Send in Lawyers, Accountants, and Money

[Q_FBE]

http://blogs.bettor.com/NBA-fails-to-convince-NBAPA-over-incurred-financial-losses-NBA-Labour-Dispute-Update-a81789

It seems that an awful lot of money is disappearing legally under the rules of accounting to show the owners are struggling financially to justify their position to impose salary concessions on the players. I originally sided with the owners on this argument over how to split the NBA BRI. But now, in light of how the rich get richer and the middle class get sucked down the sewer of the rat race to the bottom, I have absolutely no sympathy for the owners and almost want to side with the players in this unfortunate labor dispute. Personally, I almost wish they would take a year off and watch the talent go overseas and have the league contract down to 24 teams. In the end, Bron, Wade, and Bosh would take their requisite 50% paycut to stay together, South Florida gets washed away by a Cat 5 Hurricane and force the franchise to relocate to Cleveland to backfill for the CAVs who got contracted. New Orleans gets wiped out by the same Hurricane and their franchise must relocate to Seattle. Then Chris Paul, Blake Griffen (picked in the contraction lottery when the Clippers folded), Ray Allen, Kevin Garnett, and Glen Davis lead the Seattle Hornets to the 2013 NBA championship 4 games to 3 over the Cleveland Heat.

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed. And David Stern keeps the change. This hole lockout business is thoroughly repulsive.

[hardlyyardley]

Didn't realize Nancy Pelosi was a member of CB

[Roy H.]

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed.

I tend to disagree.  If you believe the NBA, 22 out of 30 teams are losing money; if you trust Forbes, it's 17 out of 30 teams.  Either way, it's not a sustainable economic model.  In an industry that generates billions of dollars of revenue, it's ridiculous that any franchise is losing money, let alone two-thirds of teams. 

[Moranis]

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed.

I tend to disagree.  If you believe the NBA, 22 out of 30 teams are losing money; if you trust Forbes, it's 17 out of 30 teams.  Either way, it's not a sustainable economic model.  In an industry that generates billions of dollars of revenue, it's ridiculous that any franchise is losing money, let alone two-thirds of teams. 

Yeah but according to Forbes the vast majority of the 17 teams are barely losing money, which might mean the answer is simply better management. 

[Roy H.]

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed.

I tend to disagree.  If you believe the NBA, 22 out of 30 teams are losing money; if you trust Forbes, it's 17 out of 30 teams.  Either way, it's not a sustainable economic model.  In an industry that generates billions of dollars of revenue, it's ridiculous that any franchise is losing money, let alone two-thirds of teams.  

Yeah but according to Forbes the vast majority of the 17 teams are barely losing money, which might mean the answer is simply better management.  

I'm not sure that simply asking for better management would solve the league's problems; if it was that possible to find management that could keep your team both competitive and profitable, then it would be happening right now.  That being the case, I think the owners are doing the sensible thing, in attempting to control costs and in trying to put more money in the pockets of league owners.

I mean, in what other business do employees get rich, but owners lose money year after year (even if it's a fairly minor amount of money)?  That's just non-nonsensical, and has to change.

[Fan from VT]

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed.

I tend to disagree.  If you believe the NBA, 22 out of 30 teams are losing money; if you trust Forbes, it's 17 out of 30 teams.  Either way, it's not a sustainable economic model.  In an industry that generates billions of dollars of revenue, it's ridiculous that any franchise is losing money, let alone two-thirds of teams.  

Yeah but according to Forbes the vast majority of the 17 teams are barely losing money, which might mean the answer is simply better management.  

I'm not sure that simply asking for better management would solve the league's problems; if it was that possible to find management that could keep your team both competitive and profitable, then it would be happening right now.  That being the case, I think the owners are doing the sensible thing, in attempting to control costs and in trying to put more money in the pockets of league owners.

I mean, in what other business do employees get rich, but owners lose money year after year (even if it's a fairly minor amount of money)?  That's just non-nonsensical, and has to change.

In what other business do you willingly buy a business that has many antitrust exemptions allowing it to run and are basically guaranteed a profit upon resale, and also try to set up a system that guarantees profit no matter how inept your management is?

[LooseCannon]

Yeah but according to Forbes the vast majority of the 17 teams are barely losing money, which might mean the answer is simply better management. 

Actually, the answer to that is revenue sharing, not better management.

[nickagneta]

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed.

I tend to disagree.  If you believe the NBA, 22 out of 30 teams are losing money; if you trust Forbes, it's 17 out of 30 teams.  Either way, it's not a sustainable economic model.  In an industry that generates billions of dollars of revenue, it's ridiculous that any franchise is losing money, let alone two-thirds of teams. 

Yeah but according to Forbes the vast majority of the 17 teams are barely losing money, which might mean the answer is simply better management. 

Also, if you believe Forbes, and I do, because the vast majority of the teams that are not making money are only losing small amounts, the entire thing can be fixed with aggressive revenue sharing on the part of the owners.

In NO business should you be guaranteed a profit. Period. End of story.

