http://www.sacbee.com/110/story/80354.html
Daniel Weintraub: As voters cool to subsidies, a few ideas for the NBA
By Daniel Weintraub - Bee Columnist
Published 12:00 am PST Tuesday, November 21, 2006
Story appeared in EDITORIALS section, Page B7
Maybe it's time for the National Basketball Association to consider an economic makeover.
As votes this month in Sacramento and Seattle demonstrated, the number of cities with residents willing to hand over tax dollars to subsidize millionaires playing ball is dwindling. And with franchises from Milwaukee to Portland struggling to turn a profit, the league ought to take a closer look at its expenses, its revenue and the balance between the two.
Like any industry where costs have outrun the money coming in from customers, professional basketball might have to consider layoffs or salary cuts. Or, since the NBA is really one business and not a group of true economic competitors, the league could also pool its proceeds and then distribute them to all the club owners in a more equitable fashion.
At any rate, it seems evident that holding up the taxpayers for more money is less and less a viable option.
In Sacramento on Nov. 7, county voters rejected a proposal to raise the sales tax by a quarter-cent on the dollar to pay for a new, $600 million arena for the NBA's Kings. The Kings are a beloved team in the California capital. But more than 80 percent of voters said No.
In Seattle on the same day, 74 percent of voters approved a pre-emptive measure declaring the public purse off-limits to professional sports teams unless the deals net a profit for the city. Sponsored by the aptly named "Citizens for More Important Things," the measure was aimed at the NBA's Supersonics, Seattle's first major league franchise and the only one to bring a championship to the city. With the team demanding a new arena, the chances of it fleeing, perhaps to Oklahoma City, appear on the rise.
In both cases, opponents of the sports subsides were joined by advocates for the poor, who argued that scarce tax dollars shouldn't be given to billionaire owners who pay their players tens of millions of dollars while generating little or no economic benefit for the region in which they play.
They have a point. The NBA's argument that its teams can't get by without public subsidies is not a strong one. It assumes that the league must be structured as it is now, with a few big-city franchises in New York, Los Angeles and Chicago making huge profits off television deals and other revenue sources while teams in smaller markets struggle to get by.
Before coming to taxpayers, there are several things the league could do to make things right:
• Shrink its payroll. The league recently gave teams the option of adding a 15th player to their active rosters. Only five players are on the court at a time, and almost no NBA coach regularly uses more than nine or 10 in a game, with most using fewer than that. Even considering the need to plan for the risk of injury, 12 or 13 players under contract would probably be sufficient. That change could save teams a couple of million dollars per year.
• Reduce salaries. This is a more radical suggestion, but perhaps even more sensible. The average NBA salary is more than $4 million a year. Former King Peja Stojakovic signed a deal with New Orleans last summer that will pay him a reported $63 million over five years. Another former King, Chris Webber, is still being paid $20 million a year by Philadelphia, even though his skills, and his playing time, have declined dramatically in recent years.
No one is going to roll back salaries owed under existing contracts.
But if the NBA's teams are having so much trouble making ends meet that they need to come to the taxpayers for handouts, couldn't they simply stop paying their stars all that money? If the next round of Stojakovics and Webbers made about 10 percent or 20 percent less than the top stars do today, most if not all of the league's problems would be solved.
• Collude. If the owners get together secretly and agree not to outbid each other for the players' services, they'll be sued by the players union.
But there is nothing stopping the league and its players from agreeing on a new deal that shares more of the revenue made by teams in the big cities with those teams from smaller markets. After all, the big-city teams couldn't make that money without teams to play against. If they don't share more of it, some of those teams might go under. If they want the league to survive as it's now structured, with 30 teams in cities large and small, the more profitable clubs should share more of their local revenue to keep the small-town teams competitive.
The NBA may be able to sweet-talk a few more towns into coughing up subsidies for its teams. But that well is eventually going to go dry. Using one or two of these options or a combination of the three, the league could end its perennial beg-a-thons and put itself on stable ground for a long time to come.
