The NBA is headed for Financial Problems

[Stephane Dumas]

I spotted that article from ZeroHedge who tell then the NBA will head to financial problems. http://www.zerohedge.com/news/2015-12-01/nba-headed-financial-problems

[DeaconG]

Sigh. I remember when Zero Hedge had excellent articles and an informed commentariat.
When they left Blogger it all went to hell.

I rarely go there now, generally to see if there's any decent articles being posted, and I do my damndest not to scroll to the comments...

[DeaconG]

And to keep it on topic:

The argument the author makes is one that can be applied to any sport these days; that being said, before I see the NBA hitting financial problems the NFL will see them first.  I think the entire who-will-move-to-Los-Angeles-angst on top of the concussion issues and the general economy is going to put the NFL in a position of having major financial issues before the NBA, I would not be surprised if within the next 20 years the NFL sheds at least six to eight teams due to the fact that no one is going to put up major money to build stadiums for these guys anymore.  The building you're seeing in Minneapolis and Atlanta is probably going to be the last time you see governments making complicated financial arrangements to have a stadium built.

Not that I don't think they won't replace them in the future, but the costs are starting to get out of hand versus the needs of the municipality.

If anything I think the NBA will be relatively stable, even after the expansion of the salary cap...as long as they can get people to buy into the product, and even then, it's cheaper to go to a basketball game than a football game and more hospitable too.  It's when you get to "do I drop $200-300 (or more) to take my family to the arena and put up with all that mess or get the game on cable for a significant drop in price, plus sit at home with my A/V system and watch and take the extra money to take care of pressing business?" Well...

[Stephane Dumas]

And to keep it on topic:

The argument the author makes is one that can be applied to any sport these days; that being said, before I see the NBA hitting financial problems the NFL will see them first.  I think the entire who-will-move-to-Los-Angeles-angst on top of the concussion issues and the general economy is going to put the NFL in a position of having major financial issues before the NBA, I would not be surprised if within the next 20 years the NFL sheds at least six to eight teams due to the fact that no one is going to put up major money to build stadiums for these guys anymore.  The building you're seeing in Minneapolis and Atlanta is probably going to be the last time you see governments making complicated financial arrangements to have a stadium built.

It could be interesting to see who might be the 6 or 8 NHL teams who'll face that fate of being shed. Will they end abruptly and lock the doors or these teams could decide to create their own league?

Meanwhile, there some NHL clubs being in survival mode then Gary Bettman do his best to keep them on these market or to move only to another American city (Phoenix/Arizona Coyotes, Florida Panthers or Carolina Hurricanes moving to Las Vegas or Seattle). I saw this article from the Toronto Star about a cautionary tale of NHL expansions http://www.thestar.com/sports/hockey/2015/12/04/the-history-of-nhl-expansion-is-a-cautionary-tale-cox.html

[DeaconG]

I always thought the surge of the NHL to the Southeast was a calculated risk.  Growing up in Philly and being an inveterate Flyers fan I was curious to see how hockey would work out 'down south'. Other than the Tampa Bay Lightning, not well at all...although I wasn't too happy with the outcome of Atlanta's second team, they should have stayed the course a few more years.

I'm not too sure that there would be room for another hockey league in a situation where the primary product doesn't seem to be working in many areas of the country. Sure, they could go to existing venues, cut back on their salaries and expenses and tweak the rules somewhat to try to give it it's own flavor, what you end up with will probably look like the Arena League...and have the same reception in the long run.

[TheStranger]

although I wasn't too happy with the outcome of Atlanta's second team, they should have stayed the course a few more years.

Atlanta Spirit (owners of the arena, the Atlanta Thrashers, and the NBA Atlanta Hawks at the time) were uninterested in having the arena being available for hockey, kinda forcing the NHL's hand on that one.

[SP Cook]

NBA - The NBA is indeed heading for financial problems for one basic reason.  Its finances are built on a MASSIVE over payment and MASSIVE over coverage by ESPN of what, really, is a second tier niche sport.  ESPN passes that cost on to customers.  As the current cable/dish all-in-one-price package goes away and people pay for only what they want, the NBA, which 95% of people ignore totally, is left with its niche.  A niche that skews heavily towards poor folks and little kids.

NHL - The NHL, not that long ago, might as well have not existed south of I-70 or so.  No teams, no coverage, no way to follow it.  So it expanded to the south.  Nothing wrong with being the #4 team in town in the south, as it makes the sport a national one.  No way to get on TV nationally if you have no presence in half the country.

