The new CBA IS going to change the way teams operate

You are right but completely wrong at the same time. Most owners who win titles don't put profitably as a top priority. A current example is Chelsea football club who's owner put in $1 BILLION before winning a title, that's the point and thrill of owning a team for most owners. Most of these guys are smart business men and realize that sports ownership is generally not a profit making enterprise.

Now there will be a reckoning day for most teams that over spend and don't win here in a few years. The opportunity cost of bad contracts has increased with the new CBA and without putting together a winning team, these contracts can severely hurt the future of a franchise.

 

Does anybody play fantasy sports where they pay a pot? Most of the participants lose money for the shot at bragging rights and possibly winning it all. This is that on a large scale. For a lot of billionaires, owning a professional sports team is for bragging rights. It puts them in the spotlight and if the team does well, they get to share in the glory. I am sure some owners do need for their team to make money, but if they all only bought pro teams to make money, why does anybody own NHL teams? To put this into perspective, if the Nets have to pay lux tax (Howard trade is estimated to hit them at 100 million plus) that would be 1/180 of the owners net worth. The average americans' net worth is $121,000. That means for the majority of the people on this board, this incredibly harsh tax would hit us at $672.22. Would you spend be okay with a $672.22 fine, if it meant a massive upgrade in personnel to your small business? Because that is what 100 million looks like to Mikhail.

 

I don't think using an NFL team is a fair example. NFL owners make bank because they have an extremely popular product. While basketball is popular, it is nothing close to the NFL. The NFL is king. Basketball owners lose money because they still pay players millions of dollars while at the same time not having as many fans go to games, paying less for tickets, and not having the tv contracts that the NFL has. The NFL is a whole different animal. Not to say your point isn't valid, I think it is - I just don't think using the NFL as an example qualifies in this instance.

 

James Dolan respectfully disagrees.

 

The fact is we don't know if it will work. It's an experiment on a grand scale. One that could potentially cripple the league and ruin a sport. All I know is if we had a system closer to the NFL's, you know, an experiment that has already been proven to work, then teams like the Rockets would already be contenders because they could sign a star outright to support their good tactics in building a supporting cast.

 

You are so right Jopatmc. IMO I say go for it Brooklyn, go for it Knicks. Take on the Joe Johnson type of contract and take every crappy contract that Orlando has on their books and feel like a winner in August.

The important thing to realize that is the more damage the big market teams do to their cap flexibility now, the better off the mid to small market teams will be in the next couple of years. That includes teams like the Rockets, now the Mavs, and even teams like the Bucks.

As long as the NBA can still draw talent from overseas and in the NCAA to continue, there will be more than enough talented players to go around that teams can build around and the big market teams will be stuck paying enough taxes for Stern to build a museum in honor of himself.

 

I don't know about the players starting another fight on the CBA. The owners have been the ones starting the fights and getting concessions. I think the players were keep the heads down and be happy with the millions they have.

 

even with the luxury tax penalty how do you know the Nets would be losing money? Before you make this claim do you have any idea what the Nets bring in a yr for their T.V. rights? Radio? What type of revenue will they be bringing in for their luxury suites? I have no idea what it is, but before I would be making a claim as you've done I would want to know.

 

Arturo Galletti did an excellent estimation of team profits when you include in tax depreciation, franchise appreciation and operating expenses. While it's only a best-guess estimate, it does really show the gulf between the haves and have nots, and how the Knicks could probably carry a $150M payroll and still come out ahead. It's not unreasonable to think that the Nets could come out similarly with their new deal.

http://wagesofwins.com/2011/11/08/the-bottom-line-on-the-nba-finances/

I definitely think the CBA will have an effect; particularly when the progressive tax penalties come into play, but until a team is willing to stare down a player and force them to turn down money, it's not going to change the aggregation of all-NBA players. Ironically, it could easily have the opposite effect, forcing teams like the Zombie Sonics to be broken up for cost considerations.

 

Try telling that to Sheikh Mansour and Roman Abramovich. Believe it or not, there are people with seemingly bottomless pockets in this world who will spend their way to a championship, by hook or by crook.

 

The Lakers have a 3 billion dollar contact with Fox Sports. They can support a $150 million payroll on their TV rights alone, so they can be profitable even with a very punitive luxury tax system. I imagine the same is true with the Knicks and Celtics.

If you feel pressure to win, you will spend at the expense of the bottom line no matter what. Look at Mickey Arison and the Heat. They have a large window to contend and will probably be a tax payer the entire time. He won't cut back until the Lebron/Wade/Bosh trio has run its course, which will probably outlast this CBA. How can you say this CBA will work when teams likely won't adjust their strategies until the next CBA?

 

You might be right about money losers will eventually go out of business. But it does nothing to prevent people like Don Sterling who have no interest in building a winning team but continue to make money out of it.

The problem is, profitability and winning are not always connected in professional sports.

 

Sorry Jopat. Some team owners view NBA franchises like trophy wives. The same can be seen in England's premier league. A loss of a fraction of a percent of net worth is well worth the bragging rights.

 

The Buss family are dependent on the Laker's profit margin. A $150 million payroll would bring on a $300+ million luxury tax at $4.50 per. That and profit sharing would doom the family to bankruptcy. It will never happen.

 

The real solution is simply to get rid of max contracts. Make teams bid for Lebron James. If someone wants to offer their whole cap, so be it. Right now, it's possible to build a roster with lots of top players because those players are "underpaid" relative to the market - they are limited by the max contract. Get rid of that, and you'll have Lebron by himself vs. 2 super-stars vs 3 all stars vs 5 really good players.

 

This also eliminates the silly glamour location problem. Right now, there is NOTHING Utah or Cleveland can offer over LA or NY. But if you don't have max contracts, those cities could overcome their location disadvantage by paying more. It still causes problems, but it makes those non-glamour destinations a little more functional as long as they have smart management.

 

Max contracts is a complicated issue. How many teams can offer a max contract without a S&T? The issue is further complicated by the NBA minimum salary requirements. Without checking I think it is $48.3 million dollars. That realistically means that no team going into the off season without great cap management can offer a max contract without a S&T.