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Tuesday, May 12, 2009

NBA: Revenue Sharing Plans?

The NBA is in preliminary discussions to get into the revenue sharing business. Will this help or hurt the league?

NBAPA Executive Director Billy Hunter said that the next collective-bargaining negotiations with the league must include increased revenue sharing among clubs. Hunter wants the NBA's model to resemble the NFL's. In the NFL system, the home team receives 60% of gate revenue and the visiting team gets 40%.

Currently, the NBA's 30 teams get equal shares of TV and merchandise revenue, but do not share gate receipts. The NFL and MLB share gate receipts. Hunter claims the NBA's current revenue sharing plan is the weakest among the four major sports leagues (NBA, MLB, NFL, NHL).

Talks between the league and union will begin this summer, two years before the current CBA expires. Hunter believes the current system works for the players and that the NBA would have to prove to the Union that major changes should be made as a result of the current economic downturn.

Hunter and David Stern began one-on-one, informal talks in February. Hunter says he floated the idea of offering an extension of the current CBA deal, with a little tweaking here and there. He claims they rejected it, saying NBA players are not yet convinced that economic conditions at the league are so dire that the players need to make major changes.

Not yet convinced? The league already has a $180 million-dollar slush fund for teams in dire financial trouble, and more than ten teams were lining up for that money. A full third of the league needs financial help? Isn't that dire financial trouble?

Revenue sharing balances out the leagues - it takes from the rich and gives to the poor. It gives teams outside the New York market place a chance to compete. It also makes you wonder why the league would sanction moves to smaller markets where they would immediately become a drain on the system instead of a contributor. Perhaps Stern still believes large, magical palaces for teams to play in are the key to success. I doubt league owners will go along like lemmings and approve small market relocations once revenue-sharing is put in place. It's a welfare system for the neediest markets (like OKC) that cannot add to the pot, but will line up to draw from it.

Makes Aubrey McLendon's "We'll be happy if we break even" admission, that much more damaging. This is a blatant statement that they'll be in line for the handouts when they are available. These guys are not about doing what is best for the league, but rather for themselves.

"It's up to David and the owners to convince us of the urgency of the situation. We have an open mind, but this is a negotiation, not a one-sided give-away.

Will revenue sharing save the league? Will the large-market owners accept this or fight it? Small markets (ie; OKC, 26th in tv ratings, Charlotte, 30th) make no TV money and are being propped up by their larger market brethren. How will the decision to move to these smaller markets hurt Stern in the negotiation, especially when large markets are available to be exploited? Instead, Stern played small-market ball. The problem is that he doesn't bear the financial burden of these decisions...the owners will. OKC, Memphis, New Orleans, Charlotte; will Stern's only-game-in-a-small-market vision be what sinks him? Be pretty ironic, huh?

4 comments:

Anonymous said...

I don't think it will save the league, but it will make them more balanced.

Until they get the horrible officiating fixed and make it more than just a league pandering to LA or NY, it'll suck. Thank God it's baseball season.

Go Cards!

Anonymous said...

can't wait for football season!

JAWA said...

"Makes Aubrey McLendon's "We'll be happy if we break even" admission, that much more damaging. This is a blatant statement that they'll be in line for the handouts when they are available. These guys are not about doing what is best for the league, but rather for themselves."

Not surprised to hear that, especially since all they cared about was being "big league" and making money, in which they can't be due to the reasons mentioned earlier. No wonder a poster from the ST forum said OKC is a "leech" in the NBA since they obviously can't make it on their own and thus, have to ride the coattails of their bigger market counterparts. Just goes to show that the "NBA in OKC" experiment won't last.

As always, great post, auroraave!

Anonymous said...

total leeches on the league. embarrassing for everyone involved.