http://sports.espn.go.com/nba/news/story?id=3936991 Well - I guess this throws a bit of a kink into KP's plans to capitalize on the down economy and cherry-pick players from teams in financial trouble. -Pop
Re: NBA to give $200 million to financially struggling teams Nonetheless, my point is still valid that we won't be dealing from as much of a position of strength as KP (and many here) initially thought when we passed on making a RLEC trade at the deadline. -Pop
Re: NBA to give $200 million to financially struggling teams I believe that loan is only to close the gap for a lot of teams who were struggling. Maybe instead of taking out a loan, they should have a responsible salary cap instead.
Re: NBA to give $200 million to financially struggling teams Correct. But if you close that gap for the struggling teams, they won't be as motivated to trim salary. Listening to KP after the trade deadline, he seemed to think the Blazers would be in a unique position of strength this offseason to acquire good players from teams that needed to think more "bottom line" than "W's and L's." This is a fairly significant development, and throws a wrench (albeit a small one) into the Blazers plans to get those final key pieces to our contending squad. -Pop
Re: NBA to give $200 million to financially struggling teams Oh I don't agree with that. That is still a loan, and most of the owners didn't get rich from being stupid with money. Only a few did.
Re: NBA to give $200 million to financially struggling teams That's one way to look at it - the other way is that perhaps it suggests they are in worse financial shape than previously believed. barfo
Re: NBA to give $200 million to financially struggling teams Yeah Barfo... wow... the way I read it... it appears the NBA has loaned teams 1.9 Billion... with the last 200 million possibly needed for immediate operating needs. That isn't good at all.
Re: NBA to give $200 million to financially struggling teams This looks just like the type of thinking that lead to the housing crisis. Oh we can take out another loan. And another. And another. Its ok one day we will be ok, lets take out another. Actually it reminds me more of Enron than the housing crisis. But that is another subject.
Re: NBA to give $200 million to financially struggling teams I don't think so. The league (not the teams) has an existing 1.7 billion credit facility, and they've arranged to expand that by another $200 million, with the intention of loaning that money to individual teams. Basically, what I get from this is the teams that are interested have such bad credit that they can't get loans on their own (not that that is any real black mark these days), so they are essentially using the league's credit to get a loan. And the league is probably taking a little off the top for themselves in the deal. barfo
NBA Borrows to Survive- End of League? http://www.washingtontimes.com/news/2009/feb/26/nba-set-to-acquire-175-million-line-of-credit/ OK, several teams can no longer meet their financial obligations. Guaranteed salaries and revenue sharing are now so far out of control that without some drastic changes, this could be the start of the end of the league. And maybe it's for the best. Let's face it, players making millions of dollars routinely dog it and play to a fractin of how they can when they're on a bad team or at the end of the season. The list of lazy NBA ballers is long. Very long.If they get injured or cop an attitude, they sit and collect tens of millions while the team goes down the drain- unless it's a contract year. Worldwide, there isn't another major sport where players care less about the game and so little earn their salaries than the NBA. And how will the money be paid back? Will salaries be lower next year? Will lousy & lazy players give back their guaranteed salaries? Will, all of a sudden, new fans will be filling in the arenas and buying zillions of dollars of trinkets & trash? No. So where does the new revenue come from? Or will they have to continue and borrow with this helplessly damaged economic league? So, the owners will have to demand hard salary caps like the NFL, non guaranteed salaries and a new revenue sharing plan. Will the union go for it? Absolutely not. Will there be a strike? Yes. How long will it last? Maybe years and that will spell the end of the league. I suppose, in the end, the players will form their own league and, essentially, barnstorm around. But this could get ugly. Very ugly.
Re: NBA Borrows to Survive- End of League? One big difference compared to Baseball and Football though is that there are other global leagues that will pay the players. Not as much you'd think, but look at Josh Childress in Greece. The point is that there are alternative leagues to the NBA (from a player's perspective) while that isn't really true for football particularly. In addition to a strike the NBA has to worry about losing talent to other leagues. Just imagine it. NBA strike. Now we have EuroLeague -> US Division.
If I remember right, a bunch of players and ex players started to work on a new league just in case, and were threatening to start it up. If the league was smart, that would be included on all their contracts from there on out for a non compete clause. The thing is though, none of those guys could pay the dough the owners are paying now. It would hardly pay their bills.
My understanding is there are teams, like Sacramento for instance, that are having trouble making payroll, not of players and their milllions but of staff making modest salaries, having trouble paying leases on buildings, etc. Very basic expenses. I know that a lot of CEOs have show amazing fiscal irresponsibility, and it would hardly shock me to see more, but it would indeed be amazing irresponsibility when a team is having trouble holding onto a building to shell out millions more for one or two players - unless you're talking about the very few who will guarantee a sellout every game and loads of jersey sales (basically LeBron James, maybe Kobe Bryant). So I really don't think this is significantly impact KP's moves this summer. Remember, Paul Allen can still outbid anyone if he wants to.
Re: NBA to give $200 million to financially struggling teams Actually, this is mythology. It isn't true. Not in the least little bit. The self-made fabulous wealthy - your typical NBA owners - are more likely to become wealthy by taking and making big bets - and winning. Lots of people in an opportunity to do so make big bets. We normally only talk about the winners, the surviors. So there is tremendous survior bias in the topic. The survivor's become "smart money". But there were lots and lots and lots and lots and lots of very, very smart people - and most of them who tried didn't get filthy rich. Dumb money is going to Vegas, or investing in Ponzi schemes, or with criminals, or poor business plans executed by bad management. Smart money is about taking calculated gambles. But, there is still a gambling element. Risk taking. Excessive optimism. Taking leaps. You don't become self-made very rich without doing things that a concensus of experts would consider "dumb" - too risky, overly optimistic, too hard, etc. Again, we are talking about self-made money here, and are talking about very wealthy people - not the merely wealthy.
Re: NBA Borrows to Survive- End of League? I agree it could get very ugly. The owners see their chance to strike and gain the upper hand. And with several teams on the brink of collapse, they have motivation to push hard for a much better deal than current, and when they don't get it, push hard for a long lockout. When teams are bleeding red ink, shutting down the season doesn't hurt them. It may even help those teams. The union has poor leadership. The players who support this poor leadership is dominated by players that are disconnected from the wider world and the massive economic issues that are happening. Sure, they hear about it, they may think they understand - but I don't think they do. Guaranteed contracts for $50+ million dollars is routine in the NBA, and that kind of money warps your thinking and processing of information in ways you can't fully control. Just ask Wall Street. The players will not concede much and there will be a long stalemate. They just won't be able to collectively process how bad things really are and how scared, desperate and serious the owners are. I just can't see any other outcome. The only other way is if there was a strong and well like union leader and he personally recruited/converted half of the superstars to form a front in favor of big givebacks. Then, the deal could be struck in a few months of brutal negotiations.
