Moneybags Lacob whines about luxury tax
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drae
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PostPosted: Thu Jul 21, 2022 7:36 pm    Post subject:

vasashi17+ wrote:
^@deal: Maybe they make it quantifiable in the same manner they do the repeater tax. In a 4 yr window, if a team earns a winning record and/or certain playoff advancements 3 times, then they receive a tax exemption particularly if they’re also a repeat tax offender.

The same “measurables” can be applied to player retention frequency & length/amount of player contracts.

All I’m saying is that there should be a reward/bonus of some sort for high performing franchises proving the capability over several years. The NBA becomes a better product and you can earn better TV deals in the future.

Just a thought.


The problem with providing bonuses to high performing franchises is that it's then easier for high performing franchises to stay high performing and be even more high performing widening the gap between top teams and bottom teams.
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PostPosted: Thu Jul 21, 2022 8:10 pm    Post subject:

Aeneas Hunter wrote:
Dr. Laker wrote:
The point is that, technically, the NBA is an equal partnership of 32 owners. In that partnership, however, revenue is not shared equally. Markets like OKC (44th), San Antonio (31st), Memphis (51st), etc., are at a financial disadvantage compared to New York (1st), LA (2nd), San Francisco (6th) and cannot ever generate the same revenue.


First, a couple quibbles. The NBA is not a partnership, and there are not 32 teams. The NBA does not have a single entity model like MLS.

More importantly, your comments identify one of the distinguishing features of the NBA (and MLB) compared to the NFL: the significance of local revenues. Local TV revenue is probably the greatest single difference between the large market teams and the small market teams. The ticket prices are a lot higher in LA and NYC than in the small markets, for sure, but the disparity in local TV revenue is striking.

In the NFL, a team like the Packers gets its share of the national TV contract. The differences in revenues are smaller. This is one of the major reasons why the dynamics of the NFL as so different from the NBA.


Good catch on the 32 teams - I was on a work Zoom and got distracted.

As for the "partnership" piece - Cuban, Jeanie, Silver, et. al., referred to each other as partners during the 2011 lockout, and was the basis for the owners' meddlings in the New Orleans sale - including their pissing and moaning about the CP3 trade (I'll look for links but it's been 12 years).
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PostPosted: Thu Jul 21, 2022 8:28 pm    Post subject:

Dr. Laker wrote:
As for the "partnership" piece - Cuban, Jeanie, Silver, et. al., referred to each other as partners during the 2011 lockout, and was the basis for the owners' meddlings in the New Orleans sale - including their pissing and moaning about the CP3 trade (I'll look for links but it's been 12 years).


Sure. The league actually owned the Pelicans. I'm not sure how that was structured legally. A partnership is a single entity, though. The NBA is 30 teams in an association, which is why they are called franchises. They aren't exactly like fast food franchises, but the concept is similar. The teams are independently owned but have contractual rights and duties through a central authority (the NBA itself).

I stress the distinction because one of the defining characteristics of a partnership is sharing profits and losses. The NBA franchises don't do that. One Burger King franchisee may make huge profits due to a great location or other factors, while another Burger King franchisee struggles. The same is true for the teams in the NBA.
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PostPosted: Thu Jul 21, 2022 8:36 pm    Post subject:

vasashi17+ wrote:
<snip>

At its core, the CBA encourages player retention. If that leads to a repeater luxury tax, it’s almost like being penalized for having a great scouting team & player developmental team that continuously drafts/develops players capable of 10+ years in the league earning above average pay. <snip>


The purpose of the CBA is to:

1 - get the players paid (including benefits), while the owners make enough money to make having a franchise worthwhile.
2 - see #1.

The cap, lottery, luxury tax, competitive balance mechanisms, etc., all evolved from #1, when the players were making $50 per game and figured out they were getting screwed.

The desire to give home teams an advantage in keeping their players just stems from places like Oklahoma City and Cleveland not being great free agent destinations. so they needed to have a leg up against Miami, LA, etc., so those teams could have revenue generating draws, instead of being farm teams for the big markets.

