Jan 5, 2011, 7:49 PM EST
If there is one thing that both the players and owners almost, kind of agree on in the new Collective Bargaining Talks is the concept of increased revenue sharing.
The players see it as a way to help make small market teams competitive — allowing those teams to pay higher salary and avoid issues such as contraction (a loss of jobs). Small market owners want more money for obvious reasons, and NBA Commissioner David Stern said big market owners are willing to discuss the idea so long as there are safeguards to make sure that money is re-invested in the team and not just pocketed.
Behind it all is thinking of the NBA like the NFL model, where there is extensive revenue sharing, great parity on the field, increased competition and a rising tide lifts all boats. Whether that is a model which really works for the NBA — where one player like a LeBron James or Kobe Bryant can alone radically alter a game in a way no one football player can; and where stars have long driven the sport — is another debate.
But revenue sharing does not work for the players or owners, argues Adam Fusfeld at Business Insider.
He notes that that while big market teams such as the Lakers and Bulls have made money, so have franchises in Sacramento, Utah, Cleveland. Also, having that money does not automatically produce wins — see the Knicks or Clippers, two profitable but losing teams.
But the data shows that those deep-pocketed owners in New York and Los Angeles might as well keep their cash. The size of the market isn’t what makes teams profitable, and the size of the payroll isn’t what makes them winners….
Washington, in the nation’s ninth largest media market, had a nearly identical won-loss record to Indiana over the five-year span, but earned $87 million more in operating income. The Wizards generated slightly more income, but also spent $7.6 million less each year on player expenses. If the Pacers simply reduced their payroll to equal that of the Wizards, their $26 million loss would transform into a $12 million profit.
In this five-year span, eight franchises – Phoenix, San Antonio, Denver, Detroit, New Jersey, New Orleans, Chicago, and Utah – finished with more wins than Indiana despite paying substantially less in player salaries between 2005 and 2009. Of those teams, only the Nets lost more than $1 million per year.
Small market owners gripe that it’s impossible for them to stay afloat without sustained on-court success, while large-market teams rake in profits no matter what. But how does that explain the Dallas Mavericks? Mark Cuban’s $75 million loss dwarf those of Pacers’ owner Herb Simon.
Sure, Mark Cuban and Knicks’ boss James Dolan can afford to incur those losses, but they are losses nonetheless. In essence, the Pacers, Bucks, and other small market teams are griping over rival owners’ riches.
And that’s the true inequity in NBA financials.
Some owners are willing to bankroll losses to assemble the best roster they can, while others aren’t.
This disparity continues. Peter Guber and Joe Lacob purchased the Golden State Warriors and have promised to run it smarter, but also said they are not going to spend over the NBA luxury tax line. Meanwhile Mikhail Prokhorov purchases the New Jersey Nets and money is no object.
With both the Detroit Pistons and New Orleans Hornets available for purchase, the debate about the types of owners the NBA has and needs is a very relevant one.
- Pacers win first Conference Finals rematch vs. Heat 9
- Days before he faced LeBron, Paul George said Durant is NBA’s toughest cover 23
- A day later, Kobe didn’t think he played quite so bad 12
- Why question “When did basketball get so bad?” misses mark 53
- Adam Silver: NBA to consider doing away with divisions 21
- Dwight Howard frustrated with Rockets’ effort in recent losses (54)
- Why question “When did basketball get so bad?” misses mark (54)
- Durant tells “60 Minutes Sports” he’s still tired of being No. 2 (35)
- Report: Heat shopping Joel Anthony, seeking depth behind Wade (35)
- Fan wanders onto court while game is going on during Cavaliers-Clippers (VIDEO) (34)