The Lockout & the Raptors: Players approve CBA, Owners too! (1944)

[Joey]

In Greenbay I think they did it back in the 20's to save the team. This would not be viable in this day in age where franchises are worth anywhere from $200M to upwards of $1B.

FYI, there is a rumor that the Packers are planning to issue some more shares(7,000) to help fund an expansion at Lambeau field. It's been over 50 years since they've issued new stocks I think.

I was actually just reading they had a sale in 1997-98 with shares going for $200 each.
Still, I wouldn't mind grabbing a couple shares just to say I did. haha

[Apollo]

Wow, I actually didn't know this! Unreal. Very cool as well.

I'm all for this if they could somehow figure out a way to make this system work else where.
I imagine the fact that Green Bay is SO small, has alot to do with its success.

And after doing some reading, apparently the Packers have a rule, where no one individual can own more than 200 000 shares, which works out to about 4% ownership stake (almost 5M shares currently owned).

The President (as elected by a Board) represents the team in all Ownership meetings.
Apparently the NFL has a rule where you can't have more than 32 owners per team, but because the Green Bay system was in place before the rule was enacted, they were exempt.

Packers are also the ONLY American Pro Sports team to release their Financial Balance sheet EVERY year.

Very cool. Thats a team I could support.

In Greenbay I think they did it back in the 20's to save the team. This would not be viable in this day in age where franchises are worth anywhere from $200M to upwards of $1B.

FYI, there is a rumor that the Packers are planning to issue some more shares(7,000) to help fund an expansion at Lambeau field. It's been over 50 years since they've issued new stocks I think.

[mcHAPPY]

Wow, I actually didn't know this! Unreal. Very cool as well.

I'm all for this if they could somehow figure out a way to make this system work else where.
I imagine the fact that Green Bay is SO small, has alot to do with its success.

And after doing some reading, apparently the Packers have a rule, where no one individual can own more than 200 000 shares, which works out to about 4% ownership stake (almost 5M shares currently owned).

The president represents the team in all Ownership meetings.
Apparently the NFL has a rule where you can't have more than 32 owners per team, but because the Green Bay system was in place before the rule was enacted, they were exempt.
Packers are also the ONLY American Pro Sports team to release their Financial Balance sheet EVERY year.
Very cool. Thats a team I could support.

But the Packers still play under parameters of a predetermined CBA which is what the NBA players are fighting.

[Joey]

This works in Greenbay, Wisconsin. I would support that direction 100%... But wait, what happens if one of those fans is a tycoon and has enough money to purchase at least a51% stake in the company?

Wow, I actually didn't know this! Unreal. Very cool as well.

I'm all for this if they could somehow figure out a way to make this system work else where.
I imagine the fact that Green Bay is SO small, has alot to do with its success.

And after doing some reading, apparently the Packers have a rule, where no one individual can own more than 200 000 shares, which works out to about 4% ownership stake (almost 5M shares currently owned).

The President (as elected by a Board) represents the team in all Ownership meetings.
Apparently the NFL has a rule where you can't have more than 32 owners per team, but because the Green Bay system was in place before the rule was enacted, they were exempt.

Packers are also the ONLY American Pro Sports team to release their Financial Balance sheet EVERY year.

Very cool. Thats a team I could support.

[Apollo]

"Personal?"

Yeah, I suppose the Owners could run the league without any players and simply play themselves right? The NBA would be awesome if it weren't for the damn players!

It's already personal for the players. It was months ago. I don't get your point here. The players are now seeking to do damage to the Owners via the courts and there are reports that suggest they make seek to toss as many suits at them as possible in a desperate hope that something sticks. The minute you bring the courts into the game is the minute it's personal. The Players have said the hard cap and other mechanisms, which would make the game better for the fans, are "blood issues". My point, Quirk, is that that Owners will undoubtedly be out for "blood" if they overcome a law suit hurtle.

If it's "Personal," the owners would really show the players who's boss and get into a different line of business.

The Players have already been given a rude awakening about who the Boss is. Hence the desperate act to decertify and toss suits at the Owners which weren't even applicable under the conditions of the negotiations to date.

With modern finance, they may have trouble finding a place, there's not too many other industries where anachronistic "Tycoon Boss" types are still prominent. Most industries are dominated by shareholder corporations, boards, etc. Pro sports is the last vestige of the tycoon, and I suspect they will soon be extinct. As others have suggested being an old-school Boss in the public eye is probably among the reasons a lot of these goons become owners in the first place. It's quick sickening how many people identify with these plantation owners.

