If the player performs, he will get paid. If the team wants to keep him, he will get paid. It's not fully guaranteed, but better for a guy like Roy than becoming a FA.
It's strange to hear NBA owners talk about a hard cap when one of the issues with the league as currently constituted is that there is not sufficient revenue sharing. I understand that there are ways to share revenue that doesn't creative a competitive advantage for wealthier teams. Still . . . it seems like a red herring in the negotiations that nobody actually wants.
Hard Cap and guaranteed contracts work for me ( say max 3 year term ) because there must be some accountability for these knuckleheads that hand out appallingly bad contracts. And if it means that they lose an " arenas" then take a teaspoon of cement and harden the fuck up. It kind of self regulates competitive balance and puts pressure on management to perform as much as the player on a shorter term deal , so in this sense , there is better alignment between management and player. Rookie contracts with a team option after the 2nd year.
Because ownership , from where revenue sharing needs to come from , is incredibly dysfunctional given the myriad different profiles and agendas Which is why I would like to see a mass consolidation of ownership to a common profile type that is more commercially motivated and in sync. Would make things a lot more efficient leading to, IMO , a better "product" Fewer Chiefs less Indians
Yah. I believe a large part of the dogma is based on a nostalgic, flawed , marketing premise Laker for life , Bull for ever , Knick till I die etc. Stern went to the dark side over 30 years ago with Magic and Bird and lucked into Jordan which is why false prophet contracts fucked the last CBA and will fuck this one too unless a paradigm shift occurs , philosophically, with how the league markets itself - and structurally with how it then handles it's business to ensure profitability and competitive balance. Hoosier Pax was ahead of the curve with Project " Right Way" It's just our talent wasn't up to snuff. But a big part of the equation is to sell teams and not individuals and a doo wop crew. Too many false prophets emerge with the irresistible temptation to pay stupid bucks to either willingly or unwillingly go with the con
Specialized assets trade in distress for somewhere between 20 to 30 cents in the buck Because worth of all assets all over the world are now based on more fundamental drivers of profit, yield , cap value and more conservative price earning multiples. Buyers demand the sausage to accompany the sizzle And buyers with cash aren't buying what they can't steal. Therefore even 50 cents in the buck on enterprises such as the Hornets , in receivership, and with no positive Net Operating Income , aren't worth 50 cents in the buck. The key to what happens here may well be with Banks/Financiers who have influence over elements of ownership and their demand for a more commercially rational business model that reestablishes certain fundamentals and a consequent restoration of value
Obviously, the bank that extended the loan did feel the loan was relatively save aka a good risk. Just as the NBA did which took on the debt obligations.
I totally agree. And a large part of what makes the big-market teams so valuable and able to throw off so much cash is the players. I never see where the players signed up to ensure all 30 teams are significantly profitable. Which would make the largest market teams incredible profitable. They have signed up to only take 57% of the revenue which is quite similar to where the other pro leagues are at.
In terms of " the Bank " I agree that they obviously felt their security was good way back when they made funding available. How they feel about it in retrospect and their ability to get 50 cents in the buck is a different story. My point was you need positive cash-flow from an asset in it's own right now to maximize it's value. Logic would dictate that the Bank / it's Receiver is waiting for CBA shakedown to help reestablish positive cash-flow , and therefore , value of security
And in terms of the NBA taken on debt obligations , I underline the word , obligation At least in what they felt they had to do
Jay: I thought about your question on the Tribune a little more. It's really a good one. The thing I forgot, in terms of assets, was the Chicago Tribune and Los Angeles Times content in and of itself. The Tribune owns(ed?) reams of priceless content: basically everything published in its two flagship newspapers after 1923. The company owned the rights to the original and probably best documentation of many of the most important events from the last 100 years. The music and book and film industries have found business models that enable them to continue to profit after, and on, the development of the internet. Newspapers are somehow still searching. If I was a lender I probably would have made that loan. Hell, I still think its content is incredibly valuable. There's just no fruitful way to monetize it at this time. In regard to "the NBA" thinking the debt obligations were a "good risk," I have to disagree. The NBA didn't take on debt obligations, it was the individual teams. And you have to imagine that the George Shinns and the Maloof brothers of the league are not thinking in terms of bad risk or good risk -- they were just looking for a way to keep their other businesses afloat.
Sure...but they are feeling way better than Borders or Chicago Trib debt holders. Not as good as angel investors of Google.
I guess I don't see the hard cap-revenue sharing conflict. A hard cap will effectively control the spending of big-market teams, something the luxury tax failed at. This will be the case regardless of what the owners do with revenue sharing.
Don't they also have to compete with European markets? The NBA doesn't have a monopoly on player salaries.
But the only way to make a hard cap work w/o more revenue sharing is make it very low and transfer a ton of $$$ from the players to the owners. Which is why we have a lockout..
You have revenue sharing now and you'll have it in the future...how much and in what forms we don't know. The players 57% share is history. Don't know where it will end up, but 50% is a good working number (by the end of the contract). Combined with a hard cap of $55-60MM (again, by the end of the contract) salaries would be more evenly spread across the league, improving the competitive balance. As the theory goes, if the profitable big-market teams cut their player costs from $90MM to $60MM and maintain their revenue streams, they could share a good portion of the $30MM savings and still come out ahead.
Okay, I think the confusion is I was using revenue sharing to refer to the sharing of income among NBA teams, not the split between the players and the owners. Now that I actually fully understand the soft cap, I'm convinced that its an absolutely ingenious idea in that it provides a mechanism for big market teams to subsidize smaller market teams, allows any easy way for teams to retain stars, and provides big market teams with (theoretically) a competitive advantage, provided they elect to go over the cap . . . and the regal genius of it is that it gives small market teams, who are under the cap, cover for their fan base. Many of those teams, in the days before the overall payments were more than the 57% of revenue, were paying less than what was actually on the books. My point is that many small market teams no doubt are seeking a greater sharing of revenue among clubs, and the soft cap provides a mechanism that achieves that goal (at the expense of parity) on seventeen different fronts.
Sorry SST, obviously I wasn't being clear enough. I was also using "revenue-sharing" to refer to the movement of money between the teams. This is separate and distinct from the "revenue split" between players and owners (players currently 57%). Agree that the LT was clever. However, it was also inefficient and unpredictable. The tax is inefficient because all teams under the tax threshold get a piece of the LT pie. For the 2010-11 season, the Bulls, Knicks and Heat are among the recipients. That's ridiculous. The LT pool is unpredictable because, well, a few years ago, the Knicks paid in $45MM and now they're a taker not a giver. According to Larry Coon's site, for the '09-'10 season, 11 teams were payers, with 6 of those paying $12+MM. This resulted in the largest LT pot ever. I haven't seen anything official, but for last season it looks like there will only be a handful of teams paying in. Assuming the soft cap is replaced by a hard one, the clever little LT goes away. The NBA may need to move to something like what the NHL did after their lost season. Though details about the mechanics of the revenue-sharing program in the NHL are hard to find, according to Forbes, the top-10 revenue-producing teams kicked in a total of $90MM which was then distributed to the 11 lowest revenue teams. I couldn't find the amount each low-revenue NHL team received, but let's use $8MM as ballpark. In the highest NBA LT year (2009-10), each receiving team's share was $3.7MM. Considering that NBA revenues are considerably higher than the NHL's, an NBA revenue-sharing pool of $120MM or so would seem appropriate.
