The Official NBA Collective Bargaining Thread vol Phased in Hard Cap

[statis22]

That's not he angle i was going at and you know it.

As I said before both sides are posturing to get public opinion on their sides, I'm in favor of getting a deal done with no games missed. I'll let y'all worry abot frozen envelopes and referees.

 

[blazerfan]

Originally Posted by CP1708

BlazerFan wrote:

---

CP1708 wrote:

---

I don't care about a couple teams dying, or even moving, the hell with that, a lockout is flat out on Stern if it's the second damn time in one decade span.  Come on, how can it not be?  He didn't see it coming?  We all did.  We all knew it was coming, he couldn't get to work years ago to fix this?  Start coming up with a way to help teams, improve the relationship between players and owners, something?  
I know, you'll say maybe he was in the background and we didn't know it, I know, maybe he was, but it obviously wasn't enough.  They aren't even close.  Not even CLOSE. 

  And now they aren't even meeting anytime soon. 

Take away 4 teams, move 4 teams, whatever, I would be FINE with that.  Hell, it would generate interest.  A dispersal draft?  That would be fantastic, and TV would eat that up.  Put a team back in Seattle, move another team somewhere else, and contract 2 others.  I'd be ok with that.  But still, fix the damn problem with owners giving out 125 million dollars to "decent" players like Joe Johnson.  Or 80 million to a guy with 2 bad knees that they in fact knew about. 

  That ain't the damn players faults. 

  

The last CBA negotiations included the players percentage rising from 48% to 57% and the protections of Bird rights.  We should be hoping their salaries get severely reduced before we start talking about moving franchises around and ignorantly placing all the blame on Stern.    



Why? 

Do you hope that your job reduces your payroll?  I sure as hell hope my company doesn't slash my money, why the hell would you root for that for the players? 

They are the product.  You pay to see them, not the suits sitting in a box.  We want to watch the players play, not the owners stack chips. 

And you're a fool if you don't think it's on Stern.  Name another commish that goes thru 2 lockouts in a decade. 

  Spare me with whoever's fault you want to put it on, he's the big boss, he runs the players and the owners, he should have done more to prevent this @#$%. He didn't.  Flat out, point blank, period. 

He watched the Sonics move because of a douche bag owner.  He sold a crappy team for 450 million, knowing that @#$% wasn't right.  He was there in 99, he saw the deal, he could see how it would shape up and work out, he never ironed out any of the kinks for the next 10 years. 

The guy running things gets the blame, the fact people are backing him up is baffling to me.  Stern has been a shady peice of @#$% for 20 years, and now in his second lockout, folks tryna make sure his image don't take a hit. 

What a joke. 

  


Binary logic escapes you. Is your average salary $92,000 a week? We're talking about paying some of the dumbest people on the face of the earth 100X times what we pay teachers. You might reassess what a joke is or ever commenting on NBA basketball again.

 

[blazerfan]

Originally Posted by CP1708

BlazerFan wrote:

---

CP1708 wrote:

---

I don't care about a couple teams dying, or even moving, the hell with that, a lockout is flat out on Stern if it's the second damn time in one decade span.  Come on, how can it not be?  He didn't see it coming?  We all did.  We all knew it was coming, he couldn't get to work years ago to fix this?  Start coming up with a way to help teams, improve the relationship between players and owners, something?  
I know, you'll say maybe he was in the background and we didn't know it, I know, maybe he was, but it obviously wasn't enough.  They aren't even close.  Not even CLOSE. 

  And now they aren't even meeting anytime soon. 

Take away 4 teams, move 4 teams, whatever, I would be FINE with that.  Hell, it would generate interest.  A dispersal draft?  That would be fantastic, and TV would eat that up.  Put a team back in Seattle, move another team somewhere else, and contract 2 others.  I'd be ok with that.  But still, fix the damn problem with owners giving out 125 million dollars to "decent" players like Joe Johnson.  Or 80 million to a guy with 2 bad knees that they in fact knew about. 

  That ain't the damn players faults. 

  

The last CBA negotiations included the players percentage rising from 48% to 57% and the protections of Bird rights.  We should be hoping their salaries get severely reduced before we start talking about moving franchises around and ignorantly placing all the blame on Stern.    



Why? 

Do you hope that your job reduces your payroll?  I sure as hell hope my company doesn't slash my money, why the hell would you root for that for the players? 

They are the product.  You pay to see them, not the suits sitting in a box.  We want to watch the players play, not the owners stack chips. 

And you're a fool if you don't think it's on Stern.  Name another commish that goes thru 2 lockouts in a decade. 

  Spare me with whoever's fault you want to put it on, he's the big boss, he runs the players and the owners, he should have done more to prevent this @#$%. He didn't.  Flat out, point blank, period. 

He watched the Sonics move because of a douche bag owner.  He sold a crappy team for 450 million, knowing that @#$% wasn't right.  He was there in 99, he saw the deal, he could see how it would shape up and work out, he never ironed out any of the kinks for the next 10 years. 

The guy running things gets the blame, the fact people are backing him up is baffling to me.  Stern has been a shady peice of @#$% for 20 years, and now in his second lockout, folks tryna make sure his image don't take a hit. 

What a joke. 

  


Binary logic escapes you. Is your average salary $92,000 a week? We're talking about paying some of the dumbest people on the face of the earth 100X times what we pay teachers. You might reassess what a joke is or ever commenting on NBA basketball again.

 

[CP1708]

Originally Posted by BlazerFan

Binary logic escapes you. Is your average salary $92,000 a week? We're talking about paying some of the dumbest people on the face of the earth 100X times what we pay teachers. You might reassess what a joke is or ever commenting on NBA basketball again.

Look dude, I get what you sayin, teachers should be paid, I know this, we all do.  But come on, not a God damn soul plunkin down 500 dollar floor seats to watch someone teach 3rd grade.  Know what I'm sayin? 

