Impending NBA Lockout Watch

[Kevin Ollie]

This article is so spot on in pointing out how Adam Silver is already laying the groundwork for a lockout in the future.

http://www.sbnation.com/2015/7/15/8969953/set-the-nba-lockout-countdown-clock-again

The end of this article has just a great, great quote showing the garbage that Silver is already talking.

And I think most fans recognize that to the extent that these guys have a special and unique talent that are being rewarded by the marketplace. It's very difficult to make value judgments. I'm like any other fan when I say, oh, my God, I can't believe that compared to a teacher or doctor or someone else. But we live in a market economy. So that's how values are set.

Right, I'm supposed to feel sorry for the billionaire jack-off owners because players aren't as valuable as teachers.
Number of billionaires in the world: 1,826
Number of NBA players in the world: 447


Here's the press conference from the Board of Governors meeting:
http://www.nba.com/video/channels/nba_tv/2015/07/15/20150714-silver-open-statement.nba/

 

[Mdog1]

I almost always take the players side, especially when it comes to money.

But the rate of growth that is about to happen is completely unsustainable going forward. It needs to be reigned in, not just for the players playing today, but for the future players.

If this is a bubble, and most things in capitalism are, then when the bubble bursts, and god forbid the cap drops 20 million, then there is going to be some major reprocussions for a lot of teams, and that could include the team not being able to pay the players.

 

[theSTEREO.]

Some more perspective:

View: https://twitter.com/zachlowe_nba/status/621356509797036033

View: https://twitter.com/zachlowe_nba/status/621356630886617088

View: https://twitter.com/zachlowe_nba/status/621357269511352320

View: https://twitter.com/zachlowe_nba/status/621357507722620929
View: https://twitter.com/patrick_fenelon/status/621358213791780864

 

[gourimoko]

I almost always take the players side, especially when it comes to money.

But the rate of growth that is about to happen is completely unsustainable going forward. It needs to be reigned in, not just for the players playing today, but for the future players.

If this is a bubble, and most things in capitalism are, then when the bubble bursts, and god forbid the cap drops 20 million, then there is going to be some major reprocussions for a lot of teams, and that could include the team not being able to pay the players.

Wha??

 

[Mdog1]

The housing market called gour, they want your emoticon.

There is ebbs and flows to everything, if it so happens that we hit a bad period, it will kill some teams. Even in the past decade we have an example of the cap taking a step back, although minor. If that were to happen with the cap explosion, instead of a million, it might be 10 million.

For the Cavs it would be a good thing, as we could potentially fleece a team trying to avoid the tax, but for the majority of teams, it is a losing proposition.

At the end of the day, I hope the players win these negotiations, and we don't miss any games.

 

[gourimoko]

The housing market called gour, they want your emoticon.

The housing market wasn't the primary factor in the financial collapse (if that's what you're saying); that's propaganda and misinformation put out by Wall Street.

The primary factors were speculative financial instruments that included over-the-counter trade derivatives like credit default swaps. Had it not been for this degree of speculation, the housing bubble's collapse would not have caused anywhere near the level of global recession we incurred (and, worldwide, is not the direct cause of the financial collapse).

This hasn't really to do with "capitalism" but unfettered, completely deregulated capitalism coupled with lack of oversight and literal corruption in the federal legislature (Congresspersons were bought off by Wall Street lobbyists).

So again, there isn't anything wrong with "capitalism" per se, but instead corruption that leads to unfettered and completely deregulated capitalism in it's most absolute form.

There is ebbs and flows to everything, if it so happens that we hit a bad period, it will kill some teams. Even in the past decade we have an example of the cap taking a step back, although minor. If that were to happen with the cap explosion, instead of a million, it might be 10 million.

Again, I'm not sure how the NBA should insulate itself from the international economy. They take in revenue, and the owners, players, and the league share in that revenue.

Arbitrarily reducing the degree to which the cap increases in a vain attempt to shield the league from an unpredictable future financial collapse is a hard sell to the players union who are only advocating getting a larger share of the pie.

For the Cavs it would be a good thing, as we could potentially fleece a team trying to avoid the tax, but for the majority of teams, it is a losing proposition.

What is a losing proposition? A higher salary cap? The salary cap represents the revenue stream the NBA is bringing in. If the NBA makes more money, the salary cap is adjusted. I'm not sure I understand you position or how an increased salary cap is bad for the majority teams?

At the end of the day, I hope the players win these negotiations, and we don't miss any games.

Agreed.

