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MyFavMartin
02-22-2011, 12:22 PM
An interesting read regarding the Kings potential move to Anaheim and mentions a potential proposal by owners for a hard cap of salaries of $45 million.

http://nba.fanhouse.com/2011/02/21/another-sign-points-to-kings-desire-to-leave-sacramento/


Another Sign Points to Kings' Desire to Leave Sacramento
By Sam Amick
Senior NBA Writer

With a March 1 deadline to file for relocation looming large in Sacramento and the owners of the Kings continuing discussions with Anaheim Ducks officials regarding a possible move to Southern California, a source close to the situation said Monday that they have yet to deliver documents that were promised to the arena development team in California's Capital City.

It is, without question, yet another sign that the Maloofs (Gavin and Joe above) are strongly considering the possibility of playing elsewhere next season.

After the Sacramento City Council voted to work with developer David Taylor and arena builder ICON venue group on Feb. 8 in attempt to construct a viable arena plan, the Maloofs issued a statement two days later that they would "provide him with the studies, research and documents done during the course of the last 11 years on the feasibility of a new sports and entertainment facility." Yet the source told FanHouse that documents have yet to be provided, and all indications are that the Maloofs will only turn their attention back to Sacramento if they can't find a way to strike a deal in Anaheim.

Such a decision would be frowned upon by the Taylor/ICON group, as they have made it clear since being selected among four groups that they needed to avoid any and all delays in order to meet the 90-day deadline that was imposed for the project. Sacramento Mayor and former NBA player Kevin Johnson had made it clear he hoped the Maloofs would cooperate immediately as well.

"To what degree do the Maloofs want to participate?" he said during an interview on Sacramento radio station, KHTK, on Feb. 9 while outlining the key questions of the issue as he saw them. "Only they can answer that. I think we all have to be respectful. They've had some financial challenges but they've been very committed to Sacramento. So only they can answer that question.

"That's No. 1. No. 2 (is) I believe they have to make a decision saying that we want to be in Sacramento. And if they do not file (for relocation), that would be them saying we want to be in our community. Assuming those two things are 'yes' and 'yes' in a favorable way, the third question is, 'How do we finance it? How do we pay for a new entertainment and sports complex?' That is what the next 90 days is about."

Years of failed arena plans in Sacramento have left the Maloofs skeptical about whether this latest plan can come to fruition. What's more, it appears they are highly motivated to move into a larger market before a new collective bargaining agreement is in place.

The NBA's current CBA expires on June 30, and the owners are pushing for the sort of structure -- i.e. a hard salary cap at approximately $45 million -- that would put the Kings in prime position to improve their team via free agency quickly because of their league-low payroll. The Ducks officials have reportedly offered a $100 million loan that could make it feasible to make the move now, with approximately $70 million being used to pay the city of Sacramento back for the Arco Arena loan and the remaining $30 million expected to be used for relocation fees. A Kings official, however, said on Monday that the report was "not accurate."

Such a move would have to be approved by the league's Board of Governor's by a majority vote, but it is believed that the Maloofs have previously inquired with their fellow owners about such a possibility and are confident the move would be approved.

PacerGuy
02-22-2011, 12:27 PM
Can't see it that low. They would have to start the whole system over to do that w/ the contracts that are out there. It will be more like 60-65 IMO.

xBulletproof
02-22-2011, 12:33 PM
Can't see it that low. They would have to start the whole system over to do that w/ the contracts that are out there. It will be more like 60-65 IMO.

It could be done with concessions to allow teams time to get under that number. It could also be done using current salaries by saying that current contracts only count 70% of their dollar amount towards the cap. Making it so players still earn the contracts they've signed, and it doesn't screw the teams that signed them to it.

I think if there is a hard cap, it will be at or just below the current salary cap. Otherwise you're still allowing teams to spend so much in salary that smaller market teams will still lose money. Which I think is what they're trying to avoid.

BillS
02-22-2011, 12:39 PM
It could be done with concessions to allow teams time to get under that number. It could also be done using current salaries by saying that current contracts only count 70% of their dollar amount towards the cap. Making it so players still earn the contracts they've signed, and it doesn't screw the teams that signed them to it.