People put their money on enterainment.  It's what we do, we want to get away from our own lives, watch movies, concerts, games, etc.  And that costs money.  That is the world. 

You can go on with all that dumbest people on the face of the earth crap. 

  

  
Statis, I hear ya, I was referring to shady in general, but my main point sticks, 2 lockouts under his regime.  That's massive failure on his part.  Slice it how you like, he had a chance to make it all good in 99, he failed, obviously.  This was a long time comin, and he made no grounds to get it fixed before then, and even now he's sittin on his throne chillin like it's no big deal.   Dude should be callin meetings every single damn day.  If he was doin that, I would be more understanding of him.  But he ain't, so I'm not. 

 

[CP1708]

Originally Posted by BlazerFan

Binary logic escapes you. Is your average salary $92,000 a week? We're talking about paying some of the dumbest people on the face of the earth 100X times what we pay teachers. You might reassess what a joke is or ever commenting on NBA basketball again.

Look dude, I get what you sayin, teachers should be paid, I know this, we all do.  But come on, not a God damn soul plunkin down 500 dollar floor seats to watch someone teach 3rd grade.  Know what I'm sayin? 

People put their money on enterainment.  It's what we do, we want to get away from our own lives, watch movies, concerts, games, etc.  And that costs money.  That is the world. 

You can go on with all that dumbest people on the face of the earth crap. 

  

  
Statis, I hear ya, I was referring to shady in general, but my main point sticks, 2 lockouts under his regime.  That's massive failure on his part.  Slice it how you like, he had a chance to make it all good in 99, he failed, obviously.  This was a long time comin, and he made no grounds to get it fixed before then, and even now he's sittin on his throne chillin like it's no big deal.   Dude should be callin meetings every single damn day.  If he was doin that, I would be more understanding of him.  But he ain't, so I'm not. 

 

[statis22]

CP I hear you too I jus feel like lockouts are bad on both parties, yeah Stern should get some blame but players should too. I mean I don't know how true that article was but waiting on owners to fold within themselves doesnt seem too smart from a union standpoint becaus like it said they got the billions to wait it out. It's been reported that players aren't willing to bargain so this stand still we got between them helps no side.

Thats why I say just throwing the lockout at Stern's feet is just silly.

 

[statis22]

CP I hear you too I jus feel like lockouts are bad on both parties, yeah Stern should get some blame but players should too. I mean I don't know how true that article was but waiting on owners to fold within themselves doesnt seem too smart from a union standpoint becaus like it said they got the billions to wait it out. It's been reported that players aren't willing to bargain so this stand still we got between them helps no side.

Thats why I say just throwing the lockout at Stern's feet is just silly.

 

[pmatic]

Look dude, I get what you sayin, teachers should be paid, I know this, we all do.  But come on, not a God damn soul plunkin down 500 dollar floor seats to watch someone teach 3rd grade.  Know what I'm sayin?  
If only...

 

 

[pmatic]

Look dude, I get what you sayin, teachers should be paid, I know this, we all do.  But come on, not a God damn soul plunkin down 500 dollar floor seats to watch someone teach 3rd grade.  Know what I'm sayin?  
If only...

 

 

[you go boy]

why are owners mad about the contracts? they are the ones overpaying players but yet they want a get out of jail free card if that player doesn't live up to expectations

 

[you go boy]

why are owners mad about the contracts? they are the ones overpaying players but yet they want a get out of jail free card if that player doesn't live up to expectations

 

[duba169]

that I understand. We don't need eddy curry status players in the nba

 

[duba169]

that I understand. We don't need eddy curry status players in the nba

 

[pmatic]

NBPA's Evans says players 'ready to negotiate'

While the National Basketball Players Association continued a whirlwind tour of regional meetings in New York on Wednesday, there was little indication any of those meetings could bring them face-to-face with their employers anytime soon. 

After union officials briefed about 10 players on the dismal state of collective bargaining talks at the NBPA headquarters in Harlem, union vice president Mo Evans said there were no immediate plans for a bargaining session until perhaps after Labor Day. 

"We're looking forward to the owners re-engaging us after a couple of weeks of vacation," Evans told CBSSports.com by phone after landing in Chicago, where the NBPA will hold another regional meeting Thursday. "We're ready to negotiate. We're ready and we're available." 

Each side, however, is endeavoring to prove otherwise before the National Labor Relations Board. Earlier this month, the NBA filed its own charge accusing the players of failing to bargain in good faith after the union accused the owners of the same back in May. There has been only one bargaining session involving all the key players from both sides since the owners imposed the lockout July 1. 

"Even in that meeting we had, they didn't engage," Evans said. "In the proposals we've given them, the players have compromised over $650 million into the owners' pockets over six years. You say you're losing money, and we've offered over $100 million a year to take out of our pockets and they say, 'That's all? That's all? Just a modest $100 million a year?' That's just not bargaining in good faith. It's hard to get anything done that way." 

The NBA contends that the players' $100 million-a-year concession would result in the average player salary rising from its current level of about $5 million to $7 million by the end of the NBPA's six-year proposal and says the players actually are proposing slowing the growth of salaries by $100 million a year. With every dollar sign and zero, the fans' eyes glaze over. "We're not so much frustrated," Evans said. 

"We're just not being impatient. Nothing's lost, nothing's jeopardized as of now. But we are eager to get this back on track. We're coming off a lot of record highs in terms of ratings and BRI, and the game is in such a good place. The NFL gets a 10-year deal, and I've been to some NFL (preseason) games and the fans are so excited. We owe that to our fans as well." 

In meeting with players throughout the country -- more than 70 in Los Angeles and about 35 in Las Vegas last week -- Evans has heard a gathering insistence among NBPA members that they are willing to lose the entire season if that's what it takes to get a "fair deal," he said. 