[Brandon]

I always thought the surge of the NHL to the Southeast was a calculated risk.  Growing up in Philly and being an inveterate Flyers fan I was curious to see how hockey would work out 'down south'. Other than the Tampa Bay Lightning, not well at all...although I wasn't too happy with the outcome of Atlanta's second team, they should have stayed the course a few more years.

I'm not too sure that there would be room for another hockey league in a situation where the primary product doesn't seem to be working in many some areas of the country. Sure, they could go to existing venues, cut back on their salaries and expenses and tweak the rules somewhat to try to give it it's own flavor, what you end up with will probably look like the Arena League...and have the same reception in the long run.

People tend to forget that the "National" in National Hockey League refers first and foremost to Canada, not the US.  I'm very sure Winnipeg is much happier with the team they got from Atlanta than Atlanta ever was.  As for those of us in the northern states, hockey is humming along just fine.

[Alps]

I always thought the surge of the NHL to the Southeast was a calculated risk.  Growing up in Philly and being an inveterate Flyers fan I was curious to see how hockey would work out 'down south'. Other than the Tampa Bay Lightning, not well at all...although I wasn't too happy with the outcome of Atlanta's second team, they should have stayed the course a few more years.

Carolina counts as "down south" and they have quite the following. I believe Dallas does as well.

[mgk920]

It could be interesting to see who might be the 6 or 8 NHL teams who'll face that fate of being shed. Will they end abruptly and lock the doors or these teams could decide to create their own league?

Meanwhile, there some NHL clubs being in survival mode then Gary Bettman do his best to keep them on these market or to move only to another American city (Phoenix/Arizona Coyotes, Florida Panthers or Carolina Hurricanes moving to Las Vegas or Seattle). I saw this article from the Toronto Star about a cautionary tale of NHL expansions http://www.thestar.com/sports/hockey/2015/12/04/the-history-of-nhl-expansion-is-a-cautionary-tale-cox.html

Although I kindof sound 'broken recordish' on this, how might things work out should either the NBA or NHL (or both) convert to a promotion and relegation system, with the weak teams being performance-relegated to a second division and the strongest of the second division teams being promoted to replace them at the end of each season?

With hockey, remember that the Stanley Cup looooong predates the NHL and IMHO, this would set it free again to be the sport's true top prize, not just the championship trophy of a single league.

Mike

[jeffandnicole]

And to keep it on topic:

The argument the author makes is one that can be applied to any sport these days; that being said, before I see the NBA hitting financial problems the NFL will see them first.  I think the entire who-will-move-to-Los-Angeles-angst on top of the concussion issues and the general economy is going to put the NFL in a position of having major financial issues before the NBA, I would not be surprised if within the next 20 years the NFL sheds at least six to eight teams due to the fact that no one is going to put up major money to build stadiums for these guys anymore....

No way.  The NFL is hugely profitable.  Not just in game attendance, but in overall popularity.  The TV packages alone are worth billions.  While the main season is from September thru December, the playoffs extend the season another month. They allow 2 weeks between the Conference Championships and the Superbowl.  Spring Training happens in baseball...and then it's time for the NFL Draft!  While the NBA and NHL have Best of Seven playoff series that allow practically every team to participate, the NFL has voluntary minicamps.  And then when July hits, the NFL starts to warm up for practices for their exhibition season in August.  All 32 teams play 16 games over a 4 month period, but yet the NFL has managed to remain relevant all year long.

[lordsutch]

More to the point, the NFL's labor model is by far the most sustainable of the major sports leagues. The NFLPA is weak, contracts aren't guaranteed, and there are "good enough" players available at most positions that even if they start losing the talent arms race to less concussion-prone sports there are plenty of acceptable replacements coming out of college each year - if they don't figure out how to reduce concussions, which they probably will even if it means turning passing plays into flag/two-hand tag football.

As for the NFL in Los Angeles, the angst there is more about the NFL leaving tens of millions of dollars in annual revenue on the table than a likely cost. When it comes to the stadium issue, if cities finally wise up and stop paying for new stadiums (something devoutly to be wished, but probably unlikely as long as there are cities that want the NFL but don't have it, like San Antonio, Salt Lake City, and Memphis) the teams will just have to live with operating in the existing stadiums and maintaining them, which they could easily do with their current revenue streams already.

[Stephane Dumas]

With hockey, remember that the Stanley Cup looooong predates the NHL and IMHO, this would set it free again to be the sport's true top prize, not just the championship trophy of a single league.

