The Lockout has arrived.

[Capt. Factorial]

Found it. Check the chart out. The owners' "flex cap" proposal would essentially lock players into a fixed dollar amount of compensation for the next ten years. I don't think the players necessarily have a right to have their compensation tied to a certain percentage of BRI, but I don't expect them to agree to a proposal that precludes them from sharing in the expected growth for the next decade.

http://espn.go.com/blog/truehoop/post/_/id/31668/nba-negotiations-in-a-handy-chart

Yeah, I don't think that proposal is going to fly. I can see why the players are unhappy with that. Still, if you look at the owners' first proposal and then the "flex cap" second proposal, the total dollar amount is a bit of a step up in the flex cap.

But in the end, I'd guess the following: Take the yellow line (owner's original proposal) and the blue line (break-even player salary). Then draw a line a bout 2/3 of the way up between them. That's where they're going to end up when it's all said and done. There's no way they end up above the break-even line (NBA won't accept it), but the league will concede about 2/3 of the gain over break-even that they originally proposed. Eh, just a guess. Now we've got to get it done so we can get a full season. C'mon, everybody!

 

[Superman]

I think this is the biggest reason for why they need some kind of hard cap. It would force the big market teams to have play with the same payroll as everyone else instead of going out and signing another player to a mid-level exeption and eating a bad contract. Small market teams can't afford to do that cause they start to lose money.

My thoughts exactly.

 

[Superman]

Now we've got to get it done so we can get a full season. C'mon, everybody!

I'm not optimistic. I wish we could lock these people in a room for the next two weeks and force some progress.

 

[Capt. Factorial]

I'm not optimistic. I wish we could lock these people in a room for the next two weeks and force some progress.

Well, I think they're meeting as we speak. Supposedly only a small number of reps. We'll see if anything comes out of today's session.

 

[Superman]

Just going based off of what happened with the NFL, there were some serious lulls in action because of the legal issues. They would go for weeks without the two sides talking, and then once they started the mediation back up, there was progress. It's obvious everyone was motivated by the imminent threat of losing money, so they whipped it into high gear and banged out a deal. Nothing is going to happen on the NBA side until they force something to happen. Otherwise they're going to have sporadic meetings, talk about how far apart they are, and nothing gets done until one side (read: the players) starts losing money, and by then we're looking at December before a deal comes to fruition. And that's best case scenario, if they play it that way.

If, on the other hand, they buckle down now, realizing how far apart they are and that only way they can bridge the gap is if they meet, or even use federal mediation like the NFL did (they were doing that even before the lockout in March), then within a month we can have a framework and an agreement in principle, and save the season and the sport. But there's no real impetus until someone starts losing money.

 

[boffacheerios]

http://www.nba.com/2011/news/08/31/players-owners-meet-manhattan.ap/index.html

here's the news from yesterday's meeting. Not super insightful, but at least we know they're trying to get this thing worked out before October 1

 

[pdxKingsFan]

Just going based off of what happened with the NFL, there were some serious lulls in action because of the legal issues. They would go for weeks without the two sides talking, and then once they started the mediation back up, there was progress. It's obvious everyone was motivated by the imminent threat of losing money, so they whipped it into high gear and banged out a deal. Nothing is going to happen on the NBA side until they force something to happen. Otherwise they're going to have sporadic meetings, talk about how far apart they are, and nothing gets done until one side (read: the players) starts losing money, and by then we're looking at December before a deal comes to fruition. And that's best case scenario, if they play it that way.

If, on the other hand, they buckle down now, realizing how far apart they are and that only way they can bridge the gap is if they meet, or even use federal mediation like the NFL did (they were doing that even before the lockout in March), then within a month we can have a framework and an agreement in principle, and save the season and the sport. But there's no real impetus until someone starts losing money.

I still think that the owners in the NBA are willing to blow a season if it means getting things their way. Which makes it hard to compare to the NFL because the NFL owners already had the better deal in place and couldn't risk blowing the season.

Likewise players in the NFL don't have many other options, especially when injury risk is considered if they went to the CFL or UFL whereas NBA players can sign lucrative deals in Europe and Asia.