"The guys are willing to suck it up as long as we have to in order to stand up for what's right and protect what all the great players who've come before us have fought for," Evans said. "The Bill Russells, Michael Jordans, Larry Birds and Magic Johnsons have done great things to allow us to make the salaries we have and wear these great uniforms. It'd be a shame to give up everything those guys have fought for." 

Reality dictates that neither side will give up anything until forced to do so. The only forces bearing down on these labor talks that could result in a change of heart are the players' unfair labor practices charge against the owners, which could result in a federal injunction lifting the lockout if successful, and the calendar itself. Sources on both sides understand that once the calendar flips to October, the currently distant threat of games being canceled becomes harsh reality. 

"In the more than two years I've been associated with this, we've been in entire sessions on ways to increase revenues and improve the game," Evans said. "We've suggested all kinds of awesome ways that will create even more competitive balance and increase profitability. But that's not what they're interested in. The only thing they're interested in is the players taking a cut and increasing the owners' profits." 

So, yeah, if you're looking for progress and positives signs, you've shown up a little too soon.

Link

 

[pmatic]

NBPA's Evans says players 'ready to negotiate'

While the National Basketball Players Association continued a whirlwind tour of regional meetings in New York on Wednesday, there was little indication any of those meetings could bring them face-to-face with their employers anytime soon. 

After union officials briefed about 10 players on the dismal state of collective bargaining talks at the NBPA headquarters in Harlem, union vice president Mo Evans said there were no immediate plans for a bargaining session until perhaps after Labor Day. 

"We're looking forward to the owners re-engaging us after a couple of weeks of vacation," Evans told CBSSports.com by phone after landing in Chicago, where the NBPA will hold another regional meeting Thursday. "We're ready to negotiate. We're ready and we're available." 

Each side, however, is endeavoring to prove otherwise before the National Labor Relations Board. Earlier this month, the NBA filed its own charge accusing the players of failing to bargain in good faith after the union accused the owners of the same back in May. There has been only one bargaining session involving all the key players from both sides since the owners imposed the lockout July 1. 

"Even in that meeting we had, they didn't engage," Evans said. "In the proposals we've given them, the players have compromised over $650 million into the owners' pockets over six years. You say you're losing money, and we've offered over $100 million a year to take out of our pockets and they say, 'That's all? That's all? Just a modest $100 million a year?' That's just not bargaining in good faith. It's hard to get anything done that way." 

The NBA contends that the players' $100 million-a-year concession would result in the average player salary rising from its current level of about $5 million to $7 million by the end of the NBPA's six-year proposal and says the players actually are proposing slowing the growth of salaries by $100 million a year. With every dollar sign and zero, the fans' eyes glaze over. "We're not so much frustrated," Evans said. 

"We're just not being impatient. Nothing's lost, nothing's jeopardized as of now. But we are eager to get this back on track. We're coming off a lot of record highs in terms of ratings and BRI, and the game is in such a good place. The NFL gets a 10-year deal, and I've been to some NFL (preseason) games and the fans are so excited. We owe that to our fans as well." 

In meeting with players throughout the country -- more than 70 in Los Angeles and about 35 in Las Vegas last week -- Evans has heard a gathering insistence among NBPA members that they are willing to lose the entire season if that's what it takes to get a "fair deal," he said. 

"The guys are willing to suck it up as long as we have to in order to stand up for what's right and protect what all the great players who've come before us have fought for," Evans said. "The Bill Russells, Michael Jordans, Larry Birds and Magic Johnsons have done great things to allow us to make the salaries we have and wear these great uniforms. It'd be a shame to give up everything those guys have fought for." 

Reality dictates that neither side will give up anything until forced to do so. The only forces bearing down on these labor talks that could result in a change of heart are the players' unfair labor practices charge against the owners, which could result in a federal injunction lifting the lockout if successful, and the calendar itself. Sources on both sides understand that once the calendar flips to October, the currently distant threat of games being canceled becomes harsh reality. 

"In the more than two years I've been associated with this, we've been in entire sessions on ways to increase revenues and improve the game," Evans said. "We've suggested all kinds of awesome ways that will create even more competitive balance and increase profitability. But that's not what they're interested in. The only thing they're interested in is the players taking a cut and increasing the owners' profits." 

So, yeah, if you're looking for progress and positives signs, you've shown up a little too soon.

Link

 

[everysingletime]

Originally Posted by CP1708

Originally Posted by Statis22

Owners take all the risks, players get majority profits, but Stern is shady. Yeah.

I'm confused, is this news to you or something?  You have heard of "weird" stuff in the NBA for years, have you not?  Frozen envelopes, certain teams getting the #1 pick just as a local star is waiting to come out, his entire history with refs......you aren't sure that Stern is Shady?  You lookin for any beach front joints up in Wisconsin? 

  

Statis was being sarcastic.

 

[everysingletime]

Originally Posted by CP1708

Originally Posted by Statis22

Owners take all the risks, players get majority profits, but Stern is shady. Yeah.

I'm confused, is this news to you or something?  You have heard of "weird" stuff in the NBA for years, have you not?  Frozen envelopes, certain teams getting the #1 pick just as a local star is waiting to come out, his entire history with refs......you aren't sure that Stern is Shady?  You lookin for any beach front joints up in Wisconsin? 

  

Statis was being sarcastic.

 

[pmatic]

Stern with the Eddy Curry Card.

Stale contracts provide new ammunition in this NBA labor battle


Before Game 4 of the NBA Finals in early June, almost a dozen players and
about 10 owners met to frankly discuss their economic differences and how they
could avoid a lockout before their current labor agreement expired less than a
month later. If there was ever a moment to crystallize why there very well may
not be an NBA season and what this is about, it came when Mark Cuban spoke
freely about a recurring frustration among his peers: stale contracts.


“When we had Tariq Abdul-Wahad, he didn’t seem to want to train, didn’t
really want to practice — he really was interested in a lot of things besides
basketball,

 

[pmatic]

Stern with the Eddy Curry Card.

