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Thread: Granger looks on as Indiana tries to keep pace with big markets

  1. #76

    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    Quote Originally Posted by aaronb View Post
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    I agree that it certainly helps. But San Antonio and the Pacers from 91-2004 are examples of Small markets having sustained success.

    The key is having good management that can formulate a plan. Then having the stones to follow that plan. (see also, OKC and Sam Presti)
    Again San Antonio is the exception not the rule. They got incredibly lucky with drafting Duncan because of an injury to Robinson. Sustain success is championships not playoff appearances. This is especially true when half the league goes to the playoffs. Seriously that is sustain success? Making the playoffs?

    All i am saying is that the numbers don't add up and they certainly contradict the idea that markets size doesn't matter. Almost half the league has never won a NBA championship. I know the league hasn't been 30 teams for a long time but 27 teams were around since 1990.

    Danny is right and who is better to comment on the problem than a current franchise player? Small markets are at a disadvantage when compared to big market teams.

  2. #77
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    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    Quote Originally Posted by Gamble1 View Post
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    Again San Antonio is the exception not the rule. They got incredibly lucky with drafting Duncan because of an injury to Robinson. Sustain success is championships not playoff appearances. This is especially true when half the league goes to the playoffs. Seriously that is sustain success? Making the playoffs?

    All i am saying is that the numbers don't add up and they certainly contradict the idea that markets size doesn't matter. Almost half the league has never won a NBA championship. I know the league hasn't been 30 teams for a long time but 27 teams were around since 1990.

    Danny is right and who is better to comment on the problem than a current franchise player? Small markets are at a disadvantage when compared to big market teams.

    That doesn't make any sense, you are saying the only teams that have sustained success are the ones who have won multiple championships. Well thats only like 3 teams in the last 10 years.

  3. #78

    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    Revenue Sharing Won't Solve The NBA's Small-Market Problems

    by Adam Fusfeld Jan. 5, 2011

    http://www.businessinsider.com/reven...roblems-2011-1


    If you ask Pacers' star forward Danny Granger, the NBA isn't fair.

    Granger is one of the best scorers in the NBA, but his small-market squad appears incapable of pairing him with a star sidekick. He thinks the problem is revenue sharing.

    "It's not fair," Granger told CBSSports.com. "If everyone in the NBA and the owners all commit to this league to keep it going, you've got to share revenue. How can Milwaukee compete with Los Angeles? It just can't. It never will. I don't care if they sell out every game, L.A. is going to get mounds and mounds of more money. That's what I think the big chip should be in the bargaining process."

    Of course, once he mentions "the bargaining process" the siren sounds. His stance is a position that the NBPA shares. Perhaps Granger is legitimately concerned about the Pacers' and Bucks' financials, but more likely, he's focused on his own bank account. Revenue sharing, in theory, gives more teams a chance to bid on free agents, thereby driving up free agent salaries. Granger is just touting the NBPA agenda.

    Actually, players aren't the only ones who like the sound of revenue sharing. Fans and sponsors would welcome the extra competition, small market owners would welcome the extra cash, and even David Stern is keen on the concept. (In fact, the NBA has a small – OK, tiny – $49 million revenue sharing fund that it instituted in 2008, and gives a few million dollars to small-market teams.)

    But the data shows that those deep-pocketed owners in New York and Los Angeles might as well keep their cash. The size of the market isn't what makes teams profitable, and the size of the payroll isn't what makes them winners.

    According to Forbes data, four teams in top-15 U.S. markets lost a combined $125 million from 2005 to 2009, the last years of available information. Meanwhile, the Lakers and the Bulls made tens of millions, but so too did franchises in Sacramento, Utah, San Antonio, and Cleveland.

    As you can glean from these charts, no one statistic correlates with operating income. But you can be sure that spending more money than your competitors do to obtain fewer wins is an unprofitable proposition.

