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owl
02-26-2009, 02:24 PM
http://hoopshype.com/rumors.htm


Several articles that talk about the NBA borrowing money to help teams.

ABADays
02-26-2009, 03:12 PM
Well you gotta believe we are one of them.

duke dynamite
02-26-2009, 03:30 PM
What was it, on the radio last week, I heard that we are taking 15 million of that loan money?

Unclebuck
02-26-2009, 04:22 PM
And probably a good 80% of the tickets sold were done so prior to the mid September economic meltdown. Meaning attendance figures are about the same as they have been for several years. Next year is when it will very noticeable - as teams are now selling tickets for next season. So it will get much worse than it is right now

Country Boy
02-26-2009, 07:07 PM
And probably a good 80% of the tickets sold were done so prior to the mid September economic meltdown. Meaning attendance figures are about the same as they have been for several years. Next year is when it will very noticeable - as teams are now selling tickets for next season. So it will get much worse than it is right now

UB, do you think that attendance figures are declining only because of economics or are there a whole range of problems affecting sagging ticket sales?

owl
02-26-2009, 07:51 PM
What was it, on the radio last week, I heard that we are taking 15 million of that loan money?

If this is a loan, why would the Simons take it? I find it hard to believe they are short
on cash. However, stranger things have happened recently. Maybe they are getting a
great rate and are using it against higher rate loans???

Peter_sixtyftsixin
02-26-2009, 08:33 PM
If this is a loan, why would the Simons take it? I find it hard to believe they are short
on cash. However, stranger things have happened recently. Maybe they are getting a
great rate and are using it against higher rate loans???

I think the NBA is taking the loan and giving the money to teams. As in the teams don't pay it back, the league as a whole does.

NuffSaid
02-26-2009, 09:26 PM
I think the NBA is taking the loan and giving the money to teams. As in the teams don't pay it back, the league as a whole does.
That makes sense.

chrisjacobs7
02-26-2009, 09:59 PM
If the teams don't have to pay it back, I'd imagine we'd be one of the teams getting the help.

Shade
02-26-2009, 10:42 PM
Why does the NBA need to borrow money? All I've heard is how the great David Stern is bringing in cash by the fistfuls.

Peter_sixtyftsixin
02-26-2009, 11:42 PM
From Wish TV via Indy Cornrows:

http://www.wishtv.com/dpp/sports/pacers_and_nba/Pacers_dont_intend_to_take_NBA_loan_20090226

We're not taking any money from the NBA.

Kstat
02-26-2009, 11:47 PM
Why does the NBA need to borrow money? All I've heard is how the great David Stern is bringing in cash by the fistfuls.

...do you realize they just got a $175 million loan in this awful economic climate?

Do you realize how stable and successful any business would need to be in order to qualify for such a massive loan?

Put down the haterade.

Kuq_e_Zi91
02-27-2009, 01:01 AM
What was it, on the radio last week, I heard that we are taking 15 million of that loan money?

Just a thought, if this is true, what impact does this have on the Tinsley buyout? Could we possibly use this money for that?

duke dynamite
02-27-2009, 01:34 AM
Just a thought, if this is true, what impact does this have on the Tinsley buyout? Could we possibly use this money for that?
Probably nothing. I think this money is to recoup from last season's ticket sales or lack thereof.

rexnom
02-27-2009, 04:30 AM
http://sports.espn.go.com/espn/page2/story?page=simmons/090227

One of Bill Simmons's best articles ever on this very subject. Definitely worth the read.

Kuq_e_Zi91
02-27-2009, 04:35 AM
I stumbled upon this interesting note while reading an article by Ric Bucher on ESPN.com about the trades being mainly centered on the finances.


http://sports.espn.go.com/espnmag/story?id=3937034


Celtics CEO Wyc Grousbeck saved $1.5M in taxes by dealing end-of-the-benchers Patrick O'Bryant and Sam Cassell. It's harder to blame him, though, because he was one of the 15 owners who took loans of up to $11.7M from the league to meet their budgets.

It's hard to imagine what it means for the rest of the league when a franchise like Boston is borrowing money. Then there's the Pacers, who have lost money in 9 of the last 10 seasons, and they're not borrowing money.

However, in the article Peter_sixtyftsixin posted, it said the teams will have to pay back the money at about 8 percent interest, so maybe the Simons figured they'll do OK without the loan.

Kuq_e_Zi91
02-27-2009, 04:36 AM
http://sports.espn.go.com/espn/page2/story?page=simmons/090227

One of Bill Simmons's best articles ever on this very subject. Definitely worth the read.

