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Stern and the NBA Owners Exposed.....

Discussion in 'Sports and News' started by qtlaw, Jul 6, 2011.

  1. qtlaw

    qtlaw Well-Known Member

    I don't care how Stern and his cohorts respond; Nate Silver (538 blog) lays it out in simple terms and has framed the argument on his terms.

  2. LongTimeListener

    LongTimeListener Well-Known Member

    Despite what the league has said, much of the reporting has centered on the fact that while the league has a whole is profitable, maybe a third to a half of the teams are losing money. Silver's analysis disregards that very salient point.

    Also, as to why they're doing it: Because they can. There may be no group of people anywhere in the world that is dumber with its money than NBA players, and these guys are going to be up against it once they miss two weeks of paychecks. The owners know this.
  3. bigpern23

    bigpern23 Well-Known Member

    I'm no math whiz, so maybe I read this part wrong, but it seems to me that Silver noted the league's operating income before interest and taxes and used that number to calculate it's margin, which he arrived at 5 percent in 2009-10 and 7 percent over the life of the current deal.

    He then notes that Forbes 500 companies generally operated on a margin of 4 percent in 2009 and 6.6 percent in 2010 after taxes. I would think that taxes would have a significant effect on the NBA's margin, no?

    It seems he's trying show that the NBA operates within the usual margins of any other average Fortune 500 company, but he's using fundamentally different figures to illustrate that point.

    Am I correct on this?
  4. Stitch

    Stitch Active Member

    It's the same old argument. Do you take money from the players or from rich teams to prop up small markets? It doesn't take a genius to figure out where the consensus is.

    What is the current revenue sharing formula?
  5. CarltonBanks

    CarltonBanks New Member

    I also think the lack of competitive balance is going to help the owners as far as the PR war. A lot of fans know their team has no shot to be competitive.
  6. cranberry

    cranberry Well-Known Member

    Which is just another reason they should have more revenue sharing in the NBA.
  7. qtlaw

    qtlaw Well-Known Member

    You're right but a pre-tax profit of 7% is fairly close to an after-tax profit of 4-5%, taxes being 20-30% of the gross profit.
  8. sgreenwell

    sgreenwell Well-Known Member

    They should probably copy baseball then and be more of an open market. Open markets lead to owners making more stupid mistakes and letting more teams compete.
  9. BTExpress

    BTExpress Well-Known Member

    The dirty little secret is that outside of the uncompetitive markets, the average fan doesn't want to see competitive balance.

    He wants his Lakers and Celtics and whomever can beat LeBron, and he has no use for seeing laundry that says "Memphis" or "Atlanta" in the NBA Finals, regardless of how good the players might be or how good the games might be.
  10. Michael_ Gee

    Michael_ Gee Well-Known Member

    Whatever happened to the idea that if you buy a business and can't make money running it, you're the one to blame and you should sell the hell out and do something else? Please note that besides income, the equity value of the average NBA franchise has more than doubled in a decade. It takes one hell of a lot of losses to cover a 100 percent capital gain.
    There's no structural reason why, say, the Golden State Warriors can't make a profit except the horseshit product they've presented to consumers for 20 years or more.
  11. MacDaddy

    MacDaddy Active Member

    That was my first thought when reading that — Silver missed the whole point. Yes, the league as a whole is profitable, but a significant number of teams aren't, which is where the problem is. The NBA dispute isn't so much owners vs. players (like with the NFL) but owners vs. owners vs. players.
  12. qtlaw

    qtlaw Well-Known Member

    Silver did not miss the point, he focused it on who rightfully should be making the concessions necessary to fix the system; the owners themselves.

    Here's the basic point, if the negotiations are owners on one side v. players on the others, you look at the owners in the aggregate, not individually. Its industry vs. labor. The industry is healthy, they are making profits. The fact that the owners cannot split up the pie they are making so that some don't starve is their own fault, they have the mechanism for correcting that, they've seen in work in the real world, the MLB model. Revenue sharing.

    Why players need to contribute to that simply because they owners cannot help themselves is disingenuous.
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