Neither the owners nor the players give a crap about whether the team is built organically or through free agency.
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PostPosted: Thu Jul 21, 2022 9:10 pm    Post subject:

Aeneas Hunter wrote:
Dr. Laker wrote:
As for the "partnership" piece - Cuban, Jeanie, Silver, et. al., referred to each other as partners during the 2011 lockout, and was the basis for the owners' meddlings in the New Orleans sale - including their pissing and moaning about the CP3 trade (I'll look for links but it's been 12 years).


Sure. The league actually owned the Pelicans. I'm not sure how that was structured legally. A partnership is a single entity, though. The NBA is 30 teams in an association, which is why they are called franchises. They aren't exactly like fast food franchises, but the concept is similar. The teams are independently owned but have contractual rights and duties through a central authority (the NBA itself).

I stress the distinction because one of the defining characteristics of a partnership is sharing profits and losses. The NBA franchises don't do that. One Burger King franchisee may make huge profits due to a great location or other factors, while another Burger King franchisee struggles. The same is true for the teams in the NBA.


You're a lawyer, right? That's why Skakespeare wrote . . . nm.

NBA owners are members of non-profit Association and has equal voting rights as the other members through its designated representative on the Board of Governors. Members are required to make annual capital contributions in proportion to their gross gate receipts, and if those funds are not sufficient to pay for the operation of the Association, the balance is distributed equally among the members.

Yada yada. to everyone but lawyers, it's like a partnership.CONSTITUTION AND BYLAWS

As others have stated, however, it would be much better for the whole if they had NFL style revenue sharing.. In the NFL, only the Giants and Browns had TV deals in the 50s. When Art Modell (a TV executive) bought the Browns, he came up with the idea of getting a deal for everyone, instead of just he vand the Giants owner keeping the money to themselves. Not only did that forward thinking change the NFL and make the owners insane profits, it changed pro sports worldwide.
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PostPosted: Thu Jul 21, 2022 10:10 pm    Post subject:

My biggest issue with the tax is that its so highly progressive. It shouldn't be that signing a guy for $5 million if you are over the tax, actually ends up costing $15 mils. That's absurd.
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PostPosted: Thu Jul 21, 2022 10:11 pm    Post subject:

Cry
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PostPosted: Thu Jul 21, 2022 10:16 pm    Post subject:

activeverb wrote:



I am not sure there is a realistic system to create competitive balance, given the unique natural of basketball where a small number of stars give the teams that acquire them a disproportionate advantage.


The best way to restore competitive balance is to get rid of the Max Salary system, and allow each player to get the most money he can while still working around the confines of the luxury tax/soft cap.

That way, the truly elite players would make their real value, and given the cap/tax no team could afford more than having 1 of those guys on their team. For instance, if Steph Curry is really worth 80 million a year, then he's not going to be able to team up with other guys in his range.

the NBA would go back to how it was in the 90s where it seemed each city had its one superstar that they paid big bucks too, and the rest of the guys were paid accordingly.
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PostPosted: Fri Jul 22, 2022 5:53 am    Post subject:

Dominic1981 wrote:
activeverb wrote:



I am not sure there is a realistic system to create competitive balance, given the unique natural of basketball where a small number of stars give the teams that acquire them a disproportionate advantage.


The best way to restore competitive balance is to get rid of the Max Salary system, and allow each player to get the most money he can while still working around the confines of the luxury tax/soft cap.

That way, the truly elite players would make their real value, and given the cap/tax no team could afford more than having 1 of those guys on their team. For instance, if Steph Curry is really worth 80 million a year, then he's not going to be able to team up with other guys in his range.

the NBA would go back to how it was in the 90s where it seemed each city had its one superstar that they paid big bucks too, and the rest of the guys were paid accordingly.


