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Thread: A glimmer of light in the distance for Pacers finances?

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    Default A glimmer of light in the distance for Pacers finances?

    I want to add another detail to the ongoing discussion about Pacers' profitability and viability. That detail is the expiration of the CBA in June 2011. The owners have a chance to renegotiate the agreement. They are likely to demand a better deal, and even the players association anticipates the owners will demand a lot of concession and may resort to a lock-out to get it.

    http://nba.fanhouse.com/2008/11/26/h...the-nbas-summ/

    Now, between now and then our whole economy is going to change and many kinds of assets are going to devalue. Your stocks and 401K, your house, and many kinds of property are going to devalue. Government revenues may take an L-shaped drop that requires structural changes. The imminent renegotiation between the CIB and PS&E is just one example. Professional athletes earnings may have to share the pain, too.

    How does a professional sports team manage in a bearish market, especially when it can see bargains on the horizon?

    A new collective bargaining agreement may help the Pacers bottom line . There are no guarantees, but they ought to plan to be in the position to take advantage as soon and as much as possible. To my mind, I would not want to encumber the payroll very much beyond 2011. Right now, the Pacers have Granger under contract and options on Hibbert and Rush. That is all. (Am I correct on that?) Those are great deals to have. But they may be smart to avoid other lengthy deals.

    How should the Pacers manage the need to win games and fans in the short run and the prospects of a very significant change in the business side 28 months away?
    Last edited by Putnam; 02-12-2009 at 01:20 PM.
    And I won't be here to see the day
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    But they never had much use for me
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    Default Re: A glimmer of light in the distance for Pacers finances?

    Good post.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Professional athletes(not just NBA guys) should have to shoulder some of the burden of the economic crunch. I mean if Joe Public who makes $25,000 a year is being laid off or having to cut back personally, or having his salary frozen, that should be the same for professional athletes with salaries that are arguably exorbitant even in stable econcomic times.
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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by Putnam View Post
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    How should the Pacers manage the need to win games and fans in the short run and the prospects of a very significant change in the business side 28 months away?

    That's a poser, right there.
    [~]) ... Cheers! Go Pacers!

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    Huge Member heywoode's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    If teams across the board were to try and make the players shoulder some of the crunch and work for devalued contracts, it will never work, and will only put the Pacers at a disadvantage to try and do that on their own. Unfortunately, that is what is likely to happen.
    Certain teams will always be in a position to spend more on key players than other teams, and those teams are the ones who are going to sign them, period. The players are going to go where the money is, and without committing collusion, the teams (and owners) will be at the mercy of the hired gun players.

    Now are you happy, Putty?

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by heywoode View Post
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    If teams across the board were to try and make the players shoulder some of the crunch and work for devalued contracts, it will never work, and will only put the Pacers at a disadvantage to try and do that on their own. Unfortunately, that is what is likely to happen.
    Certain teams will always be in a position to spend more on key players than other teams, and those teams are the ones who are going to sign them, period. The players are going to go where the money is, and without committing collusion, the teams (and owners) will be at the mercy of the hired gun players.

    Now are you happy, Putty?

    Whiner.
    But thats the whole idea of the Collective Bargaining Agreement. Notice the word 'collective'. What is being stated is that the with the current economic situation, the teams are going to push hard to get some concessions from the players association. Collectively, as in all together, as in no one team will have to try and do it alone, nor will some more financially secure teams be able to forego that (ala the yankees).

    Now will the owners succeed? We will see, but as the post said, even the players association-the collective group of players-is aware of the economic times and struggles and realizes the owners will be pushing for concessions and that such requests would not be without merit or substantiation.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by D-BONE View Post
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    Professional athletes(not just NBA guys) should have to shoulder some of the burden of the economic crunch. I mean if Joe Public who makes $25,000 a year is being laid off or having to cut back personally, or having his salary frozen, that should be the same for professional athletes with salaries that are arguably exorbitant even in stable econcomic times.
    Completely disagree. Their salary shouldn't be dependent on Joey P. It should be dependent on demand for their abilities. They should feel a hit because attendance is down (i.e., their product is not selling). NFL players shouldn't feel a hit -- they're still filling stadiums. NASCAR drivers will feel a hit -- attendance and total gate #s are decreasing.

    The only time Joe Public cares about the salaries of others is when his wallet gets hit.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    So you have millionaires fighting with billionaires.

    1. Who cares?

    2. What would a lock-out do to the league?

    The repeal of Bush's tax cuts will be in place by then and hitting both groups. And the more money one makes, the more Uncle Sam takes, so they're already paying a higher % than we do. This would just lead to a higher %.

