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Daily Archives: November 7, 2011

Brainstorming Ideas for New CBA in the NBA

I have no illusion that anyone can “solve” NBA lockout mostly because IMHO lockout is not about “fair shares” or “equal partners” or anything like that but it’s a negotiating tactic in a battle of wills.
It’s like two people pulling rope in an opposite direction, there’s no right or wrong there, it’s simply about which one of them is stronger and/or better skilled etc.
So I write this post simply as a way to present [and hopefully discuss] some CBA-related ideas…

Tackling NCAA vs NBA puzzle

NBA’s “solution” is simply to raise the age limit to enter NBA draft which IMHO is ridiculous on many levels but I shouldn’t commit the sin of attacking someone’s ideas without offering alternatives of my own so…
Everyone after high-school [or 18 years old] can enter NBA draft but with this wrinkle:
if they are drafted their new team can assign them to NBDL with max salary set for example at 50-150k$ per year range [depending on draft position] and paid by NBA team. This situation can last up to 3 years and every season in NCAA would shorten that max by one year. If a player is called up from NBDL to NBA his salary becomes typical rookie scale contract and it can’t be lowered again to previous value.
So to sum up, players could earn money playing basketball in the USA right after high-school but it wouldn’t hurt NBA teams financially and there would be a very strong incentive to stay in the NCAA if someone was not ready to contribute in the NBA right away.

Which side would be screwed in this scenario?

Seriously, Why Team’s Prices aren’t a Factor in this CBA?

Even though I wrote about this topic on July 6 thanks to a very informative interview with economist Rodney Fort on Wages of Wins I think I finally put a finger on two things: what’s technically wrong with Roster Depreciation Allowance from player’s point of view even though it’s perfectly legal procedure and how to easily fix it.

From league’s financial point of view every change of ownership creates huge losses and zero revenues.
The first part is understandable for everyone involved [again, I highly recommend that podcast] but I think the second part should be under heavy attack from NBPA. Why? Thanks to league’s growth and/or player’s actions someone earned hundreds of millions and league have nothing to show for it? What?
What’s more, EVERY change of ownership is actually hurtful to player’s bottom line? Again, whaaaat?!

You can find all those ownership changes here but I think this one couldn’t be more fitting:
in 2001 Howard Schultz bought a majority of Seattle SuperSonics for around 250M$ [adjusted for inflation].
5 years later [not a coincidence by the way, before 2004 RDA could be used for 5 years!] he sold it to Clay Bennett for around 380M$ [again adjusted for the inflation].
Here’s the catch: in the NBA books you probably could find both of those prices as a cost spread out over longer period and you couldn’t find anything about really impressive profit earned on this change of hands!

As far as I know every such transaction in the NBA has to be approved by them…
so why not create a 10-25% tax from every such transfer and put it into the BRI?
Shouldn’t NBPA fight over that and not over every percentage point of BRI?
Especially when you consider information like this tweet from Larry Coon: my guys have boiled it down to a formula — X points in BRI means $Y increase in average franchise value.

Owner’s incentives to increase team’s revenue

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1 Comment

Posted by on November 7, 2011 in Unanswered Questions

 

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