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View Full Version : A New NBA Revenue Sharing Plan Is Taking Shape



KB-Pau-DH2012
01-30-2012, 05:25 PM
http://sports.yahoo.com/blogs/nba-ball-dont-lie/revenue-sharing-plan-taking-shape-143828186.html

During the NBA lockout, as owners griped about a lack of competitive balance and the large salaries
that cause it, a chorus of observers (including me) opined that the differences in market viability were more likely to be overcome by improved revenue sharing than by cutting the pay of every player. Changing the playing field for all does little to affect small-market clubs relative to their big-market brothers -- there must be major structural changes for such a result to come about.

The NBA decided that revenue sharing would be a topic for post-lockout discussion among owners, not collective bargaining talks. To many (including me), that seemed like a sign they weren't going to cover the issue at all. So we should give credit where it's due and applaud the owners -- especially Celtics owner and plan architect Wyc Grousbeck -- for working out a new system. Talks aren't yet finished, but some details have come to light. Here's the report from John Lombardo of SportsBusiness Daily (via PBT):
When fully phased in by the 2013-14 season, it will see a stunning $140 million in additional revenue sharing coming into play compared with last year, moving money through a complex formula that shifts some of the financial wealth of big-market NBA teams to the league's neediest teams, each of which could receive up to $16 million a year as part of the plan.

Sources said that the core of the plan calls for all teams to contribute an annually fixed percentage, roughly 50 percent, of their total annual revenue, minus certain expenses such as arena operating costs, into a revenue sharing pool.

Each team then receives an allocation equal to the league's average team payroll for that season from the revenue pool. If a team's contribution to the pool is less than the league's average team payroll, then that team is a revenue recipient. Teams that contribute an amount that exceeds the average team salary fund the revenue given to receiving teams.
There are limits built into the new plan to protect high-revenue teams, such as the Celtics, Chicago Bulls, Los Angeles Lakers, New York Knicks, and Orlando Magic, with no team to contribute more than 50 percent of its total profits into the revenue-sharing pool. As is the case in calculating league revenue to determine the salary cap, audits are used to determine team revenue.

The article has many more details, so I suggest reading it in full if you're interested in the issue. And while notions of fairness suggest that revenue sharing should have been discussed in relation to player salaries if owners cared so much about a level playing field, this plan is still pretty significant. As Lombardo notes, the NBA's previous revenue-sharing plan depended almost entirely on the salary's cap luxury tax. This deal is about total profits, including the local TV contracts that make teams like the Lakers so rich. This new agreement could very well make a major difference in the long-term financial viability of a team like the New Orleans Hornets. The same even goes for a small-market playoff mainstay like the San Antonio Spurs, a franchise likely to see a dip in wins as its best players grow older.
It's important not to view revenue sharing as a panacea for what ails these teams, particularly on the court. For instance, Major League Baseball has a fairly robust revenue-sharing structure, but teams like the Pittsburgh Pirates use that check to boost the owners' profits instead of helping the team get better. Nevertheless, basketball is not football, and a bad, poor team can improve itself with relative ease through the draft. Even if bad teams stay bad, the good news here is that revenue sharing will make it easier for well-run teams like the Oklahoma City Thunder to hold on to their best young players when they become free agents. This is a positive development, albeit one that comes with some caveats.

There's still plenty of room to argue about whether or not the owners negotiated in good faith by acting as if this issue and player contracts were unrelated. For now, though, let's point to this good thing that happened and try to hold everyone who gets a big pile of shared revenue accountable to use it properly. Let's not let a good system go to waste.

desertlakeshow
01-30-2012, 06:00 PM
Hate it. Reward bad Owners for being cheap, and punish good owners for spending.

Draft well
Spend well
Manage well
Grow fan base
Enjoy life

Don't be a parasite.

310Casper
01-30-2012, 06:02 PM
Hate it. Reward bad Owners for being cheap, and punish good owners for spending.

Draft well
Spend well
Manage well
Grow fan base
Enjoy life

Don't be a parasite.

Probably the best post this thread will have.

desertlakeshow
01-30-2012, 06:07 PM
And if you disagree and give me some large market babble.