Agreed. I read that before the Bucher article and it's very insightful.

Bball
02-27-2009, 04:52 AM
I stumbled upon this interesting note while reading an article by Ric Bucher on ESPN.com about the trades being mainly centered on the finances.


http://sports.espn.go.com/espnmag/story?id=3937034



It's hard to imagine what it means for the rest of the league when a franchise like Boston is borrowing money. Then there's the Pacers, who have lost money in 9 of the last 10 seasons, and they're not borrowing money.

However, in the article Peter_sixtyftsixin posted, it said the teams will have to pay back the money at about 8 percent interest, so maybe the Simons figured they'll do OK without the loan.

And maybe the Pacers have shuck and jived their way to the losses they've claimed in order to push for an even sweeter sweetheart deal more comparable with the Colts. ...Regardless that the Pacers don't have a bad deal in reality... just not the deal comparatively that the Colts got.

The truth probably lies somewhere between...

vnzla81
02-27-2009, 07:44 AM
I don't understand why some teams in the NBA are not doing that well, the pacers are not doing well because nobody is going and because they are bad, but then you have teams like the SUNS who sell every game and are on tv every week, they are one of the most popular teams in the NBA and still they say that they don't have any money? I don't get it. The NBA needs to do what the NFL is doing not giving all this big stupid contracts, they need to stop with the guaranteed and make them year to year. This guaranteed stuff is making the NBA worse not better and it could also make the product better when you are going to have players playing hard every night because they don't have a guaranteed that they are going to have 20mil next year for doing nothing.

Unclebuck
02-27-2009, 09:55 AM
UB, do you think that attendance figures are declining only because of economics or are there a whole range of problems affecting sagging ticket sales?

It is almost all the economy. Reason for my strong statement is that TV ratings are up across the board. Allstar Saturday night was the highest ever. The allstar game was up this year. ESPN, ABS and TNT's all ratings are up. The Thursday night game a few weeks ago betwen the Lakers and Celtics was the highest ratings for a regular season game in 5 years.

The interest in the NBA is very high this season, but the economy is hurting the bottom line

Spicoli
02-27-2009, 09:58 AM
Just because a company/team borrows money does not mean they are not doing well financially.

And, conversely, just because a company/team does not accept money does it mean the they are actually doing well financially.

Often it is just the opposite...

Shade
02-27-2009, 10:05 AM
...do you realize they just got a $175 million loan in this awful economic climate?

Do you realize how stable and successful any business would need to be in order to qualify for such a massive loan?

Put down the haterade.

If they're so "stable and successful," why do they need to take out a loan?

Major Cold
02-27-2009, 10:08 AM
Sports are dependent on corporate big wigs taking their clients to games and being sponsored by corporations (Pacers must have taken a big hit trading GM for Kia).

Country Boy
02-27-2009, 11:13 AM
It is almost all the economy. Reason for my strong statement is that TV ratings are up across the board. Allstar Saturday night was the highest ever. The allstar game was up this year. ESPN, ABS and TNT's all ratings are up. The Thursday night game a few weeks ago betwen the Lakers and Celtics was the highest ratings for a regular season game in 5 years.

The interest in the NBA is very high this season, but the economy is hurting the bottom line

Thanks UB, while I don't agree that the economy is as big a factor as you do, it is however the biggest reason.

Brad8888
02-27-2009, 11:31 AM
Sorry in advance for the rant.

As a current season ticket holder who actually has felt simultaneously sorry for the franchise while feeling ripped off by the fact that we full season ticketholders paid full price for this season in advance and have received next to nothing from the franchise to equalize our treatment with those who have come in and basically been given the same seats by comparison ($96 seats for anywhere from $10 to $50 roughly for the majority of games this year), and also thereby destroying virtually any hope of selling unused tickets (which is one of the main selling points used on me by Eddie Bird when I committed to the then required 3 year contract for club level, as well as his telling me that another benefit would be that not only would my seats stay the same price, but that I would be paying less than the general public for my seats, which meant that the franchise would not be competing at any time for the duration of my contract against me for selling my unused seats), I cannot believe this franchise is not in line for this money.

I no longer want to EVER be told by this franchise through the media, its management, or its sales reps that times are tough for them financially. I also NEVER want them to EVER indicate that they need even a PENNY of our taxpayer dollars to operate Conseco for ANY reason, including for their home games. In fact, I hope the CIB is able to negotiate even less desirable terms with the Pacers so that we as taxpaying citizens are not being forced to support the franchise whether we have any interest in it or not.

