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over 2 years ago Update 24 comments
Going back to 1980, eight different NBA franchises have claimed the league's championship at season's end. In that same time span, 15 different NFL franchises have won a Super Bowl, 19 different MLB franchises have a World Series and 14 different NHL franchises have won a Stanley Cup. And of the NBA's eight franchise champions, all but two (San Antonio and Detroit) reside inside the NBA's 10 largest markets. While owners, employees and fans of the Lakers, Knicks, Bulls and Celtics may not give a crap about historical data like this, it should be alarming to the owners, employees and fans of 20 (or so) of the NBA's 30 teams.
Supposedly, the NBA -- unlike Major League Baseball -- has a salary cap and a system in place to make the playing field even. But thanks to two major factors - first and foremost, a revenue-sharing system that shares television and licensing rights only and, secondly, player salaries that are totally out of control -- most NBA owners are losing money hand over fist. Hence why NBA owners have little incentive to keep the doors open next season while they duke out a new bargaining agreement with their players union. Conversely, NFL owners -- also on the precipice of a possible player lockout and/or strike -- have all the incentive in the world to keep their league going. After all, most NFL owners, like their fellow owners in Major League Baseball, actually make a profit each season.
Because NBA owners share only national and international television and licensing revenue, teams get to keep every dollar they make in their local market, including their local broadcasting rights, sponsorship deals and ticket sales. In the NFL, ticket sales are split 60-40 between the home and visiting teams. In the NBA, the local team keeps every cent of the gate revenue. In Major League Baseball, a substantial percentage (perhaps as much as 35%) of each franchise's local broadcasting revenue is pooled for all teams to share. In the NBA, each team keeps every nickel of their local broadcasting revenue. Hence why the Pittsburgh Pirates are profitable despite being one of baseball's worst teams for 20 years on.
Or, as SB Nation's Tom Ziller aptly put it recently: "If you want to make money in the NBA, you're better off sucking in L.A. than being excellent in San Antonio."
And thus, the NBA needs its own version of Wellington Mara on the owners' side of the table as the owners and players negotiate a bargaining agreement that, in theory, will set the tone for how business is done in the NBA for the next 10 years.
Mara, as most sports fan know, was the well regarded owner of the New York Giants who famously agreed to then-commissioner Pete Rozelle's concept that the NFL's television revenue be shared equally among all teams. With revenue sharing came competitive balance and a league that has operated as one business instead of 32 individual businesses has dominated the American sports landscape for nearly 50 years.
Without a proper revenue sharing system in the NBA, one that extends beyond splitting only the national and international television and licensing revenue, the disparity between the haves and have-nots will continue, save for a few franchises willing to lose their shirts financially just to keep their teams competitive. Unfortunately, two of the NBA's big-market owners -- the New York Knicks' James Dolan and the Los Angeles Clippers' Donald Sterling -- are pariahs. The third, the Los Angeles Lakers' Jerry Buss, appears to have checked himself out of the operations of his team and his son is (allegedly) running the show. And a fourth big-market owner, the Chicago Bulls' Jerry Reinsdorf, wasn't even willing to spend to keep Michael Jordan and crew in tact ... so we certainly can't expect him to be the ringleader of a new revenue sharing system among NBA owners.
Some fans will cringe at this suggestion and others will applaud it, but the only owner I foresee being capable of being the NBA's version of Mara is the Dallas Mavericks' Mark Cuban. In many ways, Cuban has revolutionized the concept of sports ownership and say what you want about Cuban, but you can't argue with him being a visionary for professional sports as know it. Make that all sports, as Cuban is now trying to put together a much-needed, much-wanted and long overdue playoff system for the BCS. Cuban -- and only Cuban -- could bridge that gap between the NBA's 20 small market franchises and 10 big market franchises to come up with a system that produces true competitive balance on the floor and on the profit and loss statement.
As a lifelong Denver Nuggets fan and season ticket holder, I'm acutely aware of the NBA's revenue sharing problems. In Denver, we're fortunate to have owners in Stan and Josh Kroenke who historically have been willing to spend north of $80 million on payroll to compete with the likes of the big-market Lakers, Mavericks and Rockets. But even when the Nuggets took the Lakers to the brink in the 2009 Western Conference Finals, the Nuggets were rumored to be losing millions of dollars (as in, more than $10 million) while the Lakers just added more millions to their pile of millions upon millions upon millions. If the NBA's current revenue sharing persists, the Kroenkes' belt-tightening is sure to come, likely resulting in a shoddy on-the-court product in Denver and one less team worth watching in person for fans in New York, Los Angeles, Chicago and Dallas.
NBA owners can whine and cry all they want about player salaries crippling their economic model -- and make no mistake about it, those salaries are crippling -- but until the owners agree to an NFL or MLB-type revenue sharing system, slashing salaries by 30-40 percent only solves part of the problem. The NBA desperately needs a system akin to that of the NFL and Major League Baseball, and it will take a bold leader among the owners to get there.
Who among today's NBA owners would make Wellington Mara proud?