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Paul Allen sucks wang

WallyWorld wrote:
Paul Allen can get bent.

Blazers’ Allen sets fire to labor talks

For those who haven't given Billy Hunter a listen on the BS report:
sports.espn.go.com/espnradio/podcast/archive?id=2864045

I was in the airport yesterday for 4 hours so naturally, what any sane person would do, I listened to the Stern/Simmons podcast from August and followed it up with the Hunter one.

One MAJOR observation I want to point out....in Stern's podcast he does not mention the parity/competitive balance hogwash a SINGLE time in the hour. The main points: economics and pay-for-performance! This is a relatively brand new argument, that, now that I think about it I can't remember being mentioned earlier than 4-5 weeks ago! Now, compare that to recent reports on Dan Gilbert and Paul Allen wanting to raise their franchise value through limited payroll (or whatever), which Hunter points out astutely towards the end of his interview (the last 20 minutes are where the gems lie in my opinion, the first 30 minutes are fluff for the most part).

This is where it is all making complete and total sense now. It isnt about parity and it never was. It truly is a battle between the owners.

And most interestingly, if LeBron had resigned in Cleveland we could very well be gearing up for the season next week.

WallyWorld wrote: Concur that podcast was good. Thanks for sharing with everyone.

As for the bolded above, that's what I've been saying all along! It's a pure cash grab by the Owners, and it's sickening. Also, parity in the NBA pretty much isn't even possible, because of the number of players per team and the fact that you can't account for the best star players being so much better than other guys; and the star players are in very limited quantity.

There are lots of articles out there regarding parity in the NBA not being possible. Of the 4 major North American sports, over the past 30+ years, the NBA is by far the furthest away from having had any "parity."

From the other NBA Lockout thread, in case anyone missed it:


What I've been saying all along about how the NBA "losses" aren't even real money, and less than that because of Tax Shelters and other such benefits to the Owners. This is sickening:

How the Owners Plan to Steal a Billion Dollars

That article...interesting. I guess from a practical standpoint I still don't think it makes sense to lose a season. Not when you factor in opportunity costs. Either side is continuing to lob the 'we would do it' grenade, but I don't think that is true.

Article aside, I wonder what the true BRI # each side is shooting for/expecting? My guess is the owners getting 52-53% would satisfy everything they are asking for.

Even Obama is pissed.

www.washingtonpost.com/blogs/wizards-ins...gIQA8cAaIM_blog.html

WallyWorld wrote: Depends on if they still insist on taking BRI credits off the top first before the split. Hunter said on the Simmons podcast that the league gets over $600 million in credits off the top of Total Revenue before it's split. So if the Owners want that % you said, then it's truly like 57-58% of all Total Revenue.

The Players are willing to give back, but if it's not Total Revenue being split, then I totally understand why they won't go below 53%. Because after the credits, that lowers their actual % much lower.

Some good articles from today:

We All Deserve More Than This

Revenue Sharing As Profit Equalizer, Not Competitive Balancer

NBA deal finally there to be done if reason prevails

The payroll and competitive balance myth

Yesterday was seemingly a good day. Owner call going on as I type before meetings reconvene at 2. My only worry at this point is what transpires on the owner call. Otherwise I am very optimistic. Quotes out there saying this thing should be done by end of next week at very latest.

Get it done Glen

On the bright side, it sounds like there could be a deal soon. Keyword: COULD.

Still, it's sickening how the Owners are not only exploiting the Players here, but also the cities that build them all their fancy new arenas:

In NBA Lockout, Owners Give Short Shrift To Public Investment

Interesting article at ESPN about the purported advantages of owning an NBA franchise:

espn.go.com/blog/truehoop/post/_/id/3289...phys-economics-class

I am somewhat skeptical of this argument, and I'll explain why. Generally, in typical business models business valuation is based on Cash Flow and Earnings (Revenue minus Costs, Overhead, Taxes, Depreciation, and Amortization).

Say you wanted to buy a bakery. You wouldn't care how many dollars the store took in every year, you'd care how many dollars were left after you got done paying for flour, sugar, milk, rent, utilities, staffing, and so on. If you simply looked at the Top Line (Revenue) you could potentially buy an asset that costs you money to own. Why would someone buy your bakery for more money than you bought it for, given that it costs them even more money to operate it at an annual loss?

Without appreciation of the asset, the argument falls apart.

It is entirely possible that a basketball team is worth more tomorrow than it is today, but it is completely ridiculous to say that somehow this is a foregone conclusion.

Again:

Revenue = cash people pay you for your product (ticket receipts, TV contracts, concessions, etc.)

Costs = what you need to pay (i.e. 57% of everything you take in goes to the players, then you have overheads such as rent, front office staff, league fees if any, travel expenses, scouting, advertising, etc.)

Earnings/Gross Profit = what you have left over after you get pillaged by the players and pay your overheads.

Operating Loss = if you pay more than what you bring in (i.e. if you have negative Earnings)

For the sake of this discussion I am ignoring taxes, depreciation, amortization, and interest and considering Operating Income to be roughly equivalent to Earnings/GP.

If you have a job that pays you $100k per year but you have to spend $120k every year traveling to that job, it's time for a different career.

NBA ownership is a different beast because you have a tangible asset that could potentially appreciate due to non-economic factors. Also, the economics could pick up down the road. Your team ownership could also positively affect other business activities you have going on so profoundly that it outweighs the operating loss. These are real possibilities. However, to say that Franchises are worth 2.5 times their Gross Revenue seems to warrant some sort of evidence. That's not the way you'd normally value a business... We would be talking EBITDA which is basically negative in this case. Since there is no cash flow I would question that the appreciation of the asset is so reliable- I understand that Pro Sports franchises are likely different in their valuation model, but I would like some evidence is all. Without the appreciation these franchises are effectively cash flow sinkholes that provide a shelter if you have positive cash flow happening somewhere else in your portfolio but provide no financial long term advantage.

wolfenstein wrote:
While some of the owners are clearly idiots, I think it's interesting that so many fans are out to "get the billionaires" that they take an argument like this from a clearly biased source at face value- again, because he's talking about math that most people aren't familiar with it's sound as a pound without looking deeper into the mechanics of an argument that doesn't make sense from a big picture standpoint.

Completely agree, although I admit I get lost as soon as things like "tax benefits" are mentioned. I hardly understand TaxSlayer for my own taxes. Ill admit it.

It's all about perspective. If anyone read the economist interview on NBA.com from yesterday that would make sense. The players side obviously KNOWS it is all in what you factor into the accounting. It has been discussed in the meetings and relayed publicly. They aren't stupid. But as Wolfenstein alluded to I have to believe the operation costs of a franchise are in the negative for more teams than not. Call me crazy, but I just don't find it realistic that 30 rich men, some reasonable, some not, would suddenly come up with this master colluded plan to yank more cash if their wasnt at least somewhat of a need to realign the BRI. Maybe it's because I think deep down Glen Taylor is a good guy despite his poor running of the team.

As CW has said a billion times, too far? Probably. I think the owners have their true sights set on 48% or so, a nice nudge from the players, to correct things in a rough time. The rest is them trying to negotiate (just how it works) for more just as any normal human would probably due with that much money on the line. The players have been willing to go there. Either way I couldnt care less and SUPREMELY want this thing to end today more than debate players vs owners again! Fingers crossed!

Predictions?

I say no deal tonight, but progress. The devil inside says it will get derailed but I cannot imagine after last night's comments, the tremendous negative PR that would transpire without a deal over the weekend, or that the owners fucked it up somehow. They know. Stern was joking around like a schmuck, yelling things from the back of the room during Hunters presser.