OT: The NBA's Version Of A Bailout/Stimulus Package?

[ABM]

Hmmmm..........

From: Sports Business Journal

The NBA is set to borrow $175 million Feb. 26, marking one of the first league financings since the implosion of the credit markets last fall.

The money, which will be available to 15 teams, supplements an existing $1.7 billion leaguewide credit facility that uses the NBA’s media contracts as collateral to secure loans for the clubs. The NBA surveyed its teams, and 15 responded they would like to tap into the new borrowing.

While the league said it is pleased to borrow in an extremely illiquid credit market, the deal came at a cost, with interest rates up to 8.27 percent, hammering home the notion that the era of cheap money in sports is over. The 15 teams can use the money for any purpose, but covering operating losses may be high on the list.

“In this economic environment, it’s tremendous that the league can place such a facility,” said Alex Martins, chief operating officer of the Orlando Magic, which plans to borrow from the new debt. “It certainly helps us bridge the time period between now and when we move into our new events center in 2010. We’ve been operating at a $15 [million] to $20 million [annual] loss over the past half-dozen years, so it helps us.”

Each of the 15 teams can borrow a maximum of $11.66 million from the debt proceeds.........................

 

[Fez Hammersticks]

This is a perfect moment for Allen to buy the Hornets, disband that team, and bring CP and West to Portland.

 

[blue32]

If contracts for the players wouldn't be so ridiculously high, I'm sure they wouldn't have to do something like this. Max contracts in this game are crazy.

 

[Fez Hammersticks]

It wouldn't be as bad if teams weren't locked into contracts.

Jermaine O'Neal: $21.3
Tracy McGrady: $21.1
Steve Francis: $19.8

If only the NBA had non-guaranteed contracts where players actually had to earn their keep. What a concept, right?

 

[blue32]

It wouldn't be as bad if teams weren't locked into contracts.

Jermaine O'Neal: $21.3
Tracy McGrady: $21.1
Steve Francis: $19.8

If only the NBA had non-guaranteed contracts where players actually had to earn their keep. What a concept, right?

Agreed; isn't that what the NFL does?

 

[ABM]

Agreed; isn't that what the NFL does?

Yep. I think their "thing" is signing bonuses which, of course, are guaranteed.

 

[PapaG]

The league is about to swim in red and is laying off staff at both the league and team level, yet David Stern made a decision on the Blazers picking up Darius Miles that will cost Paul Allen a boatload of money. All for a player who gets 8 minutes a game on one of the worst teams in the NBA.

 

[Ed O]

The league is about to swim in red and is laying off staff at both the league and team level, yet David Stern made a decision on the Blazers picking up Darius Miles that will cost Paul Allen a boatload of money. All for a player who gets 8 minutes a game on one of the worst teams in the NBA.

It will actually help most teams by causing more of Paul Allen's money to be redistributed through the luxury tax.

Plus, it's the rules.

Ed O.

 

[PapaG]

It will actually help most teams by causing more of Paul Allen's money to be redistributed through the luxury tax.

Plus, it's the rules.

Ed O.

I don't think that an extra $300k or so is going to make much of a difference, and I still don't agree that the cap can be circumvented by legally claiming a player that no other team wants to claim. Anyhow, it appears that New Orleans is the latest team to give up their hopes for a title solely for financial reasons.

 

[DaRizzle]

If only the NBA had non-guaranteed contracts where players actually had to earn their keep. What a concept, right?

I disagree, then it will be like the NFL where you have player holdouts.

Thats another subjuect but I cant believe the NFL doesnt have guaranteed contracts. These players are killing themselves for their team

 

[Rip City Revelator]

It wouldn't be as bad if teams weren't locked into contracts.

Jermaine O'Neal: $21.3
Tracy McGrady: $21.1
Steve Francis: $19.8

If only the NBA had non-guaranteed contracts where players actually had to earn their keep. What a concept, right?

Yeah, screw accountability in the front office!