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    Jimmy did what Jimmy did Bball's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    I'm with the owners if they want to ban guaranteed contracts... and I'd support a lockout for it. It doesn't have to be exactly in the form of NFL contracts but if you sign a player to a monster contract and he decides to put it into cruise control (or worse.. or doesn't live up to it), you need an escape clause.
    Nuntius was right. I was wrong. Frank Vogel has retained his job.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by Bball View Post
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    I'm with the owners if they want to ban guaranteed contracts... and I'd support a lockout for it. It doesn't have to be exactly in the form of NFL contracts but if you sign a player to a monster contract and he decides to put it into cruise control (or worse.. or doesn't live up to it), you need an escape clause.
    The NFL owners have the most favorable contract system, but they don't even have an escape for making bad deals. Yeah, I know the contract isn't guaranteed, but there is still a consequence for "cutting" a player you signed to a monster contract. That consequence is all that signing bonus money that was paid to that player comes off the salary cap the year a player is cut from their team. Normally, that bonus money is pro-rated over the length of the contract.

    Remember T.O.'s time in Philly? Remember they had to pay him to stay away from the team (sounds familiar)? They could have just cut him, but with a hard cap.. The Eagles would have also had to cut a about half of their team for their cap to absorb the bonus money that Owens was given in his contract. Eventually, they found a place to trade him.

    Even closer to home... Rob Morris, sure he was what we needed at the end of his career, but when he got that monster contract at the beginning, no one felt he was living up to his contract. Could the Colts cut him? Sure... Did they? Nope! Cutting him would have been a cap catastrophe.

    Now, I know that you said that the system doesn't have to be like the NFL's, but I don't ever see any player's union giving up more concessions then what the NFL players union did for their owners. A system like what you mentioned just doesn't exist and I doubt it ever could.

    Personally, I think the system of guaranteed contracts isn't perfect, but it has fewer flaws in comparison to the NFL system when you also consider the "franchise tag" system, the hard cap that discourages player stability, and worst of all... Player holdouts!

    IMO, guaranteed contracts can be fixed by making the maximum length of the contracts shorter then the 6 years max that can be done now. Personally, 3 years should be about it.
    Last edited by Roaming Gnome; 02-13-2009 at 02:01 AM.
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  11. #11

    Default Re: A glimmer of light in the distance for Pacers finances?

    Here's something new:


    Stern says NBA will withstand economic crisis

    Associated Press
    Sunday, Feb. 15, 2009

    http://nbcsports.msnbc.com/id/29201705/


    Stern said he believed the league was in a “golden age of basketball,” but there are potential concerns should the economic situation not improve. It’s expected to lead to a decrease in the salary cap, and could eventually land some teams in financial jeopardy.

    This suggests that next year's salary cap may be lower than this year's. That would happen under the current agreement, just because of how the 30 teams are doing this year.

    Bear this in mind as you think about trades and salary extensions!
    Last edited by Putnam; 02-15-2009 at 10:19 AM.
    And I won't be here to see the day
    It all dries up and blows away
    I'd hang around just to see
    But they never had much use for me
    In Levelland. (James McMurtry)

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Btw, that's how the players "feel the pain" of the economic times. The salary cap is the limit on paying player wages and it is determined base on the NBA's Basketball Related Income (BRI). It's always wild coming here and seeing the incredibly pro-owner attitudes.

    Also, ironic that the 2010 free agent class will come during a salary cap down-**** (probably).

    [edit: I think the censored word was "size" or "turn", definitely not a swear word though.]
    Last edited by Fool; 02-15-2009 at 05:51 PM.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by Fool View Post
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    Btw, that's how the players "feel the pain" of the economic times. The salary cap is the limit on paying player wages and it is determined base on the NBA's Basketball Related Income (BRI). It's always wild coming here and seeing the incredibly pro-owner attitudes.
    (probably).
    It's not just here... It seems like that is a prevailing attitude of most fans that are on any message board or call-in type radio show. "The athlete that makes the sport happen doesn't deserve the money he is paid".

    Why do most fans usually fall on the side of ownership? Is it that belief that sports would be more affordable to Joe six-pack if owners paid the players 6 figure salaries or better yet, "what I get paid"?

    Anyway, sports isn't the only place this thought process exist...
    ...Still "flying casual"
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  14. #14
    Jimmy did what Jimmy did Bball's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by Roaming Gnome View Post
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    It's not just here... It seems like that is a prevailing attitude of most fans that are on any message board or call-in type radio show. "The athlete that makes the sport happen doesn't deserve the money he is paid".

    Why do most fans usually fall on the side of ownership? Is it that belief that sports would be more affordable to Joe six-pack if owners paid the players 6 figure salaries or better yet, "what I get paid"?

    Anyway, sports isn't the only place this thought process exist...
    Owners are technically the ones taking the financial risk so they should see the rewards of that risk. I say 'technically' because corporate welfare has crept into the equation and now the taxpayers are expected to bear part of the burden that allows these billionaires to pay these millionaires what they do. Taxpayers have become the 'safety net' instead of owners adjusting to market realities.

    Sports -should- be more affordable to Joe Sixpack but that is a mistake made further up the foodchain in how the sport is governed and allows owners to do what they do. There could be some rules in place that better cap ticket prices, and/or tie them to some base, regardless of what the owners COULD charge... especially in 'up' years.

    Besides corporate welfare changing the equation we can't forget how guaranteed contracts don't allow owners to adjust to market realities either. In most cases an overpaid and underperforming player will be the situation that sends you spiraling downward in the market in the first place. It doesn't get any better if you have more than one player overpaid and underperforming.

