OK revenue has stayed flat since they moved and total value increased by 30% since they moved. Far cry from Rockets impact from 2002-2008. I am not saying the stadium did not help, but I am not denying the overall effect Yao has had for the organization in terms of business. Rockets do benefit from Yao, just look at the statistics from 2002-2008. Why wouldn't the Nets want to move to NY Brooklyn.......The knicks are such a crappy team they are worth $600+ million dollars, 100% more value than the Nets. I would move too. Many teams between 2002-2008 do not see 100% revenue growth. I highly doubt that was all stadium related. Go through Forbes list. Only 1 other team has....take a guess...King James.
What i'm saying is its kinda like a perfect storm of such. I'm not denying yao had a impact, i'm just saying if the rockets were still in the small compaq center, they wouldn't have the revenue they generate now. If the rockets got all the international money, they would be so far ahead of people it wouldn't be funny, but they don't. The lakers and bulls and teams like that can charge more money for radio and tv than the rockets can because they reach many more people in their radius. The knicks and msg have over 400 lux suites alone and a courtside ticket is 18k per game vs whatever the rockets charge. The more people you can touch inside your radius has alot to do with the revenue you can generate.
I am not saying you are wrong. But the numbers don't lie from Forbes from 2002-2008 Rockets revenue and value grew almost 100%. It doesn't really matter. What matters is, from 2002-2008 this team is worth more. Some say its China effect, others say its stadium. Either way its pretty good for 1 2nd round appearance.
The tc opened in 03 and i'm not diputing what you're saying. The playoff appearences doesn't matter when it comes to generating income really. You can say the extra dates and that fine, but if you have a old, outdated small stadium and go to the finals, it doesn't matter. Its about reach.
Are you serious? First of, "overpaying" someone is always detrimental to the team. ALWAYS. That's why it's called "overpaying", someone is not worth the money you spent on him, and that money could have gone to other players, a better coach, more scouts, better health dudes etc. Secondly, just because Les is making money off of Yao doesn't mean he will pay the Lux tax. There is no relationship between paying the lux tax and the revenue he's making off Yao. Les has been making money off Yao for several years now, and IIRC the rox have always been under the lux tax. Les has repeatedly stated he'll only pay the tax if we're near the edge and a certain player is guaranteed to push us over the top. Well then, its kinda' hard to get to the edge if your most expensive player is always injured. This leads into my final point, people have legitimate cause for concern regarding the cap because if we tie up our cap with Yao and he injures himself again, what then? Its not a question whether Yao Ming is a good player or not, its a question of Yao being healthy to make a difference. We're lucky we have such a good GM in DM, but he wouldn't have to scrounge the bargain bins in the first place if we didn't sink our cap in Yao and Tmac in the first place. Yao Ming should not get more than 10-12 mill a year IMHO. Paying him more than that is ridiculous in light of his performance the past few years. Back on topic, I agree with Durvasa, its not loyalty but common sense. Why would a guy with a broken foot turn down a max contract? I doubt anyone will pay him the max if he opts out. His popularity in China is useless you're like Les who already has a lot of investments in China. You'd probably get a spike in jersey sales since he switched teams, but I doubt you'd earn after once he shuts down again.
But they might pay him for 5 to 6 years. I still don't see why people think our 1yr/$18 mil deal is so awesome. NFL stars routinely get pissed at their teams for franchising them rather than giving them a long term deal. And baseball players generally prefer multi-year contracts over the more profitable arbitration payday. Huh? Why does it take investments in China to profit off of Yao? The team Yao plays for gets its NBA games on national and local TV stations all over China. At the very least, courtside advertising is going to get a huge boost. And if the market is favorable enough(NY, LA, San Fran, etc.), the local Chinese community could also factor into the equation.
Leeb I'm with you on this one. People need to realize that the Rockets is a corporation with its own identity that's different from Les Alexander. Les Alexander got access to the Chinese market due to having Yao. He got preferential treatment and managed to get some business deals there. buts that Les the business man, and not the Houston Rockets. I doubt the Rockets organization itself gets that much from Yao Ming. The Rox get most of their income from ticket sales, food and stuff, and that has very little to do with people living in China. People talk about Chinese endorsements and whatnot, but remember Yi is also with the Nets. How come that club is hemorhagging money then, if Yi has the backing of the Chinese nation?