Players don't want that - but as long as they get their 51% of BRI, it shouldn't matter.
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PostPosted: Fri Jul 22, 2022 6:24 am    Post subject:

Dr. Laker wrote:
Dominic1981 wrote:
The best way to restore competitive balance is to get rid of the Max Salary system, and allow each player to get the most money he can while still working around the confines of the luxury tax/soft cap.

That way, the truly elite players would make their real value, and given the cap/tax no team could afford more than having 1 of those guys on their team. For instance, if Steph Curry is really worth 80 million a year, then he's not going to be able to team up with other guys in his range.

the NBA would go back to how it was in the 90s where it seemed each city had its one superstar that they paid big bucks too, and the rest of the guys were paid accordingly.


Players don't want that - but as long as they get their 51% of BRI, it shouldn't matter.


That's not quite right. The players' aggregate cut of BRI is 51% or so. But the union is made up of individual players, and only a few of them get max contracts. The union needs to promote a system under which the non-superstars get paid. This has been a balancing act over the last 25 years. The players also want strong free agency. These differing objectives are often at odds with each other and often conflict with the interests of the owners. And so we have a system that is filled with compromises.

The max contract system was pushed by the owners back in the '90s, and it has caused all sorts of problems since then. Back then, the maximum contract length was seven years, so we had teams stuck with stinker contracts (Brian Grant). Then they cut the contract length, and players like Lebron started moving and creating super teams. So then we got the super max contracts, which backfired badly in some cases. And then there was amnesty, the stretch and waive system, revenue sharing, and lots of other stuff. We'll probably get more changes in the next CBA negotiation as the sides try to find a balance that works for everyone, or at least that works better.

Anyway, the point is that it isn't as simple as a percentage of BRI. That's just the starting point.
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PostPosted: Fri Jul 22, 2022 7:03 am    Post subject:

Dominic1981 wrote:
activeverb wrote:



I am not sure there is a realistic system to create competitive balance, given the unique natural of basketball where a small number of stars give the teams that acquire them a disproportionate advantage.


The best way to restore competitive balance is to get rid of the Max Salary system, and allow each player to get the most money he can while still working around the confines of the luxury tax/soft cap.


That's not realistic though. The players won't go for a system where the top players soak up even a greater percentage of the total pie, leaving the vast majority of the players with a lot less.
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PostPosted: Fri Jul 22, 2022 7:13 am    Post subject:

- Does not resolve the tanking issue.

- Does not resolve the strength in conference issue.

In any given season, five or six teams will actively try to lose games; e.g. resting stars, showcasing players, and/or developing young players.

The obvious way to restore competitive balance would be to concentrate the talent in the league by contracting the number of teams, rather than dilute the talent in the league by expanding the number of teams.

There is talk of expanding into other countries. Imagine if an NBA franchise in China had the #1 pick.
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PostPosted: Fri Jul 22, 2022 7:47 am    Post subject:

Maybe something like players that you drafted don't count against your luxury tax. So if the scenario comes up where you drafted well you are just paying their salaries and not 2:1 or whatever the rate is.
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PostPosted: Fri Jul 22, 2022 8:13 am    Post subject:

JUST-MING wrote:
The obvious way to restore competitive balance would be to concentrate the talent in the league by contracting the number of teams, rather than dilute the talent in the league by expanding the number of teams.


Sure. We had competitive balance when the league was smaller in the 1960s. Oh, wait . . . .

Seriously, though, competitive balance doesn't mean that all of the teams are balanced. That will never be true. Competitive balance means that ability of the teams to compete is balanced. Well run teams should do better, and poorly run teams should do worse. It shouldn't only be about which teams are in the largest markets or have the largest revenue streams.

The Warriors' reward for running their team well can be found in their trophy cabinet. The Knicks' reward for running their team poorly can also be found in their trophy cabinet.
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PostPosted: Fri Jul 22, 2022 8:15 am    Post subject:

LakesGnrLake wrote:
Maybe something like players that you drafted don't count against your luxury tax. So if the scenario comes up where you drafted well you are just paying their salaries and not 2:1 or whatever the rate is.


