It’s a shame that in the NBA, or as Bill Simmons calls it, the No Benjamin’s Association that the rich do in fact get richer. No, this isn’t a rant on how the Lakers will probably land some stud at the trade deadline for a poo poo platter of expiring contracts or practice squad guys. This is about how the league is structured. Looking around it’s immediately obvious that teams stuck in small markets are going to lose money. Being a good team is supposed to raise you from financial destitute, but in a league strapped for cash, this isn’t happening anytime soon. With 40% of teams losing money last season, and the economy looking unlikey to turn around the NBA does have the most financial problems of all the major sports. Unless you count NBC, the NBA is probably the next closest organization in need of a Heidi Montag style face-lift.
It’s troubling to see how many NBA organizations are struggling to stay afloat without some good form of revenue sharing in place. It’s a travesty that teams like the Clippers, Knicks, and yes my Warriors make ten-million plus dollars profit each year, and field teams that would have a tough time beating the Washington Generals. Yes, these are the teams that I deem the greediest in terms of giving back to their fans. They do relatively nothing to improve their rosters, and they have plenty of income that could be spent to improve their respective teams. I don’t mind some of the teams atop the list, since the Lakers do deserve to make more money, because they do always put a good team on the court, but I feel that a teams revenue should be more driven by their ability to win. It’s been quite awhile since I broke down some financial situation, and most of this post is derived from Forbes numbers that they released on the teams earnings from last year.
There are many teams that are very fan friendly in the league, and two of them the Mavericks and the Blazers have shown that they are willing to spend to win. Unfortunately for them, they both lost a ton of money last season. The Blazers lost a whopping $20.3 million, and the Mavs lost $17.4 million according to Forbes. With owners like Paul Allen and Mark Cuban you know your team will always have a clear direction, and that will be towards winning. One thing I found amazing on last years earnings list was that the Eastern Conference Champions, Orlando Magic, lost $2.2 million on the season. Yes, that’s right, they made it to the finals, and still ended up losing money on the year. Imagine if they were bad, what kind of position would they be in? They would probably have the same kinds of problems as the Kings did towards the end of last year. On one road trip near the end of the season, the Kings left bench warmer Kenny Thomas at home. No, he wasn’t hurt or dealing with any personal issues, the Kings decided they wanted to save on hotel costs, and plane fares instead of taking him along.
The one good thing about this recession is that Chris Cohan is much more likely than before to sell the Warriors!
In essence, winning doesn’t matter nearly as much as where you are located when it comes to profits, which is nothing new I know. Now the teams that don’t have much to spend aren’t able to bring in the top tier max contract talent, because they know that they will be outbid, and can’t sign enough of the “roll” players that make the top tier players want to go there. There is no way a team like the Kings are going to be able to compete on the free agent market even if they have the cap space, because they know that they need the money in the long run more than the player. It hurts the league, and it’s competitiveness when there are teams that don’t really have to try to put a good product on the court. I’m wondering if this economic downturn will filter more players over to Europe, where there seems to be a bunch of money, and no salary cap. I’ve been a Warriors fan since I was born, and ever since Cohan became the majority owner, he hasn’t cared what team is out there as long as he keeps getting his $10 million annually. Same goes for Donald Sterling, the Clippers owner. The Knicks are one of the most profitable teams, and they have sucked for years now. I think the NBA needs to rethink the way money is divided up between the teams, and get a better revenue sharing program. I’d propose if you finish .500 then you don’t have to share as much, since you were a successful team. If you are in the lottery, or have an under .500 record (yes, Eastern Conference teams if you are a 6-8 seed in the playoffs you still aren’t good), then you should be subjected to heavier revenue sharing. I know this will never happen, but I don’t want to see teams go broke. I also want to see my Warriors squad forced into making good decisions, because their money depends on it. There’s been numerous talks of boycotting in Oakland, but that’s a whole different topic. I guess I’m honestly just looking for ways to force the W’s management to sell the team…
By
cali4dre
chappy81
dyslecix
mceezy
Doin Work 
February 1st, 2010 at 8:51 pm
chappy 81
The template the NBA isn’t completely equitable but every team within the NBA is on even footing as far as the salary cap goes. Where’s the downfall is in the mismanagement by the various teams.
