Comments on: CBA Talk: A Little Math

By: The Point Forward » Posts Players aren’t wrong to continue to fight «

Mon, 07 Nov 2011 18:43:30 +0000

[...] a cold dollars-and-sense argument for why players should sign now. If they lose even half a season, they’ll cost themselves more in overall salary than they would by signing the owners’ current offer. And that offer stands to get worse in [...]

By: Tim Donahue

Tim Donahue — Fri, 07 Oct 2011 20:10:15 +0000

Fair point, Shem.

I actually have a great deal of experience in turnarounds, and I have been on both sides of layoffs, plant shutdowns, and company closings. I understand exactly what you’re saying, and I think it may exist in some of the owners’ minds.

However, I just don’t think the owners are at that point collectively. Clearly, I could be wrong, but that’s just not my feel. Part of it is that I know how long and hard it is to convince business leaders that something just isn’t working, and they should shut it down and walk away.

By: The Lockout Cliff | Hardwood Paroxysm

The Lockout Cliff | Hardwood Paroxysm — Fri, 07 Oct 2011 11:31:43 +0000

[...] via CBA Talk: A Little Math [...]

By: The Point Forward » Posts Court Vision: D-Will already hating Turkey? «

Thu, 06 Oct 2011 19:39:16 +0000

[...] Donahue and Coon also get at the same question from the owners’ perspective. Both are must-read [...]

By: Shem

Shem — Thu, 06 Oct 2011 18:25:51 +0000

Tim, this was an excellent article and you are spot on about the players side of the economic picture. However, I do think there is a flaw in your logic of the owners’ economic perspective. The players take whatever revenue is theirs to the bank (minus taxes of course). However, for the owners, their cut of the revenue (be it 50% or 53%), must be sufficient to pay the interest charges on the various things they’ve financed, as well as to pay arena workers, front office and administrative staff, coaches and the referees. Not only this, but there is a big disparity in the revenues each team brings in and while revenue is purportedly going to help solve this issue, the bottom line for the owners is that their cut of the revenue has to be large enough to cover expenses or else their really is no point to field the league. For example, if you own a restaurant and you’re spending 50% of the revenue on your staff, 30% of food, and 25% on rent and utilities, there really is no reason for you to continue running the restaurant because you’re losing money each month. This is obviously an oversimplification, but the principle is essentially reality for many NBA owners.