Stale contracts provide new ammunition in this NBA labor battle


Before Game 4 of the NBA Finals in early June, almost a dozen players and
about 10 owners met to frankly discuss their economic differences and how they
could avoid a lockout before their current labor agreement expired less than a
month later. If there was ever a moment to crystallize why there very well may
not be an NBA season and what this is about, it came when Mark Cuban spoke
freely about a recurring frustration among his peers: stale contracts.


“When we had Tariq Abdul-Wahad, he didn’t seem to want to train, didn’t
really want to practice — he really was interested in a lot of things besides
basketball,

 

[cosmiccanon]

CP

Owners wanting only stars to get money, while everyone else gets peanuts. Smh RIP 2012 season.

 

[cosmiccanon]

CP

Owners wanting only stars to get money, while everyone else gets peanuts. Smh RIP 2012 season.

 

[pmatic]

NBA negotiations in a handy chart

The other day, on Bill Simmons' podcast, NBA Commissioner David Stern wondered why the players had scoffed at the owners' offer to cut player salaries just eight percent -- a smaller pay cut, he pointed out, than players in the very profitable NFL had taken. 

This eight percent story, which has since been repeated by an NBA spokesman, is somewhere between splitting hairs and a ruse. The chart above, made by TrueHoop reader David, helps to show that: Stern is talking about the first year of the league's "flex cap" offer, shown in turquoise. But the attractive first year of that offer comes is conditional on nine more years of fairly flat player income, even as league revenues are projected to climb with new national TV deals and an increasingly global audience. In other words, owners have offered a short period of salaries that are within shouting distance of the current deal, followed by many more years of below-market salaries. 

By nobody's projection has the league offered a deal that is an eight percent pay cut over the life of the deal. 

This is the kind of thing that you can see with your own eyes, thanks to this chart submitted by TrueHoop reader David. Based on educated guesses of the league's current revenues, assuming four percent annual growth over the next decade, and taking the NBA's word about how much money they're currently losing, he created the chart above based on media reports of the various offers. He cautions it is only as precise as the information that has been reported. Here's what matters: 

The blue line 
That's where the action is. The union has long built a case, and Malcolm Gladwell has their backs, that profit and loss is not the final analysis -- both because that analysis includes some costs related to team purchases, and because many of the benefits of team ownership are non-economic. But for the purposes of these talks, and this chart, I think we can safely assume that the NBA owners are not going to agree to a deal that projects league-wide losses. They want a deal that projects a league in the money, and this is that line. 

The best the union could do, I suspect, is to negotiate a deal that is precisely on that line -- or a line like it, created with the union's better financial insight -- and even that may be too hopeful. Owners want profits. And that's not weird. It's the way of business. If there aren't profits for owners, in pretty much any business, well, the hard reality is that the owner can and maybe should simply shut the doors and walk away. As employees, you want all the money you can get, but clearly not so much that you topple the entire enterprise. 

The pink line 
Make a note of this: The existing deal is the one that does the very best for players. Which matters when you look at ... 

The red line 
David Stern has said the union does not want to negotiate, and he's talking about lately. But worth noting is that the players opened talks with a giveback, and have not made one significant ask of their own. This is not a give and take. This is a give. The only question has been gift size. Not the worst people to negotiate with. 

The yellow line 
That was a while ago now, but remember it came in contrast to the status quo, or the pink line. So the league opened negotiations saying, basically, we'll keep it just like it is, only we'll take an incredibly huge chunk of your money every single year. 

The turquoise line 
Two important things have happened to date: The players have opened with a giveback, and the owners have made an offer that is, at least temporarily, right up there in "let's make a deal" territory by that all-important blue line. Even though we have not yet reached the zero hour of negotiations, when the real offers will come out, we have already had some signs that the mood is to negotiate. 

A final story of this chart: It's fairly clear what a compromise will look like, and both sides likely know it. It will be, almost certainly, somewhere near that blue line, which happens to be just about in the middle of all the various offers. It's noteworthy that neither side has yet made an offer all that close, which makes me think the good offers are yet to come.


Link

 

[pmatic]

NBA negotiations in a handy chart

The other day, on Bill Simmons' podcast, NBA Commissioner David Stern wondered why the players had scoffed at the owners' offer to cut player salaries just eight percent -- a smaller pay cut, he pointed out, than players in the very profitable NFL had taken. 

This eight percent story, which has since been repeated by an NBA spokesman, is somewhere between splitting hairs and a ruse. The chart above, made by TrueHoop reader David, helps to show that: Stern is talking about the first year of the league's "flex cap" offer, shown in turquoise. But the attractive first year of that offer comes is conditional on nine more years of fairly flat player income, even as league revenues are projected to climb with new national TV deals and an increasingly global audience. In other words, owners have offered a short period of salaries that are within shouting distance of the current deal, followed by many more years of below-market salaries. 

By nobody's projection has the league offered a deal that is an eight percent pay cut over the life of the deal. 

This is the kind of thing that you can see with your own eyes, thanks to this chart submitted by TrueHoop reader David. Based on educated guesses of the league's current revenues, assuming four percent annual growth over the next decade, and taking the NBA's word about how much money they're currently losing, he created the chart above based on media reports of the various offers. He cautions it is only as precise as the information that has been reported. Here's what matters: 

The blue line 
That's where the action is. The union has long built a case, and Malcolm Gladwell has their backs, that profit and loss is not the final analysis -- both because that analysis includes some costs related to team purchases, and because many of the benefits of team ownership are non-economic. But for the purposes of these talks, and this chart, I think we can safely assume that the NBA owners are not going to agree to a deal that projects league-wide losses. They want a deal that projects a league in the money, and this is that line. 

The best the union could do, I suspect, is to negotiate a deal that is precisely on that line -- or a line like it, created with the union's better financial insight -- and even that may be too hopeful. Owners want profits. And that's not weird. It's the way of business. If there aren't profits for owners, in pretty much any business, well, the hard reality is that the owner can and maybe should simply shut the doors and walk away. As employees, you want all the money you can get, but clearly not so much that you topple the entire enterprise. 