 

[Superman]

I still think that the owners in the NBA are willing to blow a season if it means getting things their way. Which makes it hard to compare to the NFL because the NFL owners already had the better deal in place and couldn't risk blowing the season.

Likewise players in the NFL don't have many other options, especially when injury risk is considered if they went to the CFL or UFL whereas NBA players can sign lucrative deals in Europe and Asia.

Yup. Which is problematic, because the owners' proposals don't really make the league any stronger. They just give the owners a bigger slice of the pie.

 

[bajaden]

I think there's huge difference between being williing to lose an entire season, and wanting to lose an entire season. After the NBA just came off of one its most successful seasons, I seriously doubt they want to throw a wet towel on the fire. The best news that came out of the meeting yesterday, was basicly, no news! As my grandmother used to say "No news is good news". Plus, they agreed to meet again soon. Had one side or the other came out with a negative statement, at this late date, I'd be leaning toward writing off some, or all of the season. Now I think they might get something done.

 

[rainmaker]

The NBA needs to take a hint from Euro soccer. There is big money in their current tv deals, huge money actually, and we have the same things here, with the LAL signing a 3B deal just by themselves.

What the EPL does for example, is take every penny from tv revenue, from every single EPL club, and puts it in a pot, and splits it evenly between all 20 clubs. Right now, no matter what, every club is looking at at least 35M in shared tv revenue annually. It's the lifeline for many clubs.

Bring that type of a shared system to the NBA, and implement a hard cap, I'd say around 58M next year, declining to around 53M over the next 5 years, and it's definitely a start in the right direction.

 

[bajaden]

The NBA needs to take a hint from Euro soccer. There is big money in their current tv deals, huge money actually, and we have the same things here, with the LAL signing a 3B deal just by themselves.

What the EPL does for example, is take every penny from tv revenue, from every single EPL club, and puts it in a pot, and splits it evenly between all 20 clubs. Right now, no matter what, every club is looking at at least 35M in shared tv revenue annually. It's the lifeline for many clubs.

Bring that type of a shared system to the NBA, and implement a hard cap, I'd say around 58M next year, declining to around 53M over the next 5 years, and it's definitely a start in the right direction.

The NFL does the same thing with its TV money. The NBA is different in that every team has its own television contract, with each one differing according to the market they're in. I believe the league TV money, with TNT and ESPN is now equally divided amongst all the teams. Its hard to go to the Lakers and tell them they have to share their 2 billion dollar TV deal with the rest of the league. Not sure if Buss would agree to that. But there's no doubt that if you could put all the money from TV and radio into one pot, and split it equally, along with a hard cap, the playing field would be about as equal as you could make it.

 

[rainmaker]

The NFL does the same thing with its TV money. The NBA is different in that every team has its own television contract, with each one differing according to the market they're in. I believe the league TV money, with TNT and ESPN is now equally divided amongst all the teams. Its hard to go to the Lakers and tell them they have to share their 2 billion dollar TV deal with the rest of the league. Not sure if Buss would agree to that. But there's no doubt that if you could put all the money from TV and radio into one pot, and split it equally, along with a hard cap, the playing field would be about as equal as you could make it.

Not sure about the NFL, but EPL teams have seperate tv deals, negotiated by each team. Man U would be similar to the LAL, while a club like Bolton might be similar to the Kings. Yet each year, it all goes in a pot and is split equally.

By the way, hope your summer is going well. Drink a beer for me.

 

[Superman]

The NFL does the same thing with its TV money. The NBA is different in that every team has its own television contract, with each one differing according to the market they're in. I believe the league TV money, with TNT and ESPN is now equally divided amongst all the teams. Its hard to go to the Lakers and tell them they have to share their 2 billion dollar TV deal with the rest of the league. Not sure if Buss would agree to that. But there's no doubt that if you could put all the money from TV and radio into one pot, and split it equally, along with a hard cap, the playing field would be about as equal as you could make it.

I think that's over board. Not only does it restrict a team's ability to generate revenue through local TV deals, but I think the earning power of the league as an entity is less than it would be individually, at least when it comes to TV deals.