    Washington, in the nation's ninth largest media market, had a nearly identical won-loss record to Indiana over the five-year span, but earned $87 million more in operating income. The Wizards generated slightly more income, but also spent $7.6 million less each year on player expenses. If the Pacers simply reduced their payroll to equal that of the Wizards, their $26 million loss would transform into a $12 million profit.

    In this five-year span, eight franchises – Phoenix, San Antonio, Denver, Detroit, New Jersey, New Orleans, Chicago, and Utah – finished with more wins than Indiana despite paying substantially less in player salaries between 2005 and 2009. Of those teams, only the Nets lost more than $1 million per year.

    Cuban doesn't care how much money he loses. He just wants a win.

    Small market owners gripe that its impossible for them to stay afloat without sustained on-court success, while large-market teams rake in profits no matter what. But how does that explain the Dallas Mavericks? Mark Cuban's $75 million loss dwarf those of Pacers' owner Herb Simon.

    Sure, Mark Cuban and Knicks' boss James Dolan can afford to incur those losses, but they are losses nonetheless. In essence, the Pacers, Bucks, and other small market teams are griping over rival owners' riches.

    And that's the true inequity in NBA financials.

    Some owners are willing to bankroll losses to assemble the best roster they can, while others aren't. As shown in the chart above, Cuban will do whatever it takes to win.

    But Donald Sterling doesn't care about his team's performance, and would rather sit back and collect profits in the league's second-largest market. Only the Hawks and the expansion Bobcats spent less on players than he did during this time.

    Until someone who is willing to lose money buys the team, small market franchises must behave efficiently to be viable. The other team to dominate the last decade wasn't New York: it was San Antonio. One spends a lot, the other spends wisely.

    Between the leaguewide salary cap and the standards of excellence set by the Spurs and Jazz, it's clear that efficiency is attainable in any market. And with the exception of once-a-decade free agents like Shaquille O'Neal or LeBron James, a fat checkbook isn't the key to success. Teams must draft well, scout meticulously, and unearth diamonds in the rough.

    Yep, the Hornets actually traded the Black Mamba
    And that's where many small-market teams have failed over the years. In 1998, the Bucks sent rookie Dirk Nowitzki to Dallas for Robert Traylor. That wasn't big, bad Dallas wielding its power over the little guys in Milwaukee, forcing them to trade a future Hall-of-Famer. Nowitzki was signed on the cheap. The Bucks simply weren't shrewd. Neither was Charlotte when it traded rookie Kobe Bryant to Los Angeles in 1999, and Indiana certainly wasn't shrewd spending nearly $70 million to win less than half of its games.

    As we've seen in baseball, better revenue sharing will not solve these problems. It will merely force the New Yorks and Bostons of the league to pay a little bit more than they intended to sign coveted free agents. Small-market teams will always rely on efficient roster building to compete with the biggest spenders.

    So until Milwaukee and Indiana figure out how to replicate the Spurs success – by the way, Mr. Simon, Mr. Kohl, I can be reached at the e-mail address below – those markets are best off hoping a billionaire with bottomless pockets has his or her eyes on the NBA executive suite.
    Last edited by indianapolismarkus; 01-06-2011 at 05:57 AM.

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  5. #79

    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    A Case Against NBA Revenue Sharing

    by Tom Lewis on Jan 5, 2011 10:50 PM EST in Indiana Pacers News

    http://www.indycornrows.com/2011/1/5...evenue-sharing

    Adam Fusfeld of Business Insider used the Indiana Pacers as an example of why revenue sharing isn't the cure-all for small market teams. Although, if he was trying to make the case that revenue sharing wouldn't help level the financial playing field he failed miserably.

    The argument is that several small market teams have thrived through smart efficient management. Fusfeld forgets to mention a little luck that helps land a top tier talent like David Robinson and Tim Duncan, but the general point is irrefutable. Any team in the NBA can succeed by making the right decisions across the organization, with the Spurs held up as the gold standard. I couldn't agree more.

