NBA: Apocalypse now

March 11, 2009
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NBAI’m not a sky-is-falling kind of guy by nature. But I think there’s a seismic shift underway in the NBA. The Indiana Pacers' financial distress is just the tip of the iceberg.

I’m not sure many team owners or general managers see the size of the tsunami about to besiege them. Commissioner David Stern is a very smart guy, but I’m sure the leaders of Rome were equally intelligent when they took their historic tumble.

Sports radio host Dan Dakich suggested to me yesterday that surely the Indiana Pacers can’t go away. I beg to differ, and it’s time we all start acting like the possibility is real.

The signs are definitely there—and they spread way beyond Indianapolis. Twenty seven of the league’s 30 teams either plan to freeze of lower ticket prices next season. We’re not talking about the dregs of the league here. Among the teams seriously considering freezing or dropping ticket prices are Boston, Cleveland, San Antonio and Chicago. And Yes, the Pacers. Attendance and sponsorship is down league-wide. Several teams are considering 10 percent to 15 percent across-the-board budget cuts.

Since the players’ salary cap is figured on league revenue, it’s only a matter of time before the cap comes down. It’s probably time for NBA owners to consider a harder cap. There’s only one thing the players’ union fears more than that. Contraction. It's laughable to think there are other markets waiting with open arms and sweeter deals for beleagured teams. We all see how that is working out in Oklahoma. 

Sooner or later, one city somewhere will cease the massive give-aways to its NBA team—not because they want to, but simply because economically, they have to. And then the dominos will begin to fall—at a torrid pace.

Will it be New Orleans? Oklahoma? Gasp, Indianapolis? Never say never. Especially in this climate. And when the players’ union realizes this reality, they should be willing to talk turkey with owners. And owners should be willing to get serious about revenue sharing and a sustainable business model.

Even when the economy rebounds, the golden age of NBA players’ salary will be over. We’re headed toward a time when a professional athlete can make a good living—a very good living. But the days of mad money, the days of NBA players knocking down $15 million a year or more—will soon be over.

Think I’m crazy? We won’t have to wait long to find out. At the outset of this season, all we heard about was the wild 2010 free agency frenzy about to unfold. The storyline was that teams will be fighting over the likes of LeBron James, Amare Stoudemire, Chris Bosh and a few other prized players due to hit the free agency market. Teams were clearing salary cap space to prepare. Heck, I even thought Larry Bird might take that opportunity to upgrade the Pacers.

Word out of New York was that Knicks General Manager Donnie Walsh (of previous Pacers fame) would offer LeBron the league’s largest contract. And maybe, just maybe, in New York they could actually afford that kind of deal. But at what cost to the rest of the league. At what cost to a team like the Indiana Pacers. Ironic to think, a loyal guy like Donnie Walsh could stick the last dagger in his former team.
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  • I'd like to think that if the league needs to trim costs in lieu of the economy or just because of fan support, that it can do so across the board without having to close up shop completely. Lower ticket prices to keep the fans attending, but also lower player contracts. They still can still make good money doing what they do, but perhaps lower it by 25%, 33%, or even 50%. Of course, not all players get the huge multi-million dollar deals, but even the bench players can do reasonably well.
  • One city already told a team to take a hike - Seattle. The dominos are falling.
  • What if we let the Pacers play at Pepsi Coliseum or Hinkle. Then knock down Conseco and build something new call Market Circle Casino so we can gamble on when the Colts will leave town?
  • Wait, a downtown casino would simply foil another publicly funded enterprise; the two horse tracks who get millions of dollars in subsidies a year and slot machines to boot. We have indeed hit the tipping point here.
  • Mr. Schoettle opinion has started a blazing fire with the public.

    Can You Believe What Simon Says?

    http://advanceindiana.blogspot.com/2009/03/can-you-believe-what-simon-says.html
  • Oh the NBA. Though I've loved it for years, there are so many things that could be done if Commish/owners were 100% serious about making the league totally fan friendly and the players (who unless they want to go work/live in Europe) would have to accept a very damn good lifestyle instead of crazy, mad money salaries.

    1. Cut # of season games from 82 to 64.
    That is still about double the college basketball season, it would eliminate most back-to-back games, lesson the number of wear and tear injuries, and make each game more meaningful. *By the way, that 22% drop in games would be a straight 22% cut in salaries/salary cap for players/coaches/GMs. But their season would also lose about 1-2 months, allowing players a longer off-season, etc.

    2. Cut at least 2 teams, maybe 4.
    The talent pool in the leauge is totally diluted right now. As the NFL shows, more parity is a good thing for the fans as virtually any team can win any given week. I'd start with getting rid of (or merging?) among Memphis, Sacramento, Milwaukee, Oklahoma City. Either merge those bad teams and/or draft the top players from them onto the other bottom teams in the league. More competition, better teams across the board, etc.

    3. Change playoff format back to old days.
    First round best two of three (not best of 7!) Second round best three of five (not seven!) and then conf finals and finals - best of seven. Shorter series, more excitement, etc. Current 3 rounds of best of 7 is a total slap to fans, money grab. Don't they see that??

    4. Limit guaranteed contracts to 3 seasons.
    Look if you are healthy and are delivering the goods, you will be able to get the new max every three years. If you get injured, turn into a Tinsley knucklehead or way overpaid (JO, Rasho now - $8.5M per), teams wouldn't have the mistake for 4,5 or 6 years!.

    5. Make trades easier via salary cap
    I'm all for trying to have salaries basically match, but if one team is under and can swing a trade with another team with salary bit higher and still be over a cap, then let them do it. Fans usually love trades.

