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The Bucks borrowed $55 million from the NBA… last year

Jun 26, 2011, 3:00 PM EDT

Terry Stotts Press Conference

The Milwaukee Bucks are a pretty good example of the market struggles facing smaller-market owners in the NBA. It’s not like owner Herb Kohl hasn’t hired good people. John Hammond and Scott Skiles are both very good at their respective positions. And it’s not like Kohl hasn’t spent money on players. From Michael Redd to John Salmons to Drew Gooden to Andrew Bogut, the Bucks have kept the purse strings loose to try and build a winner. But the market simply hasn’t been great without the ability to convince fans they can compete for a championship (with good reason). And as a result, the Bucks have lost quite a bit of money. And it would appear the Bucks have tapped the league for quite a bit of help to cover themselves for the red line present and future.

From the Milwaukee Journal-Sentinel:

U.S. Sen. Herb Kohl, owner of the Milwaukee Bucks, borrowed at least $55 million last year from the NBA’s credit facility, according to his Senate financial disclosure form.

Disclosure rules in the Senate do not require senators to disclose the exact amount of their investments, assets and liabilities. But the records indicate that Kohl borrowed at least $55 million in three separate loans in behalf of the Bucks.

The records also indicate that Kohl used some of the proceeds for investments by two of his trusts. That is allowable under NBA rules for those borrowing from the $2 billion credit facility.

via Kohl borrowed from NBA – JSOnline.

The Journal notes that taking the loan doesn’t necessarily mean that the team lost money. But considering Kohl has openly said the Bucks have lost money and their status in Forbes’ franchise-value list, it’s a pretty good bet. That’s quite a bit of cash for one franchise, and with Kohl deciding not to run for re-election in 2012, you have to wonder if eventually Kohl won’t be the one writing checks, or applying for loans on behalf of the Bucks.

It’s probable that Kohl would look to sell the team to a local ownership group to keep the team in Milwaukee, but considering that kind of red ink on the books, it might be difficult. Meanwhile, expect ownership to use this kind of information to squeeze the players, using it as evidence of their enormous losses over the past several years while the players continue to respond in saying that revenue sharing and other venues will solve the problem and no one really having a conversation about it.

It’s hard to pinpoint anything Kohl’s done to put himself in this situation. The Bucks have made their fair share of poor moves, player-wise, management-wise, coaching-wise over the past few years, but they’ve been respectable. Everyone points to the Knicks’ failures to win a title as evidence the system doesn’t favor big market teams, but a look at the larger markets’ black ink compared to cases like this shows there’s enough there to support the idea of the system being broken.

Only question is how long it will take to fix it.

(HT: IamaGM.com)

  1. craigw24 - Jun 26, 2011 at 3:45 PM

    Since the league wants to squeeze as much as possible out of the players before addressing what they, themselves, have to do, I have very little hope the basic situation in the league – some form of additional revenue sharing and a base level of required salary spending – will be fixed before the players union is completely broken.

    Sad – I would like to see the players start their own league and set up a fairer situation. They can do it because the NBA does not have an anti trust exemption like baseball.

    • tashkalucy - Jun 26, 2011 at 7:31 PM

      I too would love to see many of the players start their own league.

      At least years All-Star game the players were following the lead of James, Wade and Bosh to talking to each other about who they want to play with and where. This is fine with ESPN/ABC that televises national games and would love 6 super teams (as they do with Major League Baseball).

      But whether it be 30 teams of 28 or 24 or 20, when the stars elect to play in glamour markets with their friends, the rest of the league is noting more than feeder teams giving the players professional experience and allowing them to make names or themselves before they move to the glamour teams (as in MLB). Sorry, but you cannot have a professional sports league when the majority of the franchises can’t keep their stars — there is no way the fan base will stay loyal.

      So let the players, their agents and sponsors start their own league. And let them deal with the fact that most of their franchises have a fan base that turns out the league once their teams season is over. But this will never happen, because that would mean that the players, their agents and their sponsors would have to put their won money at risk…..and that is something they have no intention of doing.

      • tashkalucy - Jun 26, 2011 at 7:33 PM

        Sorry for the misspellings!

        Hit post before I proofread it.

      • thetooloftools - Jun 26, 2011 at 11:39 PM

        The spelling means nothing.
        Your F.O.S. anyway.

  2. harsh22 - Jun 26, 2011 at 6:08 PM

    There is no way the players can start their own league. I hope the owners lock out the players and set the league so the teams can be profitable. The fact that the NBA has so many players in top echelon of earners is proof the system is broken

  3. loufortune - Jun 26, 2011 at 6:24 PM

    Stretch Armstrong
    Wow. Spent countless hrs on sportstalk registered just to comment on this post. CBA doesn’t matter. Neither does the market. Problem with the knicks is who’s bringin home the groceries. If thats what they’re stickin to we better button up for a long winter.

  4. PanchoHerreraFanClub - Jun 26, 2011 at 6:38 PM

    The reason the Bucks are losing money is because no one in the organization has clue about how to market the team. It is easy to blame the small market or the way the NBA is set up. Kohl needs to look in the mirror and do some old fashioned marketing. Sometimes things are just a simple as that.

  5. philtration - Jun 26, 2011 at 7:10 PM

    I have said it before and I will say it again.
    Not every city is owed an NBA team.