Let those arrogant elitists pay the freight, provide us long suffering fans a franchise worth supporting by paying the luxury tax to the league as a result of acquiring the players required to be competitive, buy out Tinsley NOW (few arbitrators would side with us now because we obviously can easily afford to buy him out and he is being damaged from a future earnings standpoint by our banishment of him regardless of what his actions did to our franchise) and apologize to both their current paying fanbase AND the Indianapolis metropolitan area taxpayers for ripping us off in recent years while currently using veiled threats in their negotiations on Conseco against the taxpaying citizens of the community. If they don't need money from the league (regardless of the interest rate on the loan) they sure as **** don't need our money as taxpayers, either, or nearly as much money from us as their current (possibly past) season ticket holders are being asked to pay on our renewals.

The views expressed in this post, I am certain, will be refuted by many of you, supported by a few who will dare to post support for this side of things, and will be construed by some as either trolling or some kind of attempt to ratchet up the negativity of the board.

Regardless of any other viewpoints on this subject, I just wanted to share my heightened disgust for the way that the franchise continually displays a disconnect with reality in its front office, depite the fact that the Simon family is now much more hands on than it has been in the past. I am just so frustrated about the wasted opportunities we have had and seem to be destined to continue having that I felt the need to express this to the board (kind of like to a support group?).

Thanks for "listening".

Putnam
02-27-2009, 11:39 AM
The interest in the NBA is very high this season, but the economy is hurting the bottom line


This makes evident sense, but I think it is not completely right.

"Interest in the NBA is very high this season." The evidence of that is people spending money on entertainment in the form of cable TV sports viewing.

People ARE spending money. If ticket sales for NBA games is off, it is not because nobody has any money to spend. It is because consumers with money in their hands are choosing other forms of entertainment.

I'm not saying there is no reduction in consumer spending. There is a reduction, but if NBA ticket sales is showing the hurt perhaps it is losing its former share of a still substantial market. I'm not reading about any bowling alleys going out of business. The casinos are not shutting down -- they are expanding.

ajbry
02-27-2009, 12:19 PM
I don't understand why some teams in the NBA are not doing that well, the pacers are not doing well because nobody is going and because they are bad, but then you have teams like the SUNS who sell every game and are on tv every week, they are one of the most popular teams in the NBA and still they say that they don't have any money? I don't get it. The NBA needs to do what the NFL is doing not giving all this big stupid contracts, they need to stop with the guaranteed and make them year to year. This guaranteed stuff is making the NBA worse not better and it could also make the product better when you are going to have players playing hard every night because they don't have a guaranteed that they are going to have 20mil next year for doing nothing.

As Simmons said, some owners simply aren't worth what they were when they purchased their teams...

Owners have occasionally ducked the luxury tax threshold - when it was feasible in a basketball-sense - for years now, but if you're going down on a sinking ship there's no good reason to acquire players with contracts of any magnitude that could adversely affect that.

Everyone's in trouble - owners, sponsors, corporate ticket holders, normal ticket holders, and very soon, the players themselves...

switch
02-27-2009, 12:54 PM
The NBA needs to do what the NFL is doing not giving all this big stupid contracts, they need to stop with the guaranteed and make them year to year. This guaranteed stuff is making the NBA worse not better and it could also make the product better when you are going to have players playing hard every night because they don't have a guaranteed that they are going to have 20mil next year for doing nothing.

I completely agree with that. The problem is the NBA let the NBAPA get too strong so now it will be tough for owners to bargain for such contracts. They should have moslty nongauranteed contracts like the NFL IMO, but I will be surprised if they can get them without another strike/lockout.

--------------------------------------------------------------------------

Also, the link below shows why the Simons do not need money from the NBA. I'v heard the Magic have been losing money too, but I doubt they ask for money for the same reason the Simons won't.

http://www.sportsbusinessdaily.com/article/124255

Shade
02-27-2009, 12:59 PM
You know what doesn't make sense to me? That the Pacers have supposedly lost money in 25 of the last 27 seasons, and are NOT in line to get some of this $$$. Something doesn't add up here.

switch
02-27-2009, 01:00 PM
http://www.indystar.com/article/20090227/SPORTS04/902270368/1088/SPORTS04

Star article about the Pacers/NBA and the financial troubles. Doesn't say very much, just that 12 teams will get between $13 - $20 million and the Pacers are not one of them.

switch
02-27-2009, 01:05 PM
You know what doesn't make sense to me? That the Pacers have supposedly lost money in 25 of the last 27 seasons, and are NOT in line to get some of this $$$. Something doesn't add up here.

