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ezz_bee wrote:
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Yeah, sorry about that. Slim pickings for discussion of late. -
NFL owners vote to accept deal and end lockout
http://espn.go.com/nfl/story/_/id/67...abor-agreement
What does this mean to the NBA? Nothing.
The NFL operates at extreme profit for owners. Every game lost is money lost.
If you believe the owners, it is not the same situation in the NBA for the majority of franchises - again, if you believe the owners.
It will be interesting what happens come late summer and in to the fall. Someone's bluff is going to be called whether it is the players or owners.
The $200k insurance policy the NFLPA had arranged for each player in case of a lockout was brilliant - especially how they dropped the information only a few weeks ago. I wonder if the NBAPA has any clever plans brewing.Comment
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Awesome news. The PA still needs to vote though. This part has lots of relevance.
I don't think the NBA owners could pull that off without cancelling the season.Players receive 48 percent of revenue in first portion of dealComment
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im soo bored, these guys gotta hurry up and end the lockout so we can see some trades and some summer league ball!Comment
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Former Blazers exec: NBA labor dispute could be worse than NFL's
http://www.katu.com/sports/126052634...&smobile=y&c=yAs the NBA lockout heads into a fourth week, a former Blazers executive warns the labor dispute could make the NFL’s four-month lockout look like child’s play.
“If the NFL is a badly sprained ankle, the NBA is a torn ACL, a microfracture and a ruptured Achilles,” says Tom Penn, who now works for ESPN as a salary cap expert.
The Trail Blazers are among the 22 NBA teams operating in the red, even though they’ve sold out 159 straight games. The NBA wants to change its economic model by bringing the ceiling down on player salaries to keep teams from having to spend wildly over the salary cap to get a winner on the court. The league also wants a revenue-sharing plan so big market teams share part of their wealth with smaller market teams.
“It gives teams like Portland a chance to put on a winner and put on a winner at the box office,” Penn said. “It gives them a chance to financially not have to rely on the generosity of Paul Allen and his group to just completely fund losses like this. They shouldn’t have to do that.”
Penn says owners are so committed to change in the labor agreement, that he predicts there’s at least a 75 percent to 80 percent chance the NBA misses at least part of its season. And missing the entire season? Penn believes that’s a possibility.
“More so than ever, I think the owners are (more) focused on the next ten years than the next ten months,” Penn said. “And that’s critical because people say how did we get here? How did it get so bad? And it’s because when it comes to deal-making time, the owners have typically said let’s get the deal because of how it’s going to affect business in the next ten months. They’ve talked about how this is an investment in the future to get it right. And they’re willing to lose a whole season if they have to. I hate to say it, but they’re aligned in this.”Comment
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That Penn fellow must have been thinking of Greg Oden when describing the state of the NBA. It is brutal when a Arenas, Carter and a Redd for examples all made approx. 18 mill. per last season and contributed so little to their teams. There just has to be a fundamental change in how compensation is paid out or insured against injury or effect on the cap. There is a new economic reality out there in the real world and to have a Curry do what he did in his last contract and not held accountable is just insane. orMatt52 wrote: View PostComment
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Matt52 wrote: View Post
Matt52,
I have been avoiding this thread because I feel its a waste of time. The debate in it is practically non-existent. You are allowed to disagree with me, but your tone has been rather scornful and degenerating into extremes like concept definitions and far reaching ideas like Ponzi schemes. None of it productive, or very tactful in this debate. It actually shows me that it is more gratifying for you to set up straw-men and attack them, than to actually deal with the concepts that we are debating.
Take for instance me using the Buffett interview to point out a fact which you keep getting wrong over and over in this thread. I go and find facts, by posting the words from a CEO in this position, and you then, call him my idol. I hope you can understand my WTF moment at that juncture. How did you get that he is my idol? (and why should I not take that comment personally?)
It made me realize that you really do not care for the facts, or even a working example of why you are wrong in your thinking. Instead you want to use language that somehow belittles me and the facts in question.
In this thread you took a lot of liberties and went out of your way to act like you are giving me a lesson. BTW, the Buffet interview was only a few hours long when I posted it. This is what I do, I am in the business of knowing what is going on financially in our economy, it got posted because it was FRESH. It is something that I spend an inordinate amount of money and energy on. I posted the interview because it dispelled some of your myths, it had nothing to do with me idolizing him.
The fact that you would even make that into an issue shows the tact you are taking in this debate.
As for what you wrote above, its just a bunch of drivel. Yes the world is in a debt crisis, this is because a lot of companies got lured into easy money not so long ago. This COINCIDENTALLY also means that there are many cases of companies that have leveraged themselves into positions that are not sustainable.
By no means is the drivel above, some sort of proof, that this is NOT happening in the NBA. Until the books are released we will not know. I don't know how you can CLAIM THAT YOU DO.
