04/20/24
October 06, 2014
The NBA has a new TV deal.: And it's a bit bigger than anyone guessed. Zach Lowe looks at what putting all that new money into the salary cap may mean for the near future of the NBA.
posted by yerfatma to basketball at 02:46 PM - 10 comments
This deal means another $54 million a year for the Spirits of St. Louis.
"In 1982, after several years of cashing TV checks, the Silnas came close to accepting a new buyout. The NBA offered them $5 million over eight years, but the Silnas countered with a demand of $8 million over five."
posted by rcade at 04:43 PM on October 06, 2014
This deal means another $54 million a year for the Spirits of St. Louis
Somewhere in the back of my mind I think I remember hearing that the NBA & the Spirit of St. Louis owners had reached a lump sum agreement just recently?
posted by tommybiden at 05:51 PM on October 06, 2014
Looks like you're right. Bummer.
posted by rcade at 06:35 PM on October 06, 2014
Even the new deal is pretty sweet. $500 Mil plus some part of a deal between Silnas and the 4 former ABA clubs. It's a bit like hitting it big on one of your stocks, the stock paying good dividends and splitting several times. Now your position is "overweight", so you sell a big chunk of it and retain some small portion that is protected from dropping below a certain value. Nice work, Mr. Silnas.
posted by Howard_T at 05:53 PM on October 07, 2014
I wonder if the Silnas ever tried to trade in their deal for a St. Louis NBA franchise.
posted by rcade at 05:56 PM on October 07, 2014
Would you? Most of the benefits with none of the risk, cost or work sounds pretty good to me.
posted by yerfatma at 08:42 AM on October 08, 2014
Yes. The lowly Clippers sold for $2 billion. No matter what the owners say when they're negotiating with players or trying to get public money to build an arena, owning a team is enormously lucrative.
The only risk of owning an NBA team is that you might have to sell it someday at a big profit.
posted by rcade at 10:57 AM on October 08, 2014
That's the kind of thinking that keeps casinos open. You're extrapolating from a single team in the country's largest media market that was bought 33 years ago for $12.5 million. Even in 2014 dollars, that's only $37,980,606. If you're gifted a team today, it has to play somewhere and you're in a media market that wasn't attractive enough to land a team previously. The Rams aren't ecstatic about being in St. Louis, so I don't know how well an NBA team would do. You're either leasing a dated arena or taking on debt to finance one and you're on the hook for a minimum of $52 million in salary a year and that only funds a replacement-level team that won't draw. Now you need to worry about parking, access, vendors, tv and radio deals, local politics . . . give me the steady stream of smaller checks and nothing to do.
posted by yerfatma at 11:09 AM on October 08, 2014
That's the kind of thinking that keeps casinos open.
No, it's the thinking that makes people open casinos.
The Rams aren't ecstatic about being in St. Louis, so I don't know how well an NBA team would do.
If St. Louis got an NBA franchise, it would be granted on the condition of the city publicly financing an arena with lots of corporate luxury boxes and maybe even handing the whole thing over to the team.
But if that didn't work and the franchise flopped, it could move.
I love the Silna deal, but I'd rather have a team than the checks. I did a little digging and found that the Silnas wanted that too. They hoped to trade the deal back to the NBA for a franchise.
posted by rcade at 11:37 AM on October 08, 2014
Somehow this TV deal exceeded even the wildest expectations similar to the way that the prices of franchises recently has surprised basically anyone that wasn't trying to buy one. Or maybe the people buying franchises were privy to the upcoming TV deal. Anyway, there is a lot of money being spread around and it's not clear to me why.
These next few summers of free agency are going to be bonkers. Everyone is going to have cap flexibility, literally everyone. I think it'll be a mad house. I'm also interested to see if the salaries of the mid-level talent, the 5-10 million dollar guys now, will raise with the cap. Currently, those guys are the most overpaid players relative to their production. If that level of player doesn't see a pay raise it might be more viable to win without a superstar in the NBA. Getting rid of max contracts could also do the trick.
I root for a team in the non-preferred NBA market of Denver. I don't necessarily want the NBA to focus on small markets but I think it would be beneficial if franchises had an alternate path to building a contender than trying to find a superstar at all costs.