But this really really screws the teams (like the Pacers) who busted their rears to get below the existing cap because they will be hamstrung while the teams way over the cap get away for the grandfather period.

No, no, no, no, no.

What I'd favor is a hard cap that starts at a current level and slides backwards, meaning each year teams have to shed a small amount of salaries until they get under. That allows the teams well under the cap to maneuver with an eye toward the final number, while teams over it can continue but don't get rewarded.

xBulletproof
02-22-2011, 12:51 PM
But this really really screws the teams (like the Pacers) who busted their rears to get below the existing cap because they will be hamstrung while the teams way over the cap get away for the grandfather period.

No, no, no, no, no.

What I'd favor is a hard cap that starts at a current level and slides backwards, meaning each year teams have to shed a small amount of salaries until they get under. That allows the teams well under the cap to maneuver with an eye toward the final number, while teams over it can continue but don't get rewarded.

That's not possible, really. Look at the Miami Heat for example. Their salary for the next 5 years goes up just because of the big 3. In 2015 just between those 3 they have a salary of 76 million and you can't field a team with 3 players. You can't drag the number down on teams that have contracts ascending in value for the next several years. Then you're screwing THOSE teams.

Regardless, I don't see how my idea is screwing anyone. Most teams would still be pressed against the cap even with that. For example, Miami next year would still have their salaries count for close to 50 million using the 70% number. Most teams wouldn't magically gain enough cap space to have much wiggle room. We however would suddenly be looking at a $25 million cap number, instead of $34. We would still be helped by this.

I'm really not seeing how we get 'screwed'.

pacer4ever
02-22-2011, 12:52 PM
and the players reply............ :wtf2:

This is gonna get ugly.

BRushWithDeath
02-22-2011, 01:16 PM
That's a good way to make the lockout last much longer than it should.

BillS
02-22-2011, 01:37 PM
I'm really not seeing how we get 'screwed'.

Because all the teams that are up against the current cap don't lose anything, while teams that got below the current cap have no maneuvering room because they are up against the new cap.

We'd be below the minimum roster with less than $10M to spend under a $45M hard cap. Care to explain how we do anything but remain irrelevant until the grandfathered teams contracts all expire?

Roaming Gnome
02-22-2011, 01:38 PM
Looks like I will be finding something else to do next season...

spreedom
02-22-2011, 02:13 PM
Lowering the cap would stink... high-caliber players would be more likely to bolt for bigger paydays in Europe and we'd get a lot of marginal players signed to league minimum salaries.

Pacerfan
02-22-2011, 02:22 PM
I feel like they're just low-balling it right now. It's much much better to ask for more and then "compromise" and bring it to where they really want it which is probably around 60 million.

able
02-22-2011, 04:02 PM
it seems that the owners (whom i might state; are supported by many of you), want the employees back in the warehouse, and sleep in the provided for bunkbeds, perform and shutup.

What the smart owners are forgetting in their hard faced, posing; is that indeed in Europe teams don;t have those hangups about paying the extra dollar.
Teams don't have problems tax-related, salaries are tax free, for the player at all time, or "NETT" and the "owner" or club has some taxes to pay (structure different per country)

You are inches away from being outbid, with a cap at 45 I guarantee you that most top players and all fringe top players will play in Europe within 5 years.

It may well be that EU owners will look to sign some "unemployed" players this year if there is a lockout.

As for the players ??? superstar status, taxfree money, less games; you really think they will be thinking "oooh but the nba!" ??

Mackey_Rose
02-22-2011, 04:06 PM
This would be an entirely unreasonable request by the owners. Surely Stern is not that foolish.

Unclebuck
02-22-2011, 04:09 PM
If the owners insist on a hard cap under $60M, then we will not have NBA basketball next season.

Eleazar
02-22-2011, 04:11 PM
Because all the teams that are up against the current cap don't lose anything, while teams that got below the current cap have no maneuvering room because they are up against the new cap.

We'd be below the minimum roster with less than $10M to spend under a $45M hard cap. Care to explain how we do anything but remain irrelevant until the grandfathered teams contracts all expire?

No matter what happens someone is going to be "screwed". The point is to make it so teams can be profitable. Also if every contract only counts 70% that would include all of the Pacers current contracts.

