Bus Law

.. rs and emerging superstars entered the league and took it by storm. Earvin “Magic” Johnson and Larry Bird revolutionized the NBA. Magic and Bird defined the new ideal basketball player as the “versatile big man”. Both men, six feet – nine inches tall, combined their size with great shooting touch, outstanding ball handling, and tremendous passing.

Magic and Bird excited the crowds with their new styles and spectacular plays, as they influenced the rest of the league to change into a league based on their styles of play. More and more fans wanted to see this new style first hand, which garnered more revenue in the ticket office. Following the entrance of Magic and Bird was another individual who America immediately embraced. In the mid 1980s, Michael Jordan emerged as one of the most, if not the most exciting professional athlete ever to have competed in sports. His high-flying, acrobatic, and seemingly gravity-defying moves earned him such nicknames as Air Jordan and “Superman in Shorts”.

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Jordan’s exciting style of play combined with his incredible talent for the game attracted great numbers of previously uninterested NBA fans. Many of these new fans did not care about the games; they just wanted to get a chance to see Michael Jordan in action. From the time that Jordan won the league’s Rookie of the Year award for the 1984-1985 season, until the end of the ’80s, the overall NBA attendance rose forty-seven percent; thus, the Chicago Bulls became the most popular road team in the league (Attendance). In addition, during this time, the NBA’s gross revenues nearly doubled to $300 million dollars, and the average attendance rose almost four thousand per game to thirteen thousand four hundred twenty. The Chicago Bulls alone sold out more games in an eighteen month period from 1987-1988 than they had in their twentytwo year history. Almost single-handedly, Michael Jordan’s fame had brought the league from being mocked as the National Buffoon Association in the beginning of the decade, to one of the most popular sports attractions by the end of the decade.

At this time, because the media foresaw monumental opportunities ahead from the NBA, they began to reward the league with large amounts of money. The growing interest in the NBA from fans and advertisers caused the networks to shower the league with money. In 1988, the NBA’s revenue from television exceeded $130 million. The next year, Ted Turner paid $275 million to keep the NBA on Turner Network Television (TNT) for the next four years. Then, in late 1989, NBC outbid CBS, the network that had broadcasted the NBA for the past seventeen years.

CBS’s last contract was a four-year, $173 million deal. However, NBC offered a new four-year deal worth $600 million. Although this seemed like a great risk for NBC, they were very confident in the NBA. As executive Vice President at NBC Sports, Ken Schanzer said, “Right now, we think the NBA can be enormously profitable for us.” This confidence in the NBA continued throughout the 80s and continues in the 90s. However, todays fan not only wants to see Michael Jordan, but also enjoys the likes of Shaquille ONeal, Kobe Bryant, Stephon Marbury, Allen Iverson, and many more. It is evident that the players were, are, and will continue to be the reason why the owners grow wealthier.

Moreover, the NBA owners are not suffering financially, but insist on claiming poor and exercising their greed. Every NBA owner has more than enough money to pay these athletes what they want and deserve. A recent article by Forbes Magazine analyzes the entire money situation with all professional athletic teams. The article lists all NBA franchises and their total values. The Chicago Bulls ranked first at $303 million, the New York Knicks ranked second at $296 million, the Los Angeles Lakers ranked third at $268 million, and the Portland Trailblazers ranked fourth at $245 million. The last place franchise, the Milwaukee Bucks, was estimated at $94 million.

These values are relatively high and do not correspond to the owners claims of poverty. The article also ranked the revenues that each franchise earns annually based on previous statistics. The Portland Trailblazers ranked first with $34.2 million, the Detroit Pistons ranked second with $30 million, the Los Angeles Lakers ranked third with $24.8 million, and the Utah Jazz ranked fourth with $20.7 million. These figures show that owners are earning large amounts of money; enough to pay their players. Nevertheless, the Board of Directors reported that sixteen owners claimed losses in revenue last year.

Why does this math, not add up? It does not add up because owners do not report all their sources of revenue. According to Forbes, which states that only ten NBA franchises actually lost money, many owners discount revenue from corporate naming rights, advertising, luxury suites, and team merchandise stores. Two examples of this “fraud” are Jerry Reinsdorf, owner of the Chicago Bulls, the Chicago White Sox, and the United Center, and Phillip Anschutz who owns the LA Lakers, the LA Kings, and the LA Clippers. Reinsdorf beats the system by excluding part of the revenue from United Center, the state of the arena that the Chicago Bulls call home. The United Center houses two hundred sixteen luxury suites that procure $12.7 million in revenue; sixty percent, or $7.6 million, of which he can exclude from revenue.

Phillip Anschutz is in the process of building a new arena in downtown Los Angeles. This new arena will house the Lakers, the Kings, and the Clippers. Staples Inc. is giving Anschutz $100 million over twenty years to put their name on the arena. The one hundred sixty luxury suites should accumulate $40 million in revenue and corporate advertising should gain $5 million in revenue; all of which Anschutz will credit to The Staples Center.

In addition to those revenues, the NBA and its television partners have agreed on a contract worth at least $2.4 billion over four years, more than double the current deal. The contract breaks down to at least $1.6 billion for NBC and $800 million for Turner Sports. Under the current four-year contract, which expires at the end of this season, NBC paid $750 million and Turner paid $350 million. This deal also included a revenue-sharing provision that will net the NBA additional revenue. It is a shame and a disgrace for NBA owners to be “tightfisted” with its players when it is evident that a plethora of money is available for contracts.

The owners of the National Basketball Association handle monumental amounts of money that can be evenly distributed amongst the players and themselves. There is not a reason why already half, and possibly, the whole season is in jeopardy of being lost. The Board of Directors and the NBAPA, NBA Players Association, need to research other professional athletic leagues and examine their respective collective bargaining agreements for ideas. For example, the National Football League enforces a complicated, but well thought out collective bargaining agreement. In their system, which expires in 2000, each NFL team is allowed to designate one franchise player and one transitional player within the years of the agreement.

Clubs retain exclusive negotiating rights to a franchise player by committing no later than Feb. 13 to a minimum offer of the average of the top five salaries at the player’s position, or a twenty percent salary increase, whichever is greater. This offer must be presented before the end of the restricted free-agent signing period on April 14. Franchise players offered a minimum of the average of the top five salaries at their position in the 1996 season were able to negotiate with other clubs. In the latter case, the original club may match the offer and retain the player or receive two first-round draft choices as compensation if the original club elects not to match.

A transition player designation gives the club a first-refusal right to match an offer sheet given to the player by another club. In addition to the transition player option of franchise designation, each club was permitted a total of three transition designations — two in 1993 and one in 1994. To designate a transition player, the club must offer a minimum of the average of the top ten salaries of 1996 at the player’s position or a twenty percent salary increase, whichever is greater. This system, as well as others, seems to work well. The NBA needs to find a remedy for their problem so the players can do what they do best; PLAY BALL!.