The Raiders, Rams, Kings, Clippers would all love to have a word with you.

Worst idea ever.

nolafan33
01-30-2012, 07:34 PM
It's not about being a bad or good owner, it's about some owners being able to spend a whole lot more than other owners because they have deeper pockets.

Revenue sharing will make for a better more balanced league, do you think small markets in the NFL could survive without revenue sharing? Heck no. Small markets can be successful BECAUSE of revenue sharing, it's why you have New Orleans and Green Bay winning the last two Super Bowls.

SteveNash
01-30-2012, 07:39 PM
It's not about being a bad or good owner, it's about some owners being able to spend a whole lot more than other owners because they have deeper pockets.

Any recent owner knew what they were getting into when they bought the team. If they have a problem they can cut their losses and sell the team.

nolafan33
01-30-2012, 07:43 PM
Any recent owner knew what they were getting into when they bought the team. If they have a problem they can cut their losses and sell the team.

And it will happen to the next owner too, someone who buys a team in New Orleans can't compete with someone who buys a team in New York or Los Angeles.

Are yall even fans of the NBA? Either yall aren't or yall don't understand what revenue sharing is and it's purpose.

desertlakeshow
01-30-2012, 10:17 PM
If the owner does not follow my first post.

Been an NBA fan since 1979.

Your system will turn the NBA into a stinking pile.

nolafan33
01-30-2012, 10:21 PM
So having a more competitive league makes the league worse? What would you call the current state of the NBA where less than 20% of the league can actually contend for a title?

beasted86
01-30-2012, 10:38 PM
So having a more competitive league makes the league worse? What would you call the current state of the NBA where less than 20% of the league can actually contend for a title?

I don't know where fans got the idea that spending automatically equates to winning championships.

Teams like the Knicks, Cavs, Suns, Magic, Blazers, and others have been in the tax plenty times over the past 10 years, and they have no championships to show for it. You as a Hornets fan should even know very well as the Hornets were paying the tax, and they couldn't even get to the Finals let alone win a championship.

The NBA and the media in general have done a very good job throwing wool over people's eyes that this whole revenue sharing and lockout was about competitive balance. It was all about money.

Slug3
01-30-2012, 10:40 PM
So having a more competitive league makes the league worse? What would you call the current state of the NBA where less than 20% of the league can actually contend for a title?

There are some teams out there that dont want to spend anything.

kblo247
01-30-2012, 10:51 PM
So having a more competitive league makes the league worse? What would you call the current state of the NBA where less than 20% of the league can actually contend for a title?

I'm going to be real with you. No BS pie in the sky parity or utopia.

The NBA was built on dynasties and individuals not equality of a chance to win a title. The league was built on Mikan and The Lakers. Then it became Bill and Boston. Then it became West (the freaking logo), Wilt, and Goodrich. Then it went to Bird, Magic, Dr. J, and the Bad Boys. MJ and Scottie led the way with the Bulls, mixed with a sprinkle of Hakeem. Kobe,m Shaq, and Duncan carried the load.

The NBA has always been about a collection of dynasties ruling. Then you have a group of perennial contenders like Dirk, Miami, Nash and the Suns, Malone and Stockton, Run TMC, Reggie Miller's Pacers, Ewing's Knicks, Dwight's Magic, T-Mac's Magic, Iverson's Sixers, Jail Blazers, Webber's Kings, BArkley's Suns and so on. Sure two of them popped off a title but their role has always to be competitive and win 50 games, make the second round, and sell some tickets and jerseys while appearing at all star weekend.

Lets be real that is how that league survived. That is how this league generates more per player than any other league and why fans flock in and identify with the guys faces often times as much as they do the name on the front of a jersey.