...and yes, I still maintain that operational profits/loss say very little about the health of any franchise, without looking at the expenses and the capital gains. This is a very simple concept (and no capital gains do not just appear when you need to pay your taxes). It would be incredibly naive and foolish to only look at profit and loss figures and come to the conclusion that the players must give up their share of the pie.Last edited by MyMomLovesMe; Tue Jul 26, 2011, 01:48 AM.Comment
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MyMomLovesMe wrote: View Post
The insistence the owners open the books is akin to having a Tim Horton's franchise open their books for you. They are private businesses and owe a customer or a fan nothing more than the product they deliver. Even if the players assertions on accounting are fact the owners are still losing money.
As per the Warren video, there is a reason I've ignored it. For all these insults you've hurled at me about not reading posts, being condescending, and teaching lessons read your own posts and go back to some of my own.
The reality regarding Warren's video:
His conglomerate of companies make profits year after year that are taxable.
For every dollar of capital expense they are claiming against revenue they are saving the tax rate on that dollar of profit. This is after all other expenses have been paid. In other words they are putting profits in to the capital expenses - not debt.
So in essence they are saving $0.25 (or whatever their corporate tax rate is) for every $1 spent.
In Warren's situation clearly the money being spent is not more than combined profits and cash on hand, this is not a problem and is good for his business. No debt is required, no increase in expenses are necessary to cover interests costs, and all other operational expenses have been paid - in essence Buffett is spending profits to save on taxes.
Overall, the NBA's situation is much different.
22 of 30 franchises are not profitable.
For the ones that are profitable, like the Knicks, your example makes perfect sense and explains why Dolan is putting nearly $1B in to a renovation for MSG.
For the franchises that are not profitable, it does not make much sense to borrow $1 to save $0.25 (or whatever corporate tax rate is) when they have no taxes to pay. If they are failing to make a profit before all operational expenses are paid, they will not pay any taxes. The borrowing of more money for capital expenses would just add to the financial woes of the franchise and in turn create more debt and expense which will have to be rolled over at some point in the future.
Your example only relates to 8 franchises in the league.
Profits are needed to claim capital expenses in a manner that is advantageous to the company/franchise long term.
I have no doubt there are teams who could be using a capital expense to show a loss but I doubt it happens year after year for the same team and I would imagine those franchises who are doing this are barely profitable (that is all my opinion). If you believe the NBA numbers, 11 teams had a net loss of over $20M in 2009-10.
However this all once again comes down to:
You believe the players (workers).
I believe the owners.
Oh well.
On a personal level, I would ask anyone reading this thread - I know we've lost a number, lol - to go back through and read my posts. I do take much offence to the first paragraph and anyone who has had discussions with me in the past should recognize this to be totally inaccurate of my interactions on RR forums.Last edited by mcHAPPY; Tue Jul 26, 2011, 08:07 AM.Comment
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Quick summary of NFL deal
What the owners won. Not having to pay the $320 million in benefits they didn't pay last year in exchange for the players getting an uncapped year; franchise and transition tags; no judicial oversight in major-league disputes between players and owners, a major sticking point from the last CBA; the ability to keep 60 percent of all club-generated revenue.
What the players won. The continuation of the 16-game schedule; five weeks less or the rigidly organized offseason programs; $1 billion in additional benefits for retirees -- an important point from day one for De Smith; a true salary floor, with teams having to spend 99 percent of the cap in years one and two of the deal and 95 percent thereafter.
The game as we know it. Most in the football establishment, like this well-respected GM, don't like the changes that have players on the field less. "We complain about tackling all the time,'' he said. "How are we gonna teach tackling without practicing tackling enough? I will not be surprised if you see the smashmouth game disappear.''Starting next year, players get 55 percent of network dough. That'll take a big jump in 2014, when the TV deals should increase 50 to 70 percent per network.Men who play in a game in any season of this deal will be eligible to stay in the NFL medical plan for life. Currently, retired players have five years of post-career health care. Just saw Eddie George, looking like an Adonis, at the Super Bowl last February, and he said his medical benefits just ran out a couple of months earlier. "Now's not the time I need 'em,'' he told me. Born too early.Source: SI.comThis went over everyone's heads all weekend. Let's say a player signs a three-year, $6-million contract with a $2-million bonus and salaries of $1.1 million, $1.3 million and $1.6 million. And say he gets a career-ending injury in game five of the first season. He keeps his bonus. He keeps his first-year salary. That's normal. Now he'd get to keep $1 million of his year-two salary and $500,000 of year three. In the old days, he'd have been able to keep the bonus and year-one salary, a total of $3.1 million. Now he'd be able to pocket $4.6 million because of the maximum of $1.5 million in injury-protection money.Comment
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Larry Coon's chats have been pretty good during the lockout. Here are some quotes from his latest:
Randy in Miami, FL:
What are these costs, that are completely unrelated to player salaries and benefits, that are spiraling out of control?
