By all accounts, the NBA has never been in better shape: player salaries continue to skyrocket, franchises are routinely selling for record amounts, and the League’s mammoth new TV rights deal will soon kick in.
And yet, the threat of yet another lockout hangs over everything.
Adam Silver spoke to reporters Tuesday in Las Vegas, after the latest Board of Governors meeting, and the commissioner tried to sell the idea that quite a few teams are losing money.
Per USA Today:
With many executives, players and media members assuming players would opt out of the current collective bargaining agreement in the summer of 2017 and perhaps enter a work stoppage, Silver offered a sliver of hope that we may all be wrong. […] “You know, I’m not sure if the Players Association is going to opt out,” he said. “(Union director) Michele (Roberts) made some early remarks suggesting maybe they were leaning that direction, but she hasn’t told me that she plans to opt out. And I know that in discussions that she and I have had and I’ve had with Players Association representatives, it’s clear the goal on both sides is to avoid any sort of work stoppage whatsoever and maybe even to avoid the opt out.”
Business is booming, of course. The league’s nine-year, $24 billion television contract with ESPN and Turner set to start next season and the salary cap is spiking to record levels as a result. In the here and the now, though, Silver said there are still a “significant number of teams” losing money.
“They continue to lose money because their expenses exceed their revenue,” he explained. “Even with revenue sharing and fairly robust revenue sharing when some teams are receiving over $20 million checks from their partners…In order to compete across this league with a relatively harsh tax, teams are spending enormous amounts of money on payroll. Some of the (player) contracts we talked about (are a significant factor). They still have enormous expenses in terms of arena costs. Teams are building new practice facilities. The cost of their infrastructure in terms of their sales people, marketing people, the infrastructure of the teams have gone up, and in some cases their local television is much smaller than in other markets. In some cases because of historical deals, and in some cases just because the market won’t command the kinds of dollars that you can get in the larger markets.”