Why would a team get an additional bonus for drafting well? Drafting well is its own reward.
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PostPosted: Fri Jul 22, 2022 8:32 am    Post subject:

Aeneas Hunter wrote:
LakesGnrLake wrote:
Maybe something like players that you drafted don't count against your luxury tax. So if the scenario comes up where you drafted well you are just paying their salaries and not 2:1 or whatever the rate is.


Why would a team get an additional bonus for drafting well? Drafting well is its own reward.


It was something that was brought up in the article. If a team drafts well, when it comes to resign all the players it's almost impossible to sign them all without destroying your total salary. So you get the NBA saying we want stars to stay with the teams that draft them, but have a system in place where if you do draft well you won't be able to keep all your players.
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PostPosted: Fri Jul 22, 2022 9:23 am    Post subject:

LakesGnrLake wrote:
Aeneas Hunter wrote:
LakesGnrLake wrote:
Maybe something like players that you drafted don't count against your luxury tax. So if the scenario comes up where you drafted well you are just paying their salaries and not 2:1 or whatever the rate is.


Why would a team get an additional bonus for drafting well? Drafting well is its own reward.


It was something that was brought up in the article. If a team drafts well, when it comes to resign all the players it's almost impossible to sign them all without destroying your total salary. So you get the NBA saying we want stars to stay with the teams that draft them, but have a system in place where if you do draft well you won't be able to keep all your players.


Yes, the article said that, but it's a false premise. We need to be clear here: The point of the CBA changes from 2011 to present was NOT to get stars to stay with the teams that drafted them. The point was to enhance the ability of smaller market teams to keep their stars. That's different. This was not based on the idea that there is some inherent value in teams keeping the players they drafted. Instead, the idea was that smaller market teams were having trouble keeping their stars because they did not have sufficient tools to keep them from becoming free agents and leaving.

So in the case of the Warriors, the system was not designed to help a high revenue, large market team keep players just because it drafted them. The system was designed to help Milwaukee keep Giannis, Charlotte keep Lamelo, and so forth. Generally speaking, this has been successful, though some teams have shot themselves in the foot by overpaying for players (Beal is the latest example). But that's a matter of good management vs. bad management.
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PostPosted: Fri Jul 22, 2022 9:32 am    Post subject:

Great discussion in here fellas and I don’t necessarily disagree with each side.

I still believe if you place a tax exemption towards well functioning organizations, it will encourage both small and large market teams to employ more competitive decision making.
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PostPosted: Fri Jul 22, 2022 9:50 am    Post subject:

Lacob whines about luxury tax and is going to write out another check for 140 mil at the very least this coming season. (it will go up as they only have 11 players at the moment) in fact, if not for the "reset" in 2019-2020 due to injuries, they will be paying 250-300 mil now.
https://www.cnbc.com/2022/04/23/nbas-golden-state-warriors-plan-to-be-more-than-a-basketball-team.html
they can afford it because they have more income sources with the arena which we don't. (she missed a golden chance)

meanwhile, Jeanie is whining about it at 40 mil, and it is afraid of taking on more salaries this off season. would Jeanie keep Wiggins if she is the owner of the warriors in the same situation? i think you know the answer to that. she would run the warriors like a small market team.

of course no owner is happy about paying luxury taxes, but we are not and shouldn't be asking Jeanie to pay it every year. as a fan base, we just hope she can really go for it without limitations in contending years. i am perfectly fine with her collecting luxury tax payments from other owners while rebuilding.(2014-2020 she was doing it).
https://www.statista.com/statistics/196751/revenue-of-the-new-york-knicks-since-2006/#:~:text=The%20statistic%20shows%20the%20revenue,to%20298%20million%20U.S.%20dollars.
https://www.statista.com/statistics/196716/revenue-of-the-golden-state-warriors-since-2006/
https://www.statista.com/statistics/196721/revenue-of-the-los-angeles-lakers-since-2006/#:~:text=The%20statistic%20shows%20the%20revenue,to%20316%20million%20U.S.%20dollars.
lakers got a big revenue boost after 2012 with the TV deal kicked in, but their income growth is relatively flat compare to the warriors and the knicks. 2021 was the odd year because every team lost significant revenue due to Covid, but the decline for the lakers were smaller also because of the TV contract.
would Spectrum renew the contract at the end of the decade? would they pay more or less? this will be critical for the Lakers.