Larry Coon:
Non-player salary costs include thngs like:
* Salaries & benefits for front office staff, coaches, scouts, etc.
* Medical
* Travel (plane, hotel, etc.)
* Facilities (training & game)
* Marketing
* The cost of putting on games
* Depreciation of assets (eg: new scoreboards, floors, etc.)
* Etc.
But one of the biggest non-salary expenses right now is interest on the league's debts. They all have short-term credit facilities for cash flow reasons, but this isn't the problem. It's all the long-term debt. Some of this comes from financing past losses. Some comes from capital expenditures. Some apparently comes from franchise acquisition. And the interest payments on those debts are around $200 million a year.
The fact that they are rising is a big concern. What if, say, the two sides agree to split the revenue 50/50. If non-salary costs continue to rise, then how long until the owners say 50% isn't enough? As much as the split of the revenue is the focus right now, fixing the problem goes way beyond that.James in Yokosuka Naval Base, Yokosuka Japan:
Why aren't the owners fighting each other?? It was their fault the last CBA was the way it was and now they want the players to cover their losses?? Fans pay to see the players, not the owners so why aren't they held accountable??
Larry Coon:
That's like saying fans pay to eat burgers, so the cooks at McDonald's should be the highest paid.
The NBA owners would say that they set up the enviroment through which the fans pay to see games, and through which the players make so much money. And to anyone who disagrees they'd ask where else in the world does a basketball player (let alone 400+ basketball players) have a chance of making that much money? If it was just about the players, there'd be plenty of equivalent opportunities outside the NBA.
Part of the owners' argument is that the league took a beating in the current recession, just like everyone else, but they had to bear the brunt of that because the players share in the gross revenues and not the net revenues. They say they wouldn't be in so much trouble had they not had to pay the players 57% of the gross.Paul in :
i have read that players would sit out two years before they'd agree to the owners' current deal cause it sucks. if that's true and this time next year the NBA is still locked out, what happens to the draft and all the traded draft picks?
Larry Coon:
I think if it goes a year you could see the owners delaring an impasse, unilaterally declaring a set of rules, declaring the lockout over, opening their doors, and resuming business. At that point it would be up to the players to strike or sue them, challenging the new rules.
This is also part of the reason for the NLRB complaint. You have to negotiate in good faith to be able to declare an impasse, and the NLRB complaint charges the league with not negotiating in good faith.
Robby in Phoenix AZ:
Since word came out that the owners had to pay the players like $26M to reach their share of BRI, even after all those "crazy" contracts, wouldn't that be a case that the owners need more of a % of BRI?
Larry Coon:
This is part of the reason the "they should just control their spending" argument doesn't fly. They DID control their spending, but they had to pay the same 57% as they did every other year.
Jules in Delta, PA:
Why should the players cave into the owners ridiculous demands when the owners aren't negotiating in good faith and their real problem is revenue sharing? Until the owners fix that problem, the league will remain one of have and have nots.
Larry Coon:
The owners are discussing revenue sharing as a separate, parallel line of discussion, and will implement both at the same time. But that alone won't solve the problem. "You can't revenue share your way from losses to a profit," is how David Stern puts it.
solomon dwek in Jersey City, NJ:
Am I right-lock out about 1 thing only - 57% BRI, and what defines BRI. Might be interesting to discuss guarantees, owner flex to fix "mistakes", etc., but even owner rev sharing isn't really the issue. Just 57% and what goes into it. Am I right?
Larry Coon:
Yes. As I've been saying, everything besides that is just a side show.
That said, there's a deeper issue of why the players' share of BRI is the overriding issue. Remember, the owners thought 57% was sustainable in 2005 when they signed the last CBA. The problem is, non-salary costs continue to rise, so the owners can't stay in the black while they're giving 57% to the players. They are having to go into debt to cover these expenses, and the interest on that debt is now a significant part of that annual loss.
The players are saying, "hey, you need to manage your operations better, and it's not our responsibility when you choose to use a credit card, and then complain about the high monthly payments." To which the owners respond, "We wouldn't have needed to pull out the credit card it we weren't already giving you guys 57%." So there's a philosophical disagreement that underpins the principal issue -- while the 57% guarantee is first and foremost, the players would contend that it isn't the issue at all.
Read more NBA news and insight: http://www.hoopsworld.com/chat.asp?c...#ixzz1TOiQmVgEComment
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Age limit to 20?
For the conspiracy theorists among us:
Is It Time For 20?: In the Collective Bargaining process things are traded; one side gives up a point so the other side gives up their point.
Historically in this process current NBA players tend to sell out the younger NBA players, especially rookies. Notice there is not a single first or second year player on the NBA Players' Association Executive Committee? So you can expect that if selling out the next wave of NBA Players is the key to getting a percentage point swing here or there, the rookies will get traded.