The Lakers did 20 years, $3 billion. Four years ago, the Blazers did 10 years, $120 million. Both with Comcast. The Lakers rights were worth $150 million a year, while the Blazers were worth $12 million a year, albeit for a shorter agreement and in 2007. But still. The Lakers have more earning power than anyone else, and by a long shot. If you let them negotiate their deals separately, they should reap the benefits separately. If a big market team can make itself rich in real dollars because of its lucrative TV rights, that's fine with me. I don't think they should have to pot that and split it 30 ways. Let's say the small to mid market teams can do TV deals with an average of $30 million a year, but the top five teams can average $100 million a year, the average payout for each team would be about $40 million a year. I don't know why the big market teams would agree to have their TV revenues more than cut in half so small market owners can increase profits.

I don't think any of the 30 teams are fundamentally unable to exist in their current markets and turn a profit. And if they truly can't at least come close to being in the black and be competitive, then I don't think the answer is to have the big market teams subsidize their existence. I think the limits need to be put in place to truly restrict how much teams can spend on player salaries. Then you wouldn't have one team at $40 million and another team at $90 million. The majority of teams would meet right in the middle most years, and the onus would be on each team to spend wisely.

 

[pdxKingsFan]

I get what you're saying but what would the Lakers product be if there weren't 29 other teams to play against? Just because they were the first team smart enough to move to LA how many years ago they should automagically be the richest team in the league? They'd still have a tremendous advantage thanks to the strength of their local economy being celebrity driven and people being willing to pay stupid on top of stupid money just so they can be seen at the game.

 

[Superman]

I get what you're saying but what would the Lakers product be if there weren't 29 other teams to play against? Just because they were the first team smart enough to move to LA how many years ago they should automagically be the richest team in the league? They'd still have a tremendous advantage thanks to the strength of their local economy being celebrity driven and people being willing to pay stupid on top of stupid money just so they can be seen at the game.

I don't think the league needs to be subsidized by the Lakers and the other big market teams in order for the smaller teams to survive and/or be competitive. I'm not railing against all revenue sharing, I just don't think every team in the NBA should have to throw their TV money in a pool and split it evenly. I'm not partial to the Lakers, and everyone ought to know that. But I don't think that revenue sharing should punish top market teams and rescue other teams that would otherwise be operating at a severe loss. I'm a Kings fan, and I don't want to see them leave Sacramento, nor do I think they ever have to. But if they or any other small market team can't operate at a positive or close to it on a regular basis, then they need to consider significant changes to their business model. Same for everyone else. If a team can't survive in their small market, it's not up to the big market teams to bail them out. It's up to the teams to find a way to survive and compete.

While I'm not partial to the Lakers, I don't begrudge them their financial success. Whatever their business model is, it's working. Good for them. I just don't think they should be able to dump those hundreds of millions of dollars into player salary, building a perpetual dynasty and making it impossible for small market teams to compete. That's where we're headed now, despite the salary cap. We're headed for an MLB-type landscape, I don't think the reason for that is because the Lakers can do a $3 billion TV deal. I think it's because they can potentially spend all that money paying the best players.

 

[bajaden]

I certainly don't begrudge the Lakers their success. Well, maybe one year I do. However, there's no doubt that being in a major market is a huge financial advantage. Unless your Sterling of course. If nothing else, the team is worth more money because of its location. But the team is also part of a league, and I don't think asking those teams like the Lakers, Bulls, and the Knicks etc. to cough up a little of that advantage is too much to ask. I think that 20 year 3 billion package adds up to around 150 million a year. When you figure the Kings are going to pull in around 20 mil a year max, probably less, I'd say the Lakers have a distinct advantage. I'm not offering a right or wrong to this. But if the league wants more equality, then there has to some sort of remedy.

 

[Superman]

I certainly don't begrudge the Lakers their success. Well, maybe one year I do. However, there's no doubt that being in a major market is a huge financial advantage. Unless your Sterling of course. If nothing else, the team is worth more money because of its location. But the team is also part of a league, and I don't think asking those teams like the Lakers, Bulls, and the Knicks etc. to cough up a little of that advantage is too much to ask. I think that 20 year 3 billion package adds up to around 150 million a year. When you figure the Kings are going to pull in around 20 mil a year max, probably less, I'd say the Lakers have a distinct advantage. I'm not offering a right or wrong to this. But if the league wants more equality, then there has to some sort of remedy.