 

[Futuredome]

There was a bubble during the Y2K refit in Corporate bonds, that is what drove the housing bubble as a economic boom for the non-residential investment sectors. By the late 90's, individual borrowers were so confident, they asked for a ton of debt. Rising interest rates also helped spur more debt creation in 99-00 as borrowers tried to race against the clock. The problem was, it created abnormally high growth for a economy just beginning to age a bit. When the Corporate Bond bubble blew up in 2000 post-Y2K, that sent money fleeing into housing by late 2001, creating a situation where the high was so good, you would do any kind of fraud to keep it going until you could not.

Capitalism needs consistent debt expansion to survive. If that debt expansion doesn't happen, the system doesn't look so hot. The US won the cold war, not because capitalism is some kind of amazing system, but because of debt and the government servicing that debt during crisis.

The NBA can't keep on going at the current prices and it isn't growing enough to keep up the party. This is a big problem behind the post-Jordan NBA that slowly bled money and led to the 2011 lockout, which the owners wimped out on. They can't again.

 

[OldManRemy]

The video I'm going to embed at the end of my post doesn't directly relate to a potential lockout but it makes me think of pro sports in general. Teams claim they are losing money, owners threaten to move teams all the time (each league has a city without a team that is used in these threats as collateral against teams at risk of losing theirs), and the whole facade of pro sports in general is wearing thin at times (despite the fact we love the game).

I hear Las Vegas has an arena underway for an expansion NHL team. If they get that team, the arena could easily double as a basketball arena. Seattle also wants an expansion NHL team. If they land it, that arena will also have the ability to double as a basketball arena. Then you hear news that NBA commissioner Adam Silver says "many teams are losing money." Yet if you look at the stadium game, cities are still trying to build stadiums in order to gain a team or lure a team away from another city. I think if the whole business model was busted and unsustainable, nobody in their right mind would want to enter the fray if hemorrhaging money was a foregone conclusion. Nobody enters business to fail and if businesses, even an industry have a long term track record of losing money, it disappears. A poster on RealGM spoke of how there was a big scandal involving a publicly funded arena (taxpayer dollars) in Canada that ended terribly. Now more arenas are built with private funds. Imagine a Canadian city like Vancouver trying to get a team again. Imagine them trying to lure the NBA with the rationale they can make a state-of-the-art arena with private funds, instead of public funds to avoid the bitter/brutal political fight that ensues with the public-funded model. Either cities cough up the dough or move. Yet the demand for NBA teams in various cities seemingly smacks against the logic that "all these teams are losing money." You have to question if business is truly as dire as what gets reported.

Without further ado, the video from last week about pro sports and stadiums:

View: https://www.youtube.com/watch?v=xcwJt4bcnXs

 

[Fantomas]

I watched that video a few days ago and it is EPIC.

 

[Birdy89]

There is ebbs and flows to everything, if it so happens that we hit a bad period, it will kill some teams. Even in the past decade we have an example of the cap taking a step back, although minor. If that were to happen with the cap explosion, instead of a million, it might be 10 million.

The projections now show the cap jumping to $108 million in like 3 years, and then dropping back to $100 the year after and staying relatively flat from there forward for a while.

That sort of thing is going to cripple franchises that sign max guys in the next few summers as guys like Lebron would be getting yearly 7% raises in an environment with a static cap for years on end. It will kill free agency.

There almost has to be a lockout because the system has to change because it is not set-up to operate in an environment where revenues stay flat. There is a huge 2 year influx, and then jack for the rest of the tv contract based on projections. That's not going to work for anyone.

I have no pity for the owners and usually side with players, but if they've got dreams of increasing their share of the BRI they had better start saving their money now as it will be a long lockout.

The new TV money is being split already, and hanging your hat on increasing franchise values is a road to nowhere since it doesn't mean a damn thing to the owner unless they sell the team. It's great franchise values are increasing, but that doesn't generate new money on it's own.

Billionaires will always outlast millionaires in a negotiation, and can afford to take a longer/bigger picture view than players who have a finite window to make money.

Their was always going to be a lockout, but when the cap smoothing thing flamed out it basically ensured that there was no chance of avoiding a stoppage because the back end years won't work for anyone because of the upfront influx of money.

How they work that out will determine how lengthy the lockout is.

 

[theSTEREO.]

Howard Beck with a pretty insightful article. Thinks a lockout is highly unlikely, and his reasoning is pretty sound.

Influx of Money Across League May Not Guarantee NBA Labor Peace, but It Should