What you're missing here is the fact that all these Owners have made their fortunes elsewhere. Most industries are dominated by CEO's who delegate from the top and the stakeholders typically go along with their plans. Pro Sports is going nowhere. It will change with the times, just like any other industry. The only way Pro Sports dies is if something new and improved comes along.

It's quick sickening how many people identify with these plantation owners.

Just because you say that doesn't make it reality. I've only read a couple writers make that analogy and I thought it was a pretty outlandish and an insult to our intelligence. It made me question what their mission was.

Unions are actually detrimental to industry in turbulent economic times such as these and if you don't agree then please see the Detroit automotive industry. If you have trouble finding it that is because you're looking in the wrong place. You're looking in Michigan. You should be looking in China.

I understand Tim W's position, that team interests are more aligned with fan interests than player interests, and I have no issue with this position

Yes, something is far closer to the Fan's interest than absolutely nothing. I agree.

suggests the best model directly: Fan-based ownership.

This works in Greenbay, Wisconsin. I would support that direction 100%... But wait, what happens if one of those fans is a tycoon and has enough money to purchase at least a51% stake in the company?

It's not that "Tycoons" have interests aligned with fans, they don't since their whole mission in life is charging the fans as much as possible while paying the players as little as possible. It's that teams have different interests than players.

No one in here is kidding themselves. If you page through here you won't find a single person who is naive enough to think that the Owners are fighting this fight for the fans. Everyone in here knows that the Owners are fighting this for their own gain. The people in here on the Owners' side are on that side because they've looked at the issues, they've looked at what both sides are offering each other and they've come to the realization that what the Owners are offering the Players improves the health of the business and promotes a fair, more consistent on court product for all fans. What the Players are offering helps only themselves. The Players offer provides no added value to the fans.

Bring on the antitrust. The Players should own the league, the Fans should own the teams. The Tycoons can go to hell. Simple.

Someone versed in modern finance and industry should be able to appreciate the terms capital, ingenuity and know how. Simply put, the players are missing all three. Otherwise we would be talking about this new and exciting start up league right now.

[Joey]

A hard cap would most definitely work for the owners, since it would limit how much teams can spend. It doesn't work for the players, though, and it would kind of suck for the fans who would not get much continuity on their team because teams wouldn't be able to afford to keep all their best players.

Not only that, as soon as they do sign that horrible contract, (which everyone knows is going to happen) a Hard Cap would make it that much more debilitating.

[mcHAPPY]

Start by accepting the possibility that you may be wrong.

Look through my posts. I have claimed not to know the outcome of the antitrust. Even the players attorney's have acknowledged this. I think you should look at your own advice there.

Arguments about "insults to history" are an insult to logic.

Seriously? Comparing people who were mated to produce superior genetic slaves to do more work? Comparing people who if they stepped out of line they would be killed? Comparing people who were tortured and abused in all sorts of manners on the whims of their masters? Comparing people who's reward for work was the right to live another day? Comparing people who risked everything to escape through the underground to live a day without the aforementioned restrictions?

We are talking about athletes who play a game for a living and get paid millions of dollars over the course of an average career in the just expired system. We are talking about a labour agreement that was rejected by the players that could have easily seen average salaries move from $5M to $7-8M per season.

Arguments based on extremes are an insult to the discussion.

A player/fan run league would not be fighting it's way into an antitrust case.

Because such a league would most likely have 5-6 teams.

What happens when a corporation is bleeding more money than it is taking in? What happens when the market figures out that a stock is not worth the hype? Oh sure, they could issue more debt to cover losses but essentially the yields to entice debt holders would cause the team to fold as the cost to carry the debt eats up all income.

What you are advocating would result in the majority of franchises becoming bankrupt in a short period of time. What you are advocating does nothing to improve competitive balance in the NBA, in fact it only exasperates it. The NBA is not like MLB or the NFL. Two or three great players on one team alters the competitive balance of the league due to the nature of the sport.

People do not invest to lose money whether it is a stakeholder in a public corporation or a tycoon owner.

Here's a clue: Securities.

That's how the entire world economy is financed. Not Tycoons. The 19th century has been calling pro-sports wanting it's financing model back for a long time.

A sports league with billions in revenue would have no trouble securitizing their future income.
Nobody is running anything at "at a loss." The idea that the owners are running a charity on behalf of the love of basketball is nonsense. Neither group wants to lose money, both have recourse to take on debt when needed when loses do occur, like any modern business.

That initial IPO would be fantastic I am sure.