I don't think the league should be concerned with equalizing what each team earns in revenue. The financial advantage doesn't really matter to me if it's mostly kept separate from the quality of the product on the floor. I don't care if the Lakers are clearing $150 million in profits every year, as long as they are restricted in the amount they can spend for player salaries (and even coaches' salaries, at a certain point).

All I'm saying is that I don't think the Lakers need to subsidize the small market teams in order for all teams to have a chance at success.

I'll also point out again that revenue sharing isn't necessarily a bad idea. I just don't think that it should be done for the purposes of leveling the playing field. The real money is never going to be equal, no matter what kind of revenue sharing you agree to. Big market teams are always going to have an advantage. Destination cities will always have an advantage. Can't change that. What you can change, decidedly, is the ability each team has to spend money on player salaries. When you have teams at the top spending twice as much as the teams at the bottom, with relative impunity (what's a $25 million tax to the Lakers, when they're getting $150 million a year in TV money?), there's a problem with the structure of the player compensation.

 

[whozit]

I don't think it has to be a either you share all or none of it. If you have to share all of it, it takes away the incentive to drive the hardest bargain with TV deals because your going to share it anyways and you won't reap anymore of a benefit than your competitor. If the system stays the same, the imbalance between the haves and have not hurts the whole.

However, if you go to middle ground such as something like 30-40% of your individual TV deals going into the pot and that being divided equally among the teams you retain the incentive to get the most out of your individual TV deal along with helping stabilize the financial picture of the entire league. A healthy middle class makes the whole stronger.

You do this and make the cap more rigid you can go a long way.

 

[Superman]

I don't think it has to be a either you share all or none of it. If you have to share all of it, it takes away the incentive to drive the hardest bargain with TV deals because your going to share it anyways and you won't reap anymore of a benefit than your competitor. If the system stays the same, the imbalance between the haves and have not hurts the whole.

However, if you go to middle ground such as something like 30-40% of your individual TV deals going into the pot and that being divided equally among the teams you retain the incentive to get the most out of your individual TV deal along with helping stabilize the financial picture of the entire league. A healthy middle class makes the whole stronger.

You do this and make the cap more rigid you can go a long way.

I don't have a problem with a less ambitious idea like that. The only issue I do have is when owners are clearly disinterested in having a competitive product on the floor (like Sterling and the Clippers), and they would be benefiting from revenue sharing just like the small cities who do want to be competitive but are in less enviable positions.

 

[whozit]

I don't have a problem with a less ambitious idea like that. The only issue I do have is when owners are clearly disinterested in having a competitive product on the floor (like Sterling and the Clippers), and they would be benefiting from revenue sharing just like the small cities who do want to be competitive but are in less enviable positions.

Unfortunately, there are always bad apples and they shouldn't be the cause of doing nothing in terms of revenue sharing.

 

[pdxKingsFan]

Sterling is a unique case in that he has cut out his own niche selling tickets to away fans. So yes he's a complete and total leech, but for people transplanted to LA who would like to catch their hometown team without paying Laker ticket prices he provides an invaluable service.

But yeah, I would think that say 50% of local tv revenue going into a revenue sharing pool rather than the 100% that was originally suggested is much more reasonable by American standards. Still gives plenty of incentive for LA to drive the hardest bargain.

 

[Superman]

Sterling is a unique case in that he has cut out his own niche selling tickets to away fans. So yes he's a complete and total leech, but for people transplanted to LA who would like to catch their hometown team without paying Laker ticket prices he provides an invaluable service.

But yeah, I would think that say 50% of local tv revenue going into a revenue sharing pool rather than the 100% that was originally suggested is much more reasonable by American standards. Still gives plenty of incentive for LA to drive the hardest bargain.

He's lining his pockets off of revenue sharing. I don't think a new revenue sharing program should encourage future Donald Sterlings who buy into the NBA knowing that they'll get a $40 million windfall from other teams TV deals, whether their team is good or not.

