Tag: revenue sharing

Suns Robert Sarver

Report: By the way, the revenue sharing plan is also a fail

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Lost in the madness that was Thurday’s breakdown in CBA negotiations and the subsequent tommy-gunning by the union was the fact that the Board of Governors received those proposals on revenue sharing Thursday. Sometime in between evening coffee and deciding to let Paul freaking Allen and Dan freaking Gilbert be their representatives to the union (the single dumbest decision in this lockout – and I’m counting JaVale McGee denying comments he gave to reporters with recorders in front of his face and Matt Barnes shoving someone in an exhibition game), the owners heard the revenue sharing plans.

And according to Yahoo! Sports, one of them is not so good. It is a fail.

What’s more, Celtics owner Wyc Grousbeck presented a revenue-sharing plan that, sources said, left some in the room confused and uncertain. There was hardly a united front walking out of the room on how that would work, on how it would benefit the league.

via Blazers’ Allen sets fire to labor talks – NBA – Yahoo! Sports.


You’re familiar with the Saturday Night Live sketch series involving Harry Caray, yes? (Miss you, Harry.) For this episode, allow me to bring you a rundown for this as if I were Will Ferrell. That’s right, this is me, being Will Ferrell, being Harry Caray. It’s a Saturday morning during day eleventy-billion (not a number, yet) of the lockout. What do you want from me? Forget it, I’m rolling. (At this point this post is just a pop culture reference generator. Let’s just move on.)


Hey, next time, why don’t we have someone who actually needs the revenue sharing money work with someone who has the money to come up with a plan. Stick Jeanie Buss and Robert Sarver in a room and get a plan. OK, to be honest I’m just suggesting Sarver so he’s pre-occupied while negotiations continue. My next plan is to task Dan Gilbert with planning the meals for the Board of Governors for the next… let’s see… ah, yes, seventy years.

Report: Either the big cities or the players will have to placate the small markets for progress to be made

Dan Gilbert

We’ve known there are rifts inside the NBA labor strife on both sides for a while. Agents are plotting against Billy Hunter while smiling at him over video conferences. Owners are meeting furiously among themselves due to disagreements on how things should be handled. But after Saturday’s up and down news (“There’s progress but not much and we’re meeting but not until Monday and we’re not canceling games but we might really soon”), a report from CBS indicates that there’s a singular pull: small market owners. They’re going to get their cut, one way or another.

Under the owners revenue-sharing proposal, the Lakers would contribute about $50 million and the Knicks $30 million toward an initial pool of $150 million, sources said. There is reluctance, according to one of the people familiar with the talks, on the part of small-market teams to increase the players share of BRI to beyond 50 percent without a stronger commitment from the big-market teams to share more — and to share more quickly in the first year of the deal. Some big-market owners are pushing for a more gradual phase-in of their increased sharing responsibilities and are reluctant to take the hit this coming season, one of the people with knowledge of the talks said.

via Stern: Were closer than we were before – CBSSports.com.

So there you have it. Either the big markets are going to bail out the little engines that couldn’t, or the big bad wolf is going to blow down the million dollar house until the piggy brings out the bacon. Something like that. In essence, there’s pressure on both sides. The big market owners have been cooperative so far, offering up the revenue sharing, including quadrupedaling  the amount currently shared, and sitting by while the small market owners threaten seasons those big market owners have invested in, heavily. The players have bent on BRI, have bent on systemic changes, have said there needs to be help for those franchises. But the small market owners want more. They want to be sure that they can never be faced with losing money again. Because, you know, that’s usually how business works in a capitalist society. Everyone wins, right?

What’s perhaps more stunning is how risky a strategy this is. Let’s be clear. If the large market owners, who were doing just fine under the previous deal, by the way, decided to get with the players and hammer out an agreement that benefited their respective sides, the small-market owners would be excluded. The hard liners may have the majority for now, but how quickly does that change when Jerry Buss, James Dolan and Jerry Reinsdorf jump ship and commissioner Stern starts applying pressure to the mid-level markets? Nonetheless, it’s been the extremist owners running things so far. And for the foreseeable future, it looks like losing games is going to be the cost of this pout session.

