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MillerTime
01-30-2010, 04:03 PM
Some NBA team executives believe that the league office will seek to institute a hard cap -- a total salary number which no team may exceed -- in the next collective bargaining agreement.

Such a firm cap could be phased in over a period of years, allowing teams to gradually shed payroll after the 2010-2011 season.

"If there's going to be a lockout, then there's a 99 percent chance there is going to be a hard cap," one GM said.

The possibility of a hard cap could chill spending this summer.

"Teams might say, 'I don't want to give $15 million to $20 million to one guy because that might lock me out of a hard cap,'" said a team executive. "It could change everything."

A hard cap would drive player salaries down considerably.

"In the new deal, $8 million is going to be star-player money," predicted one GM.

Via SportsIllustrated.com
http://sportsillustrated.cnn.com/2010/writers/ian_thomsen/01/29/countdown.trade.deadline/index.html?eref=sihp
By Ian Thomsen

MillerTime
01-30-2010, 04:03 PM
I think this would benefit a small market city like Indy...It would stop the big cities like NY and LA from going over the cap to get keep players

Hicks
01-30-2010, 04:17 PM
So do you think the hard cap would be about where the luxury tax line is these days?

Tom White
01-30-2010, 04:32 PM
So do you think the hard cap would be about where the luxury tax line is these days?

I would think it will be less. There would be less benefit to fewer teams if they set the cap as high as the current tax level. The idea, after all, is to reduce expenses.

Frankly, I think it is darned time they got around to doing this.

Pacerized
01-30-2010, 08:43 PM
I guess that would mean an end to Bird Rights for your own free agents. I could see a lot more free agents moving around. A team gets lucky in the draft and pulls a guy like Granger out at #17 but they don't have the cap space to keep him when he becomes a free agent. The same article says the new salary for a star player would be around 8 mil.
If this were to go through the Pacers salary space at the beginning of 2011 season could net a great deal more.

owl
01-30-2010, 08:46 PM
So how short is the lock-out season going to be? Will the players threaten to start
another league? Good luck with that by the way. Will be have two leagues?
Frankly I am in favor of anything that levels the playing field. The NFL has it fairly right.
With everyone abiding by the same rules I think the whole league wins.

Pacersfan46
01-30-2010, 09:12 PM
With everyone abiding by the same rules I think the whole league wins.

Baseball needs to figure this out. Granted my Red Sox are one of the teams that benefit, but I'd be the first person in line to advocate it.

-- Steve --

Doug
01-30-2010, 09:30 PM
Hummm... I wonder what impact a hard cap would have on guaranteed salaries?

the jaddler
01-30-2010, 09:35 PM
I think hard cap would be a good thing....that would put more on player talent....strategy......those sorts of things....

I dont care where they make the hard cap at, as long as its fair for both those that do and dont have money. basically what im saying make it obtainable for small teams but dont make it so low that those big paying teams arnt able to spend money like they want to.

but im sure no one will be happy....

and yes baseball needs to figure this out....should be hard cap in every sport...that way people the like the Red Sox and Yankees actually have to win a championship instead of buying it!

Pacersfan46
01-30-2010, 09:43 PM
and yes baseball needs to figure this out....should be hard cap in every sport...that way people the like the Red Sox and Yankees actually have to win a championship instead of buying it!

Don't be throwing anyone in there with the Yankee's. The Red Sox are 4th in team salary, and the Yankee's are 80 million dollars in salary ahead of the Sox. Not even in the same zip code. ;)

-- Steve --

cdash
01-30-2010, 09:43 PM
The players union will fight this to the bitter end. Personally, I think some of these changes are needed. You better believe Stern will make it easier to void contracts if players pull some stupid **** like Gilbert Arenas did.

vnzla81
01-30-2010, 09:45 PM
I actually like this, Im tired of seen nobodys getting pay like they are all stars, I hope they get close to what the NFL does, if the player gets in trouble or is not producing you just cut him and sign somebody else, I think that the NBA product could benefit from this.

Pacersfan46
01-30-2010, 09:47 PM
The players union will fight this to the bitter end. Personally, I think some of these changes are needed. You better believe Stern will make it easier to void contracts if players pull some stupid **** like Gilbert Arenas did.

They won't fight it for too long. If that's what the owners what, they'll get it. Eventually.

As was found out in the last lockout, the players for the most part live check to check. When the majority of them start struggling to pay bills, they will give in. The owners won't have such problems.

-- Steve --

Roaming Gnome
01-30-2010, 10:32 PM
They won't fight it for too long. If that's what the owners what, they'll get it. Eventually.

As was found out in the last lockout, the players for the most part live check to check. When the majority of them start struggling to pay bills, they will give in. The owners won't have such problems.

-- Steve --

Problem was, some of the small market teams that paid a monthly lease were screaming bloody murder, also. I believe there were owners that wanted to end the last lock out as badly as a lot of the players. This current system was not what the owners wanted when they locked the players out the first time..... This was the compromise. They wanted a Hard Cap!

As for where I personally fall in owners vs players..... I look at it as Billionaires vs Millionaires and usually side with the players because I'm skeptical the savings will ever be passed down to the fans. However, I agree that contracts do need to have fewer guaranteed years. I'm willing to bet that will be the agenda of the owners when both sides come to the table for the next CBA.

I don't think ALL the owners are ready to play this game of chicken in this economy for a hard cap. As for the players union.... I'm sure they learned from watching the NHL players getting knuckled under by a hard cap.

Smoothdave1
01-30-2010, 10:51 PM
Hard cap, after being gradually phased in, could work. It helps team like Indy, Minnesota, Milwaukee, Memphis, Sacramento, San Antonio, OKC, Charlotte, New Orleans, Utah, etc. is competing against teams like LAL, Dallas, NYK, Boston, Chicago, Miami, Phoenix, etc.

However, it will be interesting to see how this all plays out. I saw an article the other day about the cap suggesting that a guy like Amare wouldn't get 5 year/60 million and that he could expect a salary more along the lines of 5-6 million a year under the new system. If this happens, maybe this creates more parity and possibly drives down tickets somewhat?

I think that regardless of what happens, salaries will come down a little bit. No longer will you have some of these guys like Troy, MDJ, TJ, etc. pulling in 8-10 million a year. I hope that a lot of the players have saved their money, because I could see another Antoine Walker or Sprewell situation.