 

[whozit]

He's lining his pockets off of revenue sharing. I don't think a new revenue sharing program should encourage future Donald Sterlings who buy into the NBA knowing that they'll get a $40 million windfall from other teams TV deals, whether their team is good or not.

I don't think the amount would be $40 million because that team would also have to put in that percentage of their TV revenue. Sterling because of where he located might receive very little. I did a quick calculation using $20 million as the average for local TV deals (I don't know if that number is even close one way or the other) for 28 teams and $250 million for the other two (Lakers and Knicks). If each team had to include %50 of their TV deals also the average increase for the other 28 teams would only be around $7-8 million. If my math is correct. How much each team would net would depend on how good their deal is in comparison to the rest of the league.

I also think going as high as 50% is getting a little too punitive. As much as you need competitive mid to smaller market teams, you also need strong big market teams.

 

[pdxKingsFan]

He's lining his pockets off of revenue sharing. I don't think a new revenue sharing program should encourage future Donald Sterlings who buy into the NBA knowing that they'll get a $40 million windfall from other teams TV deals, whether their team is good or not.

I don't think there is a market for a team like the Clippers outside of LA except maybe NY or if another huge city with a huge transient population got a second team. Full arenas bring in a lot more money than revenue sharing ever will.

50% I think makes perfect sense given that 50% of your product is the team you are playing. It's not some punitive figure I came up with.

 

[bajaden]

He's lining his pockets off of revenue sharing. I don't think a new revenue sharing program should encourage future Donald Sterlings who buy into the NBA knowing that they'll get a $40 million windfall from other teams TV deals, whether their team is good or not.

I don't think you develop a new CBA based on the worse or the best of the league. Because Sterling is a leech, doesn't mean all small market teams should have to suffer econonicaly. And, I never suggested that the Lakers or any of the major market teams should have to surrender all the money they make from TV revenues or any other extra income they might make. What the league is proposing is exactly about leveling the playing field, both econonicaly and competitively. The model their looking at is the NFL, where who will be the next superbowl champ is hard to predict.

Now I realize that the NFL is put together differently than the NBA. Fewer players and more games in the NBA. But the basic idea is to have a system where every team is solvent, and competitive on a regular basis. To my mind, some sort of revenue sharing, and something resembling a hard cap, would accomplish that. I'll leave the details to you.

 

[bajaden]

He's lining his pockets off of revenue sharing. I don't think a new revenue sharing program should encourage future Donald Sterlings who buy into the NBA knowing that they'll get a $40 million windfall from other teams TV deals, whether their team is good or not.

I don't think you develop a new CBA based on the worse or the best of the league. Because Sterling is a leech, doesn't mean all small market teams should have to suffer econonicaly. And, I never suggested that the Lakers or any of the major market teams should have to surrender all the money they make from TV revenues or any other extra income they might make. What the league is proposing is exactly about leveling the playing field, both econonicaly and competitively. The model their looking at is the NFL, where who will be the next superbowl champ is hard to predict.

Now I realize that the NFL is put together differently than the NBA. Fewer players and more games in the NBA. But the basic idea is to have a system where every team is solvent, and competitive on a regular basis. To my mind, some sort of revenue sharing, and something resembling a hard cap, would accomplish that. I'll leave the details to you.

 

[Superman]

I don't think the amount would be $40 million because that team would also have to put in that percentage of their TV revenue. Sterling because of where he located might receive very little. I did a quick calculation using $20 million as the average for local TV deals (I don't know if that number is even close one way or the other) for 28 teams and $250 million for the other two (Lakers and Knicks). If each team had to include %50 of their TV deals also the average increase for the other 28 teams would only be around $7-8 million. If my math is correct. How much each team would net would depend on how good their deal is in comparison to the rest of the league.

I also think going as high as 50% is getting a little too punitive. As much as you need competitive mid to smaller market teams, you also need strong big market teams.

I don't know exactly what the amount would be. I'm just saying I don't think the system should encourage any owner to leech off of the system. They need to jettison Sterling, and then maybe it will send a message to everyone else who owns now and who might be thinking about owning in the future.