In the entertainment business it is the performers that make guaranteed money and it is the production companies that assume the risk of profit. The NBA is no different.

If the owners want a GUARANTEED profit for every team owner, share revenue. The Lakers and Knicks of the NBA are just going to have to share their massive profits with those of teams not drawing in massive side revenues.

I do think the system needs a bit of an overhaul and there are some things the players need to give back but I believe it to be minor compared to what the real solution is that guarantees the owners the profits they want, and that's revenue sharing.

[Roy H.]

Yeah but according to Forbes the vast majority of the 17 teams are barely losing money, which might mean the answer is simply better management.  

Actually, the answer to that is revenue sharing, not better management.

According to the NBA -- which has released its audited books -- it's losing money even before looking at things like amortization, etc.  However, even putting that aside, by the rosiest estimate (which is not based upon a review of actual financial documents), the league is making, what, $100 million?  Let's put that all into a pot, and divide it equally 30 ways (which will never happen).  That leaves $3.3 million per team.  When operating expenses are often in excess of $100 million, that's not much of a return, and is not the basis of a successful business model.  For being a 1/30th owner in a multi-billion dollar industry, $3 million in profit is chump change.  In what world does it make sense for Mark Cuban or Wyc Grousbeck to earn as much as Brian Scalabrine?

In other words, revenue sharing alone absolutely is not the answer.  Before the owners can split the pot, there needs to be a bigger pot of money for them to share.

[TheReaLPuba]

Seriously, this nothing more than owners trying to browbeat the players into massive Salary cuts, non guarenteed contracts, and poorer benefits for the sake of American Corporate Greed.

I tend to disagree.  If you believe the NBA, 22 out of 30 teams are losing money; if you trust Forbes, it's 17 out of 30 teams.  Either way, it's not a sustainable economic model.  In an industry that generates billions of dollars of revenue, it's ridiculous that any franchise is losing money, let alone two-thirds of teams. 

Roy you're a respected poster and contributor to this board. I respect your thoughts and find you to be fairly intelligent and well spoken.

Now with that said if you believe that a billion dollar business has more than 1/2 of their teams losing money then you're a bit naive.

Back in '98 in the first lockout the Owners were griping about the same things.

They took the players to school in that deal...a deal that the Owners significantly profited from and agreed to themselves.

It doesn't matter what CBA is finally reached.

Mismanagement is going to cripple the next CBA as well.

Greed is greed.

And the owners are going to find a way to make things look bad again.

[Roy H.]

Now with that said if you believe that a billion dollar business has more than 1/2 of their teams losing money then you're a bit naive.

If Forbes concedes that most owners are losing money, and if the independent auditor agreed to by the Player's Association agrees that most owners are losing money, I don't really have a basis to dispute that.  Until I see something credible that suggests that the league is hiding money, I've got to lean toward the non-biased sources that paint a bleaker-than-it-should-be picture.

I mean, when the Player's Association was asked about the league's revenue issues, they didn't point to actual numbers, or mistakes in the auditing, or accounting tricks.  Rather, they said that the league had made inaccurate predictions of revenue in the past.  That's the PA's argument?  Because the league can't predict the future, we shouldn't trust them about the present or the past?  That makes no sense.

Give me something real, and I'll sympathize with the player's situation.  Hard data would be nice, but I'd settle for behavior like that of the NFL owners, where they won't open their books.  The NBA owners, at least publicly, have had nothing to hide.  Until the players show that the NBA is, in fact, acting deviously, then I'm going to assume that the NBA is in a tougher spot than desirable.

[thirstyboots18]

I don't know where to post this question.  It seems to me (back in the day,  ) that the teams got loyalties for products (shoes, sweats, etc.) and then long came Michael Jordan and he refused to wear stuff that didn't have the NIKE logo (for which he got loyalties and the Bulls stop merchandising stuff with his name or likeness on it, saying his likeness and name were his property.  I have no idea if that cost the teams money or if there is some kind of commission split.  But, for example, it was well known that most of the Celtics wore Converse sneakers...I think they were provided by converse, not sure about royalties to the team.   Now practically every big player has his own designer shoe.  Does anyone remember this or did I dream it up?

What do the owners still have control of?  How many businesses are there (outside of sports) where employees can tell the bosses that they want to make equal or more than the bosses or investors and set the terms for the contracts  and conditions under which they will work?

[nickagneta]

  How many businesses are there (outside of sports) where employees can tell the bosses that they want to make equal or more than the bosses or investors and set the terms for the contracts  and conditions under which they will work?

Entertainment

[thirstyboots18]

Even in entertainment, those who don't bring in money don't work.  Movie "stars" are relegated to tv cameos and tv "stars" disappear.  There are a lot of "one hit wonders" in the music business.  Only the consistent proven winners are rewarded to extreme.

OK...so you might say Michael Jordan was worth it.  Trouble is every one is cashing in, not just the top tier.  How about an outside mediator on individual contracts and deals, if one side or the other feels they are getting short changed?

[thirstyboots18]

After I posted about mediation, I realized that it sounded very familiar.  Has it been done before, either in basketball or another sport?