SBJ/December 5-11, 2011/Leagues and Governing Bodies

Revenue-sharing plan going to NBA owners

NBA owners are expected to vote this week on an overhauled revenue-sharing plan at the same time they vote on the league’s new labor deal.

Over the course of the five-month lockout, the league’s planning committee, chaired by Boston Celtics owner Wyc Grousbeck, hammered out a final revenue-sharing plan that long has been on a dual but separate track with a new collective-bargaining agreement. The NBA would not discuss specifics of the plan until after the vote, but a source confirmed that the planning committee has kept to its effort to quadruple the amount of local revenue to be shared among the NBA’s 30 teams.

This year, the NBA was expected to share some $60 million in revenue. The planned increase means the shared revenue pool is expected to grow over the coming three years to about $240 million annually, as the league looks for more financial balance across big-market and small-market teams.

Another provision expected to be part of the new revenue-sharing plan is a requirement for teams to meet performance criteria. One potential criterion would be that teams operate under a certain range of expenses in order to receive full revenue-sharing proceeds, according to a source.

In addition to its current limited revenue-sharing system, the NBA shares its national television revenue, which last year amounted to about $30 million for each team. There has been a growing disparity between franchises because of local TV deals, however, as big-market clubs like the Los Angeles Lakers and Boston Celtics sign lucrative new local contracts.

Published reports have put the Lakers’ new 25-year deal with Time Warner Cable, beginning next year, at $200 million annually. The Celtics have signed a 20-year extension with Comcast Sports Net New England, running until 2038, that brings the team equity in the network along with a major boost in rights fees that currently average around $20 million annually.

Those teams, along with other high-revenue clubs such as the New York Knicks and Chicago Bulls, stand to contribute the most amount of local revenue to other teams under the new formula.

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