From Charley Rosen of FOXSports.com:
Notice the empty seats that have become so prominent in the background of virtually all NBA telecasts? Let’s see — tickets for working folks cost from $50-$80 each, add at least another $50-$70 for parking, gas, beer for the grownups, and flimsy made-in-China NBA paraphernalia for the kiddies. The tab for Dad, Mom, Sis and Junior would amount to around $300. Compare this to all of the games for free on the tube. What to do? In the face of the financial downswing that affects civilians but not NBA players, said players should willingly accept a one-third cut in their contractual salaries. After all, can’t a guy live just as well on, say, $6M as he can on $9M? Then the team owners should pass the same proportional savings on to their customers. There’s no real reason why innocent bystanders like us should be called upon to make the most painful sacrifices.
In theory, this sounds like a great idea. But it’s just not practical. There are a number of teams that are struggling at the gates. According to ESPN’s attendance report, the Sacramento Kings and Memphis Grizzlies are averaging less than 12,000 fans per game. So it makes sense for players like Antoine Walker (yes, Walker plays for the Grizzlies), Darko Milicic, Brad Miller, and Kevin Martin to cut their salaries by a third so that Kings and Grizzlies fans receive a discount.
But what about guys like Kobe Bryant and Kevin Garnett? Why would Bryant or Garnett willingly accept a paycut when the Lakers and Celtics are filling their home arenas to 96.9 and 100% capacity? I suppose the NBA could argue that Los Angeles and Boston’s attendance records are a product of their markets, but the Lakers and Celtics are filling up arenas on the road too. The Lakers are filling up road arenas to 97.8% capacity, while the Celtics are at 97.9%.
Cutting salaries by a third isn’t the answer. The solution lies with the salary cap and collective bargaining agreement. The salary cap is based upon league-wide revenue. So when the league signs a $7.4 billion dollar broadcasting rights agreement with ABC, ESPN, and TNT, the cap goes up, which means teams can spend more. But most small market teams fail to generate enough revenue to support the increased spending allowance.
The salary cap would be lower if it were determined by the total operating income of each of the league’s 30 teams. It’s not a foolproof solution. It won’t put every team on a level playing field. But it would lower the cap. However lowering the cap is only part of the solution. Maximum salaries are out of control. Maximum salaries are determined by how long a player has been in the league. A player with ten or more years experience can command a salary equal to 35% of the cap. That’s ridiculous.
I agree that player salaries need to be cut, but not by a third, and not so that owners can pass along those savings to consumers (although that would be nice). The NBA has to convince the player’s association to agree to lower minimum and maximum salaries through the next collective bargaining agreement so that small market teams can remain competitive. It’s harder for small market teams to retain their franchise players and sign free agents. It’s becoming increasingly clear that in today’s NBA — owners have to spend — and spend big to win. Economic crisis or not, small market fan bases do not turn out to watch their teams lose.
Lowering ticket prices is a band-aid solution. It might help, but only minimally. A closer look at ESPN’s attendance report reveals that the bottom ten teams offer some of the league’s lowest average ticket prices. It’s not the ticket price that is deterring thousands of fans from attending games, it’s the fact that their teams stink. Some have been mismanaged, some are going through a lengthy rebuilding process, but nearly all of the teams struggling with attendance are at a disadvantage due to the salary cap and collective bargaining agreement.
December 11th, 2008 at 4:32 am
You bring up some good points. in a perfect world people wouldn’t be so greedy to want 20 million a year. but the bigger market will always tend to have better teams, and as I see it. money has diminished what I liked so much about the game. teams don’t stay together as much anymore and you never know what trade is next. but enough of the desperation trades of the west teams last year after Pau. but alas, I am but a humble fan that has watched on TV for 35 years and as a single parent, never felt that I could justify paying 300 dollars to see a game. I took my son to Dodger games for 50 bucks. but LA has movie stars that have lots of money so I’ll just watch them from here :P
good blog though, makes you think :)
December 11th, 2008 at 6:43 am
“The tab for Dad, Mom, Sis and Junior would amount to around $300. Compare this to ALL OF THE GAMES FOR FREE on the tube. What to do?”
-Charley Rosen
________________
Hoffman,
I know you are a bigshot now in all the NBA media circles so if you could please inform sorry charley rosen that he has been reported to the authorities at foxsports.com, as well as the federal and universal internets police.com for televison piracy. Since when is television free? I get a bill in my mailbox every month. Sounds like shady cable. And EVERY GAME? i get like 2 games a night. That’s it. It is *********** like this old ******* that keep TV prices high for the rest of us and it is a fedral ofence. I want a reward for my civic duties.
