Valuation is future potential profit and totally different. I know the Pacers have lost money EVER since they have existed. They have lost money in 25 of 27 years. So it is not something new base on recent player contracts or the current CBA. The most ever quote for one year is ~$30 million, but has not been substantiated. That is a far cry from $200 million a year. It is due to them signing bad local TV deals, having an absolutely horrible stadium deal coinciding with the city losing money so that no one can afford the costs of running the state of art facility in a city that didn't need one that expensive and as result is losing money, a just as bad arena naming rights contract, virtually no corporate sponsorship, having to pay a percentage of their TV rights to the Silna brothers. There are a lot of other issues with the Pacers situation and NOTHING in any CBA plan will correct any of them. (If anything a hard cap will REQUIRE them to have to spend a certain amount instead of allowing them to bottom out on nothing but rookies for a few years in an attempt to minimize the damage.)
I'll panic if the NBA cancels the Christmas games. That is when I know the season is over. I'll still remain optimistic, but it's growing thin.
Don't sweat it. There will be an agreement well before it gets to that. Christmas games won't be in danger until about Thanksgiving.
In my hearts of hearts, I agree with you. But then, I thought the lockout would be over before the season started. It's cutting it way too close for my liking right now.
N.B.A. Deal Is Tantalizingly Close, but Last Hurdle Is a Big One Spoiler [rquoter]The new N.B.A. labor deal is practically done. You wouldn’t know it from the headlines, the dour news conferences or the apocalyptic rhetoric spilling from league officials. But the deal, in practical terms, is about 95 percent complete. ... But it is the last 5 percent that is ruining the prospects for labor peace and gradually eroding the N.B.A. season. Four weeks of games are gone, and more could fall, because owners and players are still fighting over how to split $4 billion in revenue. The league wants a 50-50 split. The players want 52.5 percent. In real terms, they are separated by about $100 million a year — a hefty sum, but small in the context of these negotiations. They were once 20 percent and hundreds of millions apart. The difficulty in closing the gap is psychological and financial. ... Tentative agreements are already in place on the following major items: ¶ Luxury-tax rate: Teams will be charged $1.50 per $1 spent beyond a threshold, replacing the previous dollar-for-dollar tax, according to people who have seen the plan. To further discourage spending, the tax will increase for every $5 million spent beyond the threshold: to $1.75 after $5 million, $2.25 after $10 million and $3 after $15 million. Under this system, the Los Angeles Lakers would have paid $42.5 million in taxes last season, compared with $20 million under the old formula. (The rates could still change based on other tradeoffs.) ¶ Contract lengths: Players with “Bird” rights will be eligible for five-year deals, while others will be limited to four. The previous C.B.A. allowed for six-year (Bird) and five-year deals. The 1999 C.B.A. allowed for seven-year (Bird) and six-year deals. ¶ Raises: Annual raises will be reduced by several percentage points, possibly as low as 5 percent for Bird players and 3.5 percent for non-Bird players. The prior deal allowed raises as high as 10.5 percent (Bird) and 8 percent. ¶ Midlevel exception: It will start at $5 million, a decrease of $800,000. The contract length and annual raises attached to the exception remain under discussion. ¶ Amnesty clause: Each team will be permitted to waive one player, with pay — anytime during the life of the C.B.A. — and have his salary be exempt from the cap and the luxury tax. Its use will be limited to players already under contract as of July 1, 2011. ¶ Stretch exception: Teams will be permitted to stretch out payments to waived players, spreading out the cap hit, over several seasons. The payment schedule will be set by doubling the years left on the contract and adding one. (Thus a team waiving a player with two years left could pay him over five years.) There are a few critical issues still under debate. The N.B.A. wants to further punish tax-paying teams by denying them use of the midlevel exception and sign-and-trade deals, and wants additional penalties for “repeat offenders.” The union opposes those measures. So the broad parameters of an agreement are in place. The gap on the revenue split is significant, but manageable. As N.B.A. officials have said many times, both sides know where the deal is — they just have to get there.[/rquoter]
Dangit. I thought they were doing away with Sign & Trades. Simply that measure alone would prevent half of the idiotic GM decisions made.
A system that let's the Rockets take advantage of idiotic GM decisions is a good one, don't you think?
I was thinking, if they felt it was a possibility that they be able to get a deal done Friday or sometime next week, why are they cancelling games when there are still a few days left? I think a deal will get done next week and the current game cancellations will be rescinded.
That is true. But if the Owners argument is that players make too much money and can form super teams too often, you have to get rid of Sign and Trades. If they don't get that, then what was the point of the Owners argument?
Now compare that to the purchase price. If I buy stock, hold it for years and have ups and downs but it's still worth more than I bought it for then I haven't lost money. And I highly doubt there are many franchises worth 200M less than what they were bought for. I'd be surprised to see more than a few.
You are leaving out the debt portion though, look at how much debt they are carrying, some teams 40% of their value is tied up in debt.... DD
So the only thing left to come to an agreement on is BRI and the lockout is over? They need to start meeting already.
You do realize that in our credit-based economy, large business often operate in this manner in which they have a sizable debt. True debt can overwhelm a business, but simply having debt is not a sign of catastrophe. Also those debts include arena debt, and looking at some of those teams, I bet includes original debt from the team's original purchase cost. Again pawning off bad deals on those fronts onto the players doesn't eliminate the ones who made the bad agreements in the first place. Lowering BRI will not help.
I went back to page 23 and didn't see what you are referring to. I saw your link to a Forbes article that covered the past 2 years. Most franchises weren't purchased in the last 2 years so I don't see how that list covers how much teams have increased in value from the purchase date, or which teams are accompanied with 40% of debt. Are you referring to another list? I also saw your post mentioning the Cavs and Gilbert losing $200M when LeBron left. The Cavs are currently worth $20M less than what Gilbert purchased them for. Maybe he should have sold when he had LeBron or managed his team well enough to convince him to stay, kinda how the Spurs did with Duncan. Either way, using the Cavs as an example doesn't really help the owners argument. If they lost $200M in value it's not a system issue, it's a management issue as the loss was related to their star leaving after they couldn't get him enough help (in 7 seasons at that). Let's not forget LeBron did sign one max extension with the Cavs. Build a contender around him and he probably stays. Instead, his 2nd best player there was Mo Williams. You also mentioned the Pacers. I don't know what their debt picture looks like, but they were purchased for $11M and are currently worth $269M. I'm getting my data from a list this dude compiled on Lakersground. Can't vouch for it's accuracy but they do have a pretty legit thread on the lockout (Larry Coon is on that board): I have no clue if those figures consider debt. But I would love to see what you are looking at to say teams have 40% of their value tied up in debt.
I guess you havent followed the NBA for the past few years. Its common knowledge that Lebron/Wade/Bosh had planned on teaming up since 2006. According to what you posted, the Pacers were purchased in 1983 and had operating losses of $17mm last season. Any idea what the operating numbers were for the other 27 years? In other words, and this is purely hypothetical, if the Pacers lost an average of $9mm per year for 28 years, is the $269mm market value really that impressive?