    30 teams is too many.
    Don’t be afraid to dump some teams for the good of the league and if players are not good enough to play in the NBA then let them go overseas to make a living.

    I was going to say the Bucks have not won a title in 40 years but then again neither has New York and they believe that they are the Mecca of basketball for some stupid reason.

    • theghostofwillisreed - Jun 26, 2011 at 11:02 PM

      jealous much?

      • philtration - Jun 27, 2011 at 8:37 AM

        Of what exactly?

        I will take my Bulls history over the Knicks any day of the week.

  6. goforthanddie - Jun 26, 2011 at 10:15 PM

    I find it odd the NBA will loan money to owners “for investment purposes”, when so many owners are claiming losses. Are those the sort of people you loan money to? And is this money-for-loan available to the players also? I’m sure some of them could turn a nice profit.

  7. nadermayoub - Jun 26, 2011 at 11:12 PM

    In the NBA there are only a few large metro areas which have the potential to sign an MVP caliber player in the off season: New York, Los Angeles, Chicago, Miami, and maybe Boston. These are your tier one, premier cities which represent 7 franchises (Knicks, Nets, Lakers, Clippers, Bulls, Heat and Celtics).
    After that you have several large metro areas which can retain an MVP caliber player or players from either a draft or trade. Metro areas like Dallas, Phoenix, Orlando, Philly, Detroit, Washington, Denver, Houston, etc.; these are your tier two cities.
    Next are your small market cities which have good management and/or tradition. Teams like the Spurs, Thunder, Portland, Salt Lake, etc. All have a good fan base, but typically pick up their core talent in the draft, and try and hold on to them.
    Your bottom tier, the fourth tier, represents small markets, with little support, tradition, and an inability to keep key players. Teams in this category are ones who could not fit into anything above.
    As much as New York has not won a title in a long time, it’s more likely they will compete heavily for one over the next 10 years than a team like Milwaukee. Moreover, the TV execs really want a finals matchup between large metro areas like a NY vs. LA. A small market team will only be competitive for a 5-6 year stretch over a 10 year lifecycle, and will rarely reach and win the title multiple times, unless they have some freakish twist of fate like having an MVP candidate go down with a broken leg (David Robinson), tanking a season to end up in the lottery (The Spurs), and through shear luck, ending up with number one pick in the draft (Tim Duncan)… allowing them to team up two MVP’s for a good stretch.

    • nightman13 - Jun 27, 2011 at 5:50 PM

      Milwaukee has plenty of tradition, some of the greatest players ever played in Milwaukee. Oscar Robertson, Kareem and Ray Allen to name a few. Milwaukee’s support waned after the Eastern Conference Finals against the 76ers when the series was handed to Philly because they would out draw the Bucks in the Finals against the Lakers.

      People can say all they want about that being a conspiracy theory, but look at the numbers that season. The 76ers went to the line a disproportionate amount compared to the regular season and the Bucks were whistled way more often as well. Throw in a bogus suspension of Scotty Williams for game 7 and it all points to a fix.

      George Karl then traded away the biggest superstar in the team’s recent history and brought in a bunch of thugs that destroyed the community’s relationship with the team.

      Fans in MIlwaukee know we will never be allowed to win a championship because the NBA needs big market teams in the Finals to draw ratings. After the weak ratings for the Finals in 2004-2007 that didn’t feature big market teams, there’s no way a small market team gets in even if they can retain their players. Milwaukee could have 5 All Stars on the team but the metro Milwaukee area only has around 1 million residents. Compare that to LA, Chicago, Boston, Miami, etc there’s no money in small markets.

      I agree that Milwaukee probably doesn’t deserve a team, but it has nothing to do with the fans or the history. It has everything to do with $$$, just like everything else in this god forsaken country.

      • icu84bs - Jun 28, 2011 at 2:33 PM

        Delusional, there is no conspiracy or the Spurs would not have won there 4 championships.

        The Bucks did win it with Kareem in 1971 (so much for your conspiracy theory), too bad the fans kept on slinging racial slurs (different times back in the 70’s) or he might have stayed on.

        Cheers.

        PS Even Mark Cuban posted a long blog discrediting the conspiracy theory a couple of years ago. Good thing too or he might feel somewhat foolish holding the trophy now.

      • icu84bs - Jun 28, 2011 at 2:41 PM

        Your theory also infers the NY Knicks should have won / been in the most championship finals (especially in the past couple decades). The reality is far from that as any NY fan can attest.

        Your theory also implies Chicago was handed to trophy in the 90’s because they are the third largest market in the US. Personally I thought it had a lot to do with a certain #23 but don’t quote me on that ;-).

  8. icu84bs - Jun 27, 2011 at 3:08 AM

    ‘The records also indicate that Kohl used some of the proceeds for investments by two of his trusts’

    So the money is not to cover losses but to fund his trusts. No wonder the players are suspicious when the owners talk finances.

  9. rhb1994 - Jun 27, 2011 at 11:41 AM

    The NBA does need fewer teams but which ones can they contract? Personally I would have only one team in a market so that would get rid of the Clippers,Nets and Kings. Also I contract the Raptors,Grizzlies and the Hornets. These teams don’t have much of a history unlike some small market teams like the Jazz or Bucks
    That would leave us with 24 teams and a good dispersal draft as well helping the weaker teams. The order of the draft would be a combination of winning percentage and market size.

    • philtration - Jun 27, 2011 at 1:37 PM

      Makes sense.

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