SBD/Issue 21/Leagues & Governing Bodies

NBA Tells Players Union That Owners Are Suffering Deep Losses

Hunter Wants To Look At NBA
Finances Before Next CBA Talk
NBPA Exec Dir Billy Hunter indicated that the NBA has told the union that team owners "will lose 'hundreds of millions of dollars' over the course of the current" CBA, based on the "last four years of the deal combined with projections of declines in revenue for the next two years," according to Mullen & Lombardo of SPORTSBUSINESS JOURNAL. Hunter said that the league has "begun disclosing its finances to the union, sending two boxes of documents" to the NBPA last week. The NBA's statements about losses were based in part on "projections of what will happen in the future," and Hunter noted that the NBA last year "projected revenue declines and ended up with" a 2% revenue gain for the '08-09 season. Hunter: "They say they have lost money ... and they want to recoup those losses and achieve a more positive financial statement or balance. Their contention is the players are receiving too great a portion of the revenues." But he added, "They are losing money because of their alleged reduction in fans ... and as a result they have had to reduce ticket prices. That is why they are losing money." While NBA owners are "pushing for another bargaining session," Hunter said that he "wants to be cautious and digest the financial information the league sent before meeting again." Hunter: "They would like for me to negotiate a deal now in the current climate" (SPORTSBUSINESS JOURNAL, 10/12 issue).

ALL ABOUT THE BENJAMINS: In Boston, Gary Washburn wrote with the NBA CBA set to expire after the '10-11 season, Hunter "might have bookmarked" NBA Commissioner David Stern's comments last week regarding the financial state of the league. Stern while addressing reporters in London said of the economic downturn, "Actually, we've been remarkably unaffected by it. Our attendance will be strong, again, this year. Our television ratings have been up for two years and likely will go up. ... We feel pretty good about our place in this difficult time." Washburn noted Hunter may "figure that if the league is doing so well and remaining strong during this tumultuous time, then there is no reason for the players to give more of a percentage of revenue to owners" (BOSTON GLOBE, 10/11).

RUSSIAN DRESSING: ESPN.com's Bill Simmons wrote, "You know the NBA is in at least a little trouble financially when it allows a Russian billionaire to buy a team. Five or six years ago, how fast do you think David Stern squashes the idea when someone says to him, 'So, I guess the best way to describe him is that he's like a Russian Mark Cuban'? Two seconds? One second? Which raises the question: Did Stern just open the door to all foreign billionaires, or was this a one-time thing?" Simmons wrote the NBA simply was "desperate to fix this Nets situation and salvage the Brooklyn complex that it didn't care where the money came from," and the sale was a "one-time exception" (ESPN.com, 10/9).

UNION DUES: SBJ's Lombardo & Mullen in a separate piece report the NBRA in its most recent financial filing reported total assets of nearly $133M for the 12-month period ending June 30, down from $136.7M from the year earlier. A union source indicated that the "decrease was due to a decline in the stock market and other union investments." The filing reveals that the NBA paid the union $6.8M in licensing fees "in each quarter of the most recent fiscal year," up from $6.25M a year earlier. The league also paid the union $8M in logo-use revenue, up from $7M. Meanwhile, the filing shows that Hunter earned $3.465M last year, up from $2.318M a year earlier. The increase is "attributed to a one-time payout" of about $1.1M for "vacation time accrued over 13 years" that Hunter has served as Exec Dir (SPORTSBUSINESS JOURNAL, 10/12 issue).

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