NBA says “You want revenue sharing? We’ll give you revenue sharing! All revenue sharing everything!”


Since the beginning of the NBA lockout, revenue sharing has been a huge issue. When you have an entity locking out its employees, and you have a massive disparity between the rich contingents and the poor contingents within that entity, naturally the employees are going to ask “Why don’t you just redistribute some of that wealth among yourselves, like the other leagues do?” For years, literally years, the NBPA has maintained that the best way to recover the losses for the owners in the recession is through revenue sharing. The league has insisted that that is an owners’ issue, and not a players’ issue, and would not be part of the conversation. But eventually, that has relented, and on Friday, we got the first indications of what that plan might look like. And geez, Louise, did they ever decide to attack the problem with fire and brimstone as David Stern has promised they would.

From Ken Berger of CBSSports.com:

The only progress described by anyone Friday other than the fact that theyll meet again Saturday was the state of the owners revenue sharing plans. Stern revealed for the first time that the league is prepared to triple the current revenue sharing pool in the first two years and quadruple it starting in the third year.

But even that issue is clouded in big-market, small-market politics and the issue of when the high-revenue teams will begin to substantially increase their sharing. According to two people familiar with the owners revenue sharing plans, the Lakers and Knicks would be called upon to pay the lions share — with the Lakers paying roughly $50 million and the Knicks $30 million — into the new pool. But some big-market teams are increasingly reluctant to share their growing local TV revenues; the Lakers, for example, recently signed a 20-year, $3 billion deal with Time Warner that dwarfs some teams total revenue.

via Star power stirs up NBA talks – CBSSports.com.

That’s daring. That’s substantial. That’s borderline insane. To be clear, the revenue sharing doesn’t just increase the first two years. From NBA.com’s David Aldridge:

And rev sharing will quadruple every yr forward from yr 3, meaning at least $240M/yr thru deal. Yr 1: $180M, moving toward 240 in Yr 2

via Twitter / @daldridgetnt: And rev sharing will quadr ….

That’s a boatload of money. I mean that’s an epic tonnage of money that is being moved from the big markets to the small. I’m one of the staunchest supporters of revenue sharing you’re going to find and even I think that’s really far, if not too far.

But more importantly, for the fans, who don’t really care that much about parity or revenue sharing’s effect on it, this represents a huge “OK, now what you got?” from the owners. The players said they needed a revenue sharing plan. The league gave them one. Dwyane Wade may have freaked out over David Stern’s finger, but this revenue sharing plan’s totality may be the biggest finger the league can give the players and their reluctance to deal on the economic issues.

The players are getting some of the things they want out of this deal. Now it’s time to see what they’re going to have to surrender.

As NBA slides toward lockout, owners talk revenue sharing

NBA Commissioner Stern holds a news conference before Game 1 of the NBA Finals basketball series between the Dallas Mavericks and the Miami Heat in Miami

In negotiations that have had a lot of sticking points — percentage of Basketball Related Income (BRI), hard cap — one of the other big ones has been revenue sharing.

The owners know they need to address it and David Stern has called the discussions on the topic “robust.” The players think it is an essential part of the current CBA negotiations — why should the players take massive salary cuts to make the league profitable when the owners of big market teams do not share much of their revenue with struggling smaller markets?

The NBA owners’ planning committee is discussing the issue Monday via conference call, and the owners will talk about it again when they meet Tuesday in Dallas. Ken Berger at CBSSports wrote about revenue sharing talks.

But a key tipping point in bargaining could be what revenue-sharing details the owners come forward with this week. Owners have long rejected the players’ request that revenue-sharing be collectively bargained, but the players believe many of the issues owners have addressed with regard to improving competitive balance could be satisfied by redistributing revenues from successful to struggling teams…

It has been difficult for the NBPA to justify the massive salary reductions the league is seeking without knowing how owners plan to address this enormous disparity among teams. One option at the NBPA’s disposal would have been to file a request with the National Labor Relations Board seeking a ruling that revenue sharing should be a “mandatory subject” of collective bargaining. Sources say union officials have opted not to go this route and instead have trusted the owners to come forth with an effective and transparent approach to getting their own financial house in order before getting further salary concessions from the players.