NBA teams will never earn similar revenues. the knicks haven't win anything for 35 years now(most years they were laughing stocks), and their revenue is still very high.
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PostPosted: Fri Jul 22, 2022 9:53 am    Post subject:

vasashi17+ wrote:
Great discussion in here fellas and I don’t necessarily disagree with each side.

I still believe if you place a tax exemption towards well functioning organizations, it will encourage both small and large market teams to employ more competitive decision making.


It would basically mandate tanking. The key to winning becomes drafting a super-max player and several role players for their exemptions. Only then can you afford to pay for contending roster.

Not to mention the inflation that would put on super-max contracts. Suddenly Beal's contract is cheap as long as you keep him in the exemption status, but its radioactive to every other team in the league.
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PostPosted: Fri Jul 22, 2022 9:53 am    Post subject:

vasashi17+ wrote:
Great discussion in here fellas and I don’t necessarily disagree with each side.

I still believe if you place a tax exemption towards well functioning organizations, it will encourage both small and large market teams to employ more competitive decision making.

if this was in place, OKC would've kept Harden. i do agree, teams should be rewarded by drafting well. Wiggins was not drafted by the Warriors, but OKC really drafted all of their stars.
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PostPosted: Fri Jul 22, 2022 11:33 am    Post subject:

Quote:
Before his $500,000 fine for describing the NBA’s current luxury tax system as “incredibly penal” and “very unfair” on the Point Forward Podcast hosted by Andre Iguodala and Evan Turner, Warriors owner Joe Lacob made the argument directly to fellow team owners at the recent Board of Governors session during summer league in Las Vegas that tax penalties should be reduced when teams re-sign players they drafted, league sources say. Three of Golden State’s four highest-paid players (Stephen Curry, Klay Thompson and Draymond Green) are Warriors draftees who have only played for one team. Because of the “repeater tax,” Golden State was charged $170 million in luxury tax alone last season and thus spent more than $340 million in salary and tax in winning the club’s fourth championship in eight seasons. Boston, beaten by the Warriors in six games in the NBA Finals, spent nearly $140 million in salary and tax in 2021-22. – via Marc Stein @ marcstein.substack.com

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PostPosted: Fri Jul 22, 2022 1:19 pm    Post subject:

^^^^

I gather that Stein did not say what kind of reaction this got. I'm guessing that the other owners didn't applaud.
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PostPosted: Fri Jul 22, 2022 2:34 pm    Post subject:

Aeneas Hunter wrote:
^^^^

I gather that Stein did not say what kind of reaction this got. I'm guessing that the other owners didn't applaud.


I'm fairly certain that at least 18 of them reacted along the lines of "OK, let's switch places."
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PostPosted: Fri Jul 22, 2022 4:44 pm    Post subject:

JUST-MING wrote:
-
The obvious way to restore competitive balance would be to concentrate the talent in the league by contracting the number of teams, rather than dilute the talent in the league by expanding the number of teams.


1. Obviously, the NBA isn't going to actually contract the number of teams. For one thing, contracting the league by, say, four teams would cost each of the remaining owners $300 million apiece or more since they would have to buy out the owners of the contracted teams.

2. Beyond that, contracting the number of teams doesn't inherently mean the league would become more competitive. That just means the players would be spread among fewer teams, but it doesn't inherently mean the talent would be spread any more evenly among teams than they are now.

3. As another poster said making the league competitive isn't about ensuring each team has the exact same level of talent. It's about making sure each team has the same ability to compete for talent, regardless of their size or location.
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