Nov 9, 2011, 10:51 PM EDT
When the NHL lost a season due to lockout, the operative phrase used by the owners was “cost certainty.” The NBA owners were smarter about their spin and disguised it as “competitive balance” but the idea of controlling team spending has been the same.
One thing that happened for NHL owners when the lockout ended — their franchise values went up. Any business where you can better control costs becomes a more valuable asset.
Which brings us around to the NBA lockout. With each percentage of basketball related income the owners squeeze out of the players, not only do they get more revenue their franchise value will reflect it. Friend of this blog Larry Coon explains it well at ESPN.
How much will franchise values increase? It’s hard to say. There are a lot of factors that go into determining the value of a business, and a number of ways to do the calculation. A conservative estimate might be a $3 million to $12 million average increase in franchise values for each percentage point in revenues the league wrests from the players. Decreasing the players’ split of BRI from 57 percent to 50 percent therefore might be worth $21 million to $84 million per team.
The owners will only see this money when they sell their teams. But when they do sell, none of it is shared with the players.
Just a reminder how big the owners are winning these negotiations. The rich get richer. And maybe it’s why they can give a little on system issues and end this thing.
- Reports: Phoenix Suns sign Tyson Chandler, re-sign Brandon Knight, try to reshape roster 0
- Kevin Love will return to Cavaliers, contract is reportedly $110 million over five years 56
- Report: Spurs reach deal to trade Tiago Splitter to Hawks, create cap space for LaMarcus Aldridge offer 26
- Report: Heat, Goran Dragic agree to five-year deal worth $90 million 43
- Report: Paul Millsap had midnight meeting with Orlando, will decide between Magic and Hawks 17
- Report: Blazers, Damian Lillard nearing agreement on five-year max contract extension worth $120 million 17
- Report: Kawhi Leonard, Spurs reach deal for five-year, $90 million contract extension 19
- Anthony Davis and Pelicans agree to five-year, $145 million contract extension 36