Report: Eight NBA owners willing to lose an entire season
Posted: Thursday July 16, 1998 09:06 PM
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The Clippers and the Spurs are among four NBA teams reporting financial losses for the 1997-98 season (Tim Hauck/Allsport) |
MILWAUKEE (CNN/SI) -- While fans wait and wonder if the NBA's lockout will
end before the scheduled season begins, at least eight team owners already
have decided to forgo the year rather than take an unsatisfactory deal.
The Milwaukee Journal Sentinel reported Thursday that a source told the
paper there already exists a core of at least eight owners prepared to sit
out next season if a satisfactory agreement cannot be reached.
The existence of a group of hard-line owners may explain a statement made
by Commissioner David Stern on June 29, the day the league announced a
lockout of its players.
"Unfortunately, there'll be a number of clubs that will do better not
operating than operating," said Stern at the time.
The players are digging in also.
"We would like to reach some agreement before the start of the season,"
said Billy Hunter, director of the players association. "But if we can't,
we're prepared to go the distance."
Team officials are operating under a league-imposed gag order since the
lockout was imposed. However, late in the regular season, Bucks owner Herb
Kohl, while conceding that it has become more challenging to keep a
small-market professional sports franchise viable and prosperous, did say
that the team had remained profitable in each of his seasons as owner.
"Some more than others," he said.
Kohl also said the Bucks had received one of the league's special payments
to "fiscally challenged" franchises. Those can run upwards of $3 million.
It is not clear how many teams are operating at a loss as varying signals
are emitted from the two sides. The players have contended that only a
handful of teams are losing money. But if there are eight owners already
prepared to sacrifice the season, perhaps there are more.
League owners voted to impose the lockout by a 27-2 vote.
One of the problems that exists is that the league and the players have not
always seen eye-to-eye on the definition of "revenue."
According to deputy commissioner Russ Granik, league revenue is determined
by an independent auditor who passes the information along to both sides.
"That produces the BRI; basketball related income," Granik said recently.
"The players have received all of the league and team financials over the
last few years. Most, although not all (of the teams), have audited
financial statements and where they do, they have been given to the union
as well.
"Those statements show what they show although the union has come out and
said, 'We think that only four teams, maybe, lost money'. We don't know how
they have arrived at that and frankly we don't look at that as the central
issue in any event."
According to the players association, the four teams that lost money in
1997-'98 were the Washington Wizards, Los Angeles Clippers,
Denver Nuggets and
San Antonio Spurs.
"The real issue for us is how profitable is the league as a whole," said
Granik. "And we have been in a steady decline in profitability over the
last four years to the point where this year, we feel that for the first
time in maybe 14 or 15 years, the league as a whole, with all 29 teams
taken together, was actually unprofitable."
Stern has said that league profits peaked in 1992-'93 and have been on the
decline ever since.
What, then, actually qualifies as "basketball-related income"?
"I don't know anything that's not in there that somebody would rationally
say belongs there,"
Granik said. "We've had a couple of disputes like naming rights in the
building, or you know if a team gets a payment to move somewhere else, how
much of that gets included.
"But we sat down four years ago with the union's accountants because they
had complained in the prior deal that there were lots of revenue items that
were not included and we said, 'Look, you throw in anything you want to and
we'll put it in, then we'll agree on the percentage.'
"And so we really set out to include just about anything. Then we came to
the 48% [of the league revenue paid to players] number."
The two sides have not met since the lockout was imposed. They hoped to
meet again sometime in the near future.
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