Is the NBA over its head financially?

How the pie is split is set by the CBA. Currently it's 50/50--players get 50% of all NBA revenue and owners get 50% of all NBA revenue. So it doesn't matter how high max salaries go--if Harden makes $50M in a year, it just means less money for other players.

I'm not saying there won't be a lock0ut--it just won't be because the NBA is "in over its head" or becoming less profitable. It'll be because owners will be trying to pry more of the revenue away from players. They'd be doing that no matter how profitable the NBA is because more money for them is more money for them.

 

To me owners are there worst enemies how can you ever agree on super Max contract. Then they later on cry about we not making any money. They put there self in bad situations. But the fans going to pay higher ticket sales and merchanise will go up. Put get more pricey for the fan. The big contracts by networks help too. Now is the league in bad shape no if one network goes down another going to pick it up.

 

Social media like Youtube, Instagram is showing us that entertainment is indeed a massive business. If ESPN/Turner Sport cannot pay the money, I'm sure some of the new media will gladly pick up the tab. America and the world wants to be entertained. Sport is one way of doing it. It is no secret. The actors of this should get rewarded handsomely. And If the reason the value of these franchises is going up is because there are guys with cash on the sidelines (around the world) waiting to spend it. You see it in Europe with guys coming out of nowhere and buying soccer teams. Even former athletes are now spending their fortunes on teams (Jeter, Hill, LeBron ...).
Once these (former) Athletes realize what they can do with their millions (Guys like Durant, Harden, Curry, Kobe will probably make 1/2 billion+ in their careers) ... a whole new class of owners will be out there.

 

I understand what you are saying, but some get the wrong idea. Owners don't get anywhere near 50% profit.

I think if you went up to the owners and said "you guys get 30%" in profits, they jump at that. The remaining 70% goes to the "players" who have to pay the salary of all of the team's employees, for the stadiums, for practice facilities, for advertising, doctors and medical .... for everything.

 

Sure, I said 50% revenues. Expenses are taken out of revenues to get profit. If you want to go in that direction, players have to pay their agents out of their salaries, which is generally at least 10%.

I'm also not sure why it not being "50% net" is relevant--yes, the 30 owners aren't netting as much as the 450 players, but each one of them is making far more than any player. The players are also the ones actually producing what people want to see. The owners are making a hefty amount of money from providing the venue. Also, in many cases, owners don't have to pay for stadiums. While that may be starting to change, generally stadiums are tax-payer funded and many times the team owners are the ones who profit from other, non-basketball uses of the stadium.

IMO, owners are getting a pretty nice deal.

 

I have no info for the last 10 or so years, but previously, many owners made zero until they actually sold the team - when owner got 53% of the BRI.

Zero is much less than what James Harden is getting paid next year. I'm not sure the owner of the Rockets is making that much next year.

Of course, players do not need to use agents.

If you don't see why "50% net" is relevant, don't worry about it - I have nothing further to add.

 

Do you have a source for that? My understanding was that both NBA and MLB teams have claimed to be unprofitable going into lockouts, but refused to open their books to prove it. I wouldn't take the unsubstantiated claims of the teams as gospel, considering they're trying to get leverage in negotiations.