With an argument to take on more debt when loses do it occur all credibility is lost. The majority of teams would never turn a profit in a truly free market. Taking on debt to cover operational losses is a good way to go BANKRUPT. Look what happens when yield rates rise. There comes a point when the cost of carrying debt becomes greater than incomes. That is the end game.

What happens in a truly capitalistic marketplace when one business goes bankrupt? The stronger businesses come in to pick up the assets at pennies on the dollar.

Giving this some thought it is interesting and could work. However if the goal is to have a 26-30 team league with each franchise having an opportunity to compete, well good luck with that, in my opinion.

Well what about revenue sharing? Yes, I am sure stakeholders in NY are going to be very happy to share their revenues with stakeholders in MIL. That would be like JPMorgan shareholders saying, "Ohhhh CitiBank, you are having such a hard go of it - especially on that one time charge of $1.5billion. Here, let me take a collection from the profitable banks of GS and BofA to cover those costs."

The goal of a private business is to control the marketplace hence mergers and acquisitions. The goal in professional sports is to win on the court but to do that you need competitors. If the goal is to watch truly great teams squash the majority of the opposition, I believe there is already a professional basketball circuit that meets those desires of the market - they go by the name of the Harlem Globetrotters.

[Quirk]

Where to begin? lol

Start by accepting the possibility that you may be wrong.

Comparing athletes to slavery is an insult to history.

Arguments about "insults to history" are an insult to logic.

No doubt a professional sports league violates antitrust laws. However, how can a league truly operate without them - unless it is a league of 5-6 teams.

A player/fan run league would not be fighting it's way into an antitrust case.

Players owning the league and fans owning the teams... that will work out splendidly. I'm sure the players and fans will enjoy fronting the billions needed to run the league - all at a loss!

Here's a clue: Securities.

That's how the entire world economy is financed. Not Tycoons. The 19th century has been calling pro-sports wanting it's financing model back for a long time.

A sports league with billions in revenue would have no trouble securitizing their future income.
Nobody is running anything at "at a loss." The idea that the owners are running a charity on behalf of the love of basketball is nonsense. Neither group wants to lose money, both have recourse to take on debt when needed when loses do occur, like any modern business.

[mcHAPPY]

"Personal?"

Yeah, I suppose the Owners could run the league without any players and simply play themselves right? The NBA would be awesome if it weren't for the damn players!

If it's "Personal," the owners would really show the players who's boss and get into a different line of business.

With modern finance, they may have trouble finding a place, there's not too many other industries where anachronistic "Tycoon Boss" types are still prominent. Most industries are dominated by shareholder corporations, boards, etc. Pro sports is the last vestige of the tycoon, and I suspect they will soon be extinct. As others have suggested being an old-school Boss in the public eye is probably among the reasons a lot of these goons become owners in the first place. It's quick sickening how many people identify with these plantation owners.

I understand Tim W's position, that team interests are more aligned with fan interests than player interests, and I have no issue with this position, this position would hold whatever the nature of team ownership, including shareholder based, and actually suggests the best model directly: Fan-based ownership.

It's not that "Tycoons" have interests aligned with fans, they don't since their whole mission in life is charging the fans as much as possible while paying the players as little as possible. It's that teams have different interests than players.

Bring on the antitrust. The Players should own the league, the Fans should own the teams. The Tycoons can go to hell. Simple.

Where to begin? lol

Comparing athletes to slavery is an insult to history.

No doubt a professional sports league violates antitrust laws. However, how can a league truly operate without them - unless it is a league of 5-6 teams.

Players owning the league and fans owning the teams... that will work out splendidly. I'm sure the players and fans will enjoy fronting the billions needed to run the league - all at a loss!

[Quirk]

I think the owners could invent their own internal agreement(salary cap, exceptions, etc.) right now and start offering contracts. One catch would be that all 430 players would be free agents.

Such an "Internal Agreement" would be exactly what is illegal under antitrust law, same as the lockout is. That's what they call a cartel or "trust" which "antitrust" law is designed to break-up.

Also there would be far more than 430 free agents, all undrafted players too, since the draft is a construct of the CBA, which requires a union to exist for the "CB" part. No C = no Draft.

[Quirk]

If it wasn't personal before now to the Owners you have to think it's changing.

"Personal?"

Yeah, I suppose the Owners could run the league without any players and simply play themselves right? The NBA would be awesome if it weren't for the damn players!

If it's "Personal," the owners would really show the players who's boss and get into a different line of business.