Bball
01-30-2010, 11:57 PM
Problem was, some of the small market teams that paid a monthly lease were screaming bloody murder, also. I believe there were owners that wanted to end the last lock out as badly as a lot of the players. This current system was not what the owners wanted when they locked the players out the first time..... This was the compromise. They wanted a Hard Cap!

As for where I personally fall in owners vs players..... I look at it as Billionaires vs Millionaires and usually side with the players because I'm skeptical the savings will ever be passed down to the fans. However, I agree that contracts do need to have fewer guaranteed years. I'm willing to bet that will be the agenda of the owners when both sides come to the table for the next CBA.

I don't think ALL the owners are ready to play this game of chicken in this economy for a hard cap. As for the players union.... I'm sure they learned from watching the NHL players getting knuckled under by a hard cap.


I look at it like any savings passed down to the fans would be gravy.

With non-guaranteed contracts (or some form thereof) the real benefit for the fans would be seeing their teams able to get out from under mistakes rather than sinking under the weight of albatross contracts. And getting rid of guaranteed contracts has (IMHO) another benefit... It allows teams to go ahead and take a chance on a player they aren't sure about. Probably not the best example but a recent one- Jarret Jack. Or Brad Miller...
Players the team might like to keep but has reservations about their price tag vs their worth to the team.

Young
01-30-2010, 11:59 PM
I actually like this, Im tired of seen nobodys getting pay like they are all stars, I hope they get close to what the NFL does, if the player gets in trouble or is not producing you just cut him and sign somebody else, I think that the NBA product could benefit from this.

Man if the NBA becomes more like the NFL in that regard I will be so excited! That is one thing I have been wanting to see in the NBA for a while.

Roaming Gnome
01-31-2010, 12:20 AM
I look at it like any savings passed down to the fans would be gravy.

With non-guaranteed contracts (or some form thereof) the real benefit for the fans would be seeing their teams able to get out from under mistakes rather than sinking under the weight of albatross contracts. And getting rid of guaranteed contracts has (IMHO) another benefit... It allows teams to go ahead and take a chance on a player they aren't sure about. Probably not the best example but a recent one- Jarret Jack. Or Brad Miller...
Players the team might like to keep but has reservations about their price tag vs their worth to the team.

I think that guaranteed contracts can be improved by making the guaranteed years much shorter. (3 years max) I know that a lot of you feel that the NFL has the best way of doing contracts. For low talent, or unknown guys that are barely in the league, it's good to be able to cut guys that have no impact or in our case negatively impact the team. The rub is for the NFL stars because even the NFL contracts have player protections in them with the signing bonus system. With the signing bonuses teams just can't cut anyone without a consequence. Remember T.O. and his ordeal in Philadelphia. I'm sure the Eagles wanted to cut him outright, but they couldn't due to the rules of their CBA. If the Eagles were to cut him that season, his signing bonus would have come off the cap all at once instead of being pro-rated over the life of his contract. That would have prevented the Eagles from fielding a 53 man roster that season, so they had to put up with T.O. embarrassing antics while they tried to work a deal to get him out of town.

What I'm getting at is.... If the owners were to get from underneath guaranteed contracts, they would more then likely have to at least give up some sort of protection for the players like "signing bonuses" or a "franchise tag" system. Some of those could end up being a worse situation then shorter guaranteed deals.

speakout4
01-31-2010, 12:24 AM
Problem was, some of the small market teams that paid a monthly lease were screaming bloody murder, also. I believe there were owners that wanted to end the last lock out as badly as a lot of the players. This current system was not what the owners wanted when they locked the players out the first time..... This was the compromise. They wanted a Hard Cap!

As for where I personally fall in owners vs players..... I look at it as Billionaires vs Millionaires and usually side with the players because I'm skeptical the savings will ever be passed down to the fans. However, I agree that contracts do need to have fewer guaranteed years. I'm willing to bet that will be the agenda of the owners when both sides come to the table for the next CBA.

I don't think ALL the owners are ready to play this game of chicken in this economy for a hard cap. As for the players union.... I'm sure they learned from watching the NHL players getting knuckled under by a hard cap.
All the players are making money but all the owners aren't.

Roaming Gnome
01-31-2010, 12:29 AM
All the players are making money but all the owners aren't.

Why do the owners in **(name a pro league)** always balk at opening the books when this always come up? ...and this always seems to come up.

speakout4
01-31-2010, 12:34 AM
Why do the owners in **(name a pro league)** always balk at opening the books when this always come up? ...and this always seems to come up.
I don't believe that the simons made much in the 25 years they owned this team. Writing off profits form other businesses with basketball loses is not making money.

Bball
01-31-2010, 01:10 AM
I think that guaranteed contracts can be improved by making the guaranteed years much shorter. (3 years max) I know that a lot of you feel that the NFL has the best way of doing contracts. For low talent, or unknown guys that are barely in the league, it's good to be able to cut guys that have no impact or in our case negatively impact the team. The rub is for the NFL stars because even the NFL contracts have player protections in them with the signing bonus system. With the signing bonuses teams just can't cut anyone without a consequence. Remember T.O. and his ordeal in Philadelphia. I'm sure the Eagles wanted to cut him outright, but they couldn't due to the rules of their CBA. If the Eagles were to cut him that season, his signing bonus would have come off the cap all at once instead of being pro-rated over the life of his contract. That would have prevented the Eagles from fielding a 53 man roster that season, so they had to put up with T.O. embarrassing antics while they tried to work a deal to get him out of town.

What I'm getting at is.... If the owners were to get from underneath guaranteed contracts, they would more then likely have to at least give up some sort of protection for the players like "signing bonuses" or a "franchise tag" system. Some of those could end up being a worse situation then shorter guaranteed deals.

I like the idea of guaranteeing the first year with subsequent years being team options... and maybe some type of pre-decided prorated severance pay if a player is cut while the contract still is in force. And I mean it's predecided in the CBA, not something negotiated individually into each contract.

Gamble1
01-31-2010, 01:12 AM
I don't believe that the simons made much in the 25 years they owned this team. Writing off profits form other businesses with basketball loses is not making money.
Not everyone believes that the Simon's are losing money.