The pink line 
Make a note of this: The existing deal is the one that does the very best for players. Which matters when you look at ... 

The red line 
David Stern has said the union does not want to negotiate, and he's talking about lately. But worth noting is that the players opened talks with a giveback, and have not made one significant ask of their own. This is not a give and take. This is a give. The only question has been gift size. Not the worst people to negotiate with. 

The yellow line 
That was a while ago now, but remember it came in contrast to the status quo, or the pink line. So the league opened negotiations saying, basically, we'll keep it just like it is, only we'll take an incredibly huge chunk of your money every single year. 

The turquoise line 
Two important things have happened to date: The players have opened with a giveback, and the owners have made an offer that is, at least temporarily, right up there in "let's make a deal" territory by that all-important blue line. Even though we have not yet reached the zero hour of negotiations, when the real offers will come out, we have already had some signs that the mood is to negotiate. 

A final story of this chart: It's fairly clear what a compromise will look like, and both sides likely know it. It will be, almost certainly, somewhere near that blue line, which happens to be just about in the middle of all the various offers. It's noteworthy that neither side has yet made an offer all that close, which makes me think the good offers are yet to come.


Link

 

[pmatic]

Meet Your New NBA Owners!

When June turned into July, the NBA came to a screeching halt. Free agency went on hiatus. Team employees are now prohibited from contacting players, preventing someone from Memphis' staff to warn Zach Randolph that it may not be a good idea to (allegedly) use his home as a marijuana depot. But on the ownership landscape, the league is still active in a big way.

Still, since the lockout began, two buyers have reached tentative deals to purchase teams: Joshua Harris, a private equity executive, heads an investment group that will soon secure the Philadelphia 76ers. Alex Meruelo, the founder and CEO of La Pizza Loca, is on the verge of landing the Atlanta Hawks. The purchases, which need approval from the league's board of governors to be finalized, continue a large, recent turnover among the NBA's owners club. Since 2010, eight teams have changed majority ownership hands: Charlotte, New Jersey, Golden State, New Orleans, Washington, and Detroit, along with Atlanta and Philadelphia.1

That list alone encompasses a considerable amount of the league and does not include the Sacramento Kings (the Maloof family would have likely been forced to sell the team had it relocated to Anaheim, which remains a distinct possibility) or the Toronto Raptors (owned by the Ontario Teachers' Pension Plan, which is looking to sell majority ownership of Maple Leaf Sports and Entertainment, which includes the Raptors and Toronto Maple Leafs). With those two teams added, one-third of the league is in some sort of current or recent ownership transition.

It is doubtful that the new owners will have an effect on the lockout. The NBA is built on a seniority system. The voices heard from the ownership side have overwhelmingly come from the old guard. (Michael Jordan is a noticeable exception and one of the most adamant owners in favor of reducing player salaries.2) For the most part, the newbies are waiting in line.

"They're coming into a well-set position and they are of the view that a better financial profile for our teams is something to be desired in these collective bargaining negotiations," commissioner David Stern explained in a recent telephone interview.

"We have a sport that people still like. In the cases of Charlotte, Atlanta, Philadelphia, New Jersey, and New Orleans, buyers were able to make the purchases at a reduced valuation without the amount of cash up front that was historically required. When Philadelphia sells for less than $300 million because Comcast is tired of writing the check necessary to support it, the buyer got themselves either a good deal or a bad deal, but their investment is low by historic standards.

"The game is at a high level," Stern said. "But the percentage that we are paying the players is substantially high. It has to be reduced and there has to be a reset. In the case of the NFL, where all the teams are making money, there was a substantial decrease in player compensation. In our case, where the league is losing money, we expect the players to ultimately be willing to agree to a reasonable reset so the league can continue to prosper."

Stern and Billy Hunter, the executive director of the National Basketball Players Association, agree that the recent ownership push proves the league is a valuable commodity with invested personalities. But they differed on what that change ultimately means. Hunter argued that it makes little sense for seasoned businessmen to buy into a league in which all but eight of 30 teams lost money last season, as the league's numbers show.

"I think it demonstrates that there is still a robust ownership market and that the NBA has great appeal," Hunter said. "A lot of it has to do with the fact that they realize that the game is growing globally. It's probably at a high-water mark in terms of popularity in the U.S. and the domestic market, and I think it's about to explode internationally. People are just lining up to get in place, coupled with the fact that David has commented from time to time that the franchise values will go up and there will be great interest once he puts in place the new labor agreement. Obviously, that's assuming he gets everything he's asking for."

Michael Jordan paid $25 million less than Robert Johnson did when he first bought the Bobcats. Mikhail Prokhorov paid $100 million less for the Nets than the $300 million Bruce Ratner paid in 2004, and received a majority stake of the franchise and 45 percent of the years-awaited Barclays Center in Brooklyn. Harris and his partners paid a reported $280 million for the 76ers, a transaction that does not include the Wells Fargo Center, down from the $330 million that Forbes estimated the franchise's value at earlier in the year.3 Meruelo paid in excess of $300 million to secure the Atlanta Hawks, or, as they say in Atlanta: 2½ Joe Johnson contracts.

In those cases, the new owners paid more than the Forbes estimates, but the trends haven't all pointed downward. The Warriors were purchased for $450 million, a price much higher than the $363 million Forbes estimate. The Pistons sold for $420 million — $80 more than their Forbes estimate. Tom Gores obtained The Palace at of Auburn Hills in the deal, unlike Joe Lacob and Peter Guber, who did not receive the rights to the Oracle Arena in their transaction with Golden State. Ted Leonsis bought the 56 percent of Washington Sports & Entertainment that he did not own for $551 million.

