NBA to Explore Contraction?

by October 22, 2010

by Marcel Mutoni / @marcel_mutoni

David Stern went on the offensive yesterday, telling the media that he and the 30 NBA team owners are hell-bent on making the League profitable.

Stern’s goals include the slicing of player salaries and benefits by one-third (the NBA says it spends somewhere in the neighborhood of $2 billion annually on pay for its players), and to make the finances work, the League may consider getting rid of some teams.

CBS Sports reports:

A person with knowledge of the owners’ discussions said the league “will continue to be open to contraction” as a possible mechanism for restoring the league to profitability. The owners’ ongoing talks about competitive balance, profitability and revenue sharing have included the notion of whether teams are operating in “the best available markets,” the person said, and whether reducing the number of teams from the current 30 would help improve the product and the bottom line.

Stern and deputy commissioner Adam Silver spoke after completing two days of meetings with league owners, who are seeking major changes to the current CBA that expires June 30. Silver said the league has told the union that owners are in a “diseconomic situation,” with projected losses of about $340 million to $350 million this season. Even though season ticket sales are up, both insisted that no matter how well the league does at the box office, it won’t change the fact that an overhaul is necessary. “There’s no chance we can change the fundamental economics regardless of our success because it just costs us too much money to generate those sales,” Silver said.

One recurring complaint from fans and media is that the NBA isn’t as competitive today as it used to be, and its rapid expansion over the years is often blamed for this. Perhaps a contraction wouldn’t just be a good thing for its economic health.

And if getting rid of struggling franchises can help avoid a lockout next summer, it’s an option definitely worthy of serious consideration.