Mike

Yes, the NHL hold the cup since the 1920 but a new rule allow the Stanley cup to allow non-NHL teams to fight for the cup if the NHL season is cancelled due to a strike or lock-out. https://web.archive.org/web/20071216083200/http://www.tsn.ca/nhl/news_story/?ID=153935&hubname=

[formulanone]

and I do my damndest not to scroll to the comments...

The commenters have totally missed the idea that race has nothing to do with the financial situation. If you dislike the sport: don't watch it, don't patronize it, and move on.

There's always been bad teams in every sport; someone has to be the cellar-dweller. But 30+ teams in a league might be on the excessive side, but with revenue sharing, teams stay afloat. And there always seems to be a buyer when the current owners find it to be an untenable situation.

[Desert Man]

The NBA as well the NHL had recent years of financial problems and teams had issues staying afloat. Considering the two leagues plan an expansion of their sports (Las Vegas granted teams), they need to keep older teams in existence away from filing bankruptcy. Seattle might not get teams because of their city council disapproved funding of their proposed arena. Las Vegas' proposed NBA team (if they were given one) may purchase the NBDL Reno team and the Sacramento Kings' start a new one in Stockton. The NBDL has serious financial crises due to being a smaller or more semi-pro league.

[jeffandnicole]

The demise of these sports and these sport teams has been going on for quite a while.  Any predictions today have been predicted before, and failed to materialized.  And before you say it's different today than it was in the past, when it comes down to it, no it's not. 

The NHL is EXPANDING, not contracting.  Las Vegas was just awarded a franchise.

[Henry]

The NBA as well the NHL had recent years of financial problems and teams had issues staying afloat. Considering the two leagues plan an expansion of their sports (Las Vegas granted teams), they need to keep older teams in existence away from filing bankruptcy. Seattle might not get teams because of their city council disapproved funding of their proposed arena. Las Vegas' proposed NBA team (if they were given one) may purchase the NBDL Reno team and the Sacramento Kings' start a new one in Stockton. The NBDL has serious financial crises due to being a smaller or more semi-pro league.

Let's not forget MLB, which has had the same problems that led to strikes in 1972, 1981 and 1994. We said that Washington would never get a team again based on the failures of the last two teams that played there, and then there were the Nationals, which are doing quite well for a change. Too bad it had to come at Montreal's expense, though. It's good to see some small-market teams winning for a change, such as the Pirates making the playoffs in the last three seasons, and the Royals winning the World Series last year. Most of the MLB teams have gotten new stadiums, or had their current ones renovated, in the last quarter-century, but cities like Tampa/St. Petersburg and Oakland are in danger of losing their teams.

[Duke87]

Most of the MLB teams have gotten new stadiums, or had their current ones renovated, in the last quarter-century, but cities like Tampa/St. Petersburg and Oakland are in danger of losing their teams.

The A's have already relocated twice, what's it matter if they relocate again? There's another team right across the bay anyway, so that market will remain served.

If the Rays were to move that would leave Tampa/St Pete without a permanent baseball team, but there are plenty of teams playing spring training down there and there is at least another team in Florida.

Sports club relocations have been happening as long as there have been pro sports and are a natural reaction to shifting market conditions. They do not in any way indicate the league as a whole being in trouble.

[SP Cook]

Oakland:  Oakland cannot/does not wish to spend money on a stadium, and a, really goofy IMHO, court ruling prevents it from moving elsewhere in the Bay Area, such as San Jose.  Oakland being more of a blue collar industrial area, while San Jose is more prosperous.  If the people of Oakland would rather build roads or schools or hospitals than ballparks, then good for them.  Reality is that the SFO area probably is going to draw about the same number of people to baseball, whether it has 2 teams or one. 

Florida:  Baseball's expansion to Florida was a mistake.  Many people in Florida retain loyality to teams "back home" even if they moved to Florida early in life, not to mention retirees.  Even many Florida natives follow teams from where their parents or grandparents lived.  And, because of spring training, this is easier and more logical than elsewhere.  If baseball has declared Florida an "open zone" with all the teams on TV and even a few regular season games played there, with all the teams spliting the money, it would have been a great way of revenue sharing.

[bing101]

Oakland:  Oakland cannot/does not wish to spend money on a stadium, and a, really goofy IMHO, court ruling prevents it from moving elsewhere in the Bay Area, such as San Jose.  Oakland being more of a blue collar industrial area, while San Jose is more prosperous.  If the people of Oakland would rather build roads or schools or hospitals than ballparks, then good for them.  Reality is that the SFO area probably is going to draw about the same number of people to baseball, whether it has 2 teams or one. 

