Primarily because of their massive local television contracts, the Lakers and Knicks end up putting money every year in a pool for smaller market teams as part of a revenue sharing plan. Los Angeles and New York aren’t alone (they just pay the most), but there is a pool of money every year that flows to smaller markets in an effort to balance the playing field. Billionaire NBA owners that publicly loathe “socialism” in every other aspect of their business accept it in the NBA, understanding the need to have some balance and parity.
The level of revenue sharing may go up when the new CBA kicks in (either 2023 or 2024, depending on opt-outs and negotiations).
In a story about the succession plan in New Orleans to keep the Pelicans in town, Jeff Duncan and Lee Zurik of the Times-Picayune have an interesting quote from the Pelicans’ president, who had spoken to NBA Commissioner Adam Silver.
Adam Silver has told New Orleans Pelicans president Dennis Lauscha that the next collective bargaining agreement will have “an enhanced revenue sharing model” to benefit small market teams.
“He’s very happy with what we’re doing in this market,” Lauscha said. “He’s actually bullish. He thinks a lot of things could land in our favor (in the new CBA). We’re going into this very optimistically.”
What that means is unclear, and while it may be what Silver envisions it has to be negotiated — the Lakers and Knicks are not looking to just throw more of their local revenue in the pot for fun.
That extra revenue would boost the bottom line of a number of teams that operate each season on the edge of even (or a little bit below, for just that year, although increased franchise valuation and other things are not factored into that number).
New Orleans is one of those teams. When speculation around the league starts on what franchise could be the first to move, the Pelicans always come up quickly. New Orleans is the second smallest market in the league, as a sports town the Saints and college football dominate, and the Pelicans gate receipts and local revenue have long been an issue. Owner Gayle Benson has made no indications she plans to sell or try to move the team, and she now has a succession plan in place to keep the Pelicans from flying away, but that will not stop the speculation.
More money from revenue sharing would be a boost to the Pelicans, although ultimately, a new stadium is what is called for. Still, New Orleans and a lot of teams would welcome a little more money from the big boys every year.