Mel made $2.8 billion in 2008 and $2.9 billion in 2007 (link in previous post)

He can afford to lose a few million each year. He probable would rather spend his own money than accept a loan that he would have to pay back. Just my opinion though.

count55
02-27-2009, 01:06 PM
You know what doesn't make sense to me? That the Pacers have supposedly lost money in 25 of the last 27 seasons, and are NOT in line to get some of this $$$. Something doesn't add up here.

Two things: they can get better financing through SPG, and they don't want to open their books up during the negotiations with the CIB.

It is my understanding that the teams accepting the loan must allow access to their complete financials.

Take that FWIW.

count55
02-27-2009, 01:08 PM
Mel made $2.8 billion in 2008 and $2.9 billion in 2007 (link in previous post)

He can afford to lose a few million each year. He probable would rather spend his own money than accept a loan that he would have to pay back. Just my opinion though.

I don't see any reference to that in the Wells article, and, intuitively, there's no way they had that kind of income.

That might be for SPG or his net worth, but not an annual income figure.

Shade
02-27-2009, 01:10 PM
Mel made $2.8 billion in 2008 and $2.9 billion in 2007 (link in previous post)

Is that profit or net worth?

EDIT: count55 beat me to it. :-p

ChicagoJ
02-27-2009, 01:33 PM
Why does the NBA need to borrow money? All I've heard is how the great David Stern is bringing in cash by the fistfuls.

Here comes the damn day job again...

Leverage and Seasonality.

The NBA has an asset. Let's pretent it is one asset worth $100.

A 10% return on that asset makes it worth $110.

Now let's say that they get somebody to loan then $80, so they only have to put up $20 in their own equity.

That same 10% return on the asset is a 50% return on the equity value. ($110 - 100)/ ($20).

Although I know for a fact that the league has a league-wide credit agreement, it is also reasonable to assume that leverage is common throughout privately held businesses, whether they are sports franchises, manufacturers, or anything else.

As for seasonality, when do you think NBA frachises receive most of their cash inflows? The answer is that the bank account gets a big boost when the national television broadcast money is deposited. So each year, there is typically a need for short-term borrowing to cover the peaks and valleys of the checking account.

Shade
02-27-2009, 01:53 PM
I was originally under the impression that the money was a sort of "bailout" for some teams, and would not have to be paid back to the league. Since it looks like the NBA is instead essentially serving as the middle man here, it makes more sense.

switch
02-27-2009, 02:30 PM
I don't see any reference to that in the Wells article, and, intuitively, there's no way they had that kind of income.

That might be for SPG or his net worth, but not an annual income figure.

It was in the link before the wells article. I meant to say worth not made. My bad.

YoSoyIndy
02-27-2009, 08:44 PM
Why does the NBA need to borrow money? All I've heard is how the great David Stern is bringing in cash by the fistfuls.

NFL did the same thing a couple months ago. To me, it's the corporate version of getting an unneeded student loan as the interest rate on the loan is lower than the interest you earn on it -- therefore netting out in the positive.

YoSoyIndy
02-27-2009, 08:57 PM
If they don't need money from the league (regardless of the interest rate on the loan) they sure as **** don't need our money as taxpayers, either, or nearly as much money from us as their current (possibly past) season ticket holders are being asked to pay on our renewals.

First off, I appreciate any heart-felt rant that isn't racist/sexist/etc. You're speaking openly and honestly, so no one should bash you for it.

I would guess the Simons can get loans w/ lower interest at any point they want and at any amount they need. If that's the case, then there would be no reason to take a loan at a higher interest rate. If anything, it would cost STH like us more money.

I've had a lot of issues this year w/ the way some things have been handled, but i didnt' have a problem w/ my renewal prices -- I saved something to the effect of 35% on my tickets.

I don't know how much I believe it, but I was told that tickets wouldn't be discounted lower than the full season amount I pay next year in my seats in the lower section. We'll see.

Peter_sixtyftsixin
02-27-2009, 09:20 PM
I'm buying season tickets soon. I'm really excited, but I'm nervous that I'm going to be really upset if tickets are uber discounted.

aceace
02-27-2009, 11:40 PM
I would think the money would be paid back through tv revenue over the next several years. The NBA doles out that money so they would be guaranteed to get it back.

Unclebuck
02-28-2009, 12:11 AM
I was originally under the impression that the money was a sort of "bailout" for some teams, and would not have to be paid back to the league. Since it looks like the NBA is instead essentially serving as the middle man here, it makes more sense.

It is a loan, so someone has to pay it back. I assue the teams have to pay the league back and because of that the Simons don't want to partake.