The bidding war with Larry Ellison jacked up the price of the Warriors. The team also sits in a desirable TV market and boasts one of the most loyal, dedicated fan bases in the league. The inclusion of the arena increased the price of the Pistons. Leonsis probably overpaid, but gained ownership in two Washington, D.C., sports by also owning the NHL's Capitals.

Only the Hornets remain in basketball purgatory. The NBA obtained the Hornets for $310 million. Forbes pegged the franchise at $280 million. The league purchased the organization from longtime owner George Shinn — who lost millions of dollars annually — after negotiations with minority owner Gary Chouest collapsed last December. "We're working hard to, in effect, shine it up for sale to keep it in New Orleans," Stern said. "But we're funding the losses."

The Hornets would be the primary example that not every team can locate viable ownership. The logic unsurprisingly does not bode well with Hunter. "The league can find somebody," he said. "If you remember, Larry Ellison tried to purchase the Warriors and offered more than what the current owners paid. Then he attempted to buy the New Orleans Hornets. My understanding is that he was unsuccessful because Stern was concerned he would attempt to move or would move the franchise from New Orleans to San Jose, Calif., so as a result, they held off. But I'm sure that they've got other prospective owners in the wings and it's just a question of time. Once the new CBA is agreed upon, then they'll close a deal with somebody."4

The newcomers are an eclectic mix and include several firsts: the first former player to secure majority ownership (Jordan with the Bobcats), the first foreigner to head a team (Prokhorov with the Nets), and the first Hispanic owner (Meruelo with the Hawks). Gores, who bought the Pistons, and Harris head equity groups. Lacob is a venture capitalist, and Guber is the CEO of Mandalay Entertainment. Meruelo, who tried to buy the Bobcats, but ultimately lost out to Jordan, owns a pizza chain and a construction and real estate firm. Leonsis is a capital investor and worked for AOL.

"The fundamental reason that owners are selling is because they are tired of paying cash out of pocket for the cash losses that teams are losing with no end in sight unless David Stern negotiates a new collective bargaining agreement," said Marc Ganis, president of the sports business consulting firm SportsCorps. "But these new owners are absolutely taking a risk.

"In most cases, you have sophisticated financial investors buying these teams. They are buying based on the terms they are getting. None of them are necessarily laying out a huge amount of cash. They are assuming debt, paying some cash, and assuming future losses. The fact that they don't have to go out of pocket too much makes it an interesting leverage opportunity. These guys are used to taking those types of risks."

Rapid turnover among NBA owners is not a new phenomenon. The Boston Celtics have been owned by about 10 different people/entities5 since the death of founder Walter Brown and were even headed by the Ballantine Brewery. But the motivation of the influx of new owners is not always grounded in buying low and selling high. Buying a sports franchise can also enhance an owner's public profile. But Ganis said he advises prospective buyers against that tactic.

"In some cases, of course that's part of it," he said. "I explain that's a negative not a positive. They'll find that out for themselves soon enough. The attention, the glare of the spotlight can be very damaging. The passion, the fans have, the interest over the Internet and ESPN, the various means in which the sports are covered, makes it a challenging environment to slip under the radar screen."

Jordan, Lacob, and Leonsis were minority owners of NBA teams before becoming majority owners. Gores, Meruelo, and Guber all live in Los Angeles and were perhaps influenced by the success and draw of the Lakers or the continued profitability, despite years of mediocrity from the Clippers.

"It's owner fatigue, but it is my hope that the long-term prospects, particularly digital, global, and collective bargaining, can improve the prospects of the teams," Stern said. "But teams that have had to pay for a long time get owners' fatigue, and they'd rather see someone come in who seems more optimistic, upbeat, and may be prepared to fund it a little bit while times get better."

David Carter, a professor of sports business and USC's Marshall School of Business executive director, termed the turnover differently and described it as the "greater fool theory," in that there will always be a prospective buyer who thinks he or she can run an operation better than current management.

"The realist may think you can't extract any more money," Carter said. "It's the newbies who come in and think they can do a better job. They may be thinking they are getting a relative bargain, but they are also taking a huge risk in acquiring a business that could go dark for a long period of time."

Leonsis provided the quote that hangs over the negotiations (or lack thereof).

"In a salary cap era — and soon a hard salary cap in the NBA like it's in the NHL — if everyone can pay the same amount to the same amount of players, it's the small, nuanced differences that matter," Leonsis told a group of local businessmen in Virginia last September. The comments drew a swift rebuke from Stern in the form of a $100,000 fine. The comment is why Hunter thinks the new owners have been told that stripped down costs and increased revenue sharing will be part of the new deal. "I have to suspect or believe that's a part of it," Hunter said of new owners' buying into the league under the impression that they will be arriving to a restructured and favorable (for them) model.

That mentality is akin to a person buying a house on the cheap in a run-down neighborhood slated for improvement and development. The faith is thrown into the next five years and not the past five.

The majority of the new owners have already been directly involved in team decisions. One of the NBA's most surreal moments occurred last season when Prokhorov flatly told reporters he had ended the Nets' negotiations for Carmelo Anthony only to meet with him in Los Angeles less than a month later.6 Leonsis traded Gilbert Arenas and his albatross contract. Lacob and Guber hired Mark Jackson to replace Keith Smart (Lacob is also known to play pickup basketball with team employees during the day). Gores hired Lawrence Frank to coach and retained Joe Dumars. "He's been great to work with," Dumars wrote in an e-mail. "He's passionate, smart and committed to winning."

Because of Leonsis' comments and the general closed-mouth state of the league, none of the new owners agreed to speak on the record for this article. They are an ambitious bunch according to their public comments the past few months.

"Bill Davidson put these championship banners up, and I have to build on that," Gores said in his introductory conference.

"If everything goes as planned, I expect us to be in the playoffs next season and championship in one year minimum and maximum in five years," Prokhorov said in a video message to Nets fans.

"I want to bring a championship to the city of Atlanta," Meruelo told the Atlanta Journal Constitution.

