NBA Lockout Reaction Thread

We don't know exactly how much they are losing. The players think it's more in the $100M range. Good analysis, but you also have to include the momentum in interest that will be lost. I have no clue what that is worth or how you put a number on it. I'll just say it took the league a while to get over the last lockout. So when you add in those costs with the lost revenue and having to pay back this years TV $$ with future revenues, it doesn't look so rosy when you had the players at a 50/50 deal.

 

Ok, this little argument has grown tiresome, and you're not doing yourself any favors by cowering behind other posters.

T_mac1 said that he believed more than 95% of the players wanted to reject the deal.

I pointed out that b/c players realize how difficult it'll be to recover a lost year of basketball income, its common sense to think that >5% of the players supported the deal and wanted to get the season started.

And then you started ranting about majority opinion which was totally irrelevant to the conversation between T_mac1 and myself. Like I said, before you reply to posts, you should understand the context in which the post was written.

 

Sure - to a small extent. But that's a fight you can always have later. If the players accept 48% instead of 50%, and the league is superprofitable in 7 years, they can demand more then. They got 57% last time - it didn't help them at all in this negotiation, because each one is going to be based on the economic realities of the time.

For players, revenue = profits because they have no accompanying expenses. For owners, the goal is profits rather than revenue. Therefore, the owners can make up lost profits even by losing revenue simply by decreasing expenses. Players can't ever do anything to get that money back.

If 50% BRI is $2 billion per year, then if they lose one year of a 7 year deal, the only way to make that back is to get 58% in the remaining 6 yearsThat's never going to happen, so they would be guaranteed to end up with less money. And that's assuming no damage to total BRI due to a missed season (which we know won't be the case).

What do you base that on? The players agreed to give back hundreds of millions of dollars per year - you think they do that if they don't think the owners really are losing money? And BRI will only be lower after a year of no basketball, putting more pressure on the owners' profits since their non-player expenses won't change.

What NBA teams are selling for record amounts these days? The Hawks sale got cancelled because of labor uncertainty. The Bobcats sale was not considered a very good price. I don't actually know much else of what has been sold recently.

 

And don't forget the NBA absorbing the Hornets when Shinn couldn't finalize his sale. And Heisley put the Grizz up and never found a buyer. Numerous folks are suggesting that the record losses have more to do with repaying loans used to buy teams than with actual operating expenses. With contraction talk getting louder, it's clear that the NBA Team Purchase Bubble is bursting.

 

And the point that all 3 of us made after that comment was that >5% is irrelevant. Again, this would have been clear to you if you simply took your own advice.

Carry on....

 

Let's not forget that George Shinn was unable to sell the Hornets, and the league had to eventually become the majority owner.

 

Good point on the Hornets - didn't even think about that, and didn't know about the Grizz.

On the losses, a repayment of a loan would make your cash flow statement look ugly, but not your income statement. Repaying a loan isn't an expense (just like getting the loan wasn't income) so it shouldn't have any negative affect on the profitability. If anything, it would increase your net income slightly because it would eliminate your interest expense.

 

I think this is the core of the issue. The two parties have different concerns. BRI promises nothing to an owner who has operating expenses and has to spend money to help grow the league. For the players, BRI is a guarantee with no risks or expenses to take into account. From that perspective alone, they are gonna talk past each other on some issues.

As for system issues, I would guess that teams competiting for championships are more popular and probably generate more revenue than teams that perennially suck. So those small market owners have an incentive to push hard.

 

There is little doubt that all of this jockeying or attempting to curry favor from the public is helping anyone.

I wish they both would learn their lessons from the NFL and simply get back to negotiating.

While we fans are clearly not in their thoughts, they should be focusing on more important matters than trying to get us to agree with a certain sides position.

 

The players logic seems to be that once you go down that far it may be hell to get back. Remember, they were dead-set against dropping below 53%, supposedely. They haven't been at 50% in forever.

OK, now how does that tie-in to missing $$ based on system issues? The owners have won on the $$ issues. Is the cost worth the system issues?

I base it on the union economist saying they think the owners losses are more in the $100M range. I think the players agreed to give so much $$ back because they do in fact want to play basketball and realize they don't have the leverage that the owners have.

The owners created the labor uncertainity, so that cancellation is their fault. In other words, if the league was active the sale would have gone through? I'm asking because you say it got cancelled and I don't know much about the cancellation. The Warriors were sold for a record $450M last summer:

http://sports.espn.go.com/nba/news/story?id=5383261

The economy was horrible at that point and all signs pointed to a lockout this year. And there was another owner willing to drop a huge amount to bring the Hornets or another team to the Bay area. I posted the link in another thread some time ago. I think the Nets had multiple suitors as well. Point being dudes still want to buy in, so it can't be that bad.

 

That's because the league won't let them leave. The Hornets could have been in OKC if the league would have let them move. I'll try to find that link again, about the dude who wanted to buy the Hornets and move them out West as well. Unsure about the Grizz. However, the Bobcats did sell (at a loss though) and they are in a bad market. But IIRC, they also had more than one potential buyer.

Edit: Oracle CEO Larry Ellison also tried to buy the Warriors and was interested in moving the Hornets. Although this link says the rumors about moving the Hornets to San Jose weren't true, the league did outbid him for the team.

http://abclocal.go.com/kgo/story?section=news/sports/pro/basketball&id=7881947

 

Yeah, that could be. I just think they are guaranteeing themselves substantial losses now for a theoretical problem later - they'll still lose out down the road, I think. Over a 7 year deal, 1% BRI is worth about $280 million, not accounting for inflation. Over 14 years (2 deals), it's $560 million - you'd need to average 4% more BRI for the next TWO deals to make up the $2 billion being lost this season.

This is where, I think, you have the owner split. The smaller market owners want the system changes as well. They want the ability to retain their stars after seeing guys like Lebron and Bosh leave, and Dwight Howard and Chris Paul planning on it. The only way to do that is system changes that give teams a better edge retaining their own players. I think a fun player-friendly solution there would be to just make bird free agents max salaries substantially higher and longer, while limiting S&Ts to non-bird max salaries. This lets those top players make "market value" if they stay with their current teams instead of all being at an artificial ceiling.

I think if they really believed that, then that would have been the place to make the stand. Given how much they are holding out on what seem to fairly minor system issues that only affect a few players, I don't think they give up $200MM a year if they feel the owners are cooking the books.

Oh yeah - I'm not blaming anyone here. I'm just saying that the Hawks sale just got cancelled a few weeks ago because no one knew what the labor agreement was going to be like. I don't know the details.

Interesting, along with your other examples. It's weird that there's such a range for these franchises, with some having no demand and others in high demand. I don't know what to make of that.

 

I just wanted to highlight this. If that is the small owners take then that is essentially limiting free agency, something that has been a point of contention in almost every sports related labor dispute. It has to be somewhat understandable why the players don't want to give back such a large amount of $$ AND limit their ability to leave as easily, or at least have other suitors to up the ante for their services.

 

that link is no good.

is this the link you meant
http://audio.1080thefan.com/a/48683317/ric-bucher-espn-nba-analyst.htm

 

Major has covered it: because they stand to lose more $$$ if they lose this season even if they get higher BRI%

IF they are worried about the next generation of players, then yes, this is worth fighting for, but I'm not sure most of them really are. Right now they are calling MJ a dick, but if they were in his position...

 

wow...Bucher lays out the most emphatic defense of the players I have heard from a media personality to date. nice find.

 

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