My Common Sense Compromise to End the Lockout Today

Sorry - I mean in aggregate. If the league as a whole can't make money now, then taking money from the wealthy teams and giving it to the poor teams doesn't change that. The total profit/loss would be exactly the same, though different teams would see different results.

 

my solution is contraction.

The NBA purchases all franchise licenses back at fair market value and puts 26 of them back up for sell between the existing 30 owners. Then we play a season under the last CBA and see what the revenues look like then. Then the owners can choose to lockout again or let the CBA renew.

 

It all depends on which dangers you're most concerned about.

 

I think it does, to some extent. A pure revenue-sharing model would pull up a lot of smaller market teams while wiping out the profits in the giant markets. So, the $300m loss (ir whatever) from last season would be only $10m per owner, instead of having a smaller number of owners shouldering the loss. Then, you'd need to move the BRI% less to get all teams in the black, instead of trying to make the worst team in the league profitable. Plus, it would also address the issue of competitive balance.

I would do it differently though, if we're just revolutionizing the system. I'd have all teams owned by the NBA. All revenues would go to one place and all salaries paid from one place. The current owners could get shares in the single company. Each team would still have front offices who still try their hardest to win and get bonuses when they do. Each team could allot 1/30th of a regular salary kitty, and each player would negotiate his share with his team, under whatever CBA. Then I'd have a second kitty to generously compensate winners. Players could have different percentages of the 2 kitties, if they wanted to negotiate that way (stars could take low base salaries but a large share of the award for winning, for example).

 

Right - but the key to your idea is reducing the BRI%, which is the sticking point in the first place. The idea behind his proposal is that everyone would be on board because everyone wins - but why would wealthy owners be on board here? The only way to get all the owners on board is to reduce the BRI% - and if you did that, you don't need his system. Everything here revolves around BRI% and without that, nothing else matters - all you're talking about is how to distribute the losses.

 

I see where JLO is going with this, but it creates a problem that the owners won't agree upon. If player's salaries can ascend and descend based on the team revenue, the owners would have to openly share their books with the players. We've seen how this is something the owners will simply not do.

 

Interesting but untenable, who pays for the franchises that have already been paid for?

Where does that money come from? The owners already own those franchises, where does the money come from to buy them back?

DD

 

Here is my plan: give the players 57% but require them to withhold 10% of their income. The 10% goes into a financial plan set up for the player, investing in stocks, mutal funds, debt, etc. The money will then be paid out starting some years after they have been out of the league, and will be paid out with an annuity with the length of the annuity based upon their time and income earned in the league.

However, the financials of the 10% income will be managed by the owners. This way the owners can get a little extra money to work with, and when the players leave the NBA we don't have to hear about how they are all broke and living with their moms after spending $20 million over the course of 8 years.

 

What do you mean? The league buys the franchises back at fair market, in order to contract the league. I'm pretty sure most franchising contracts allow this to prevent dilution. Remember, the owners don't own anything; they are only licensing it.

Several ways:

Easiest one is: Do them each as an autonomous transaction? The sell and buy-back happen together...the league covers any shortfall by buying a % preferred shares of ownership of each franchise (funding that at market, and giving the owners options to buy it back), but there won't be, since 26 will be the same value as 30, if not more.

Or you get shortterm funding for the entire recall purchase -- which is almost 100% secure, and certainly guaranteed to be a very high quality investment.

anyhow, the main point is the solution to all this mess is contraction. Everything else is an attempt to prop up dilution.

 

Where does the league get the money to pay billions of dollars to the franchise owners...the league doesn't have any money.

Wait, you are now asking the league to borrow for assets that are already paid for by the owners?

And then the owners to pay the league back for those assets for them to pay off the note?

What if the owners decide to not pay much for those assets and the league is stuck holding the paper?

I like that you are thinking outside the box, but that is not a good idea, IMO.

Nor do I think contraction works - just fix the system as is......50/50 is a fair split.....and go from there.

DD

 

Watch as I fails maths, Englishes and civics!

For my next trick, I supply half the response posts to my own thread! Yessssss!

 

Oh, I forget. I also solves NBA lockout.

Thanks you!

 

I explained it more fully in my edits above.

But the main thing is that contraction is the only thing that will fix this longterm. Everything else in my post is just an entertaining exercise in how the contraction might happen.

btw: the league is not borrowing anything.

You do an autonomous transactions to collapse 30 into 26. Nothing ever changes hands, unless an owner can't meet the new market price when 30 turns into 26. See, the sell is market for 30 teams...the buy is guaranteed to be higher for 26. If not, you don't sell back, until you find a new owner to pay what you want. The will be a difference in sell price and purchase back price. That difference in $ will represent the value for the owner to stay in a more profitable, contracted league.

Each owner is essentially just poney-ing up a little bit more cash for the franchise in exchange for a bigger slice of the pie in a healthier league. Follow along.

 

Player salaries ALREADY go up and down based on league revenue (his proposal). There is an escrow system to ensure that BRI is 57%. If salaries exceed that, everyone gets a pay cut, and vice-versa.

 

Again, how does this help the owners? The owners don't need to hold on to players' money - they want to actually make profits. If they are still giving out 57% of the revenues, the model doesn't work.

 

I understand that, but player's individual salaries don't change. If I'm not mistaken, its the pool of $ that goes to pay total player salaries that fluctuates. The total $ spent on the Rockets team as a whole goes up, not specifically Martin's.

 

I thought they aren't fighting for 57% anymore, that was the last contract.

my solution would be to take the 50/50 and in three years bump it up to no more than 52% for the players