BRushWithDeath
02-22-2011, 04:12 PM
If the owners insist on a hard cap under $60M, then we will not have NBA basketball next season.

If they insist on a hard cap under $60 million we will not have another NBA basketball game ever.

Another league will come in and pay fairly. It may be Europe. It may be a new start-up here in the states. But someone will pay. Everybody talks about how greedy the players are but the owners have taken that greed and raised it 500%.

BillS
02-22-2011, 04:15 PM
For all the "they'll go to Europe" hype, I don't think they'll be able to afford anything other than skimming off the very top few players - or, more likely, the lower-top/upper middle because the very top will still command the big salaries in the NBA. The economy in Europe is no longer swamping the US, and I don't think the kind of money to sustain $70 million payrolls in more than two or three cities is there.

Roaming Gnome
02-22-2011, 04:29 PM
$45M hard cap... Let the negotiations begin! All negotiations have to start at some ridiculous starting point.

I'm not concerned about a mass exodus to Europe as I am about how long it will take the two sides to start negotiating for real.

Day-V
02-22-2011, 04:30 PM
I'm sure that's just a low number set so they could agree to a happy medium in the CBA negotiations.

able
02-22-2011, 04:37 PM
It seems that the owners dont want the league back, they want slavery back

first of all i am assuming that most of you know what bri is, if not then i'm not sure what you are doing in the discussion to being with.
Now the players get 57% of that bri as max salaries, so pls be aware, that a 15 mio contract is MAX 15 mio and can easily be 12 or 13 mio if revenue are down.

Owners claim they lose money, so they want the split more towards them, in fact with want 59% of bri and leave 41 for the players

Now on top of that, the owners want to be able to deduct cost before bri is applied

Now let's get some facts straight; no one held a gun to anybody's head when they signed lebron, wade and bosh to those monster contracts, nor did anyone do that to any other far over the cap teams, yet they decided to give those out.

of course we "GRANDFATHER" the over the top contracts, giving tax-relief etc so indeed the frugal owners are screwed royally.

now explain to me the following; the current cap, and the LT are set as a result of revenue (bri) totals.
They risen quite a bit over the years but so have the prices for the concseeions and the tickets, so has the amouhnt paid for tv rights and local tv rights.
in other words the salaries had an exponential growth which was equal to the income growth of the owner, so in short, the increased salaries are paid frome the increased revenue.
The owners part has not shrunk, it has equally grown and whilst I am sure i can make some interesting calculations on profit and loss of a frnachise, I am pretty sure that in hard cash it is not nearly as bad as they want you to believe
I seriously don't hope anyone thinks the pacers are the only team that uses and arena for free, in fact i think the pacers are one of the very few teams who paid a substantial amount on the build of the arena.

When all is said and done, the billionaires were not forved to buy a team and don't lose money on it, unless you can show me one team that was sold for substantial less then it was purchased and has not either created a sincerely nice tax-deduction whlst entertaining the friends etc and the real profit will be made one it is sold.
I am pretty sure most franchises do not lose that much if any money in reality

or do you really think it is "fair" that the owner gets 59% of every shirt that is sold, every ticket that is sold, every games that is played every car that is parked,while the players are the ones doing it on the court ?

The players did not make salaries go up, there were bidding wars over their services and they (in most cases) went to the highest bidder and in that high bid allowd for a provision that if less turnover was made, they'd reduce their salary.

able
02-22-2011, 04:40 PM
and Bill I can name you 15 - 20 cities that can afford that easily.

Why do you think the NBA is playing two regular season games in london?

London has no real team in the euroleagues atm

Europe is a lot bigger, a lot richer and the infrastucture is a lot better.
And as lot of current fringe players are not coming to the nba becase they make more money in europe, lots more.

xBulletproof
02-22-2011, 04:41 PM
It seems that the owners dont want the league back, they want slavery back

I stopped reading here. When you can't utter a full sentence without sounding that ridiculous, I can take a pretty good guess that the rest isn't going to sound anymore coherent.