Gamble1
01-31-2010, 01:15 AM
I like the idea of guaranteeing the first year with subsequent years being team options... and maybe some type of pre-decided prorated severance pay if a player is cut while the contract still is in force. And I mean it's predecided in the CBA, not something negotiated individually into each contract.
Everyone would like to see that but there is a reason why it hasn't happened yet.


Here we go again with the tanking....



One GM hopes that the new CBA will do away with max contracts.
"If we do get to a hard cap, I want to get rid of all the stupid rules, like mid-level exceptions and max salaries," he said. "Say the new max is $12 million, which means some team is getting LeBron at $12 million when he is really worth $60 million to their franchise. All that will do is tilt the playing field toward losing more than ever."
In other words, a limit on max salaries will provide further incentive for teams to improve their lottery position in order to acquire a star like James.
"The only way to get a player like LeBron is to get a top-five pick, and the only way to get that kind of pick is by losing," the GM said. "The league is only going to increase the incentive to lose games if you're prevented from paying LeBron more than $10 to $12 million. It's too big of a competitive advantage to the teams that have a player like him."



I wonder how this will affect Grangers contract?

able
01-31-2010, 08:13 AM
hmm yeah a hard cap, pennies on the dollar of course, and oh yeah non-guaranteed contracts, hmm that too.

yeah those poor owners who struggle so hard to pay all the losses of their team, their hobby, their flagship "see how rich i am" label, they really need all the help they can get because otherwise how can they send Jermaine O'Neal to the birthday party for their grandchildren

Yeah selling the team at a nice profit does not come to terms with making losses, are they making real losses ? are those losses not tax deductable so in part paid by not paying tax over other income ?
and is the other part more then 300 million over the years > because that is the increase in value of the franchise.

Why not shackle all the players, have them live in bunkhouses, so they cant get into trouble anywhere or embarrass the franchise; so they "stay in line"
Why not keep all the income for the owners so they can make a handy dandy profit on their team and see the value increase evenmore

That way, if you dont like a player you can just sell him ?
Means you can take a flyer on someone that may not work out.

It all reminds me of something, not sure what .................................................. ....



There is a set percentage of income for the nba/franchise that goes to player salaries and i know it is horrible to see knuckleheads (some) make so much money, but you know what ? there are a lot of rich a'holes in the world that made money by sheer luck or plain cheating, so i can live with the talented knucklehead getting rich and doing some charity work, better then community service.

I think you can guess where I stand

Pacersfan46
01-31-2010, 08:49 AM
I'm with able. I am in favor of the hard cap, but shortening of contracts, making them not guaranteed and all this other stuff can go out the window. All of those things are just to protect the owners. If you can just release players and such at any time, and have tiny 3 year contracts all the time, there's no risk at signing anyone. Just release them. That's .... asinine. Talk about making GM's jobs just too easy.

I just want what's in line for leveling the playing field. A hard cap. I don't care if that hard cap is 5 million or 500 million. I just want every team playing by the same rules.

-- Steve --

Putnam
01-31-2010, 09:13 AM
Abel needs to use the green font!


You make some good points, Abel, but the suggestion that being allowed to write off sports-team losses against shopping mall profits or clothing-store profits is a perk for owners isn't serious, is it?

Sports team owners shouldn't be expected to subsidize the teams with their other businesses. The sports teams ought to stand on their own.

Bball
01-31-2010, 01:52 PM
This shouldn't be about what's good for owners or players... it should be about what is best for the game('s health) itself...

Teams shouldn't need cities and states subsidizing them. The genie is out of the bottle on this one but it can only help if player salaries are reduced overall.

Teams shouldn't be shackled with the need to write a contract on 'potential' and then see that player not realize his potential (for whatever reasons).

I don't think it's fair to fans to see their team buried under the weight of overpriced and underperforming players. That's not healthy for any team nor is it good for the league to have 'bad' teams stuck as 'bad'.

Guaranteed contracts take away incentive for players to perform... except in a contract year. Most players have other motivations, not the least of which is their competitive spirit, but there's plenty of examples of players getting a a contract and then going into 'coast' mode.

As I understand it, nobody is talking about capping an individual player's salary... the cap is on a team's total salary. If so, a player is free to pursue as much of that team cap as he wants... but can now suffer consequences if his greed hurts the team in the end.

Players are free to join a different league or take up another occupation instead of signing an NBA contract if they feel the NBA isn't being fair to them.

speakout4
01-31-2010, 02:07 PM
I could stand the high player salaries if they performed up to the stated salary but to pay people who aren't performing is a bit absurd. Why players have contracts that have no performance clause is hard to fathom.. Who else gets a free performance pass?

Three year contracts max, a hard cap, and revenue sharing to protect the smaller markets.

able
01-31-2010, 02:39 PM
What cost to the city ?? Afaik Indianapolis is only "asked" at this stage to run CFH, not pay for the team's bb losses.

Subsidizing buildings is not quite the same, also the Pacers paid the pargest part of the building and repaid most loans on it, are still paying tax on sold tickets, so I think at THIS moment in time they are BRINGING the city money.

Which team is exactly "subsidized" ?

Outside of the cost of an arena, which has mostly teams paying part and the rest coming back in either rent or taxes or both, I don't see much subsidizing going on .

What I do know is that there is lots of Basketball related income to a frnachise and that the players get a part thereof in salaries, aka cap, that those salaries tied in with that bri, in a sense that if it is down the salaries go down as well, bonuses are less etc. (and yes for a top earner on a team that can be a diference of millions)

Athletes have a short lifespan in which they can make money of their talent, after that we can only wish them enough sense and smarts to not lose it or grow it.
Team owners survive all players, again and again.

Are you going to somehow give the increase in value of the franchise to the players ?
After all they were instrumental in that.

Of course not.

If teams are "shcakled" by contracts then the team is ran like a mickey mouse outfit.
Taking a long shot ?? look at SAS and tell me, how did they get Parker and Ginobli, long shots ? or skill ?

The Lebron's of this world make a diffrernce to a franchise but so do the Parker's and Ginobli's and Miller's

What you are saying is you need to protect the owners from bad management of their teams, that my friend is a business risk the players do not need to pay for.

And max salaries are a percentage of the cap and based upon bri, so no they can not choose to give Lebron 50% of that.

speakout4
01-31-2010, 02:45 PM
Athletes have a short lifespan in which they can make money of their talent, after that we can only wish them enough sense and smarts to not lose it or grow it.
Team owners survive all players, again and again
I need to understand why team owners have to pay players exhorbitant salaries because players have a finite lifespan as players. That makes no sense to me.