Like wise there will always be penny pinching owners like Michael Jordan who cripple their own team to stay under the tax number at the cost of acquiring talent just so he can get a handout. There will always be guys like Sarver who leverage their future and sell every pick they have while not wanting to guarantee their marquee guy and then ***** when they leave. There will always be kiss ***** like Gilbert who bend over and let a player's ego build to the point they can't control them because of bad decisions and then cry when they leave their ***. There will always be idiots like Otis who makes dumb move after dumb move as GM

There will always be smart owners who have no choice but to manage their team well because they have no other income like Jerry Buss. There will always be owners like Dolan who will throw money at every problem and pay when the **** blows up in their face to they get it right. There will always be a guy like Cuban who will gamble and try to get the right pieces and pay the cost happily because he loves his team and winning

Just be accountable and accept what the league is, was, and always has been. You are a fan of it and it should know what is about and how it really is by now

nolafan33
01-30-2012, 10:59 PM
I don't know where fans got the idea that spending automatically equates to winning championships.

Teams like the Knicks, Cavs, Suns, Magic, Blazers, and others have been in the tax plenty times over the past 10 years, and they have no championships to show for it. You as a Hornets fan should even know very well as the Hornets were paying the tax, and they couldn't even get to the Finals let alone win a championship.

The NBA and the media in general have done a very good job throwing wool over people's eyes that this whole revenue sharing and lockout was about competitive balance. It was all about money.

Teams are over the tax because they have to overpay to attract guys to their cities. Everyone wants to play in New York, LA, Chicago, Miami, etc. Being a Hornets fan, I know if the Hornets pay a guy 5M more than what one of the above listed teams that guy probably won't choose the Hornets.

That's why just say "spend wisely" is way to simple. With the way the NBA is today, you can't spend wisely and put a good product on the court. You either have to play in a big market, or get lucky through the draft (SA, OKC, etc) to be competitive. If you spend your time trying to spend wisely, your going to end up in the lottery every year. And then without revenue sharing, you can't afford to hire the top scouts and such that the above teams can, and your going to draft busts.

Though your last paragraph, I could not agree more. I do think revenue sharing will help the league be more competitive, but I also feel like the lockout was about money, and in the end some of the issues that were discussed will fail and the NBA will just say "eh, well we tried."

Your a Heat fan. As you saw tonight, the talent level across the board on our two teams is why the NBA is the worst run professional league in sports. You have guys that are coming off your bench and getting limited minutes that would easily start for the Hornets and plenty of other teams. And what kills me is that the players were against profit sharing, franchise tags, and anything that would allow the NBA to have competitive balance in the league. Why as a competitor would you not want to feel the team you play for has a chance to win a championship every season? I don't think the players in this league are smart enough to realize that they all can't play for the same 4-6 teams. I think pre-revenue sharing the good players knew they would just wind up on the large market/better teams, and a wide number of others players are just happy to get pay checks.

I mean, I know the NBA has been dominated by the same teams for a long time. But honestly, who cares? Things can change, and honestly we're entering a time where they NEED to change. What would you rather see. Four or five "super teams" who can only win the title, or a league where going into the season half the league (if not more) can win the title?




There are some teams out there that dont want to spend anything.

Sure, but that's in every sport and it's a small number.

kblo247
01-30-2012, 11:09 PM
Why would a player want a franchise tag ever? They have restricted free agency already in which a team can match an offer sheet and force them to stay someone for four more years against their will.

Restricted free agency is why guys like LeBron, Wade, Melo, Paul, Deron, and Dwight all signed their extensions years ago anyhow. It is why Durant signed his and why they paid Westbrook.

Players don't want to just be stuck in a city with no owner like NOLA or with a crap owner who penny pinches over trying to win like Sarver and Jordan. They also don't want to play for the likes of Gilbert who goes on a media tangent and write letters and emails to belittle them. A lot of reasons that players don't want to sign with these teams or stay with the ones who drafted them are self inflicted from bad management due to either selling away talent and picks or broken promises to bring in this guy or that guy. That **** piles up and guys have enough after 7 years.

7 years.

7 years pass and you enter your prime and lose out on it and possibly your peak years

mekedubs
01-30-2012, 11:35 PM
I fully thinking you contract, take away a few teams, then you will see a more balanced league... I'm sorry, but teams like the Bobcats, Raptors, Hornets and a couple of others will always be bad unless they relocate to a bigger market...

valade16
01-30-2012, 11:40 PM
Hate it. Reward bad Owners for being cheap, and punish good owners for spending.