Hicks
02-22-2011, 04:41 PM
Owners ask for 45m cap, NBPA can then ask for 140m cap, and we'll get a 70m hard cap. ;)

xIndyFan
02-22-2011, 04:43 PM
i disagree. a compromise of $50M to $60M. some kind of semi-hard cap. [ie vet's minimum contracts only over the cap.] an 'alan houston' exception for teams to cut salary. maybe a lockout, but no lost season.

owners want a number for salary costs. right now, they don't have one. the escrow system has finally broken down under the creeping costs. players have offered a hard number for salary costs, with overages paid back to the league. so the players are not against a league wide cap on salary costs. so it is just a matter of settling on a number that the players get and designing a system to keep that number in place. both of these are doable things.

i expect some kind of two tier salary system similar to the present system. but with a semi-hard cap instead of a luxury tax. and an 'alan houston' rule to get teams down to that number. and a lower salary cap number with exceptions like the MLE and BAE. the $45M number for the salary cap and a hard cap of $60M seem reasonable.

BillS
02-22-2011, 04:44 PM
If the expenses (which currently are not deducted first) have grown faster than the income, then there are lots of reasons why the bri allocation or the deduction of reasonable expenses before the calculation should be changed.

To bring the idea that any reduction in player income is somehow returning to slavery is ridiculous. The original 57/43 split is not somehow enshrined in economic perfection because it is the starting number.

In particular, unless the rank-and-file players want to make what I call the "Eastern Airlines mistake", it is in their interests to make sure owners can afford to run teams without losing their shirts. Every team that folds is 15 players unemployed. Those players aren't going to be LeBron James or Dwight Howard or Kobe Bryant.

The owners may be putting their starting point out there. Why not, everything has to start somewhere?

Kegboy
02-22-2011, 05:11 PM
Boy, if the slavery talk has already started 4 months beforehand, just think how fun this place will be during the lockout.

:yay2:

Unclebuck
02-22-2011, 05:13 PM
it is really simple - there are two issues

How best to help the small market teams make money

And what is the best split of the overall money between the players and owners. 57/43 is too much in favor of the players.

Every other issue, comes from those two. (I think)

Unclebuck
02-22-2011, 05:14 PM
Boy, if the slavery talk has already started 4 months beforehand, just think how fun this place will be during the lockout.

:yay2:

I just hope we have some fun quotes like Patrick Ewing 1999, "we make a lot but we spend a lot too" (when he was trying to justify their salaries) That was one of the alltime quotes.

Actually the fans best allies are the wives of the players. I still think they had as much to do with ending the lockout in 1999 as any other group

BillS
02-22-2011, 05:16 PM
57/43 is too much in favor of the players.

Would you be good with a 57/43 split of some determined Basketball Related Net Income, which would be BRI minus certain very tightly defined expenses?

Unclebuck
02-22-2011, 05:25 PM
Would you be good with a 57/43 split of some determined Basketball Related Net Income, which would be BRI minus certain very tightly defined expenses?

Probably. But at first blush, I think everything should be thrown in and a more fair split should be established.

TheDon
02-22-2011, 05:30 PM
It really just seems like what is in place now is the rich get richer and the poor get poorer. I don't want to sit around for the next couple of decades knowing that the cards are stacked against us ever winning a championship or having an equal shot at getting a player in free agency or in the draft and being able to retain said player. I'm not a cap/financial guru of the NBA but I think the way the NFL is set up is about as close to fair as anyone is going to get on both sides I think it gives everyone a pretty good shot at being able to compete with anybody in the league for a championship. There are still bad owners in the NFL and perrenial losers like the lions but I think it has more to do with poor business decisions on the organizations part than it actually does with the system itself.

vapacersfan
02-22-2011, 05:32 PM
Boy, if the slavery talk has already started 4 months beforehand, just think how fun this place will be during the lockout.

:yay2:

Tell me about it.

I wish I was "forced" to get paid as well as some (most) of these guys are.

Much like the NFL, I do not have a side. It is millionares vs billionares.

I just want basketball, and I have no problem walking away if both sides feel the fans are not important enough to geta new CBA done, and soon

ilive4sports
02-22-2011, 05:36 PM
It really just seems like what is in place now is the rich get richer and the poor get poorer. I don't want to sit around for the next couple of decades knowing that the cards are stacked against us ever winning a championship or having an equal shot at getting a player in free agency or in the draft and being able to retain said player. I'm not a cap/financial guru of the NBA but I think the way the NFL is set up is about as close to fair as anyone is going to get on both sides I think it gives everyone a pretty good shot at being able to compete with anybody in the league for a championship. There are still bad owners in the NFL and perrenial losers like the lions but I think it has more to do with poor business decisions on the organizations part than it actually does with the system itself.