    But this also makes my point that the playing field is far from level a la the NFL. Fusfeldsays, "Small-market teams will always rely on efficient roster building to compete with the biggest spenders." A little condescending, no? Keep trying real hard little fella and if you do real well you can have a seat at the big boys table.

    In other words, in a league where all of the teams are competing for the same prize, some teams have to be "efficient" with no margin for error, while other teams can absorb mistakes and keep making money to try to fix their problems. The Chicago Bulls weathered some down years in the recent past with a full UC and other big-market revenue while the Pacers' market struggles to support the down years.

    The part of this article that made me laugh out loud though, was this comment on the Pacers payroll.

    absolutely love the term, "simply reduce their payroll" as if no one ever thought of that as an option. This has nothing to do with revenue sharing but with another CBA issue, that being the guaranteed contracts which are nearly impossible to shed or simply reduce.

    But the laugh out loud part is the point about teams that won more with less payroll from 2005-2009. Um, can we have a little context here. I'll give you more than $26 million in losses that saddled the Pacers with nothing but grief. How about $18 million in center that couldn't stay on the court nor appear any sense of urgency to get back on the court? Oh, and what about the roughly $12 million in back court players who couldn't seem to stay out of court (the kind with a judge)? I don't even need to mention the brawl ramifications.

    The Pacers would've been happy to simply shed those salaries but couldn't in large part due to the NBA's trade rules and the guaranteed contracts. The Pacers organization is definitely the poster child for not committing to long-term contracts, but again that's a different issue from revenue sharing intended to balance the resources available to each team.

    One thing is for sure: this summer is going to be brutal. I just tried to discuss one issue up for bargaining and ended up touching on several contentious issues that have little to do with the ball going through the hoop.

  6. #80

    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    Revenue sharing is no magic bullet

    by Henry Abbott

    http://espn.go.com/blog/truehoop/pos...o-magic-bullet

    Adam Fusfeld of Business Insider has been thinking about revenue sharing, and has dug into some numbers, and he has found that revenue sharing is unlikely to do much to help small market NBA teams perform better.

    Here's why:
    Money spent on salaries correlates very little with wins.
    Market size doesn't lead to wins or necessarily to riches, as some small market NBA teams made a lot, and some big market teams lost plenty.

    Fusfeld writes:

    Small market owners gripe that its impossible for them to stay afloat without sustained on-court success, while large-market teams rake in profits no matter what. But how does that explain the Dallas Mavericks? Mark Cuban's $75 million loss dwarf those of Pacers' owner Herb Simon.

    Sure, Mark Cuban and Knicks' boss James Dolan can afford to incur those losses, but they are losses nonetheless. In essence, the Pacers, Bucks, and other small market teams are griping over rival owners' riches.

    And that's the true inequity in NBA financials.

    Some owners are willing to bankroll losses to assemble the best roster they can, while others aren't. ...

    Until someone who is willing to lose money buys the team, small market franchises must behave efficiently to be viable. The other team to dominate the last decade wasn't New York: it was San Antonio. One spends a lot, the other spends wisely.

    Between the leaguewide salary cap and the standards of excellence set by the Spurs and Jazz, it's clear that efficiency is attainable in any market. And with the exception of once-a-decade free agents like Shaquille O'Neal or LeBron James, a fat checkbook isn't the key to success. Teams must draft well, scout meticulously, and unearth diamonds in the rough.

    And that's where many small-market teams have failed over the years. In 1998, the Bucks sent rookie Dirk Nowitzki to Dallas for Robert Traylor. That wasn't big, bad Dallas wielding its power over the little guys in Milwaukee, forcing them to trade a future Hall-of-Famer. Nowitzki was signed on the cheap. The Bucks simply weren't shrewd. Neither was Charlotte when it traded rookie Kobe Bryant to Los Angeles in 1999, and Indiana certainly wasn't shrewd spending nearly $70 million to win less than half of its games.