Draft well
Spend well
Manage well
Grow fan base
Enjoy life

Don't be a parasite.

I mean, everyone knows the Knicks have one of best owners in sports, that's the REAL reason they're worth so much and so popular and has nothing to do with the fact they're in NY :rolleyes:

desertlakeshow
01-31-2012, 12:54 AM
I mean, everyone knows the Knicks have one of best owners in sports, that's the REAL reason they're worth so much and so popular and has nothing to do with the fact they're in NY

your proving my point, the knicks suck and they are the largest market team.

valade16
01-31-2012, 01:12 AM
I mean, everyone knows the Knicks have one of best owners in sports, that's the REAL reason they're worth so much and so popular and has nothing to do with the fact they're in NY

your proving my point, the knicks suck and they are the largest market team.

Haha, I completely missed your point! Oh man, I'm an idiot! Disregard what I said, I agree with you 100%!

JLynn943
01-31-2012, 01:46 AM
"Spending wisely" isn't so easy when you have no choice but to overpay to get players to play in your city. Small market teams tend to live off of their draft picks, which wouldn't be quite as bad if the worst teams actually got the best picks (not the BS lottery system). Still though, that just keeps them afloat in most cases. Drafting alone can't build an entire team, you need to sign players at some point. So, when it takes an extra year or an extra couple of million to get someone to sign, that hurts the team by bogging down their money/cap space the same that it helps the team compete. It's a pipe dream to believe otherwise and only blame the owners (who certainly still share some of the blame).

beasted86
01-31-2012, 02:10 AM
@nolafan33

None of what you say is accurate. Nobody wants to believe it but Miami is not a big market team. They are a middle-pack market. I've been watching this team since it was started, and there were never these ludicrous, cap crippling, ****** contracts being given out by our owner... simple as that. Never had 1 playoff appearance in a 20 year period or anything like that... Never sold away all our draft picks like they carried disease like some of these f-ing idiot GMs do.

We've missed out on a ton of all-star free agents, from Juwan Howard to Elton Brand and others. We've had our franchise player while in his prime go down with kidney disease... and guess what... we never had playoff droughts like the Warriors, Clippers, Knicks, Wolves, and others of recent years that went over 5 years without a playoff appearance.

It's time to hold ownership accountable for not choosing the right management, coaching, and player development within their organization. It's not always about big market vs. small market.

beasted86
01-31-2012, 02:16 AM
"Spending wisely" isn't so easy when you have no choice but to overpay to get players to play in your city. Small market teams tend to live off of their draft picks, which wouldn't be quite as bad if the worst teams actually got the best picks (not the BS lottery system). Still though, that just keeps them afloat in most cases. Drafting alone can't build an entire team, you need to sign players at some point. So, when it takes an extra year or an extra couple of million to get someone to sign, that hurts the team by bogging down their money/cap space the same that it helps the team compete. It's a pipe dream to believe otherwise and only blame the owners (who certainly still share some of the blame).

Well explain the issue of sustaining success in New York, the SF Bay area, and LA (Clippers)... just to name a few. I just named 3 of the 6 biggest markets in the US, who have 3 combined playoff appearances in the past 10 years.

mngopher35
01-31-2012, 03:08 AM
Dont think about the success each team has had think about the revenue they bring in. I dont know the number but my guess is those NY teams spent a lot on bad players and still had the revenue coming in, because its new york. Some citys dont have that luxury...

lakers4sho
01-31-2012, 03:46 AM
Dont think about the success each team has had think about the revenue they bring in. I dont know the number but my guess is those NY teams spent a lot on bad players and still had the revenue coming in, because its new york. Some citys dont have that luxury...

which proves the point that this entire "competitive balance" thing is ********...it's all about the money, crap owners wanting free handouts

JLynn943
01-31-2012, 01:54 PM
Well explain the issue of sustaining success in New York, the SF Bay area, and LA (Clippers)... just to name a few. I just named 3 of the 6 biggest markets in the US, who have 3 combined playoff appearances in the past 10 years.
The owner still matters. You can be a bad owner in a big market.