Um...what? Are you serious? Let's break Yao's choices down in a very logical, absolutely no feelings light: Choice A: Get 18 million now, may get paid for 5-6 years an unknown amount after one year later Choice B: may get paid for 5-6 years an unknown amount after one year now Do you see the difference between the two choices? Why would Yao (or any sane person) turn down guaranteed money now for a chance at a 5-6 year contract when he'll get that same chance one year later? There is literally no "downside" to this decision which is why implying its done due to loyalty is ridiculous. If Yao Ming wants to show his loyalty, he'd opt out so we can sign him to a lower amount and get more money for free agency next year. He's not playing this year anyway, he owes the organization for missing games the last 4 years or so Why will the Rockets get all the income from China? Are all Chinese watching the Rockets, and the Rockets only? What about the teams the Rockets are playing against? Don't they get a participation fee for being in the same game? My guess is the nba licensing rights belong to the entire league. Its probably pulled into a huge "pot" and then distributed evenly. In this case everyone (i.e. the entire league as Leeb mentioned) is earning from Yao Ming. As long as he is in the league the Rox will benefit whether he is on the team or not. As for the courtside advertising, being foreigner I'm not familiar with the local market however from all accounts the Rockets have always been popular (i.e. sellouts everywhere). Considering Yao Ming is not playing this year and its still sellouts everytime it stands to reason that the team would still sellout even if Yao Ming were not on the team. Again this points to Leeb's bigger arena theory...since the team sells out everytime when they moved to a bigger arena which had a bigger capacity they made more money.
roslolian, you make some very good points. You're right, there's no guarantee that Les would DEFINITELY pay the luxury tax if he had Yao vs. not having him. But then you go on to state that Yao should not make more than $10-12M per season. Well, the max is going to be around $18M per. That's a $6-8M per season difference. You're telling me that Yao's presence within the organization doesn't result in a marginal increase in annual revenue of at least 2 or 3 times that amount? Or are you factoring all of the revenue increases into your "$10-12M" figure, and if he were not a Chinese megastar you would only pay him $3-4M per season? Either way, I think you either vastly discounting his value as a revenue generator or as a player. And, again, we're likely arguing purely over dollars here, not cap room. The Rockets will not likely be able to add another star in 2011, even if Yao takes a substantial paycut that summer. Scola will presumably be re-signed to a larger deal. Same with Lowry. While Aaron Brooks's (~$4.2M) and Carl Landry's ($4.5M) cap holds will be fairly manageable, those guys will be in line for big deals. Add to that whichever player(s) Morey adds this summer with the MLE/cap room, and we're not talking about a ton of money being available to any big-time players, other than Yao Ming. So, if Yao Ming is (a) the only high quality player available to the Rockets in 2011 from a salary cap standpoint and (b) a major revenue generator, then it will not make a major difference to pay him $18M per instead of $12M per. Of course, the LENGTH of that deal may be a bigger subject of discussion between Morey and Yao's representatives.
Bima, you're pretty good at stuff like this and I understand what you're saying about not being able to sign a max player even with a yao reducing his salary. The other side of it is having the ability to avoid the lux tax and have that flexibility which is just as imporatant. I mean shaq went from being grandfathered in at 30m down do 20m and his on court impact is far greater than what yao has ever accomplished. If we just look at a few things and I'm saying I'm right, i'm just using numbers afor arguments sake. I don't think the team will be able to retain scola and landry. I think one will vet his salary doubled and the other will be traded. I think this is the last yr in a rox uni I think someone will offer him close enough to the mle and the rockets will let him walk. I think brooks is going to get a contract starting at 6.5m or so. So let me start the breakdown of the money assuming yao resigns for 12m per and the cap is at 54m and the lux tax is at 66m. Yao-12m Brooks-6.5 scola/landry-6m ariza-6m chase-1m taylor-1m Now I'm talking at the end of the 2010-2011 season. Even if they somehow resign tracy for 9m or so which is his value right now, the team would still have flexibility to add another player. The sheer fact that tracy and yao are eating up 40m and maybe can be reduced to almost half even some other player increases makes sense.
Are you saying Yao may not get a 5-6 year deal right now at $12+ mil? Are you serious? You may think Yao's worthless all you want from a business perspective. But are you KIDDING ME? The Dalemberts, Biedrins, and Dampiers, and Brands of the world can get that kind of money, Yao somehow may not get it!? Which all-star center in the history of the NBA didn't get near max regardless of health? I set the bar at $12 mil as a very low, conservative estimate. It's probably higher than that. And if Yao were to go to the right place(say Knicks with Lebron), then Yao would make a lot more money just from endorsements to make up for any salary deficit. Courtside advertising is for TV viewers. I'm not sure what this whole sellout thing is about. As for other NBA teams being on TV in China. First, Rockets get more games. And second, people WATCH the Rockets/Yao. I mean, if you put a Grizzlies game and a Rockets game in the Houston market, which game do you think gets more viewers? Same concept.
Are you serious? Yao made more money for Rockets than Rockets paid him. Look at all those Chinese ads at Toyota Center. Yao is helping the organization pay incentive to other players. Look at how no name Rocket players get their show deals from China. Rockets get insurance money when Yao doesn't play. Most importantly, Yao gets injured on the court, not by some freaking motorcycle accident. If anything, Rockets organization owes Yao.