Swingman
01-31-2010, 02:51 PM
I need to understand why team owners have to pay players exhorbitant salaries because players have a finite lifespan as players. That makes no sense to me.

Exactly. If players don't make enough money during their NBA careers, then they are more than welcome to get a job in another field. This might also get more players to take advantage of their FREE college education and not jump to pros so early.

Roaming Gnome
01-31-2010, 03:45 PM
Isn't the BRI split pretty close to 50%? Isn't that how the cap is based to keep the owners currently in check? What's fair is fair. Last I checked, isn't it the "owners" that give these contracts, anyway? Maybe if the owners can show a little self control, they wouldn't be in the situation that they're in.

Sometimes I think if the BRI was split 70/30, some if you'd still think the players were getting too much because they're earning more then "Joe Fan" for playing a game.

Doug
01-31-2010, 04:22 PM
Which side is pushing for lower ticket prices?

That's the one I want to support.

(I'm pretty sure the answer is 'neither')

Roaming Gnome
01-31-2010, 04:29 PM
Which side is pushing for lower ticket prices?

That's the one I want to support.

(I'm pretty sure the answer is 'neither')

Something we can "all" agree on.

Gamble1
01-31-2010, 04:42 PM
What you are saying is you need to protect the owners from bad management of their teams, that my friend is a business risk the players do not need to pay for.

You have to admit able that the current NBA makes it hard for good managment.

I don't care much about the owners or the players. The product speaks for itself and it has gotten worse over the years.

I mean talley it up. How many well run teams are out there vs the bad ones and do you put the blame solely on the management. Its not like idiots with zero credentials are running these franchises.

Dece
01-31-2010, 04:59 PM
Not going to find me shedding any tears for either side...

if you don't believe owning an NBA team is a winning investment, then don't do it, or do it because you enjoy it, boo hoo billionaires.

If you don't believe 1-10M a year salary is enough pay to make playing in the NBA a worthy venture for you, don't do it, or do it because it's the best job in the world, boo hoo millionaires.

able
01-31-2010, 05:09 PM
You have to admit able that the current NBA makes it hard for good managment.

I don't care much about the owners or the players. The product speaks for itself and it has gotten worse over the years.

I mean talley it up. How many well run teams are out there vs the bad ones and do you put the blame solely on the management. Its not like idiots with zero credentials are running these franchises.

if it was THAT hard, then how come SAS is successfull ?
In "noirmal" life companies that are badly run lose value and go bust, NBA teams are a "hobby" of the happy few, they still grow in value no matter what (bri must be nice enough) and no matter how they are ran, for that to change we dont need to cut on the players without whom there would be no nba

and yes without the owners there would neither be an nba but likely another league that paid the same salaries, like nfl or mlb or euro football or euro basketball

cdash
01-31-2010, 05:14 PM
Not going to find me shedding any tears for either side...

if you don't believe owning an NBA team is a winning investment, then don't do it, or do it because you enjoy it, boo hoo billionaires.

If you don't believe 1-10M a year salary is enough pay to make playing in the NBA a worthy venture for you, don't do it, or do it because it's the best job in the world, boo hoo millionaires.

People who buy professional sports teams aren't looking for a winning investment. They do it as a prestige sort of thing. They know that they are probably going to lose money, and they don't care.

Gamble1
01-31-2010, 05:29 PM
if it was THAT hard, then how come SAS is successfull ?
In "noirmal" life companies that are badly run lose value and go bust, NBA teams are a "hobby" of the happy few, they still grow in value no matter what (bri must be nice enough) and no matter how they are ran, for that to change we dont need to cut on the players without whom there would be no nba

and yes without the owners there would neither be an nba but likely another league that paid the same salaries, like nfl or mlb or euro football or euro basketball

Pointing to one teams success doesn't cover up the fact that the product on the floor is less desirable than Nascar or pro-wrestling. Of course its not that way for me but to ignore the fact would be dumb of Stern and the owners.

The problem I see in the current structure is that any mistakes made by management can't be corrected in a timely fashion. That word "mistake" could be a bad contract or whatever but in the end it needs to be dealt with so the league as a whole doesn't suffer. The guaranteed contracts is just one example.

EDIT: When you are in a performance based business you need to reward the performance. If a player stops performing the money should reflect it.

Gamble1
01-31-2010, 05:35 PM
People who buy professional sports teams aren't looking for a winning investment. They do it as a prestige sort of thing. They know that they are probably going to lose money, and they don't care.
Tell Jim/Robert Irsay that. 15 million in 1972 too 1 billion today. His net worth is 1.1 billion so minus the 1 and do the math.

Pacersfan46
01-31-2010, 05:37 PM
Pointing to one teams success doesn't cover up the fact that the product on the floor is less desirable than Nascar or pro-wrestling. Of course its not that way for me but to ignore the fact would be dumb of Stern and the owners.

The problem I see in it is that any mistakes made by management can't be corrected in a timely fashion. That word "mistake" could be a bad contract or whatever but in the end it needs to be dealt with so the league as a whole doesn't suffer. The guaranteed contracts is just one example.

Nothing you do will fix that some teams are bad, and some teams are good. The rest fit in the middle somewhere. Maybe I'm missing something, but to me none of these ideas will fix that. So I'm not understanding how the "league as a whole" is anything but indifferent to these ideas except to help the owners wallets.

-- Steve --

Bball
01-31-2010, 05:42 PM
I've not read one thing that says a cut player would be screwed and be sent to the homeless shelter. He's going to have some form of guarantee for the time played (if not for a full season), just not multiple years of 100% guarantee. And by all counts that will be a hefty sum.

The owners are the ones taking the financial risks so I have no problem with them reaping some financial rewards because of that. But it takes players playing at the highest level to make it a success. So it is a 2 way street. But the fact remains, if the owners don't make enough money then that's when they start looking to sell/move their franchise... demand money from their city/state (AKA Taxpayers)... or put an inferior product on the floor intentionally because they can't or won't spend to fix the team. That's not good for the league or fans.

cdash
01-31-2010, 05:49 PM
Tell Jim/Robert Irsay that. 15 million in 1972 too 1 billion today. His net worth is 1.1 billion so minus the 1 and do the math.