@nolafan33

None of what you say is accurate. Nobody wants to believe it but Miami is not a big market team. They are a middle-pack market. I've been watching this team since it was started, and there were never these ludicrous, cap crippling, ****** contracts being given out by our owner... simple as that. Never had 1 playoff appearance in a 20 year period or anything like that... Never sold away all our draft picks like they carried disease like some of these f-ing idiot GMs do.

We've missed out on a ton of all-star free agents, from Juwan Howard to Elton Brand and others. We've had our franchise player while in his prime go down with kidney disease... and guess what... we never had playoff droughts like the Warriors, Clippers, Knicks, Wolves, and others of recent years that went over 5 years without a playoff appearance.

It's time to hold ownership accountable for not choosing the right management, coaching, and player development within their organization. It's not always about big market vs. small market.
Not everybody is lucky enough to draft a player like Wade. That doesn't mean management is bad though. Geoff Petrie has proven to be a good GM through putting together championship-caliber teams in the past, but they simply don't have the money necessary to attract players to Sacramento anymore and Petrie is now stuck.

The NBA isn't as perfect of a market as some people seen to think.

Hawkeye15
01-31-2012, 02:04 PM
Hate it. Reward bad Owners for being cheap, and punish good owners for spending.

Draft well
Spend well
Manage well
Grow fan base
Enjoy life

Don't be a parasite.

Only using the Knicks as an example, so chill out Knicks fans. They were run pathetically for years, yet still turned in huge profits. Not every big market team can be the Lakers, and put out great teams, and not every small market team can be the Thunder.

Hawkamania
01-31-2012, 02:11 PM
Hate it. Reward bad Owners for being cheap, and punish good owners for spending.

Draft well
Spend well
Manage well
Grow fan base
Enjoy life

Don't be a parasite.

This pretty much sums it all up. Great post.

valade16
01-31-2012, 02:13 PM
Only using the Knicks as an example, so chill out Knicks fans. They were run pathetically for years, yet still turned in huge profits. Not every big market team can be the Lakers, and put out great teams, and not every small market team can be the Thunder.

Exactly. People don't understand the money goes a long way towards competitive balance.

For each team there are 2 types of fans (generally), the hardcore fans and the casual fans.

The difference between NY and say Portland is while there might be close to the same number of hardcore fans, there are millions upon millions more casual fans.

This is where the unbalance starts to play out. The Knicks (again, only using them as an example) can be terrible forever and still turn a profit, the Blazers simply cannot do this.

Hawkamania
01-31-2012, 02:18 PM
Only using the Knicks as an example, so chill out Knicks fans. They were run pathetically for years, yet still turned in huge profits. Not every big market team can be the Lakers, and put out great teams, and not every small market team can be the Thunder.

And that's certainly true, but I believe there's a healthy median for every franchise that can be found. Sad thing is, we see so many falling to one side or the other, regardless of resources or lack there of, that we have very few examples of well run franchises.

topdog
01-31-2012, 02:25 PM
Let's not forget that this is going to be working in combination with the new CBA which forces teams to spend a higher minimum payroll and limits player movement.

This is going to put an emphasis on acquiring guys when they are either young or under contract (the seller can force a price) in order to re-sign them and will leave guys looking for big contracts with options that are not loaded teams.

topdog
01-31-2012, 02:32 PM
We've missed out on a ton of all-star free agents, from Juwan Howard to Elton Brand and others. We've had our franchise player while in his prime go down with kidney disease... and guess what... we never had playoff droughts like the Warriors, Clippers, Knicks, Wolves, and others of recent years that went over 5 years without a playoff appearance.


3 of the 4 teams you mentioned are Western Conference teams which brings up another issue - competitive balance between the East and West. Sub-.500 teams can make the playoffs out East while .500+ teams fail to make it in the West. Playoffs mean extra revenue. Why should owners of mediocre Eastern Conference teams be rewarded with extra revenue for putting together a half-assed team in a sub-par conference?