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NBA Lockout Thread

ToughLoveDeac

ToughLoveDeac

Ricky Peral
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Since there's no thread on this thus far, I doubt anybody cares. But it looks more and more like there won't be a full season.

Primary issue right now is split of basketball-related income (BRI). Currently, players get 57%, which is too high IMO. Owners are saying they want players to take 47%, players say they want no less than 53%. Owners informally offered 50-50 split near the end of today, but players turned it down.

All the preseason games will almost certainly be canceled. Apparently the absolute drop-dead date for regular season games is next Monday, 10/10. No deal by then = season starts late (if at all).

Best people to follow on twitter on this are Chris Sheridan @sheridanhoops and David Aldrige @daldrigetnt.

I'm apparently the .001% of the population who gives a shit. Can't believe this is going to happen after such a great season last year. The league has finally fully dug itself out from the '99 lockout. Tons of great young players like Griffin, Wall, Durant, Love ... all going to waste.
 
Bookending your first post with "I doubt anybody cares" and "I'm apparently the .001% of the population who gives a shit" is possibly the best way to build momentum on a thread.
 
Also, this is prime time for foreign leagues to step their game up financially.

Formerly they could offer some solid money but it didn't matter because it still wasn't the NBA. Now? Who knows.
 
I care about the NBA, but following the lockout doesn't interest me. I don't see the point. If the NBA misses some regular season games, I'm not going to lose any sleep.
 
Players have to take less money. I know it's not their fault they were granted the contracts they were given, but the league can't sustain itself the way it was hemorrhaging money.
 
Demon09 said:
Delonte West is working at a furniture store in MD:

http://www.washingtonpost.com/blogs...rniture-store/2011/09/30/gIQAjuF39K_blog.html
Click to expand...

images.jpg
 
Deadbolt said:
Players have to take less money. I know it's not their fault they were granted the contracts they were given, but the league can't sustain itself the way it was hemorrhaging money.
Click to expand...

Yea, I was on the side of the players during the NFL lockout, but I'm with you here. The fact that they were taking in 57% of BRI was insane.
 
Also a main sticking point is the actual definition of BRI. Right now it is gross revenue, but the owners are arguing their expenses on marketing/arenas/facilities that promote attendance eat from their own share and help the players as well, although the players don't bear any of that burden.

So the informal 50/50 would still be towards a more owner friendly version of BRI.
 
Deadbolt said:
Players have to take less money. I know it's not their fault they were granted the contracts they were given, but the league can't sustain itself the way it was hemorrhaging money.
Click to expand...

If it's really hemorrhaging money how come two of its worst franchises sold ofr well over $400M knowing there would be a lockout?

Some teams are losing money. But the reason is incompetent management not the CBA.
 
Fuck Your Couch said:
Also a main sticking point is the actual definition of BRI. Right now it is gross revenue, but the owners are arguing their expenses on marketing/arenas/facilities that promote attendance eat from their own share and help the players as well, although the players don't bear any of that burden.

So the informal 50/50 would still be towards a more owner friendly version of BRI.
Click to expand...

and the players don't benefit fomr the increased value of the franchises that they crfeate.
 
RJKarl said:
and the players don't benefit fomr the increased value of the franchises that they crfeate.
Click to expand...

That's the difference between an owner and an employee.
 
Then the employer shouldn't complain about how much the employee makes as long as the owner does as well as they are doing.
 
RJKarl said:
Then the employer shouldn't complain about how much the employee makes as long as the owner does as well as they are doing.
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How well are the owners doing?

Take the Oklahoma City Thunder. This is one of the NBA's better run franchises, but it isn't in a "home run market" (aka: Celtics, Knicks, or Lakers). The franchise was purchased in 2008 for $350 million plus a $45 million settlement with the city of Seattle. Operating income for 2009 was $12.7m, and then $22.6m for 2010. Per some quick, "back of the spread sheet", calculations (not much precision due to lack of info), with a 10% growth rate of operating income post 2010, a $580m sale price would be required to cover a 10% cost of capital if sold in 2014. Does that seem likely?

Adjusting the assumptions in favor of this sweet deal you think owners are getting, let's say a 5% cost of capital and 20% growth of operating income (and this is even more ridiculous than it initially sounds given that the Thunder's costs are bound to soar since James Harden will make $14m more next season relative to last and Russell Westbrook is still on a rookie contract). Hell, let's even pretend that Seattle is going to get a franchise by 2013 resulting in the Thunder not having to pony up a further $30m that year. That gives us a sale price of $377m. A lot more likely, but, per Forbes, current value is $329m.

I think it's pretty fair to say that financials take a back seat in the mind of most franchise owners. If that wasn't the case players would not be making what they are now.
 
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I agree with the sentiments stated earlier about the comparisons for the NBA and NFL. When it was the NFL, I was in agreement with the players. The NFL teams are making so much coin the players deserved a little more. With the NBA, there are just so many floundering franchises and for the players to be taking on that much of the pie is just insane.


Glad to see one of our boards resident douches chimed in on this matter (BKFAN). Now we just need KanhojiAngre to chime in for this thread to reach expert status.

If you have a hatred for the NBA, stay out of the thread you annoying old man.
 
"Thunder's costs are bound to soar since James Harden will make $14m more next season relative to last"

Where do you get such inaccurate information? Harden is still under his rookie contract. He's a year behind Westbrook. He's under contract (qualifiying offer) through 13/14.

James Harden
$4,604,760
$5,820,416
$7,636,385


Read more: http://hoopshype.com/salaries/oklahoma_city.htm#ixzz1ZsUKewe9

Forbes' franchise values happened before the Warriors and Hawks were sold for over $400M each.
 
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RJKarl said:
"Thunder's costs are bound to soar since James Harden will make $14m more next season relative to last"

Where do get you such statements? Harden is still under his rookie contract. He's a year behind Westbrook.

Forbes' franchise values happened before the Warriors and Hawks were sold for over $400M each.
Click to expand...

My bad on Harden, I wasn't reading very carefully.

And, the recent sale prices pretty much prove my point. I don't see how that would be a positive value investment given a realistic cost of capital and the operating income levels the franchises currently offer ($14m for the Warriors, -$7.3 for the Hawks).

Also, here are the $20m+ teams (other than the cash cows, aka Lakers, Celtics, Knicks, and Bulls):
$32m Pistons
$25m Raptors
$20m Suns
$23m Thunder
$26m Rockets

Thunder aside, who would have put that list together on their own? The better, non-big market teams are mostly losing money (Mavericks, Spurs, Magic, Heat). This pretty much reinforces that, for the most part, owners make the decisions they make because they want to win games, not because they want to make money. At the same time, they can't afford to take a total bath.

Let me ask you this RJ, where do you think the Forbe's valuations came from? I can pretty much guarantee that they did not come from a study of "comparables". I would assume that they projected out cash flows, and then discounted them back with a reasonable cost of capital. Aka, a more sophisticated version of what I did. And their result for the Warriors? $363m. The purchase price 6 months later? $450m. Either off the wall assumptions were used or the new owners just really wanted a NBA franchise and didn't really give a damn what they paid. What I am saying is that the Warriors are only worth $450m because someone was willing to pay it. From an investment point of view, the value is more or less $363m.
 
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