The economics of sports have changed drastically since 1972. People that buy teams these days do it for their egos, not because they think it's going to make them a boatload of money.

Roaming Gnome
01-31-2010, 05:58 PM
I've not read one thing that says a cut player would be screwed and be sent to the homeless shelter. He's going to have some form of guarantee for the time played (if not for a full season), just not multiple years of 100% guarantee. And by all counts that will be a hefty sum.

The owners are the ones taking the financial risks so I have no problem with them reaping some financial rewards because of that. But it takes players playing at the highest level to make it a success. So it is a 2 way street. But the fact remains, if the owners don't make enough money then that's when they start looking to sell/move their franchise... demand money from their city/state (AKA Taxpayers)... or put an inferior product on the floor intentionally because they can't or won't spend to fix the team. That's not good for the league or fans.

Since you mention "2 way street"... What are your thoughts on player "holdouts" for renegotiation? I know of another league without guranteed deals that deal with this aspect. So does better performance equal better pay? ...or does it just mean "better perform, or your cut?"

Gamble1
01-31-2010, 06:15 PM
The economics of sports have changed drastically since 1972. People that buy teams these days do it for their egos, not because they think it's going to make them a boatload of money.
IT may seem that way but the majority of owners don't make as much as you think. They need the league to succeed just like the players. For some owners their franchise is all they have.

Check it out. http://hoopshype.com/owners.htm

cdash
01-31-2010, 06:22 PM
IT may seem that way but the majority of owners don't make as much as you think. They need the league to succeed just like the players. For some owners their franchise is all they have.

Check it out. http://hoopshype.com/owners.htm

Not sure how I much I believe those numbers...

Pacersfan46
01-31-2010, 06:25 PM
Not sure how I much I believe those numbers...

I'm in this boat as well. If those numbers are correct .... wouldn't it mean that some of those guys sold everything just to buy an NBA team?

That's hard to believe.

-- Steve --

Gamble1
01-31-2010, 06:28 PM
Not sure how I much I believe those numbers...
I doubt them a bit too but the sources are Forbes and USA Today. Fact is a lot of the owners do look at the NBA as an investment and not some expensive "hobby" to pi$$ away their money in.

Go ahead and do a background check on Forbes...

Bball
01-31-2010, 06:35 PM
Since you mention "2 way street"... What are your thoughts on player "holdouts" for renegotiation? I know of another league without guranteed deals that deal with this aspect. So does better performance equal better pay? ...or does it just mean "better perform, or your cut?"

I fully expect that would be part of the deal. But realistically, how bad of a problem is it in the NFL? You sure don't have marginal talents holding out. Agents are smart enough to know where their bread is buttered and most situations are situations where a player has a legitimate beef and shot at a better contract.

Of all the players in the NFL with a contract heading into training camp, what percentage are holdouts in any given year? I don't see why the problem would be any worse in the NBA.

The hard line option is always there for both parties- "You have a contract- You don't play, you don't get paid... "

And if the player truly has moved into a new upper echelon of players then it's understandable why he'd want a better contract... and it's understandable the team would fold and renegotiate.

The opposite is true as well though (IMHO).

Why should the team be on the hook for an underperforming, overpaid player?

Bball
01-31-2010, 06:40 PM
Hey Putnam... What is the real 'value' on these sports investments? If a team was purchased for X in 1972 and is now worth Y times $X what does the value of Y need to be for it to actually be real profit? How far does those 1972 X$ go compared to 2010's Y($X)?

cdash
01-31-2010, 06:45 PM
I doubt them a bit too but the sources are Forbes and USA Today. Fact is a lot of the owners do look at the NBA as an investment and not some expensive "hobby" to pi$$ away their money in.

Go ahead and do a background check on Forbes...

I have a hard time believing that these rich, successful individuals would see owning an NBA team as a good investment. Almost every team in the league loses money. Hell, Cuban has touched on this subject before. He didn't buy the Mavericks to make money, and he loses a boatload on the team each year.

Sparhawk
01-31-2010, 06:52 PM
I would like to see Baseball and Basketball go with something similar to how Football does it. How often does a player live up to their contracts. Very rarely I would wager.

Baseball - all too often a player has an amazing year in his contract year and inks a huge deal and never produces anything similar again. Hopefully with a huge crackdown on steroids, this will not happen as often.

Basketball - I've seen players get a huge contract for having one successful playoff series (Austin Croshere among the past Pacers). Injuries seem to happen more often in Basketball that seem to sideline players for long periods of time and usually causes their effectiveness to decline. Jermaine O'Neal would be the poster child for how this happens.

I'm not saying pay players a max of $8mil a year. A player should get paid, but it's these long term deals that are really hurting the sport. I'd say guarantee no more than the first two years. If players get hefty signing bonuses up front like NFL players, then more power to them. It would be nice to be able to cut players that aren't performing and not be hamstrung by guaranteed contracts. You have a player like Tinsley who causes major trouble, but the team can't do anything about it cause his contract is guaranteed and buying him out costs quite a bit. It's not right for the franchise nor the fans who pay a lot of money to see games.

No one is forcing teams to give these long deals, but who was the Pacers or any other team supposed to know that their players will either make bad choices on/off the court or just not play as hard once they have their money.

speakout4
01-31-2010, 07:28 PM
If all these nba players were to disappear the owners would be perfectly able to start over with different personnel even though there was no Kobe or LeBron to start with. The reason is demand -that people want to be fans for their home team and if that product isn't great so what. The NBA is just post-college basketball.

Is basketball not popular in europe? Does it draw and do the players have to make US salaries? It helps that the players are really good but packaging and team loyalty make up for the rest.

Just look at the loyal fans supporting the pacers to know that it is more than just star players.

owl
01-31-2010, 08:43 PM
Which side is pushing for lower ticket prices?

That's the one I want to support.

(I'm pretty sure the answer is 'neither')

You got that right. I am more for the level playing field. The dollars will be worked out
and if it is too much I just won't go. That is the answer to the ticket prices.
Supply and demand can take care of that.

vapacersfan
02-01-2010, 02:48 AM
I have a hard time believing that these rich, successful individuals would see owning an NBA team as a good investment. Almost every team in the league loses money. Hell, Cuban has touched on this subject before. He didn't buy the Mavericks to make money, and he loses a boatload on the team each year.