    This is an ongoing conversation, with many moving parts. I'd be interested to hear the league and Players Association on why they are generally in favor of increased revenue sharing -- is there a reason to expect it to improve the game, or is it really more just about alleviating financial hardships for some cash-strapped owners?

    Also, it's worth noting that succeeding as an NBA team almost always depends on getting a superstar, and there will never be enough of those to go around.

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  8. #81
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    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    Quote Originally Posted by Gamble1 View Post
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    Again San Antonio is the exception not the rule. They got incredibly lucky with drafting Duncan because of an injury to Robinson.
    Spurs have also been incredibly good at drafting late in the first round and second round. Sure they were lucky, but they also have been very good in acquiring players around Duncan.

  9. #82

    Default Re: Granger looks on as Indiana tries to keep pace with big markets

    Splitting the pie that is BRI

    by Matt Tolnick

    http://blogs.hoopshype.com/blogs/tolnick/


    Among the most critical of issues in collective bargaining discussions between the NBA’s owners, led by commissioner David Stern, and the NBA Players’ Association (NBPA), led by executive director Billy Hunter, is the issue of dividing the NBA’s revenues, known in league circles as basketball-related income (or BRI). Presently, NBA players are guaranteed to receive 57 percent of BRI while the owners receive 43 percent. This negotiation point is a zero-sum game in which every extra percent garnered by the NBPA will be a percent conceded by the NBA owners and vice versa.

    In searching for a fair BRI split, the NBPA will argue in favor or the status quo pointing to the revenue sharing structure of the NFL, which affords players 59.5 percent of league revenues; however, this structure is one that has the NFL careening toward a lockout in March of 2011, shortly before July 1, 2011, when the NBA’s lockout could ensue. The current revenue split between the NHL’s owners and players, arrived at after a lockout of the entire 2004-05 season, affords players 57% of league revenues.

    On the NBA’s side, Stern has made it clear that the NBA is not a profitable venture as presently constituted; he has demanded a swing of $750-800 million in revenues in favor of NBA owners under the new CBA. Expecting to lose $340-350 million during the 2010-11 NBA season, deputy commissioner Adam Silver acknowledges the problem as endemic to the system, stating that “Even though we reported we have record season-ticket sales over the summer and otherwise very robust revenue generation, because of the built-in cost of the system, it’s virtually impossible for us to move the needle in terms of our losses.”

    In other words, solid revenue streams fail to translate into profits for NBA owners (collectively), considering the overhead cost of labor.

    The parties to the collective bargaining discussions are going to have to get creative and determined in the months ahead if the NBA is to circumvent a lockout. In October, Hunter rejected Stern’s position as a non-starter, instead rallying his players to “prepare accordingly.” In November, Hunter was “99 percent sure” that a lockout would ensue.

    CBS Sports’ Ken Berger has recently reported that the NBPA offered to scale back the guaranteed take that its players receive while permitting willing owners to spend in excess of the new, lower guarantee. Even assuming the continued existence of a salary floor, this NBPA proposal would allow franchises with lesser means to keep even lower payrolls while also allowing willing teams to further expand their ability to achieve bloated payrolls (e.g. two mid-level exceptions). Meanwhile, effectively throwing out salary matches in trades and adding a second mid-level exception would lead to a veritable arms race among franchises willing to spend.

    Will the Magic and Lakers become the Red Sox and Yankees of basketball, or would Mr. Prokhorov’s Brooklyn-based operation blow everyone out of the water?

    The biggest drawback to this proposal would be the widening of the talent gap between the NBA’s haves and “have lesses”, a death knell for parity in the NBA. Absent drastic, game-changing revenue sharing, small market teams without very deep-pocketed owners would have little chance of both profitability and on-court success. A better system, which will be portrayed as the blog series rolls on, would allow all NBA franchises to field competitive teams and simultaneously profit. Salary floors, enhanced revenue sharing, a more taxing luxury tax, cutting back soft cap loopholes, and concessions from both the NBA and NBPA would all be required to accomplish make such a system possible.