About the writer: The Bee's Daniel Weintraub can be reached at (916) 321-1914 or at dweintraub@sacbee.com
Daniel Weintraub: As voters cool to subsidies, a few ideas for the NBA
By Daniel Weintraub - Bee Columnist
Published 12:00 am PST Tuesday, November 21, 2006
Story appeared in EDITORIALS section, Page B7
Maybe it's time for the National Basketball Association to consider an economic makeover.
As votes this month in Sacramento and Seattle demonstrated, the number of cities with residents willing to hand over tax dollars to subsidize millionaires playing ball is dwindling. And with franchises from Milwaukee to Portland struggling to turn a profit, the league ought to take a closer look at its expenses, its revenue and the balance between the two.
Like any industry where costs have outrun the money coming in from customers, professional basketball might have to consider layoffs or salary cuts. Or, since the NBA is really one business and not a group of true economic competitors, the league could also pool its proceeds and then distribute them to all the club owners in a more equitable fashion.
At any rate, it seems evident that holding up the taxpayers for more money is less and less a viable option.
In Sacramento on Nov. 7, county voters rejected a proposal to raise the sales tax by a quarter-cent on the dollar to pay for a new, $600 million arena for the NBA's Kings. The Kings are a beloved team in the California capital. But more than 80 percent of voters said No.
In Seattle on the same day, 74 percent of voters approved a pre-emptive measure declaring the public purse off-limits to professional sports teams unless the deals net a profit for the city. Sponsored by the aptly named "Citizens for More Important Things," the measure was aimed at the NBA's Supersonics, Seattle's first major league franchise and the only one to bring a championship to the city. With the team demanding a new arena, the chances of it fleeing, perhaps to Oklahoma City, appear on the rise.
In both cases, opponents of the sports subsides were joined by advocates for the poor, who argued that scarce tax dollars shouldn't be given to billionaire owners who pay their players tens of millions of dollars while generating little or no economic benefit for the region in which they play.
They have a point. The NBA's argument that its teams can't get by without public subsidies is not a strong one. It assumes that the league must be structured as it is now, with a few big-city franchises in New York, Los Angeles and Chicago making huge profits off television deals and other revenue sources while teams in smaller markets struggle to get by.
Before coming to taxpayers, there are several things the league could do to make things right:
• Shrink its payroll. The league recently gave teams the option of adding a 15th player to their active rosters. Only five players are on the court at a time, and almost no NBA coach regularly uses more than nine or 10 in a game, with most using fewer than that. Even considering the need to plan for the risk of injury, 12 or 13 players under contract would probably be sufficient. That change could save teams a couple of million dollars per year.
• Reduce salaries. This is a more radical suggestion, but perhaps even more sensible. The average NBA salary is more than $4 million a year. Former King Peja Stojakovic signed a deal with New Orleans last summer that will pay him a reported $63 million over five years. Another former King, Chris Webber, is still being paid $20 million a year by Philadelphia, even though his skills, and his playing time, have declined dramatically in recent years.
No one is going to roll back salaries owed under existing contracts.
But if the NBA's teams are having so much trouble making ends meet that they need to come to the taxpayers for handouts, couldn't they simply stop paying their stars all that money? If the next round of Stojakovics and Webbers made about 10 percent or 20 percent less than the top stars do today, most if not all of the league's problems would be solved.
• Collude. If the owners get together secretly and agree not to outbid each other for the players' services, they'll be sued by the players union.
But there is nothing stopping the league and its players from agreeing on a new deal that shares more of the revenue made by teams in the big cities with those teams from smaller markets. After all, the big-city teams couldn't make that money without teams to play against. If they don't share more of it, some of those teams might go under. If they want the league to survive as it's now structured, with 30 teams in cities large and small, the more profitable clubs should share more of their local revenue to keep the small-town teams competitive.
The NBA may be able to sweet-talk a few more towns into coughing up subsidies for its teams. But that well is eventually going to go dry. Using one or two of these options or a combination of the three, the league could end its perennial beg-a-thons and put itself on stable ground for a long time to come.
About the writer: The Bee's Daniel Weintraub can be reached at (916) 321-1914 or at dweintraub@sacbee.com
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