A Substitute for War

Basketball philosophy

Posts Tagged ‘Salary cap

It’s simple: NBA owners are either hobbyists or terrible businessmen

with 3 comments

National Basketball Association

Image via Wikipedia

TrueHoop has two posts today reporting on the discussion from the Sports and Label panel at the the MIT Sloan Analytics Conference today, which to me go right together in explaining the crux of the problem in the upcoming CBA re-negotiation.

The first is titled, “Is sports franchise ownership a hobby for the rich?“, and it talks about the growing trend of NBA owners being so rich that the amount of money at stake on their NBA franchise is pocket change to them.

The second is titled, “Sports and Labor panel address boarder issue of NBA profit“, which talks about all sorts of tricky nuances to the NBA situation.

To me the situation though just doesn’t seem that complicated. The NBA owners insisted on putting a salary cap in place last time the CBA was negotiated which actively penalizes teams in a variety of ways if they go over that limit. The current salary cap is $58.044 million, and 24 out of the 30 are over that cap. That salary cap was put there because NBA owners had already proven prone to spending too much money – and clearly, even though the owners now have an explicit penalty to their bottom line telling them “You’re doing this wrong, stop spending money!”, they still spend. Only the owners themselves stand in the way of achieving profitability.

Read the rest of this entry »