    But back to BRI… Larry Coon, unofficial CBA “professor,” indicates on his NBA FAQ website that the NBA’s BRI in 2009-10 was $3.643 billion. At this level of BRI, a 57/43 split resulted in players receiving $2.076 billion in salaries while owners received $1.567 billion in revenues. Stern, having initially indicated that a $750 million swing was necessary, will ultimately accept a swing that is substantially less in light of the fact that NBA teams collectively lost less than half of that figure (using the NBA’s figures) in a down economy.

    With BRI at 2009-10 levels ($3.643 billion), players under Stern’s proposal would receive $1.326 billion and owners would receive $2.317 billion. Thus, the Stern-proposed split would be 36/64 in favor of the NBA’s owners. Coincidentally, this reduction would also represent a 36 percent paycut for NBA players.

    This is the last CBA that Billy Hunter is likely to negotiate, and he will be loathe to see the NBA’s players become the first in a major North American, salary-capped sport to receive less than 50 percent of league revenues (much less 36%).

    One of the reasons that the last CBA succeeded for players but failed for some NBA owners is that players receive a percentage of revenues, irrespective of the actual profit numbers generated by NBA teams. So, if NBA teams sell more tickets than ever but at lower margins than ever, NBA players can receive record salaries despite owners experiencing anything but record profits. The proposal that follows is grounded upon the premise that NBA owners, as business owners who risk their own wealth to create wealth, should experience considerable upside on increases in new revenues.

    Conversely, players, who invest hard work and labor for the benefit of the business, should be entitled to certain guaranteed salary, isolated from the vagaries of market conditions. Because neither NBA players nor NBA owners will be successful without the other, a certain degree of partnership should be provided for, especially since NBA players are not fungible factory employees, but rather world-class athletes with remarkably rare skill sets.

    The proposal detailed below would make the players and the owners 50/50 partners in the event that BRI stayed constant. The BRI split would change incrementally, depending on how much BRI was realized by NBA activities.

    The first $1.2 billion in revenues is split 57/43, for the benefit of the players. The next $1.2 billion is split 50/50. The next $1.2 billion is split 43/57, in favor of the owners. At the point in which $3.6 billion of BRI is received, each side receives $1.8 billion. This $1.8 billion represents a $233 million swing in favor of owners. In the event that the NBA improves its revenues beyond the roughly $3.6 billion it made in 2009-10 (and it should be noted that BRI increased every year under the last CBA), then the owners will receive nearly two-thirds of these increased revenues.

    For example, if revenues increased to $4.0 billion, ownership would receive $2.056 billion and players would receive $1.944 billion. Compared to the $1.567 billion that NBA owners received in 2009-10, this increase would amount to $489 million, an amount likely to ensure profitability across all NBA franchises, especially if revenue sharing between teams is bolstered.

    As league revenues continue to climb north of $4.0 billion, additional upside could be realized by both owners and players. With the yet unsated appetite for NBA basketball internationally (the NBA just signed an undisclosed deal to bring NBA basketball to TVs in India), combined with a massive base of mobile phone users and an impending rollout of NBA mobile services internationally, sizeable increases in NBA revenues are conceivable.

    This proposal on the subject of BRI is one which could possibly make for a compromise, as both parties would feel as though they’ve given up something and made the other party give up something as well. In reaching an agreement, the NBA could prevent years of fan resentment (or “badwill”), owners could be on the path to profitability, and players could continue to earn healthy salaries. As the NBA’s owners have tremendous upside in this deal, the players would have incentive to make this a shorter-term deal. If the NBA grows steadily as it has in the past five years, this deal could work well for both parties. However, if the NBA experiences a revenue explosion (possible though unlikely) the deal would be far more beneficial for the owners than for the players.

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