    6. HARD salary cap.
    Make it a set amount (now there seems to be one cap, one for where luxury tax kicks in.) I'm all for hard cap with strict $ for $ luxury tax. If Cuban or Paul Allen want to go $30M over, then each team will at least get a nice $1M check and largest payrolls don't always mean winning championship.

    7. STRICT player code of conduct clauses
    If a player wrecks on a motorcycle (Monta Ellis, Golden State), shoots up a downtown hotel area (Jamal Tinsley, Pacers), is arrested for DUI going 120mph with a 3 year old w/out seat belt in back seat (Jason Richardson, Phx), then owners should be able to cut/null void the contract and have immediate new salary cap space as a result. Player would have to sit out certain time frame (perhaps remainder of that season) and then could be a free agent again next season. The players need to realize how much they can hurt the brand terribly by their seemingly stupid moves. I don't care if society does it to, with whom much is given, much is expected and getting paid millions to be in the NBA is a luxury they should cherish and respect greatly with the threat of it going away.

    Imagine if all the above were incorporated what a better, fan-friendly league it would be and the view the fans would have of the league then! (And I didn't even mention can we address the heavy sleeve, tattoo factor? Black or white, players can look like prison or biker gangs and now we see the tats popping up down in college/hs ranks too. Is that addressable too?)
  • As long as the NBA continues to allow its image to be defined by uneducated, illiterate, tattoo covered, dope smoking, pimp-mobile driving gangstas, nothing will change. No one cares anymore!
  • Bill Simmons (the Sports Guy for ESPN the Mag) wrote on this very topic last month. He was at the All Star Game and mentioned that the mood there was very sour because they all see what is coming. He believes there will be a lockout and that the players will lower their salaries because they will have to - they cannot survive without cash coming in. And this problem is going to hit MLB and the NHL next.
  • What do all the sports leagues have in common???

    UNIONS....There is your problem folks
  • Does the NBA salary cap have a floor? If so, there will have to be a lockout by the owners to change that. Otherwise, player contracts will always exceed revenue.
  • My concern about the Pacers leaving is the affect on the community. Without them who will:

    A: Start early morning near riots at strip clubs
    B: Precipitate downtown drive by shootings involving assault rifle in front of the Conrad.
    C: Give IMPD's narcotics dogs the practice they need for staying sharp at detecting drugs and weapons in vehicles.

    The Colts have already proven, that despite having a pill popping owner, they are second rate menaces to society compared to the Pacers.
    Whatever will Gene Rodriguez and David McAnally have to report on if they leave???
  • Two things that need to be included in this discussion. First, the CBA is up in 2011. The owners want to negotiate a more favorable deal and have an incentive to make the financial state of the league seem worse than it is in order to get the union to agree to take a worse deal than they currently have. Second, there is at least one city making a push to add a team as Kansas City is seriously courting the Kings or anyone else interested in relocating.
  • No question with the coming economic landscape that is being politically reformed professional sports will undergo a huge contraction as available corporate and individula dollars will be very limited. We voted for Change and Change we are going to get. A lot of things that we've taken for granted will never be the same.
  • this is a funny thread. great points all around.

    :lol:
  • # Ray Bowan Says:
    March 11th, 2009 at 1:24 pm

    As long as the NBA continues to allow its image to be defined by uneducated, illiterate, tattoo covered, dope smoking, pimp-mobile driving gangstas, nothing will change. No one cares anymore!
    -----------------------------------------------------------------

    obviously you are clueless and you aren't paying attention. The league has lots of nice players now. Did you ever hear about LeBron, Bosh, Dwight Howard, Paul, Roy, Billups, Rose, Mayo, Deron Williams, Granger and countless others? There will always be a few bad apples but most of the players are nice guys who get a bad rep just because a few bad apples. So get your facts straight b4 stereotyping every single NBA player.

    also, last I checked the NFL has players getting arrested weekly, so why don't you whine about it?

    And BLOGOjevic, the Pacers got rid of those bad apples. Check their roster and tell me how many players who are menaces to society you can find. Are you even paying attention?
  • In all fairness, attendance is slightly up compared to last year (1% up last I checked a couple of weeks ago) and many teams who are freezing tickets are doing very well when it comes to attendance. Just think to teams like Cleveland, Chicago, Detroit, Boston, Utah, Portland, Dallas, San Antonio, Phoenix, New York, Golden State etc. Those teams sellout most games (and many of them sellout every single game) so I don't get why you consider this a bad thing.
  • I agree w/ Roki. When this is all over there will be about 10, maybe twelve, at the most, teams left in the NBA.
  • I suspect in the next CBA negotiations in 2011 the owners will use the leverage of the threat of contraction of a few teams as justification for limiting guaranteed contracts to say 3 years as mentioned earlier. This could be very benificial to the Pacers as they would not have to pay Jamal Tinsely millions for not even showing up or Jonathan Bender for riding the pine for all of the years he did which is a contruting factor to the issues they have. The last thing the union will want is a reduction in teams and fewer players in the league. This could allow smaller market teams a chance at survival.
  • NBA players need to realize they are the investments of the teams. The rest of the world has seen a 40-50% decline in the value of investments. Maybe it is time the NBA used mark-to-market accounting and write down the value of their investments to their real value.

    Everything comes down to cash flow, and if a $15million/year contract is not generating at least $18million/year in positive cash flow then the player is not worth the investment.

    Funny how the NBA smart guys don't understand simple business.
  • Roki, While ticket prices are frozen, costs of running an NBA franchise continue to go up. That's bad news.

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