December 11th, 2008 at 9:33 am
Interesting concept. I agree with you, cutting salaries by one third won’t necessarily fix anything.
That being said, I would love to see major change when it comes to pro athletes’ salaries. Doubt it will happen though.
Endorsement dollars are one thing. But when a player earns a $20 million salary, the fan is ripped off at every turn. Overpriced tickets, $100 jerseys, $8 beers, etc. Not to mention this TV deal business.
I’d have to give it some more thought, but I think there is some work to be done on the top end. There should be a max salary, for example…say $15 million. When agents and players constantly try to drive the market by one-upping each other for the next record-breaking contract, it has an exponential effect on the consumer. If there was a max, not only would the savings be passed to the consumer…but it would allow all teams to remain competitive under a salary cap. Think about it, if $15 million is the max you can make…does it really matter if you’re earning it in Phoenix or Oklahoma City?
But I refuse to feel sorry for the NBA or any other pro league that struggles. Despite their greed & corruption (in general), we’ve made them rich beyond belief. And in a social context, pro sports is probably the least important industry out there. I understand its importance in the economy, but that’s just a big fat sign that as a society…our priorities are completely messed up.
Rant over in 3, 2, 1…
December 11th, 2008 at 2:13 pm
It’s interesting that the wheel keeps having to be invented here.
In the real world, businesses have employees, shareholders (owners), and employee-shareholders… employees who have a stake in the business.
It seems like NBA ownership could come up with a formula so that players have a base salary, and a percentage of the profits of a team. That way, if things go downhill, not only is the player “paid” less, but he is financially motivated to do what he can to turn around the team’s fortunes.
If the team shares were standardized league wide, then players could be traded from franchise to franchise.
Anyway, as things currently stand, players bear the lions share of the reason for success or failure, but not the risk. That is on the owners.
December 11th, 2008 at 5:33 pm
alan – Thanks. I think one of the reasons there are so many desperation trades is because small market teams are forced to rebuild more often. They can’t weather losing seasons like teams in larger markets.
dusty – Lol. Sadly, I don’t have Rosen’s contact info. But it’s good to see that you’re looking out for the television industry.
ShooterB – Thanks. A fifteen million dollar maximum salary isn’t a bad idea. The highest paid player in the league (KG) makes $24 million this season, lowering his salary by a third is close to $15 million so maybe Charley was on to something.
But I definitely agree that there needs to be a hard cap on maximum contracts. I don’t like player salaries being set by a percentage of the salary cap. I don’t know if the player’s association would agree to these kinds of changes, but I really believe they’re in their best interests.
Basketballogy – Long time no see. You brought up an interesting scenario. But I see a big problem with making players shareholders. I don’t think players would commit to rebuilding processes. Why would anyone want to play for a cellar dwellar like Oklahoma City when there’s a good chance they could more playing for a contender?
I think we would see players signing for less to play for contenders, which would create a huge talent imbalance.
Just my two cents.
December 11th, 2008 at 5:35 pm
What about the drought of front office talent? The Matt Millens and Kevin McHales of the world. It seems guys get to run franchises just because they were good players, never mind the fact they don’t know anything about management.
I know I could turn a struggling NBA franchise into a winner within a short amount of time. But hey, I’ll never get that chance because I wasn’t a Hall of Fame player.
I think there are too many clowns in the front offices of sports franchises. Owners just care about money. GMs just care about being in the spotlight.
If you can’t improve the product on a league-wide level, then you need to improve the product on a team level, starting from the bottom up. Screw giving the players incentives. How about we give each team’s management incentives to run a successful franchise? Say, if you win X amount of games, you will be entitled to X bonus or X percentage increase of the profits, etc.
There seems to be too many Tampa Bay Rays-like organizations out there who don’t care about winning but rather making money. If you have smart management, you can accomplish both.
December 12th, 2008 at 1:25 pm
A-Train,
You bring up a valid point, but I don’t know how the league can regulate front office hirings.
Your bonus idea is interesting.
I don’t know if offering incentives is the answer though. Owners are rich and front office reps make seven and six figure incomes.
Would financial incentives provide extra motivation and accountability?
I have my doubts.