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NBA AM: The $7.6 Billion Dollar Gap
Posted By Lang Greene On August 25, 2011 @ 8:40 am In All,Main Page,NBA | 1 Comment
Over the course of the past month public relations officials for NBA franchises have released preseason schedules and some have even went the extra step to distribute media credential requests for the 2011-12 campaign.
Of course everyone is just doing their job and being proactive in the event a new Collective Bargaining Agreement is secured, but from all accounts it appears more likely that the current labor dispute will stretch into the regular season and cause the cancellation of games.
The thought of missed games is seemingly becoming clearer by the moment.
Yesterday, National Basketball Players Association vice president Maurice Evans reiterated the huge financial gap between players and owners causing the lockout in an interview with SI.com’s Sam Amick.
“The deal we’ve been offered would so drastically alter the game as we know it today,” Evans commented on the latest proposal by league owners. “The offers have been so pathetic that it’s hard to even talk about it when we’re informing the guys. We’re $7.6 billion apart [over the life of the proposed deal]. Again, when you realize all the components that they’re trying to take away, and trying to take out of the [collective bargaining agreement] that’s already in effect — the guaranteed contracts, grandfathering in [contracts], the [salary-cap] exceptions, Larry Bird [rights]. You and I have already talked about this many times, but [players] are really starting to get it and they’re willing to sit out for as long as necessary to get us a fair deal.”
If the last statement Evans alludes to is true, it may be something the owners didn’t factor into the equation. Most experts fully believe the players will eventually cave once actual paychecks are missed as it is widely known most guys live paycheck to paycheck.
However Evans says the players are more unified than ever and ready to tackle the challenge presented to them by the owners group.
“They’re unified, and as unified [as the players], and that’s great for them,” Evans said. “It’s not about who’s more unified and having a battle of wills. It’s about knowing what’s right. We’ve earned the right to compete. We’re the ones playing. You can’t tell me their sponsorships and the package that they’re selling is what has allowed the game to grow to what it is. That’s not what increased basketball-related revenue 4.8 percent. We can go down the list about record television ratings and all kinds of different things. And for those guys to jeopardize that, you can’t tell me that the owners aren’t going to be hurting as well. They’ve made commitments to sponsorships and things that are contingent on us having a season. We’re not holding that over their heads. We’ve never walked into negotiations and told them about all the things they’re going to be losing. We’ve only walked into negotiations and tried to get deals.”
The league stance is that it’s been losing upwards of $300 million dollars annually and over 70 percent of its franchises are operating unprofitably.
NBA commissioner David Stern has went on record on numerous occasions claiming the current system cannot be tweaked but needs a massive overhaul to protect the longevity of the league moving forward.
Of course the Players Association vice president had a completely different slant.
“The last [players'] offer was [a giveback of] $630 million over a six-year period,” Evans continued. “That’s over a $100 million a year and they told us that it was pathetic. …If they think that’s what this negotiation is about, then they’re miscalculating. Again, even with the 57 percent of BRI — when you total out the total revenue, we receive 50 percent [in the old system]. We allow them to deduct expenses and deduct things, so when they overpay coaches and fire them and then they have three coaches on payroll that, in effect, goes into BRI. We’ve never told them that they could take that out, even though it’s one of the highest expenses. We don’t want anyone to take a loss, not even the owners. But they seem to be hellbent on contracting [teams] and, as David Stern said, have a huge reset [of the entire system]. If we’re going to reset … then they’re going to have to reset the entire league.”
While it’s obvious the current system needs an adjustment the question still remains are the players’ salaries being used as the easy scapegoat?
There are numerous events over the past two years such as the Washington Wizards ($550 million) and Golden State Warriors ($450 million), perennially middle tier teams, selling for a combined $1 billion which points to a much brighter future for the league. After all, billionaire business moguls don’t typically invest in sinking ships.
For now, as the ongoing lockout nears its second month, the players are gearing up to miss substantial court time which may unfortunately bleed into the upcoming season or lead to its cancellation altogether.
“Our guys are willing to miss this season and more,” Evans said. “We’re willing to do what it’s going to take because accepting a deal at the numbers that they’re asking for will be worse than missing the season.”
Hornets Solidifying Local Support: The Hornets have been struggling as of late to prove its viability in the city of New Orleans. But that trend may be coming to an end as the franchise continues to receive more and more backing from local supporters and corporate sponsors.
The club introduced Chevron as its fifth million-dollar corporate sponsorship partner yesterday, leading team president Hugh Weber to cast an optimistic forecast for the future.
“Momentum is our most valuable commodity, and at a time when no one is talking about basketball, we’re still making progress,” Weber stated according to Brett Martel of the Associated Press. “That speaks to how the community feels about the team and how important they feel it is for the team to have a long-term legacy here in New Orleans.”
The Hornets’ lease at New Orleans arena doesn’t expire until 2014 and it includes a clause which would allow the club to relocate if their attendance levels ever fell below an average of 14,735 over the course of a twenty-four month timeframe.
Since the team was purchased by the league from departed owner George Shinn it has maintained the goal is to create solid revenue flow and ultimately sell to an investor who desires to keep the club in New Orleans long term.
Despite the lockout, which began on July 1, Hornets season ticket sales currently sit at 8,900 which represents a 41 percent (2,600 tickets) lift over last season. Weber also stated there is a sixth million-dollar investor currently in the works for the franchise.
NBA Chats: There is one chat on the schedule today. HOOPSWORLD’s Joel Brigham will be hosting his weekly chat today at 1:30 EST. Get your questions in early as Joel’s chats are known to fill up quickly.
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