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Thread: My radical concept for a new league structure

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    Default My radical concept for a new league structure

    T-bird's post got me thinking.

    I have a different, more radical concept.

    My radical concept for a new CBA would likely be even more simple, and would potentially change the way professional sports contracts are handled going forward. I would completely do away with the CBA in its entirety. I would also completely change the ownership structure of the league in its entirety also.

    As a league, why shouldn't all existing franchises complete a "merger of equals" into a league ownership consortium where existing owners receive stock (that would then become publicly traded stock) in a newly formed corporate structure with percentages of ownership determined by what the current market valuation of each team is after subjecting the entire league to independent appraisal of every franchise. These initial owners would be issued Class A stock with voting shares just like most publicly traded corporations, as well as those shares of final league profit.

    Then, the players would receive some sort of security that has value based on their own estimated "market value" that would also end up publicly traded with no voting rights but also shares of final league profit. The difference is that this security would be more like a commodity contract in that it would have a fixed expiration at the end of the player's employment contract with the corporation.

    Then, run the entire league just as large corporations are run, with performance based compensation packages, as well as the risk that anyone employed in any position can be fired at any time if they fail to perform for whatever non-injury related reason (whether it be just a simple degradation of skills, or whatever transgressions the employee might have due to personal conduct outside of their employment).

    All of a sudden, free enterprise and actual market forces begin to shape the league, and there are incentives to both cut costs and increase productivity on both sides of the current equation! There are no longer Tinsleys or Marburys or Stephen Jacksons or Jailblazers because they are subject to immediate termination of employment, with loss of all income, and the free market then determining that the player's valuation on any commodity style contracts that are based upon that player becoming zero due to lack of interest in a player no longer being in the league. The expiring nature of the commodity-like contracts would also allow room for new contracts to be issued to new players coming into the league through whatever means they come in, whether it be though the draft or some other mechanism.

    In that all Class A shares / Class B commodity-like shares would be able to be publicly traded, all parties involved would have the opportunity to sell or buy either class of shares, or to actually sell them to the public! Imagine being able to own Class A shares of the Pacers, or Class B shares of whatever player around the league that you want to, for whatever reason you choose! Imagine how the market valuations would fluctuate with team and player performance, and the interest that would drive towards both players and individual teams!

    I am certain that there are lots of holes that need to be poked into this idea, but I feel that the NBA system needs to be completely re-thought from the business model on up.

    Let the free market rule!

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    The Dude Abides MrSparko's Avatar
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    Default Re: My radical concept for a new league structure

    Deron Williams would just stay in Turkey.
    Report: 82% Of Wiseguys Think They're Real Funny

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    Default Re: My radical concept for a new league structure

    Yikes!



    Let the free market rule!
    A free market requires free entry and exit of buyers and sellers. A free market applied to the NBA would require that teams go out of business. The current owners wouldn't allow that, and I don't suppose small shareholders would be happy with it either. A profitable team's shares would be bid up until only billionaires owned them -- just as they are now.


    Imagine being able to own shares in . . . whatever player around the league that you want to
    I don't think it is legal to own shares in another person. The 13th Amendment prohibits it.


    I say just let the two sides face off as they are doing -- until one blinks. Maybe the owners will get the "No guaranteed contracts" clause you describe. It would accomplish just as much in the current system as in your share-based system.
    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: My radical concept for a new league structure

    Quote Originally Posted by Putnam View Post
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    Yikes!





    A free market requires free entry and exit of buyers and sellers. A free market applied to the NBA would require that teams go out of business. The current owners wouldn't allow that, and I don't suppose small shareholders would be happy with it either. A profitable team's shares would be bid up until only billionaires owned them -- just as they are now.




    I don't think it is legal to own shares in another person. The 13th Amendment prohibits it.


    I say just let the two sides face off as they are doing -- until one blinks. Maybe the owners will get the "No guaranteed contracts" clause you describe. It would accomplish just as much in the current system as in your share-based system.
    Allow me to clarify what I attempted to portray initially.

    What if each player were to set themselves up as a business entity (like, for example, Lebron could have Lebron James Enterprises)? They specifically set up this entity for the purposes of receiving income from both playing basketball and earning other income from endorsements, etc.. Also, they deduct their expenses for anything related to any aspect of that business, just as they probably do for self employment income taxes today. I guess that is the type of thing I was trying to convey with my poor choice of words.

    As far as teams continuing to be owned by billionaires, if those teams values were represented by a publicly traded stock (that would initially be owned by the billionaires), it would be up to the billionaires to determine when they would offer those shares for sale to the public, and at what price. The initial price of a share of any public offering would equal the value of the franchise divided by the total number of shares issued. Example: The Pacers have a current market value of let's say $300,000,000. The powers that be decide to place an initial par value on those shares of $100 each. Therefore, the total number of shares issued to Simon would be 3,000,000. He may keep those shares for as long as he wishes, or choose to sell them, or any portion of them, to anyone he chooses, or trade them on the open market as a small cap stock and receive what the market would bear at the time he offers them. After that, the shares are no longer held by him, but he maintains control of the franchise as long as he doesn't sell so many shares that he loses controlling voting interest in the franchise. Also, at whatever point in the future, anyone interested in purchasing the franchise outright could do so by making a premium offer above whatever the stock would be currently trading at to purchase all outstanding shares of the franchise, just as happens frequently in other publicly traded firms.

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