Florida:  Baseball's expansion to Florida was a mistake.  Many people in Florida retain loyality to teams "back home" even if they moved to Florida early in life, not to mention retirees.  Even many Florida natives follow teams from where their parents or grandparents lived.  And, because of spring training, this is easier and more logical than elsewhere.  If baseball has declared Florida an "open zone" with all the teams on TV and even a few regular season games played there, with all the teams spliting the money, it would have been a great way of revenue sharing.

http://www.constructiondive.com/news/ruling-helps-to-clear-way-for-new-golden-state-warriors-arena/422936/  The Warriors could move to San Francisco Soon.

[jeffandnicole]

Florida:  Baseball's expansion to Florida was a mistake.  Many people in Florida retain loyality to teams "back home" even if they moved to Florida early in life, not to mention retirees.  Even many Florida natives follow teams from where their parents or grandparents lived.  And, because of spring training, this is easier and more logical than elsewhere.  If baseball has declared Florida an "open zone" with all the teams on TV and even a few regular season games played there, with all the teams spliting the money, it would have been a great way of revenue sharing.

While I tend to agree with much of that, saying it's a mistake is probably overboard.  It's not like these teams experimented with Florida baseball and folded or moved.  The Marlins started in '93; the Devil Rays in '98.  The Marlins built a new stadium a few years back; the Rays are looking at sites for new stadiums now.  It's clear there's a market for summertime Florida teams and neither of them don't have any appearance of leaving the state anytime soon.

[dirtroad66]

The Devil Rays are a location problem. Because of where the Dome is it is not conducive for people from the surrounding counties to get to games during the week with only 3 bridges leading into downtown St Pete. If they get a stadium across the Bay,East of Tampa could open the market to 3 million more fans.

[I-39]

My two cents.

I have a feeling there is going to be a MAJOR NFL labor dispute in 2021, especially if Roger Goodell is still around. I believe the NFL players are absolutely fed up with the direction of the league and they are going to push for things like fully guaranteed contracts and fairer arbitration, amongst other things.

The NBA, IMO, is having a talent problem. The talent coming out of the draft the last few years has been pretty bad. They need to end the one and done rule and force kids to stay in college for at least two years (3 would be better though, so they are at least 21).

NHL and MLB are humming along fairly well.

[Desert Man]

Florida:  Baseball's expansion to Florida was a mistake.  Many people in Florida retain loyality to teams "back home" even if they moved to Florida early in life, not to mention retirees.  Even many Florida natives follow teams from where their parents or grandparents lived.  And, because of spring training, this is easier and more logical than elsewhere.  If baseball has declared Florida an "open zone" with all the teams on TV and even a few regular season games played there, with all the teams spliting the money, it would have been a great way of revenue sharing.

While I tend to agree with much of that, saying it's a mistake is probably overboard.  It's not like these teams experimented with Florida baseball and folded or moved.  The Marlins started in '93; the Devil Rays in '98.  The Marlins built a new stadium a few years back; the Rays are looking at sites for new stadiums now.  It's clear there's a market for summertime Florida teams and neither of them don't have any appearance of leaving the state anytime soon.

Move the Rays to Montreal then and if there's another MLB expansion, switch leagues to the NL, and grant new teams for Buffalo NY and Brooklyn NY (if the NL Mets and AL Yanks oppose this, how about Charlotte NC, Puerto Rico-AL or NL or another team for Tampa Bay in the AL?), because a poor-performing MLB team is an embarrassment of themselves to the Florida State and Gulf Coast Leagues with better winners and sells out more even for smaller minor league venues. There are 2 AA teams of the Southern League in FL: Jacksonville and Pensacola.

About the troubled NBA: does this mean 1/3 of the leagues' teams can go out of business or fail for bankruptcy? In CA, the Lakers are still selling despite Kobe's retirement and a not-so-winning season, the cross-town rival Clippers are doing much better in recent years, the GS Warriors had a record-breaking season (most wins in a single year at a robust 73) and could win next season's championship like in 2015, and the Sacramento Kings stay in the state capital. In 2009-10, the Portland Trail Blazers held their training camp in La Quinta high school near Palm Springs, where they hosted 3 outdoor NBA games (2008-11) in Indian Wells Tennis Garden.

If the NBA plans to expand, I thought the Inland Empire region of southern CA can be granted their first major league sports team: San Bernardino needs an upgrade to its decrepit image, but serves as the hub of CA's 2nd largest metro area (centered in Riverside, affluence in Palm Springs and suburban growth in Temecula near San Diego, Victorville near SB and even the 29 Palms USMC base which is sparsely populated), let's have a new NBA-standard arena in SB. Imagine the "California South Stars" (NBA) to indicate its location in the state.