A look at the NBA’s new revenue-sharing program
This morning, we briefly mentioned the NBA’s expanded revenue-sharing program that was ushered in following the basketball lockout. If you’re curious about how the new program works (since the NHLPA is pushing ahrd for more revenue-sharing between NHL owners), this SportsBusiness Daily article from January (via PBT) explains it well.
[The revenue-sharing program] was fueled by a plea from eight small-market teams in 2007 and grew into one of the league’s most contentious issues, running parallel with the league’s collective-bargaining agreement negotiations.
When fully phased in by the 2013-14 season, it will see a stunning $140 million in additional revenue sharing coming into play compared with last year, moving money through a complex formula that shifts some of the financial wealth of big-market NBA teams to the league’s neediest teams, each of which could receive up to $16 million a year as part of the plan.
Some team executives said that while the system does not completely close the financial gap between high- and low-revenue teams, it is the most progressive form of revenue distribution in the league’s history.
“Whenever you have 30 teams in 30 different markets, you have 30 different goals and needs,” said one team executive, addressing the sensitivity of the issue among owners. “It’s not perfect, but I think it will show that it will be a success.”
When it comes to an expanded revenue-sharing program in the NHL, the most reluctant owners will obviously be the ones that have to cut the checks.
Why would teams like the Leafs, Rangers and Flyers want to subsidize their weaker brethren?
The Los Angeles Lakers are one of the NBA’s high-revenue teams, and this is how team executive Jeanie Buss put it: “Any business operator wants to keep their revenue. That’s the nature of the business, but we also understand the bigger picture and we want a league with teams that are economically viable so that every team has the opportunity to compete. It makes for a healthier league.”