"The plan for the Capitals and the Wizards is similar," Leonsis told Modern DC Business. "We want to produce generationally great teams that are in position to compete for a championship each year."

"There is no reason that we can't turn this into a championship contender," Lacob told the San Francisco Chronicle.

The vast majority of the new owners will be disappointed in the years to come. The enclave of new voices will only fortify the stance laid before them in these labor negotiations. How they develop their voices and teams in the next few years will be the most important first step. Without that, they will be hard-pressed to compete for that championship they all desire, their losses will probably compound and confound, and the cycle of new owners will likely begin again with another eager set — or as Carter would term them, "greater fools."

Link

 

[pmatic]

Meet Your New NBA Owners!

When June turned into July, the NBA came to a screeching halt. Free agency went on hiatus. Team employees are now prohibited from contacting players, preventing someone from Memphis' staff to warn Zach Randolph that it may not be a good idea to (allegedly) use his home as a marijuana depot. But on the ownership landscape, the league is still active in a big way.

Still, since the lockout began, two buyers have reached tentative deals to purchase teams: Joshua Harris, a private equity executive, heads an investment group that will soon secure the Philadelphia 76ers. Alex Meruelo, the founder and CEO of La Pizza Loca, is on the verge of landing the Atlanta Hawks. The purchases, which need approval from the league's board of governors to be finalized, continue a large, recent turnover among the NBA's owners club. Since 2010, eight teams have changed majority ownership hands: Charlotte, New Jersey, Golden State, New Orleans, Washington, and Detroit, along with Atlanta and Philadelphia.1

That list alone encompasses a considerable amount of the league and does not include the Sacramento Kings (the Maloof family would have likely been forced to sell the team had it relocated to Anaheim, which remains a distinct possibility) or the Toronto Raptors (owned by the Ontario Teachers' Pension Plan, which is looking to sell majority ownership of Maple Leaf Sports and Entertainment, which includes the Raptors and Toronto Maple Leafs). With those two teams added, one-third of the league is in some sort of current or recent ownership transition.

It is doubtful that the new owners will have an effect on the lockout. The NBA is built on a seniority system. The voices heard from the ownership side have overwhelmingly come from the old guard. (Michael Jordan is a noticeable exception and one of the most adamant owners in favor of reducing player salaries.2) For the most part, the newbies are waiting in line.

"They're coming into a well-set position and they are of the view that a better financial profile for our teams is something to be desired in these collective bargaining negotiations," commissioner David Stern explained in a recent telephone interview.

"We have a sport that people still like. In the cases of Charlotte, Atlanta, Philadelphia, New Jersey, and New Orleans, buyers were able to make the purchases at a reduced valuation without the amount of cash up front that was historically required. When Philadelphia sells for less than $300 million because Comcast is tired of writing the check necessary to support it, the buyer got themselves either a good deal or a bad deal, but their investment is low by historic standards.

"The game is at a high level," Stern said. "But the percentage that we are paying the players is substantially high. It has to be reduced and there has to be a reset. In the case of the NFL, where all the teams are making money, there was a substantial decrease in player compensation. In our case, where the league is losing money, we expect the players to ultimately be willing to agree to a reasonable reset so the league can continue to prosper."

Stern and Billy Hunter, the executive director of the National Basketball Players Association, agree that the recent ownership push proves the league is a valuable commodity with invested personalities. But they differed on what that change ultimately means. Hunter argued that it makes little sense for seasoned businessmen to buy into a league in which all but eight of 30 teams lost money last season, as the league's numbers show.

"I think it demonstrates that there is still a robust ownership market and that the NBA has great appeal," Hunter said. "A lot of it has to do with the fact that they realize that the game is growing globally. It's probably at a high-water mark in terms of popularity in the U.S. and the domestic market, and I think it's about to explode internationally. People are just lining up to get in place, coupled with the fact that David has commented from time to time that the franchise values will go up and there will be great interest once he puts in place the new labor agreement. Obviously, that's assuming he gets everything he's asking for."

Michael Jordan paid $25 million less than Robert Johnson did when he first bought the Bobcats. Mikhail Prokhorov paid $100 million less for the Nets than the $300 million Bruce Ratner paid in 2004, and received a majority stake of the franchise and 45 percent of the years-awaited Barclays Center in Brooklyn. Harris and his partners paid a reported $280 million for the 76ers, a transaction that does not include the Wells Fargo Center, down from the $330 million that Forbes estimated the franchise's value at earlier in the year.3 Meruelo paid in excess of $300 million to secure the Atlanta Hawks, or, as they say in Atlanta: 2½ Joe Johnson contracts.

In those cases, the new owners paid more than the Forbes estimates, but the trends haven't all pointed downward. The Warriors were purchased for $450 million, a price much higher than the $363 million Forbes estimate. The Pistons sold for $420 million — $80 more than their Forbes estimate. Tom Gores obtained The Palace at of Auburn Hills in the deal, unlike Joe Lacob and Peter Guber, who did not receive the rights to the Oracle Arena in their transaction with Golden State. Ted Leonsis bought the 56 percent of Washington Sports & Entertainment that he did not own for $551 million.

The bidding war with Larry Ellison jacked up the price of the Warriors. The team also sits in a desirable TV market and boasts one of the most loyal, dedicated fan bases in the league. The inclusion of the arena increased the price of the Pistons. Leonsis probably overpaid, but gained ownership in two Washington, D.C., sports by also owning the NHL's Capitals.

Only the Hornets remain in basketball purgatory. The NBA obtained the Hornets for $310 million. Forbes pegged the franchise at $280 million. The league purchased the organization from longtime owner George Shinn — who lost millions of dollars annually — after negotiations with minority owner Gary Chouest collapsed last December. "We're working hard to, in effect, shine it up for sale to keep it in New Orleans," Stern said. "But we're funding the losses."