I agree.

I have read many articles by Cuban and others stating they lose money far more then they make money.

They own the team as a matter of "prestige", not because it will make them money.

able
02-01-2010, 07:51 AM
Yeah a comparable system was in te NBA in hte early 90's bit like the NFL where rookie draftpicks hold out because they dont like the money, that was the time where the contracts for a rookie ran into 10 and 15 years for 65 to90 million, nods to self, MUCH better...........


What I taste most of all is the resentment people have against the salary nba players make, because they themselves dont make that kind of money (read cant), I have nothing to say to that, but that you buying tickets keeps it all ticking over, like the musix you buy makes all those artists wealthy people and the IP makes their grandchildren just as rich, for what ?? one or two measily songs ?

Musicians are not "limited" in time, just talent, and even that (see Mick Jagger) is doubtful

What if Lebron had or has a career ending injury, to bad so sad ?
Ohh wait he is rich enough as it is so who cares.
What do you think is happening Oden ?

Yeah really time will tell, and he can always go take a job.....


Incredible scary thinking that goes on at times.

Unclebuck
02-01-2010, 10:48 AM
I have not read this whole thread. But one downside of a hardcap is that it will promote much greater player movement from team to team. That isn't all bad as it will allow bad teams to probably move up to average more quickly. But it will make it more dificult for teams to keep their best players and the casual fans will not get to know their local teams players as well.

That is why I've never been a huge proponent of the hard cap

Gamble1
02-01-2010, 11:27 AM
Hey Putnam... What is the real 'value' on these sports investments? If a team was purchased for X in 1972 and is now worth Y times $X what does the value of Y need to be for it to actually be real profit? How far does those 1972 X$ go compared to 2010's Y($X)?
Times it by the inflation rate from 1972 to 2009 and you'll get a rough estimate of what the intial cost of purchase translates to 2009 dollar value. So intial cost is 1 million (1972) + 1million time the inflation rate ( 4.14 ) = 5,137,00 million dollars.

So minus the 5 million that took to purchase from the overall value of the team and you'll have a rough estimate of how much the return of investment was.

Of course my economic skills are so out dated and inferior to some on the board but this is how I would do the math.
http://inflationdata.com/inflation/inflation_calculators/Inflation_Rate_Calculator.asp#results

BillS
02-01-2010, 12:09 PM
The one thing that always sets my teeth on edge in these discussions is when people start acting like the expected current value of a team over the initial purchase price is some kind of spendable income.

That's like thinking you have money if your house is worth a lot more than you paid for it but you still have to live in it. The only way to spend that money without cashing in is to borrow against that value, and we all saw what happens when that gets done indiscriminately.

Ultimately, if your cash flow isn't happening you sell (to someone who thinks they can do better) or go out of business. In the second instance, you get nothing from that supposed increase in worth. In the first instance the chances are the REAL value is not going to match that estimated value, especially if the buyers are truly taking into account the operating losses.

All the arguments that the owners should get to spend whatever they want because it benefits the players will eventually lead to all but the richest franchises going out of business, providing opportunities for FEWER players to earn lots of money. How this means that restrictions that level the playing field so more franchises can stay in business are anti-player, I don't know.

The NBA is going through something similar to the Real Estate situation, in that the cap/tax rules work when the income (values) keep going up, but when they drop significantly over multiple years teams find themselves underwater.

Tom White
02-01-2010, 12:25 PM
Why do the owners in **(name a pro league)** always balk at opening the books when this always come up? ...and this always seems to come up.

Because the teams are privately owned businesses, not public utilities. They should not be required to have to open their books to a curious public. Now, if they get public monies in the form of government (city, county or state) support that originates with tax revenues, then I would think they would be obliged to make some public disclosures.

Compare it to a company applying for a loan from a bank. The bank certainly has a right to know if their potential loan client has a solvent business model, but the customers of the company have no right to the same information.

Now, how all my long winded gibberish applies to the right of the player's union to see the books from the teams? I would guess that depends on the language in their current agreement. It may, or may not, be addressed in that agreement.

Roaming Gnome
02-01-2010, 12:42 PM
Anyway, was there any mention of getting rid of guaranteed contracts? I know that this thread kind of ran that way because that is fan candy, but was there any article speculating this? The most I've seen was a want for a hard cap.

Personally, I still feel the best approach is keeping the status quo with adjusting the max length of guaranteed contracts down to 2 years with an option year to be negotiated whether it's team or player.

Roaming Gnome
02-01-2010, 12:49 PM
Because the teams are privately owned businesses, not public utilities. They should not be required to have to open their books to a curious public. Now, if they get public monies in the form of government (city, county or state) support that originates with tax revenues, then I would think they would be obliged to make some public disclosures.

Compare it to a company applying for a loan from a bank. The bank certainly has a right to know if their potential loan client has a solvent business model, but the customers of the company have no right to the same information.

Now, how all my long winded gibberish applies to the right of the player's union to see the books from the teams? I would guess that depends on the language in their current agreement. It may, or may not, be addressed in that agreement.


Tom, I was referring to what you covered in your last paragraph about negotiation between the players union and ownership. Specifically when the owners "in mass" claim that they are ALL losing money or about to lose money due to the current deal in place. Then the next play by the union is to ask for the owners to prove their claims by "opening the books".

Of course that never happens and negotiations continue as they always do.... A game of chicken until someone blinks!

You are right, it isn't the business of the public.

Gamble1
02-01-2010, 12:55 PM
I have a hard time believing that these rich, successful individuals would see owning an NBA team as a good investment. Almost every team in the league loses money. Hell, Cuban has touched on this subject before. He didn't buy the Mavericks to make money, and he loses a boatload on the team each year.
Do you see a contradiction there. Smart successful people don't throw 100 million dollars into a unsuccessful hobby or they would be bankrupt in 10 years.

I have an easier time believing Forbes than Cuban. I mean who has the agenda here. Cuban and the owners want everyone to believe that the league is in jeoprady because thats how new labor contracts are made in their favor and how staduims are built.

Just look at the NFL which is more successful than the NBA. What do they want to do with the first round pick salaries?

If what Cuban was saying was true than Abe Pollin who has been in the league for 46 years would have been bankrupt a long time ago.