Did you realize that over the last decade alone the NBA has borrowed in excess of $1.2 billion from the major banks and investment houses to facilitate themselves with financing and for venue upheavals ?
What Stern and the hierarchy need to be doing, is to have the GM’s and their CFO’S behave more frugally when it comes to their lavish spending.
In 2009 the NBA borrowed in excess of @250 million to be shared between 17 teams around the league. At the time Stern made the statement …..’ that this shouldn’t be viewed as a bailout. But merely to keep those teams viable and financially stable’. Once again only Stern knows how to blow ‘hot air’ up someone’s a_s and make it sound somewhat different.
Amongst the teams part-taking of that $250 million were the Kings, Magic, Raptors, Hornets , Clippers , Warriors to name but a few.
Alan Parkins
February 1st, 2010 at 9:56 pm
Well, obviously the salary cap is meant to keep the league on an even keel, but the point of this post was that the teams that are actually successful should receive more of the money that the league makes opposed to the crappy teams in good markets being the teams that turn a profit. I’m well aware of the league “borrowing” money, which I don’t find troublesome in any form. I think everybody overspent for awhile there, and that goes for many corporations not named the NBA, and now they are paying for it…
I didn’t mention it in the post, but some of the franchises overall value rose even when they lost money on the season, so it’s not all bad. I’m just pushing the my point that the NBA should get an MLB type revenue sharing, so teams aren’t nearly as worried about going bankrupt. You’d think the rich uncles of the league would want to help out their poor college grad buddies for the health of the leagues sake! I guess the teams with crappy owners with crappy teams just don’t care enough about the struggling family, and would rather keep the $$$ for themselves…
February 2nd, 2010 at 3:31 pm
chappy 81
The problems with many of these franchises isn’t the salary cap ($71.2 million) . It’s that they’re financially fiscally irresponsible. They’re not the Federal government wherein you can spend more money than you’re receiving in revenues. And that’s what is happening with the vast majority of the franchises. It’s becoming almost as bad as baseball. And we’ve all seen how idiotic all parts of that hierarchy is to begin with !
New piece up if interested ?
I Won’t Discuss Politics But I Will Discuss Sports ………..
Alan Parkins 🙂
February 2nd, 2010 at 3:38 pm
chappy
The scenario you propose won’t be allowed to happen at all. The owners in the smaller markets would be in uproar. Besides Stern and the NBA hierarchy aren’t stupid enough to propose such a thing.
Did you realize that this past Sunday , Stern has been in office as commissioner of the NBA for 25 years ?
Alan Parkins
February 3rd, 2010 at 12:04 am
Hey Chappy!
Did you hear the rumor? I know it’s been out there before, but supposedly, or should I say “reportedly” Larry Ellison IS trying to purchase the Warriors.
We shall see …
February 3rd, 2010 at 7:27 am
sportsguyby
Someone has to , so why not Ellison ? What with his billions , a couple of hundred million isn’t going to set him back that much , now is it ?
I mean we’re talking the Warriors for God’s sake . Not the ‘Lakers’ or ‘Knicks’ for that matter.
Alan Parkins
February 3rd, 2010 at 9:48 am
Yeah, it has me pretty excited! I hope it ends up happening. I think Ellison would be a great owner! We’ve heard these rumors before, so lets hope this one ends up coming through! We need an owner who isn’t a stingy bastard! Since he has more money than Paul Allen and Prokohov (Nets Russian owner) combined, I don’t see us being stingy when it comes to free agents! I hope that even if the W’s are a little overpriced he still buys them! We better not blow up the team at the trade deadline, unless it’s okay’d by Ellison first! I’m crossing all fingers and toes that it happens!
February 3rd, 2010 at 2:30 pm
chappy
Don’t forget also that the Cavs are now in part owned by a wealthy Chinese venture capitalist. All we need now for the tri-fecta is an Iranian owner . And that’d blow the lid of the roof and have Congress intervening. Never mind the fact that Stern would be running for the hills looking for somewhere to hide.
Alan Parkins
February 14th, 2010 at 4:23 pm
What A Wonderful Blog Post…
[..] I saw this really great post today and I wanted to link to it. [..]…