The Hornets would be the primary example that not every team can locate viable ownership. The logic unsurprisingly does not bode well with Hunter. "The league can find somebody," he said. "If you remember, Larry Ellison tried to purchase the Warriors and offered more than what the current owners paid. Then he attempted to buy the New Orleans Hornets. My understanding is that he was unsuccessful because Stern was concerned he would attempt to move or would move the franchise from New Orleans to San Jose, Calif., so as a result, they held off. But I'm sure that they've got other prospective owners in the wings and it's just a question of time. Once the new CBA is agreed upon, then they'll close a deal with somebody."4

The newcomers are an eclectic mix and include several firsts: the first former player to secure majority ownership (Jordan with the Bobcats), the first foreigner to head a team (Prokhorov with the Nets), and the first Hispanic owner (Meruelo with the Hawks). Gores, who bought the Pistons, and Harris head equity groups. Lacob is a venture capitalist, and Guber is the CEO of Mandalay Entertainment. Meruelo, who tried to buy the Bobcats, but ultimately lost out to Jordan, owns a pizza chain and a construction and real estate firm. Leonsis is a capital investor and worked for AOL.

"The fundamental reason that owners are selling is because they are tired of paying cash out of pocket for the cash losses that teams are losing with no end in sight unless David Stern negotiates a new collective bargaining agreement," said Marc Ganis, president of the sports business consulting firm SportsCorps. "But these new owners are absolutely taking a risk.

"In most cases, you have sophisticated financial investors buying these teams. They are buying based on the terms they are getting. None of them are necessarily laying out a huge amount of cash. They are assuming debt, paying some cash, and assuming future losses. The fact that they don't have to go out of pocket too much makes it an interesting leverage opportunity. These guys are used to taking those types of risks."

Rapid turnover among NBA owners is not a new phenomenon. The Boston Celtics have been owned by about 10 different people/entities5 since the death of founder Walter Brown and were even headed by the Ballantine Brewery. But the motivation of the influx of new owners is not always grounded in buying low and selling high. Buying a sports franchise can also enhance an owner's public profile. But Ganis said he advises prospective buyers against that tactic.

"In some cases, of course that's part of it," he said. "I explain that's a negative not a positive. They'll find that out for themselves soon enough. The attention, the glare of the spotlight can be very damaging. The passion, the fans have, the interest over the Internet and ESPN, the various means in which the sports are covered, makes it a challenging environment to slip under the radar screen."

Jordan, Lacob, and Leonsis were minority owners of NBA teams before becoming majority owners. Gores, Meruelo, and Guber all live in Los Angeles and were perhaps influenced by the success and draw of the Lakers or the continued profitability, despite years of mediocrity from the Clippers.

"It's owner fatigue, but it is my hope that the long-term prospects, particularly digital, global, and collective bargaining, can improve the prospects of the teams," Stern said. "But teams that have had to pay for a long time get owners' fatigue, and they'd rather see someone come in who seems more optimistic, upbeat, and may be prepared to fund it a little bit while times get better."

David Carter, a professor of sports business and USC's Marshall School of Business executive director, termed the turnover differently and described it as the "greater fool theory," in that there will always be a prospective buyer who thinks he or she can run an operation better than current management.

"The realist may think you can't extract any more money," Carter said. "It's the newbies who come in and think they can do a better job. They may be thinking they are getting a relative bargain, but they are also taking a huge risk in acquiring a business that could go dark for a long period of time."

Leonsis provided the quote that hangs over the negotiations (or lack thereof).

"In a salary cap era — and soon a hard salary cap in the NBA like it's in the NHL — if everyone can pay the same amount to the same amount of players, it's the small, nuanced differences that matter," Leonsis told a group of local businessmen in Virginia last September. The comments drew a swift rebuke from Stern in the form of a $100,000 fine. The comment is why Hunter thinks the new owners have been told that stripped down costs and increased revenue sharing will be part of the new deal. "I have to suspect or believe that's a part of it," Hunter said of new owners' buying into the league under the impression that they will be arriving to a restructured and favorable (for them) model.

That mentality is akin to a person buying a house on the cheap in a run-down neighborhood slated for improvement and development. The faith is thrown into the next five years and not the past five.

The majority of the new owners have already been directly involved in team decisions. One of the NBA's most surreal moments occurred last season when Prokhorov flatly told reporters he had ended the Nets' negotiations for Carmelo Anthony only to meet with him in Los Angeles less than a month later.6 Leonsis traded Gilbert Arenas and his albatross contract. Lacob and Guber hired Mark Jackson to replace Keith Smart (Lacob is also known to play pickup basketball with team employees during the day). Gores hired Lawrence Frank to coach and retained Joe Dumars. "He's been great to work with," Dumars wrote in an e-mail. "He's passionate, smart and committed to winning."

Because of Leonsis' comments and the general closed-mouth state of the league, none of the new owners agreed to speak on the record for this article. They are an ambitious bunch according to their public comments the past few months.

"Bill Davidson put these championship banners up, and I have to build on that," Gores said in his introductory conference.

"If everything goes as planned, I expect us to be in the playoffs next season and championship in one year minimum and maximum in five years," Prokhorov said in a video message to Nets fans.

"I want to bring a championship to the city of Atlanta," Meruelo told the Atlanta Journal Constitution.

"The plan for the Capitals and the Wizards is similar," Leonsis told Modern DC Business. "We want to produce generationally great teams that are in position to compete for a championship each year."

"There is no reason that we can't turn this into a championship contender," Lacob told the San Francisco Chronicle.

The vast majority of the new owners will be disappointed in the years to come. The enclave of new voices will only fortify the stance laid before them in these labor negotiations. How they develop their voices and teams in the next few years will be the most important first step. Without that, they will be hard-pressed to compete for that championship they all desire, their losses will probably compound and confound, and the cycle of new owners will likely begin again with another eager set — or as Carter would term them, "greater fools."

Link