Roaming Gnome
02-01-2010, 01:06 PM
I'm not sure if Forbes and the values that they have listed are the "gospel". I remember an article in the IBJ talking about the listed values of both the Pacers and the Colts. I believe Herb Simon's response was that Forbes wasn't even in the ballpark for his franchise. Granted, Herb could have been pulling the wool, but maybe he's right. I guess it gave me pause on thinking that their info was "gospel" accepted by all.

SycamoreKen
02-01-2010, 01:20 PM
A couple things from the article, not direct quotes, but just things not touched on. One was the owners think they can survive the lockout and come out a head because the players do not save their money. While this is probablya generality, I doubt the married players don't have some of it banked. My wife makes sure we do. The young single guys may be burning through it likecarazy and might miss that check. This could give the owners an upper hand.

Another thing was the idea of making salaries a percentage of the teams income. The best player gets 15% of the teams revenue for the year and the salaries would go up when more revenue comes in. Not sure how well that would go over.

The third thing I read that has not been mentioned is the players my dissolve the union and sue the league using anti-trust laws. Again, not sure how successful that would be, but it was mentioned.

I hope they find a way to get this resolved. It will be interesting to see how much money the 2nd tier and lower guys get this summer. Remember how KG's big deal right before the last agreement hamstrung Minnisota? i doubt anyone wants that to happen again.

SycamoreKen
02-01-2010, 01:23 PM
Do you see a contradiction there. Smart successful people don't throw 100 million dollars into a unsuccessful hobby or they would be bankrupt in 10 years.

I have an easier time believing Forbes than Cuban. I mean who has the agenda here. Cuban and the owners want everyone to believe that the league is in jeoprady because thats how new labor contracts are made in their favor and how staduims are built.

Just look at the NFL which is more successful than the NBA. What do they want to do with the first round pick salaries?

If what Cuban was saying was true than Abe Pollin who has been in the league for 46 years would have been bankrupt a long time ago.

We have to be careful looking at the NFL and thinking everything there is nice and rosey. Their CBA is up for renewal and they are nowhere close to getting a deal. How they pay their draft picks is going to be a central issue, along with vets getting paid better as well.

Gamble1
02-01-2010, 02:21 PM
I'm not sure if Forbes and the values that they have listed are the "gospel". I remember an article in the IBJ talking about the listed values of both the Pacers and the Colts. I believe Herb Simon's response was that Forbes wasn't even in the ballpark for his franchise. Granted, Herb could have been pulling the wool, but maybe he's right. I guess it gave me pause on thinking that their info was "gospel" accepted by all.
Oh I am sure they don't have exact numbers but one has an agenda and the other one doesn't. One is journalistic in nature and the other is a calculated bussiness mind. If Cdash is right than owning a sports team is just a waste of money. Well the numbers don't add up, IMO.

The Irsays bought the colts at 77.1 million in todays dollar. The franchise today is worth a rough 1 billion dollars in a small market. Even if your off 100 million thats a good investment.

Of course if someone can produce better numbers I would be happy to see them but I doubt anyone can find better numbers that show how much these franchises are worth.

Why should I believe that smart business men would waste their money at an alarming clip for the sake of their ego. That certianly goes against everything that got them to where they are. I mean we are not talking about Micheal Jackson building never never land here. The majority are not entertainers with little education on finances, ie. MC Hammer.

Keep in mind that a third of the NBA owners have been around for over 15 years. Do you honestly think that they would stick around if there wasn't some profit being made.

Edit: Even if the Pacers are worth half of what Forbes says that is still 140.5 million. They bought the Pacers for 11 mill which translates to 23.76 mill in todays dollar. Maybe I am jacking up the calculations but I still find it hard to believe that successful people would invest in failing hobbies.

GO!!!!!
02-01-2010, 05:49 PM
Did I not read a article last year about some baseball team in the majors that has the worst attendence and lowest payroll and wins next to no games but the owner keeps the team for the TV royalties and other league payments which makes him money...

The teams may not be making millions but I have a hard time believing they are losing 10's/100's of millions each year...

your Pacers, Sixers, Grizzlies, maybe worse of then the Knicks, Lakers and Celtics but not that bad....

the hard cap has soom good points and bad...

there is no easy way of fixing this problem but when players are earning 15-25 Mill a year it's getting pretty high..

People need to remember, Sports Stars, Movie Stars, Music Stars are here for our amusement and entertainment and we pay for that right to enjoy what they provide and to make our life more exciting & rewarding...

the more people that person entertains the more he gets paid, basic logic...

Hicks
02-01-2010, 06:26 PM
The NBA has a minimum cap as well, and they could keep that to prevent the baseball scenario you describe (stripped down roster/salary and just profiting on TV).

Brad8888
02-01-2010, 07:02 PM
I think that both sides could accept shorter contracts fairly readily. That actually would give a lot of players the opportunity to escape undesireable contracts and possibly get into more lucrative contracts more quickly and leave teams that they no longer wish to play for more easily just as much as it would allow owners to have a lot more flexibility in managing their rosters and negotiating contracts due to the ramifications of mistakes being lessened. Shorter contracts would also be beneficial to reducing liability insurance for covering career ending injuries due to decreasing the total maximum value of player contracts and the length of time the exposure would exist on a given contract.

Also, for overall league promotional purposes, the league tends to focus on promoting the league to casual fans as we have discussed elsewhere, with a near year round interest being cultivated with speculation about the draft and offseason trades. I suspect that the NBA would love to see more player movement due to more merchandise sales as the players change teams as well as providing hope to franchises that are down at any given point that a return to competitiveness might only be a year or two away at any given point regardless of how bad things get.

Hicks
02-01-2010, 07:37 PM
I like the idea of keeping it as-is but with contracts that are 2 years with a team option for a 3rd.

However long they end up, I think contracts must become easier to void . At least to where maybe the player still gets most or all of the money, but if he did something to hurt the franchise, the team gets off the hook and the league itself picks up the tab.

speakout4
02-01-2010, 08:03 PM
I'm sure everyone realizes this but I will say it anyway. Players receiving ungodly compensation when their performance isn't close to their payscale (or even when they retire) doesn't really impact the owners nearly as much as the fans who basically pay that salary. All those who bleed for the players can't even afford decent tickets and these same fans innumerable times gloat when they are able to score upscale seats at low cost.

The owners get theirs but probably not nearly as what they want but I just don't understand fans who believe that the compensation that players receive which means they can't afford to take their families to a game is somehow justifiable.