 

[Superman]

I don't think there is a market for a team like the Clippers outside of LA except maybe NY or if another huge city with a huge transient population got a second team. Full arenas bring in a lot more money than revenue sharing ever will.

50% I think makes perfect sense given that 50% of your product is the team you are playing. It's not some punitive figure I came up with.

The gate receipts don't work that way though. The home team gets all the gate receipts.

 

[Superman]

I don't think you develop a new CBA based on the worse or the best of the league. Because Sterling is a leech, doesn't mean all small market teams should have to suffer econonicaly. And, I never suggested that the Lakers or any of the major market teams should have to surrender all the money they make from TV revenues or any other extra income they might make. What the league is proposing is exactly about leveling the playing field, both econonicaly and competitively. The model their looking at is the NFL, where who will be the next superbowl champ is hard to predict.

Now I realize that the NFL is put together differently than the NBA. Fewer players and more games in the NBA. But the basic idea is to have a system where every team is solvent, and competitive on a regular basis. To my mind, some sort of revenue sharing, and something resembling a hard cap, would accomplish that. I'll leave the details to you.

If so, I think they're missing the point. Leveling the playing field competitively would serve to boost lower revenue teams ability to stay solvent as a byproduct. Every NFL fan base has hope in August. As a result of that, fans buy tickets, go to games, buy the DirecTV package, etc. And because there are only 8 home games, every team effectively sells out every season, or else they get blacked out on TV locally.

The goal, if you ask me, should be to make sure that every team can compete, with smart management, regardless of whether they're profiting $2 million a year or $200 million a year. The reason small market teams suffer isn't because they can't get TV deals like the Lakers. It's because they can't compete with big money owners who are willing to go over the cap and pay the luxury tax every season and still do all they can to add more talent to their roster. Level the competitive field, and then the Bucks and Pacers and Kings and Hornets and every other small market team will have a chance to build a winning team. And once the fan bases catch on to that, then season ticket sales increase, gate receipts increase, TV deals get more lucrative, and the owners can profit a little more. They'll never profit like the big market teams will, but at least they'll be in the black and have a competitive product on the floor.

Just to say again, I'm not against all revenue sharing. Putting a percentage of the TV money in a pot and divvying it up isn't the worst idea in the world. But it's completely pointless if you don't address the inequities with player acquisition and compensation, because the big money/big market teams will always have more to spend on players than the small market teams, regardless of revenue sharing.

 

[kennadog]

If so, I think they're missing the point. Leveling the playing field competitively would serve to boost lower revenue teams ability to stay solvent as a byproduct. Every NFL fan base has hope in August. As a result of that, fans buy tickets, go to games, buy the DirecTV package, etc. And because there are only 8 home games, every team effectively sells out every season, or else they get blacked out on TV locally.

The goal, if you ask me, should be to make sure that every team can compete, with smart management, regardless of whether they're profiting $2 million a year or $200 million a year. The reason small market teams suffer isn't because they can't get TV deals like the Lakers. It's because they can't compete with big money owners who are willing to go over the cap and pay the luxury tax every season and still do all they can to add more talent to their roster. Level the competitive field, and then the Bucks and Pacers and Kings and Hornets and every other small market team will have a chance to build a winning team. And once the fan bases catch on to that, then season ticket sales increase, gate receipts increase, TV deals get more lucrative, and the owners can profit a little more. They'll never profit like the big market teams will, but at least they'll be in the black and have a competitive product on the floor.

Just to say again, I'm not against all revenue sharing. Putting a percentage of the TV money in a pot and divvying it up isn't the worst idea in the world. But it's completely pointless if you don't address the inequities with player acquisition and compensation, because the big money/big market teams will always have more to spend on players than the small market teams, regardless of revenue sharing.

I feel about like this. It is also a very bad business model to have maybe half your members losing money most years. Not only do teams need to be more even competitively, they need to be able to at least break even, if the local market is reasonably good. Teams shouldn't have to move cities more and more often, because they can't make it financially and are too limited in what they can contribute for a new arena. (Unless they are the megabillionaires and even they don't want to pour money into a long-term, losing business.)