The thing is that the NFL, teams are making money just from the TV revenue. They don't even need to sell out every game to make money. The NFL is in much better shape than the NBA which is why its hard to compare the two.

Major Cold
02-22-2011, 05:50 PM
Name an industry where it is a ratio of 57/43.

The economy is no where near what it is when the last CBA was instituted. A 45 mil is a first bid. I could see this number rising after a bit. I can't see how moving to a 55/45 is slavery. The reality is until the players want to do some of the owning, they are going to need the owners.

Why does this always come down to eat the rich?

King Tuts Tomb
02-22-2011, 05:52 PM
I'm surprised that so many Pacers fans feel like the deck is stacked against us. We've had some great runs followed by a couple years in the doldrums but we never bottomed out. With a few good moves we could jump up to the next level easily. We've been a pretty blessed franchise all things considered.

It's impossible for us to get a LeBron, true, but if there was a baseball team in Indiana it wouldn't have a shot at signing Albert Pujols either.

beast23
02-22-2011, 05:52 PM
it is really simple - there are two issues

How best to help the small market teams make money

And what is the best split of the overall money between the players and owners. 57/43 is too much in favor of the players.

Every other issue, comes from those two. (I think)I would probably include a third issue. Parity. However, I will concede that if the rules governing your first two issues are handled well, that parity (over time) would be achieved.

Major Cold
02-22-2011, 05:54 PM
And another thing is. The revunue might be up, but the expenses have grown even more. Not only do they have to pay for player union request, they have to pay for facility union requests and increase in making goods.

If the owners are making so much money, why are they losing so much of it? Why are their so many teams near bankruptcy?

xIndyFan
02-22-2011, 05:58 PM
Would you be good with a 57/43 split of some determined Basketball Related Net Income, which would be BRI minus certain very tightly defined expenses?

that sounds like a 55/45 or 50/50 split said in a face saving way. :hmm:

this actually sounds like a probable solution. change the split in favor of the owners, and call it the same.

i am still optimistic about this. at least more optimistic about the NBA than the NFL. the NBA does seem to agree that a split of the money should be about 50% to 57%. it is just finding a way to lock that number in that's left to be negotiated. the NBA owners and players do want to play basketball next year. not sure all the NFL owners want that. :whoknows:

BillS
02-22-2011, 06:12 PM
that sounds like a 55/45 or 50/50 split said in a face saving way. :hmm:

Only if you believe changes in those expenses will always track changes in the income.

To take into account that some years expenses will grow faster than revenues and some years revenues will grow faster than expenses, you separate the two rather than just lumping them together.

Another way to do it would be to move some expenses to the players, though that would be pretty ludicrous without giving them some ownership say.

Brad8888
02-22-2011, 07:07 PM
In case anyone, like me, who has read this thread and is still wondering what "bri" actually stands for, it is "basketball related income".

Now for the even sillier question for those who know, what is the definition of "basketball related income"? In that the NBA is a basketball league, what income (other than interest income on the coffers of the league and its teams that happens prior to disbursement to players and personnel as well as vendors that supply everything it takes to operate the league) is considered NOT basketball related?

ballism
02-22-2011, 10:41 PM
In case anyone, like me, who has read this thread and is still wondering what "bri" actually stands for, it is "basketball related income".

Now for the even sillier question for those who know, what is the definition of "basketball related income"? In that the NBA is a basketball league, what income (other than interest income on the coffers of the league and its teams that happens prior to disbursement to players and personnel as well as vendors that supply everything it takes to operate the league) is considered NOT basketball related?