With modern finance, they may have trouble finding a place, there's not too many other industries where anachronistic "Tycoon Boss" types are still prominent. Most industries are dominated by shareholder corporations, boards, etc. Pro sports is the last vestige of the tycoon, and I suspect they will soon be extinct. As others have suggested being an old-school Boss in the public eye is probably among the reasons a lot of these goons become owners in the first place. It's quick sickening how many people identify with these plantation owners.

I understand Tim W's position, that team interests are more aligned with fan interests than player interests, and I have no issue with this position, this position would hold whatever the nature of team ownership, including shareholder based, and actually suggests the best model directly: Fan-based ownership.

It's not that "Tycoons" have interests aligned with fans, they don't since their whole mission in life is charging the fans as much as possible while paying the players as little as possible. It's that teams have different interests than players.

Bring on the antitrust. The Players should own the league, the Fans should own the teams. The Tycoons can go to hell. Simple.

[Tim W.]

I can't help but to disagree with the bolded part.

1. Again we go back to the evidence that the correlation between spending and winning is almost non-existent. People keep using this reasonging yet, time and time again, the evidence says it is not true. And even where a team that has spent wins, they also have the same resource a smaller salary winning team has. A superstar. The problem is not that teams don't spend enough. Its that there are not enough superstars to go around and no economic system change will effect that.

2. Every overpaid player means less resources (cash, roster spot, floor time, usage etc) that could be used in a different manner (ie. to improve the team) or saved to make the team more profitable. There is a level of waste that any overpaid contract creates... that waste prevents wins, costs money and effectst a teams bottom line.


That said, I do agree there is a need to find the 'sweet spot' in between (a completely free market system and a restrictive cap system). And I think what the owners are proposing is probably relatively close (I think the 'new' tax system is a bit to harsh early.... but should stay harsh at excessive levels). But at the same time, that sweet spot should also fit into something that will get the players to agree . Its time for the owners to give back... whether that be a part of the BRI (ie. the 52 or 53% the players wanted) and try to keep the system changes, or try to keep the BRI at 50/50 and give up some of the system changes.

Side note: I think, just my feeling, the sticking point is either the removal of the sign and trade from tax paying teams, which is unfortunate because it probably the second best way to keep star players in their towns (after actually building a good team) and/or the harsher tax system. But I also don't think that the sign and trade from tax paying teams or a harsher tax is worth giving up a season over... although, if the owners offered 480 mil over 6 years (ie. rough number of moving the BRI up to 52% and a 6 year deal), or vice-versa, and thereby giving the players the appearance of winning a labour negotiations they already 'lost', the players may get over it.

I completely agree about your argument about superstars. That is a problem and there's really nothing to be done about it except to clone Michael Jordan, Bill Russell, Larry Bird and Magic. I do disagree about the spending, though. I don't think there is a direct correlation between spending and winning, but there is certainly a correlation between keeping a winning team together and making them contenders and spending. Eventually any contender will have to start paying out if they want to continue to be one. It's inevitable. Even San Antonio, which has been one of the best managed franchises in pro sports, had to make a decision in order to continue to be contenders. They chose to pay the tax. I think that speaks volumes.

Miami isn't a tax paying team, now, but wait a couple of years with the old CBA and they will have been. It would have been the only way to add decent talent to their trio of stars. Oklahoma will have to make a decision eventually when the rookie contracts expire whether or not they can afford to keep everyone.

Last season, Dallas had one of the highest payrolls and won the Championship. The previous year, the Lakers won with one of the highest payrolls. The year before, Boston won with one of the highest payrolls. And then last season they traded away Kendrick Perkins because they didn't want to pay him and didn't make it to the conference finals.

Obviously simply spending money will not automatically make you a contender, but if you want to be one and stay one, eventually you'll have to pay through the nose.

And if every team has an overpaid player (which is pretty much true) then everyone is on a relatively level footing. Besides, it's simply not realistic to say that GMs need to stop giving signing bad contracts. You might as well say that players need to stop having career years in the last year of their contract. The chance of either not happening are pretty much the same for the exact same reason.

[GarbageTime]

Nothing is a cure all. There is no perfect solution. But a good CBA will curtail too much spending that the league as a whole simply can't afford. The luxury tax did work to a point, but the problem was that there were still teams willing to go into the tax, making it even more of a have/have-not division between the rich and not-so-rich teams. The luxury tax was a starting point and all the owners were able to get in the last negotiations. It proved that it was simply not enough and now they are looking to expand on that. And rightly so.