    This is probably the wrong thread to mention this, but in the case of the Pacers and their 'losses', as anyone considered just how much fat there is and has been in the upper-echelons of the Pacer hierarchy? At one point weren't we paying Walsh, Bird, and Morway for essentially the same job (or what should be the same job)? It's not just player salaries on the team's payroll... but at least player roster has a 15 man limit. There's apparently no limit to the jobs and job titles that PS&E have handed out. It's an Old Boy's Club it appears.

    ...But I digress...

    Player salaries aren't based on reality. If there was no corporate welfare owners would be forced to operate these businesses in a whole different way.
    Nuntius was right. I was wrong. Frank Vogel has retained his job.

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  15. #15

    Default Re: A glimmer of light in the distance for Pacers finances?

    I think the questions about how much players ought to be paid are good questions. As an economist, I've always found the theory of price a complex and fascinating topic. If you all want to discuss that here you may, of course. But please don't overlook the topic I've tried to start.

    How does a diminishing salary cap impact all the NBA teams, and especially the Pacers? This latest mention from Stern suggests a bear market for players' salaries may last a long time (in the short run because of the economy and a salary cap adjustment; in the long run because of a re-negotiated collective bargaining agreement.)

    Faced with a diminishing cap, how do you negotiate differently with players? Don't TPTB have to take this into account in a big way as they consider what to do about the free agents, and about building a roster for next year?


    Player
    2008/09
    2009/10
    2010/11
    2011/12
    2012/13
    2013/14
    Troy Murphy
    $10,126,984
    $11,047,619
    $11,968,253
    $0
    $0
    $0
    Mike Dunleavy
    $9,000,000
    $9,780,992
    $10,561,984
    $0
    $0
    $0
    Radoslav Nesterovic
    $8,400,000
    $0
    $0
    $0
    $0
    $0
    $8,000,000
    $8,500,000
    $8,500,000
    $0
    $0
    $0
    $6,860,000
    $7,350,000
    $0
    $0
    $0
    $0
    Jamaal Tinsley
    $6,750,000
    $7,200,000
    $7,500,000
    $0
    $0
    $0
    $6,175,000
    $6,077,500
    $6,655,000
    $0
    $0
    $0
    Danny Granger
    $2,329,804
    $9,930,500
    $10,973,202
    $12,015,904
    $13,058,606
    $14,021,788
    $2,002,623
    $2,899,798
    $0
    $0
    $0
    $0
    $2,000,000
    $0
    $0
    $0
    $0
    $0
    $1,970,000
    $0
    $0
    $0
    $0
    $0
    $1,799,160
    $1,934,160
    $2,069,040
    $2,956,658
    $4,089,058
    $0
    $1,620,000
    $1,740,000
    $0
    $0
    $0
    $0
    $1,465,440
    $1,575,360
    $1,685,280
    $2,588,590
    $3,655,089
    $0
    $826,269
    $0
    $0
    $0
    $0
    $0
    Josh McRoberts
    $711,517
    $0
    $0
    $0
    $0
    $0
    TOTALS:
    $70,036,797
    $57,786,131
    $56,158,439
    $12,015,904
    $13,058,606
    $14,021,788

    http://hoopshype.com/salaries/indiana.htm
    Last edited by Putnam; 02-15-2009 at 06:20 PM.
    And I won't be here to see the day
    It all dries up and blows away
    I'd hang around just to see
    But they never had much use for me
    In Levelland. (James McMurtry)

  16. #16
    Member Swingman's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    The players that have expiring contracts will likely not be getting as much money as past players.

    Teams will be able to resign their players for cheaper because teams won't bid as high under the current economy. The smart thing would be to get some long-term deals at a lower salary IMO. Once the economy rebounds and pocketbooks open back up, you won't be able to get the same deals.

    At the very least, owners can be frugal with their offers and get some good deals.

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    Administrator Peck's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    I wonder if we won't start seeing more mid-level to lower upper level guys start playing over seas for larger dollars?

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    Member MiaDragon's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by Peck View Post
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    I wonder if we won't start seeing more mid-level to lower upper level guys start playing over seas for larger dollars?
    IMO its only a matter of time till we do.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    We aren't the only nation facing tough economic times.

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    Default Re: A glimmer of light in the distance for Pacers finances?

    Quote Originally Posted by heywoode View Post
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    Certain teams will always be in a position to spend more on key players than other teams, and those teams are the ones who are going to sign them, period. The players are going to go where the money is, and without committing collusion, the teams (and owners) will be at the mercy of the hired gun players.
    This is one reason I am not a major league baseball fan. I don't know if the NBA is any better, but it seems like it is.

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    The Dude Abides MrSparko's Avatar
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    Default Re: A glimmer of light in the distance for Pacers finances?

    Basketball is bigger here than it is in 95% of other nations. Plus like Fool said its not like the rest of the world is able to throw money around. I don't think anyone in this tough economic times is going to throw a 50 million a year 7 year deal to anyone. Especially not when people would rather watch soccer/football.
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