NBA fails to convince NBAPA over incurred financial losses - NBA Labour Dispute Update
It has been more than a week now since the league imposed the lockout on players and with the passage of time, the skirmish between the player’s union and league is peaking up. The latest in this regard are the claims made by players
association that the league showed inaccurate financial losses.
This issue caught the fire a day after a feature was published in a local news paper. The report raised the question as to whether the league really lost the quoted amount of money in the previous two seasons.
Union spokesman Dan Wasserman commenting on the report said, “In 2009-10, the NBA repeatedly offered projections that league revenues would decline as much as 5 percent, or $180 million, while also projecting losses of $370 million.
Revenues were actually up in '09-10 and the revenue projections were off by as much as $200 million. Yet, the loss figures were only adjusted by $30 million. So yes, we feel there is more than adequate basis for questioning their projections and financials.”
Earlier the players union and franchise owners failed to make an accord on new Collective Bargaining Agreement that caused work stoppage in the National Basketball Association. The owners want compensation through new CBA by converting
the soft salary cap into hard. They also want that the revenue earned from the league should be shared, since the franchises are baring heavy losses.
NBA spokesman Mike Bass termed Wasserman’s claim absurd and added that the feature in the news paper was based on estimations of Forbes and Financial World Magazines. Bass made it clear that Forbes cannot project true financial
situation, as they do not have the requisite data.
Bass also casted doubts on the working of Forbes and financial magazines as during the 2009-10 season 23 teams were in red zone and out of them 11 were showing more than net $ 20 million losses. Under the previous CBA, according
to Bass, the league never achieved a positive net income.
The union has been very adamant, that even if there were some losses, they were because of their accounting procedures that include depreciation and amortization, when a franchise is vended. NBA however discarded that notion as
well and stated that use generally accepted accounting (GAAP) approach and do not include sale and purchase of franchises in the losses.
Although the league has shown their and team financials to the players union, specifically to avoid such situation, but still the association does not look satisfied with it.
The latest objection raised on the accounting system is proving to be the main thorn in the settlement at the moment. The union is arguing that the league has depicted false finances deliberately because the 2010-11 season remained
successful and there was an overall growth in ticket sales, TV ratings and merchandise. NBAPA has a valid point and it seems that NBA has all the running to do at the moment.
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