One topic that has not gotten a lot of attention in this process is the NBA's expressed desire to raise the NBA's minimum age limit from 19 years old or one year removed from your graduating class to 20 years old and two years removed from your graduating class.
Now most people thing the NBA's age limit is bad for basketball, which is debatable. Some believe the NBA's age limit is biased, and it very well may be.
The NBA fought for the 19 year age rule, not because they had huge issues with straight from high school players not being able to play, it was more about maturity, coachablity and ultimately marketablitly.
The NBA wanted desperately to get their people out of high school gyms and out of the business of dealing with high school coaches and the seedy underbelly of basketball, not that college basketball is much better, but at least there is a basic layer of accountability, where almost none exists in high school especially among the power teams.
The NBA also wanted to give its teams more of a chance to avoid mistakes. This is a common theme in the Collective Bargaining process that the players hate and the fans hate even more. But the reality is it is the league's responsibility to craft a rule set that helps team's succeed and sometimes that means protecting them from themselves.
There is a common belief that the more time teams have to evaluate players in highly competitive setting the better prepared they will be in making decisions.
The fastest way to the lottery in the NBA is to swing and miss on a draft pick. The NBA Draft is the easiest and fastest way to improve a team, and it also ends up being the cheapest way to add quality talent. The cheapest talent a NBA team will ever get is its first round draft pick, and swinging and missing on those picks can cripple a franchise.
Factor in the number of dollars that NBA teams have sitting on benches because the player they drafted either wasn't ready or was a bust and the need for an age limit become pretty clear on the NBA side.
As a general philosophy NBA owners want to pay players to play, they generally do not want to pay players to learn the game. This is a battle most GMs face on a year to year basis in convincing ownership of the importance of development dollars. Smart owners have bought in for the most part, but that has not changed the overall idea that an age limit only helps teams avoid mistakes and reduce the development expense.
As the labor talks in the NBA are set to resume Monday, the bigger picture topics still have to be reached and agreed upon, but once both sides start in on details, expect one of the bigger details to be an increase in the NBA's age limit and with everything the NBA is pushing for a 20-year age rule seems to be an easy chip for the NBA Players to cash, especially if it gets them a concession from the owners.
You may not like the idea of an age limit, but the truth of the matter is players have employment options other than the NBA and as far as the NBA's concerned playing in the NBA is not a right, and it's something a player has to earn.
Considering how many players opted to return to college, the 2012 NBA draft could still be a solid draft class even if the incoming rookies like Kentucky's Anthony Davis or Baylor's Quincy Miller are blocked from jumping into the NBA after their freshman year, it just means the player your team drafts might actually be ready to play in the NBA in his rookie year rather than spending the bulk of his first season in a suit or worse yet rolling in a bus in the D-League.
Read more NBA news and insight: http://www.hoopsworld.com/Story.asp?...#ixzz1TPBMOrXMComment
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I am actually enjoying your discussion a lot. I think you should ignore the personal notes and continue the debate. As for the offesnive writings I think MyMomLovesMe kind of went over the line first with a little more personal word. Not that anyone cursed or anything. Just keep it cool and go on with the debate. To be honest I can't take side on the debate because after every post you both have some valid points...which made it difficult for me to decide on whose side I am.Matt52 wrote: View PostComment
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I'm glad to hear someone is benefiting from the discussion. Good advice - thank you.footarez wrote: View PostComment
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well its been around a month or 2, how long will this lockout go on? any news?Comment
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Probably a long time. This is a much different situation than the NFL. I don't know how long the lockout will go on but this piece from HoopsWorld.com dated July 5th might give an indication:NoPropsneeded wrote: View Post
The key dates to know:
September 15th (72 days): It will be almost impossible to pull off free agency, training camp and a full preseason if a deal is not reached by September 15th.
October 1st (88 days): It will be impossible to have a full slate of pre-season games if a deal is not in place by October 1st, in fact failing to have a deal by October 1 jeopardizes regular season games.
November 1st (119 days): Failing to reach a deal before November 1st means regular season games are missed and a full 82-game season is lost.
January 6th (185 days): This was the drop dead date in 1999 and should be viewed as the last day to make a deal. A deal in January means no All-Star game and a compressed regular season.
February 1st (211 days): If a deal is not reached by February 1st the entire 2011-2012 season will be lost and the Players will lose $2.1 billion in salaries and benefits
So while labor meetings are a good thing, don't expect a lot to happen on the labor front in the NBA, mainly because it does not have to.
The NBA's Lockout simply buys both sides more time; let's hope they use this time to reach a deal not build further impasses to making a deal.
Read more NBA news and insight: http://www.hoopsworld.com/Story.asp?...#ixzz1TSRc3Xq0Comment
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