Lots of it. There's no exclusive list.
Some more important examples of non-BR income:

expansion fees (e.g. the 300 mil that the previous Bobcats owner payed before expansion);

fines payed by players, coaches, etc.;

luxury tax;

most of income for arena naming rights, arena signs and luxury boxes - only ~40-50% of this is counted into BRI;

whatever owners transfer to their teams out of their own pocket;

interest income, as you mentioned, also any income from team's property rent and sales (real estate, planes, equipment, etc);

insurance-related income (like when a player gets injured);

whatever teams may get from cities to relocate or to stay (lets say Anaheim decides to push hard for the Kings and covers their 70 mil arena debt to Sacramento);

whatever teams get from arena vendors (and similar) if it goes to cover arena construction costs

Eleazar
02-22-2011, 10:53 PM
The thing is that the NFL, teams are making money just from the TV revenue. They don't even need to sell out every game to make money. The NFL is in much better shape than the NBA which is why its hard to compare the two.

Of course you can't do a complete copy and paste of the NFL, but the same principles apply to every sports league.

speakout4
02-22-2011, 11:06 PM
it seems that the owners (whom i might state; are supported by many of you), want the employees back in the warehouse, and sleep in the provided for bunkbeds, perform and shutup.

What the smart owners are forgetting in their hard faced, posing; is that indeed in Europe teams don;t have those hangups about paying the extra dollar.
Teams don't have problems tax-related, salaries are tax free, for the player at all time, or "NETT" and the "owner" or club has some taxes to pay (structure different per country)

You are inches away from being outbid, with a cap at 45 I guarantee you that most top players and all fringe top players will play in Europe within 5 years.

It may well be that EU owners will look to sign some "unemployed" players this year if there is a lockout.

As for the players ??? superstar status, taxfree money, less games; you really think they will be thinking "oooh but the nba!" ??
Do you really think that players will lock stock and barrel all move over to Europe where the culture is totally foreign, where the language is difficult to master as an adult not going to school because they would be making several million more?

i don't think so because I know that after a few years I had to leave. No friends or relatives to share the good life? Afraid not. Sure some will but most will want to be in the comfort of home. Just my own experience.

Spirit
02-22-2011, 11:40 PM
I'm sorry but talking about fairness and saying 45 million is low just sounds ridiculous to me. I don't think NBA Basketball all stars should make more than about 13-15 million a year. If you pay your big star that kind of money you still have 30 million left to build around them. This would also keep borderline all stars like Al Jefferson from getting paid nearly 20 million for non-all star productivity.

vnzla81
02-22-2011, 11:48 PM
According to the experts on ESPN, they said that if the league has a hard cap it would be around 70mil or close to that.

Spirit
02-22-2011, 11:51 PM
According to the experts on ESPN, they said that if the league has a hard cap it would be around 70mil or close to that.
Then nobody would probably ever even need to worry about it.

ballism
02-23-2011, 12:13 AM
Because all the teams that are up against the current cap don't lose anything, while teams that got below the current cap have no maneuvering room because they are up against the new cap.

We'd be below the minimum roster with less than $10M to spend under a $45M hard cap. Care to explain how we do anything but remain irrelevant until the grandfathered teams contracts all expire?

Well obviously if there's any sort of rollback of numbers, it would affect every team. If there's a deal that says 10 mil salary will now only count for 7 mil towards the cap, it helps us too, not just teams like the Lakers... :confused:

Low cap is fine for us. Rollback the salaries - or rollback their cap 'costs' - and we are still in great position to sign free agents.
What I'm afraid of is that they leave the cap where it is or even increase it, just reduce guaranteed years, max contracts, remove exceptions and rollback current salaries. That's where it may get bad for us, with a number of teams possibly under the hard cap.

Pacerized
02-23-2011, 12:21 AM
I can't believe some of the comments on this thread. $45 mil for 14-15 players is still a lot of money. It's not like the players are being asked to play for minimum wage. That's a very fair offer IMO. If it means a few players bolt for an overseas team so be it, that's better then the current system that gives big market teams an unfair advantage over us. If they start at $45 mil and settle at somewhere around the current cap then that's fine. $60 mil is too much and doesn't make enough of a difference. I think making an exception for year 1 that shrinks to nothing in 3 years would be a fair way to handle it. If a team like Miami can't get under then they have to give away a player to a team with a trade exception. The Cavs have an execption and might take Lebron off their hands if Miami throws in a 1st.
Seriously I think that's the best way to handle it. It gives teams that are under the cap a lot of leverage against star loaded teams that need to dump salary. I'm all for a hard cap as long as teams over the cap aren't grand fathered in to give them an unfair advantage.