Report: NBA Owners Discussing Revenue Sharing

When the NBA owners and players agreed to end the lock out, I think most people thought that was the end of all talks about competitive balance. However, as it turns out, the owners argued that revenue sharing among owners was an owners issue and not something that needed to be collectively bargained. And now it appears the owners are close to agreeing on a groundbreaking new revenue sharing plan.

From Ball Don’t Lie’s Kelly Dwyer:

And while notions of fairness suggest that revenue sharing should have been discussed in relation to player salaries if owners cared so much about a level playing field, this plan is still pretty significant. As Lombardo notes, the NBA’s previous revenue sharing plan depended almost entirely on the salary’s cap luxury tax. This deal is about total profits, including the local TV contracts that make teams like the Lakers so rich. This new agreement could very well make a major difference in the long-term financial viability of a team like the New Orleans Hornets. The same even goes for a small-market playoff mainstay like the San Antonio Spurs, a franchise likely to see a dip in wins as their best players grow older.

This shouldn’t impact the Cavaliers too much. Sure, getting a share of the TV revenue of the large market teams will be nice and will help infuse even more cash into the franchise, the fact is that spending is not the Cavaliers’ problem. They have the infrastructure to support high salaries and an owner willing to spend. The Cavaliers just need a superstar or two (or three?) to overlook the cold winter and embrace the great franchise and fans that Cleveland has to offer.

[Ball Don’t Lie: “A new NBA revenue sharing plan is taking shape”]

  • Anonymous

    “they have the infrastructure to support high salaries and an owner willing to spend.”

    I think this is extremely short-sighted.  We are going to see our revenues continue to dip a bit as we are no longer a national brand even if Irving becomes the player he seems to be.   At best, we can quickly build a good team and have a cult NBA fan following like the Nuggets have.

    Television contracts will continue to have a gulf between the bigger markets and us.  Attendance will dip if our rebuilding efforts take more time than anticipated.

    And, I think this is why we saw Gilbert’s name linked on the teams that wanted a more even split during the lockout.  He’s a smart business man and he understands that he no longer has one of the top “brands” playing for his team and to truly compete for championships, he may need a more even split.

  • Andrew Schnitkey

    What I mean by that line is that if the team is good and fans are showing up, the Cavaliers know how to operate and make money while spending a lot of money trying to win. They know how to be a winning franchise and spend with the elite. They shouldn’t (and aren’t) do so when the team isn’t in place to do so. 

    Either way, I just don’t see this as a big deal to the Cavaliers unless everything completely falls apart, someone suffers a career ending injury, the Cavs never have a winning season again, etc.

  • Anonymous

    Fair enough.  I guess I just view the “LeBron-Cavs” years as a similar time to the “90s Indians” where the team was able to spend above the threshold that the city/market would generally allow.  And, I suspect that if the NBA doesn’t do something with the local TV deals, then the gulf between the biggest markets and the smallest markets will just continue to grow.

  • Lou Rounick

    More with the silly declarations.  They have an owner willing to spend only when LeBron brought them revenue.  Precisely what is willing to spend about being 28th in the league in payroll last year.  It went up this year because of the rookie contracts of two high draft picks and they’re in the middle of the pack.  Next season, after Jamison is gone, it’s back to the bottom of the NBA payroll heap.