NBA owners meet in New York to discuss revenue sharing – NBA Labour Dispute Update
NBA owners met Tuesday, October 25, to discuss revenue sharing between the 30 franchises that the league presently has. The meeting that took place in New York was attended by 10 owners and other staff, while many NBA owners were
connected through a telephonic conversation.
Revenue sharing is a tense matter within the league. It basically entails some of the big market teams sharing their wealth with the smaller market teams to offset some of the losses. While other sports leagues, such as the NFL,
have a very efficient and appraised revenue sharing system, the NBA has always avoided the matter.
The reluctance of NBA owners to touch the issue came under severe criticism from the National Basketball Players Association (NBPA) during the NBA labour negotiations. The players wanted the league to introduce a new revenue sharing
system in the new Collective Bargaining Agreement (CBA) which would ease some pressure on them to make financial sacrifices.
The NBA Commissioner David Stern though insisted it is an internal matter for the owners and they will deal with it as such. However, throughout the NBA lockout, the owners have not really talked about the issue; and the first
time it really came up in a meeting was on 19th-20th October.
The matter is a very divisive one for the owners and would take them plenty of time to sort out. NBA deputy Commissioner Adam Silver insisted after that meeting that it could be a long drawn out affair,
"A few of our owners," Silver told reporters at the time, "remarked after the robust revenue discussion last night that we might want the assistant of the federal mediator for our revenue sharing discussions, as well."
The NBA has announced that it would ramp up the amount of revenue shared between the league’s 30 franchises from $60 million to $150 million next year, but that isn’t as easy as it would seem.
The league announced this summer that it has been operating at a loss for many years. Just this year only eight NBA teams turned a profit, a combined $150 million. The 22 other franchises suffered losses worth $450 million.
So, basically, the NBA is going to ask the larger market, profitable teams, such as the Los Angeles Lakers and Miami Heat, to turn over all their profits to the rest of the league. One can see why that idea is not at all popular
with the NBA’s money spinners.
The league believes a revenue sharing system is necessary if the league is to be truly competitive and all teams are to be given a level playing field. However more and more owners in the NBA are in it today for the business side,
i.e. to make a profit.
If they were asked to turn over the profit they made after a hefty investment, why would they want to remain in the business?
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