Putnam
02-01-2010, 08:28 PM
Hey Putnam... What is the real 'value' on these sports investments? If a team was purchased for X in 1972 and is now worth Y times $X what does the value of Y need to be for it to actually be real profit? How far does those 1972 X$ go compared to 2010's Y($X)?

Isn't this exactly ChicagoJ's area of expertise? I'll defer to him!

Bball
02-01-2010, 09:09 PM
I don't think anyone is arguing players shouldn't be paid what they are worth. I know I'm not.

When the two sides agree to a contract that means both sides feel they have reached a workable agreement on market value. But sometimes the market changes... When a player is paid too much the team needs a way to mitigate that sooner rather than later.

Right now, should a player suddenly underperform or hit a ceiling much sooner than projected, or go into coast mode on the court, or decide it's "Party Time!" every night (let alone decide to start hanging out with murders or drug dealers) management doesn't have a way to mitigate their losses (or deal very effectively with the PR hit). You shouldn't have to hope for a felony conviction to get a bad character away from the team.

That player (in almost anyone's bookkeeping system) is no longer going to have the same market value as the day he signed his contract and of course it's almost just as certainly went down (not up).

Any player maintaining or expanding their level of play would be a rare exception if the team deemed them expendable while still under contract.

And yet still... Players are still going to get paid market value. You get cut as a top player on your team then someone is going to pay well for your services.

And if they under perform.... they will still get market value. They will get cut and have to negotiate with a new team.

Coaches will suddenly have a little more sway again because a player falling out of favor with the coach could see his market value decline if he gets limited minutes or becomes known as not a team player.

---
I'm not sure what to make of the 'team's all losing money vs team's are making out like bandits' arguments. If teams really are losing money and if teams really do need taxpayer subsidies to survive then obviously player salary levels is one major expense that needs looked at. Whether they took the line too close to the margin of error or whatever is for someone else to decide.

Fair market value should be fair market value though.

Bball
02-01-2010, 09:10 PM
Isn't this exactly ChicagoJ's area of expertise? I'll defer to him!

I guess I coulda went and asked in the counting thread.... You know you can count on those guys! ;)

Pacersfan46
02-01-2010, 10:40 PM
If you shorten the contract length for everyone down, what do you do with rookie contracts? Most people from what I've seen seem to be advocating 3 year contracts. I can't fathom NBA vets being okay with rookies getting potential 4 year contracts and they can't.

And I can't imagine NBA teams being okay with drafting players and only getting 2 years out of those draft picks. Then you might as well let high school kids in because you're just developing talent for someone else to steal it. A major complaint owners had with high school players.

There's no way the contract lengths change. Can't even being to fathom it.

-- Steve --

cdash
02-01-2010, 10:57 PM
Do you see a contradiction there. Smart successful people don't throw 100 million dollars into a unsuccessful hobby or they would be bankrupt in 10 years.

I have an easier time believing Forbes than Cuban. I mean who has the agenda here. Cuban and the owners want everyone to believe that the league is in jeoprady because thats how new labor contracts are made in their favor and how staduims are built.

Just look at the NFL which is more successful than the NBA. What do they want to do with the first round pick salaries?

If what Cuban was saying was true than Abe Pollin who has been in the league for 46 years would have been bankrupt a long time ago.

No, I don't see a contradiction there. It is exactly what you said it is: a hobby. It's like buying a yacht. The second that thing touches the water, it loses value, and it never regains it. They don't do it to make money, they do it so they can say, "Look at me! I'm ****ing rich!"

I don't know why you would believe Forbes over Cuban. That's like believing a secondary source over a primary source. Cuban has always been a guy who shoots straight from the hip, and somewhere in the annals of his ramblings, he has touched on this subject before. He of all people isn't afraid to criticize the NBA when he doesn't agree with something they do.

I'd be careful comparing the NFL to the NBA as well. They are completely different entities and their respective CBA's are different enough to make them a poor comparison.

This certainly doesn't qualify me as an expert, but once upon a time I took a Sports Economics class in college (2 years ago, so it's fairly fresh in my brain), and we looked at all sorts of things of this ilk. Sure, owners that bought their teams in the 70s or what not have surely seen the franchise's value grow, and it might have been a good investment. That still doesn't take into account operating losses they incurred each year that they owned the team, because again, they rarely actually make money. If you buy a team these days, it's almost purely because you want the prestige.

GO!!!!!
02-01-2010, 11:22 PM
Maybe it could be time to see where all these owners are making there money from if they have the luxery to **** millions down the drain...

I believe Cuban made his fortune by selling a online radio station/network in the early ninties for a few hundred million and bought the Mavs when then were not winning much..

The Pacers Owners have a few malls around the US...

what about the rest ?, what is there main income source ?

2 down 28 to go...

Gamble1
02-02-2010, 11:20 AM
No, I don't see a contradiction there. It is exactly what you said it is: a hobby. It's like buying a yacht. The second that thing touches the water, it loses value, and it never regains it. They don't do it to make money, they do it so they can say, "Look at me! I'm ****ing rich!"

I don't know why you would believe Forbes over Cuban. That's like believing a secondary source over a primary source. Cuban has always been a guy who shoots straight from the hip, and somewhere in the annals of his ramblings, he has touched on this subject before. He of all people isn't afraid to criticize the NBA when he doesn't agree with something they do.

I'd be careful comparing the NFL to the NBA as well. They are completely different entities and their respective CBA's are different enough to make them a poor comparison.

This certainly doesn't qualify me as an expert, but once upon a time I took a Sports Economics class in college (2 years ago, so it's fairly fresh in my brain), and we looked at all sorts of things of this ilk. Sure, owners that bought their teams in the 70s or what not have surely seen the franchise's value grow, and it might have been a good investment. That still doesn't take into account operating losses they incurred each year that they owned the team, because again, they rarely actually make money. If you buy a team these days, it's almost purely because you want the prestige.
You have no proof of this outside of the owners propaganda. They don't open up the books for a reason. You can ride this egotistocal argument all you want and it still wouldn't add up why people like Karen Davidson holds onto the Pistons or why owners making 80 million would hold onto a money sucking franchise. Do the math man. When you pump in 70 mill and your only worth 80 million the odds are that your not going to be in the league for 16 years if your franchise doesn't make money.