How big is the disparity?

In the NFL — the gold standard for revenue sharing among professional sports — about 70 percent of what is considered football related income is shared (which is an issue because that used to be more than 80 percent just a few years back). In the NBA, that number is about 25 percent. That NFL number is driven largely by the massive national television contracts the league has. (Numbers via EightPointsNineSeconds.)

Or look at it this way, The Lakers new local television contract that kicks in next seasons and will pay them upwards of $150 million a season, which is more than some teams will make in total revenue in a season. Yet, under the current system the Lakers have to share none of that money.

It’s an issue the owners need to deal with. Big market owners have valid concerns that if they share more money that needs to be invested back into the business and not just pocketed by owners.

The question is — should the revenue sharing between owners be part of the CBA negotiations? The players say yes, the owners no. It’s just another in the long line of sticking points between the two sides that makes a lockout inevitable.

Portland owner, one of world’s richest men, complains about NBA finances

Paul Allen

For some context, Portland Trail Blazer owner Paul Allen is worth $13 billion dollars according to Forbes. That would make him the 21st richest man in the United States. Which is the kind of money you get when you are one of the founders of Microsoft. Put it this way: When it was time to interview Rich Cho for the Trail Blazers’ GM position, Allen few Cho out to do the interview on his yacht in Helsinki, where he was vacationing.

So when Paul Allen complains about the economic system in the NBA it’s not that he can’t afford it. It’s that he feels he shouldn’t have to.

And in his new biography — with the NBA parts reviewed at Blazers Edge — he complains not about the salary cap or percentage of Basketball Related Income, he complains about revenue sharing. You know, the things the players union keels bringing up.

Allen also goes into a fair bit of financial detail about the Blazers. He says he purchased the team for $65 million after making a “handshake deal” with previous owner Larry Weinberg and that he sunk “more than a half billion dollars in the franchise” prior to filing for bankruptcy to restructure the Rose Garden deal.

By the end of the chapter, Allen is advocating for a more level playing field between small market and big market teams. “We’re doing just about everything right, but we’re still losing money,” Allen writes. And, due to contract extensions for Brandon Roy and LaMarcus Aldridge, the Blazers “won’t be turning a profit anytime soon, a fact that speaks volumes about the plight of smaller-market franchises in the NBA.” He points out that the NBA has yet to address the “big market / small market discrepancy” in revenue generating potential and says that in his “perfect world” the NBA would be a place where “the most successful NBA teams wouldn’t necessarily be those with the biggest local television markets or corporate-suite bases.”

Perhaps most interestingly, Allen says that he met with NBA commissioner David Stern in New York City when the Rose Garden was in bankruptcy to discuss his options. Stern’s response: “Well, you can always sell your team.”

Allen is a private person who doesn’t talk much, but is now. He did a long sit down with the Oregonian talking about the book and more — why he had to have the team file bankruptcy to get out of the Rose Garden deal, his relationship with Clyde Drexler, why Qyntel Woods disappointed him, and even Greg Oden’s knees. It’s worth a read.

In that interview he sounds more like one of the owners who is looking for this new Collective Bargaining Agreement change the economic playing field for small market franchises. But he realizes revenue sharing has to be a part of that. And David Stern said that was discussed frankly by owners at the last Board of Governor’s meeting. But that is very, very different than having a consensus.

Allen could use that economic change and some revenue sharing cash, because he is locked into Brandon Roy for a long time now.

One other interesting line that Blazers Edge pulled out.

Allen on Michael Jordan: “I’ve seen just one other person up close who compared to him, who wanted not only to beat you but to crush you if he could. Those two stood apart for raw competitiveness: Michael Jordan and Bill Gates.”