A hard cap would most definitely work for the owners, since it would limit how much teams can spend. It doesn't work for the players, though, and it would kind of suck for the fans who would not get much continuity on their team because teams wouldn't be able to afford to keep all their best players.

The sweet spot is somewhere in between, but the question is where.

And, yes, GMs will give out bad contracts no matter what the rules are, but that's not really the problem. The problem is not a few players being overpaid, but teams having to pay too much for an entire roster in order to compete with teams who have a lot of money. The issue is not that bad decisions make it difficult for teams to compete, it's that even when teams make good decisions, they can't compete with the rich teams and if they do they can't make money.

I can't help but to disagree with the bolded part.

1. Again we go back to the evidence that the correlation between spending and winning is almost non-existent. People keep using this reasonging yet, time and time again, the evidence says it is not true. And even where a team that has spent wins, they also have the same resource a smaller salary winning team has. A superstar. The problem is not that teams don't spend enough. Its that there are not enough superstars to go around and no economic system change will effect that.

2. Every overpaid player means less resources (cash, roster spot, floor time, usage etc) that could be used in a different manner (ie. to improve the team) or saved to make the team more profitable. There is a level of waste that any overpaid contract creates... that waste prevents wins, costs money and effectst a teams bottom line.


That said, I do agree there is a need to find the 'sweet spot' in between (a completely free market system and a restrictive cap system). And I think what the owners are proposing is probably relatively close (I think the 'new' tax system is a bit to harsh early.... but should stay harsh at excessive levels). But at the same time, that sweet spot should also fit into something that will get the players to agree . Its time for the owners to give back... whether that be a part of the BRI (ie. the 52 or 53% the players wanted) and try to keep the system changes, or try to keep the BRI at 50/50 and give up some of the system changes.

Side note: I think, just my feeling, the sticking point is either the removal of the sign and trade from tax paying teams, which is unfortunate because it probably the second best way to keep star players in their towns (after actually building a good team) and/or the harsher tax system. But I also don't think that the sign and trade from tax paying teams or a harsher tax is worth giving up a season over... although, if the owners offered 480 mil over 6 years (ie. rough number of moving the BRI up to 52% and a 6 year deal), or vice-versa, and thereby giving the players the appearance of winning a labour negotiations they already 'lost', the players may get over it.

[RaptorDan]

History of Anti-Trust in the NBA.

Nice find Matt. I remember some players getting pretty pissed off in 1995. Wonder if some current dissident players will emerge soon and voice their dissatisfaction. I was surprised that the union didn't put the owners latest offer nor the motion to disband the union (or whatever its called) nor filing of anti-trust suit to a vote.

[Tim W.]

But I've already asked how a good CBA will prevent a signing like that, and no one has been able to answer it.
Matt did say that the 'Stretch Exception' will offer some protection from that, but I'm not sure to what extent that will be effective.
The proposal everyone was pushing for the players to sign would have done nothing else (as far as I could tell) to dissuade a team with space from signing a player to a market ruining contracts. And as soon as it happens, another will get signed. And the market is effed.
A good CBA will limit the amount they can spend on salaries, yes. But everyone thought the old Salary Tax was bullet proof and no one would be willing to do thaat... whoops. They are going to abuse this one, and find the loops holes just they like did the others. They're 'savvy' businessmen, afterall.

But that won't change. All the same things will happen just within greater limits. Which means less total bad contracts, but each bad contract is exponentially worse.

But you hit the nail on the head as to where the problem is:

A hard cap will not change that. Watching a team go bankrupt will.

Nothing is a cure all. There is no perfect solution. But a good CBA will curtail too much spending that the league as a whole simply can't afford. The luxury tax did work to a point, but the problem was that there were still teams willing to go into the tax, making it even more of a have/have-not division between the rich and not-so-rich teams. The luxury tax was a starting point and all the owners were able to get in the last negotiations. It proved that it was simply not enough and now they are looking to expand on that. And rightly so.

A hard cap would most definitely work for the owners, since it would limit how much teams can spend. It doesn't work for the players, though, and it would kind of suck for the fans who would not get much continuity on their team because teams wouldn't be able to afford to keep all their best players.

The sweet spot is somewhere in between, but the question is where.

And, yes, GMs will give out bad contracts no matter what the rules are, but that's not really the problem. The problem is not a few players being overpaid, but teams having to pay too much for an entire roster in order to compete with teams who have a lot of money. The issue is not that bad decisions make it difficult for teams to compete, it's that even when teams make good decisions, they can't compete with the rich teams and if they do they can't make money.