at some point an owner will only be able to get back what he put in.
Of course players should not get any of that money.
What? The players aren’t asking for any of that money- they’d never, ever get it. Team valuations have gone up a lot because so has revenue as the game has become more popular around the world, and the players have received a share of that in terms of growing contracts, not to mention endorsements. They’re not asking to be part owners of the team. Success does increase the value of a team, but if you’re paying $400 million for a team, the players are a fraction of that.
They players, being employees, shouldn’t receive money if a business is sold if they haven’t received a share of ownership. Neither should they lose money if the team/business is sold at a loss or goes bankrupt.
There was a recent very interesting article by Malcolm Gladwell outlining why the owners’ talk of how much money they’re supposedly losing is nonsense, because they’re not really owning a team to make money on it.
Daniel Snyder may have done a terrible job making his team into a champion, but only the uninformed would accuse him of not doing well with it as a business. They’ve had an operating income around $80 million over the past few years and he only bought the team for $750 million.
Odd that he would choose an NFL team to make his example–the sport where, no matter what ownership does, the team is guaranteed a profit (short of building a solid-gold stadium, I suppose).
Many owners of professional sports teams are not what I would call “exorbitantly wealthy.” Don’t get me wrong, all these guys are rich bastards, but most of them do not have hundreds of millions to burn. They’re not all Paul Allens (who, somewhat ironically, is one of the most hawkish owners in the NBA right now). For many owners, an operating loss of 10 or 20 million dollars a year actually is a big deal.
You make a good point, but the teams losing money would be better off arguing for enhanced revenue sharing than for a greater percentage of revenue (beyond the compromise offered by the union). The real problem, as it is in baseball, is that certain markets are FAR less profitable, and have FAR lower revenue ceiling due to several intrinsic factors.
But honestly, the thing that bothers me about all of these lockouts is that the underlying reality is that the owners recognize they need to be protected from themselves and their bad decisions. Nobody forced the Orlando Magic to give Rashard Lewis $118MM. Gilbert Arenas is scheduled to make nearly $20MM this year. Who exactly thought that would be a good idea? The problem is thinking that someone who signs these contracts shouldn’t suffer the consequences of those actions. What makes anyone think the organization should still be profitable despite these bad decisions and mismanagement? It’s like they want to shitty businessman insurance at the expense of the players.
But it doesn’t matter (too much) if it’s Gilbert Arenas getting $20MM or Arenas, Lewis and Shaq splitting $20MM, the profit for the business doesn’t change. The team does get less revenues if it doesn’t perform well but the portion of the player’s split of the entire earnings doesn’t have to do with poor decisions by GMs.
Sure it does. I am not sure how you figure it doesn’t. The NBA has a soft salary cap that basically means many teams overspend and waste money on no talent bums. If it were just as simple as the players taking a static percentage of revenue, you would be right, but that number often varies a lot as a result of bad contracts and management decisions, and the ever increasing reliance on exceptions to the salary cap to field more competitive teams. Last year, 26 teams ended the season over the cap, while 7 were over the tax threshold.
For example, The max salary in the NBA in 2010-11 was $19,045,250. So how did Kobe make $24.8 million? Mostly because of the byzantine nature of the NBA salary structure, the league max doesn’t apply. Rather, he can sign for his personal max based on his prior salary. I am not saying Kobe doesn’t deserve the pay, just that stuff like this is what is putting many owners in the hole.
Another example of mismanagement was the Darius Miles fiasco.
So Portland messed up and had to put the money they actually spent on the books, thus triggering the luxury tax. So one bad contract not only costs them millions of dollars, but also got them taxed. That’s without even getting into too far the luxury tax, or the fact that the owners agreed to the BRI split in the first place.
Plus, even if the aggregate amount is roughly static, the allocation is not. That is the problem in a nutshell. The NBA as a whole is profitable by most people’s estimation. It’s that a few teams cannot compete that makes for such disparate financial outcomes.
Clearly there are bad contracts given out, but at the end of the day the owners still had to pay the players extra because total salaries didn’t equal 57% of BRI. Couple that with the league’s claim that it lost upwards of $200m last year, and it’s clear that the BRI split is out of whack.
If an owner was giving out dumb contracts left and right, incurring the luxury tax, then complaining about their financial status, I wouldn’t have too much sympathy.
The players get 57% of basketball related income, the contracts only decide how its split. Even with all those horrible contracts given by the owners in the last round of free agency they STILL didn’t reach 57% and had to cut a hefty check to the players association after the season.
But that is what many of them ARE doing. Few people buy the claim that the league as a whole is unprofitable. The problem is the revenue is not spread evenly. The actions of individual owners only exacerbate the problem, and bad contracts are a large part if that. In fact, first and foremost is the bad collective bargaining agreement they signed that gave 56% of BRI to the players.
The problem is that they decided to just take their ball and go home. More importantly, the 57% of BRI is really less than 50% of total revenue, and thus pretty much in line with what other athletes are getting (eg. the NFL).
So it’s not entirely clear why the NBA are losing money whereas the other leagues can survive largely on a similar percentage of revenue.
If few people buy the claim, then why hasn’t the Players’ Association come out and openly disputed the league’s claim that it lost money last year? They have been downplaying the extent of the losses, but I haven’t heard any serious disagreement on this point.
Furthermore, what is or is not included in BRI is kind of irrelevant. Based on what the owners were paying in salaries last year and their gross income, the league lost money. Whether it’s 57% or 49%, it doesn’t matter. What matters to the owners is adjusting that percentage, based on whichever measure you want to use, such that the owners end up with more profit certainty.
But it all comes back to the league posting a loss. If this is the case, and to the best of my knowledge it is, something has to change in order for them to achieve their much-desired profit certainty.
So what do you have to say about the NHL (players get 54-57% of around 2.5B)? The players take in more as a percentage of revenue, and the league brings in less, yet, the teams seem to be profitable now. Why can’t the NBA owners get their acts together?
He is basically saying that the league as a whole is profitable. Otherwise revenue sharing would not address the problem. The reason they don not state this directly is because it’s clear that through accounting, you can make a business appear how ever you would like regardless of reality. More importantly, if there are losses, it’s not due to the nature of running a basketball team, but extrinsic factors like interest rates due to financing a team purchase, building multi-purpose arenas, or things like zambonis.
Well, your first issue is the matter of “profit certainty”. What kind of crap is that? There is should never be profit certainty because that implies that how you actually run your business is secondary importance.
Second, of course the definition of BRI matters because it obscures the fact that NBA players, as a percentage of revenue, are not taking much more than most other professional sports leagues. Therefore the question becomes, why can’t NBA teams make money like the other leagues given that their expenses are of a similar percentage relative to other leagues.