Lakers Continue To Be An Economic Juggernaut

Lakers Continue To Be An Economic Juggernaut

Postby Kobe8Fan on Wed Oct 17, 2012 7:51 pm

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By Mike Bresnahan
October 18, 2012

The Lakers aren't just a roster of All-Stars trying to win a 17th NBA championship.

They're an economic machine, with more money than ever pumping into, and out of, their franchise.

Their $100-million payroll is the NBA's largest, they currently owe $30 million more in luxury taxes, and they're projected to pay $49 million next February for revenue-sharing dues from last season, according to NBA documents.

Don't cry too much for the Lakers, though.

The team makes up to $90 million in annual ticket sales and is starting the first year of a TV deal with Time Warner Cable that pays them $120 million more this season.

Their bean counters will be, um, busy.

"The numbers are staggering," said George E. Belch, chairman of marketing at San Diego State. "The Lakers are clearly a marquee franchise of the NBA. Because of the size of their market, they can command large revenue, particularly on the TV side, a big part of paying some of these bills."

The Lakers received about $60 million total in local broadcasting rights from KCAL and FS West last season, a number that doubled in the first year of the Time Warner deal. Annual raises bring the deal to about $3.6 billion through 20 years, and the Lakers hold an option to extend to 25 years, potentially pushing the total over $5 billion.

The shark swimming through the water, though, is the prospect of stalled negotiations between Time Warner and a host of TV providers to carry Lakers games. The first Time Warner game to be televised is Oct. 31 in Portland, one day after the Lakers begin the regular season with a TNT exclusive broadcast against Dallas at Staples Center.

The beast that's already attacked the Lakers is the revenue-sharing concept installed after the NBA lockout ended last December. NBA Commissioner David Stern, acting on behalf of several small-market owners, deemed the luxury-tax payroll penalty too insignificant to stop large-market teams from distorting parity by spending freely.

Teams that prosper financially in a given season don't owe revenue-sharing dues until the following February.

"It damages the Lakers a lot because they're projected to pay $49 million, which sucks up a lot of the money they're getting from the Time Warner contract," said NBA salary-cap expert Larry Coon. "Luckily, they got that contract in order to pay for the revenue sharing."

The Lakers aren't quite alone. Chicago, Boston, New York and Miami also owe steep revenue-sharing payments, though the Lakers are projected to owe twice the amount of any other team, according to NBA documents. Small-market teams with limited payrolls and annual financial losses will gain from the redistributed wealth.

"They needed to bring player expenses down but also level the playing field. They figured revenue-sharing would do that," Coon said. "Combine that with progressive luxury taxes coming next year and it's getting to the point where few teams will be able to spend."

Indeed, larger luxury taxes loom next season. The $30 million the Lakers could pay in luxury taxes this season would be pocket change to the $85 million owed next season if they had another $100-million payroll.

Will they keep spending? They certainly received a heavy boost from Time Warner for years to come.

"Sports broadcast rights, there's a premium on them," Belch said. "You wonder where it's going to stop. The draw of the Lakers is they win. They may not get the championship every year, but you know that they're in there, you know they're going to contend for the title."

mike.bresnahan@latimes.com

twitter.com/Mike_Bresnahan


http://www.latimes.com/sports/basketbal ... 8119.story
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Re: Lakers Continue To Be An Economic Juggernaut

Postby therealdeal on Thu Oct 18, 2012 9:09 am

Damn. It's easy to ask the Busses to keep spending when you don't see the exact numbers...

I wasn't aware that the TV deal wouldn't really make them any money over the next two seasons. The luxury taxes (and redistributed wealth) will be THAT punitive to this team. Of course, in 2 years they'll be rolling in money again because of the deal, but for now that's a huge committment.

85 million in taxes alone next season? And there's really very little hope of being able to avoid much of that at this point. Unless they unload Pau and Metta for peanuts and even then it'd still be a huge hit. Kobe must have really talked a great game to get the Busses to buy into this "2 year" plan.

Major props to the Busses for putting the fans, winning, and ultimately marginal profit above making bigger money.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby Finwë on Thu Oct 18, 2012 10:23 am

therealdeal wrote:Major props to the Busses for putting the fans, winning, and ultimately marginal profit above making bigger money.

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Re: Lakers Continue To Be An Economic Juggernaut

Postby V.V.V.V.V. on Thu Oct 18, 2012 1:10 pm

I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby JGC on Thu Oct 18, 2012 1:16 pm

V.V.V.V.V. wrote:I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.


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Re: Lakers Continue To Be An Economic Juggernaut

Postby Battle Tested20 on Thu Oct 18, 2012 1:28 pm

V.V.V.V.V. wrote:I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.


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Re: Lakers Continue To Be An Economic Juggernaut

Postby LakerFan1235 on Thu Oct 18, 2012 2:02 pm

V.V.V.V.V. wrote:I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.

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Re: Lakers Continue To Be An Economic Juggernaut

Postby Kasumi on Thu Oct 18, 2012 2:15 pm

LakerFan1235 wrote:
V.V.V.V.V. wrote:I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.

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Yup, I'd never heard of this TWC deal. Something that big should spark a 34-page thread discussing it.... oh wait... :man11:
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Re: Lakers Continue To Be An Economic Juggernaut

Postby John3:16 on Thu Oct 18, 2012 2:19 pm

:man10: :man10: :man10:

Thread quickly derailed.

Back on topic: Not sure about the $120 million figure from TWC deal. The math is $200 million a year. Maybe they are receiving less in the first few years. Anyone know?
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Re: Lakers Continue To Be An Economic Juggernaut

Postby Alcindor on Thu Oct 18, 2012 2:24 pm

LakerFan1235 wrote:
V.V.V.V.V. wrote:I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.

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Re: Lakers Continue To Be An Economic Juggernaut

Postby Forklift on Thu Oct 18, 2012 3:08 pm

I'm pretty sure the Buss's have other sources of income besides Lakers, but even so a team eating up so much money can be kinda depressing. Props to the Buss's for trying to give us Rings after Rings! :jam2:
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Re: Lakers Continue To Be An Economic Juggernaut

Postby John3:16 on Thu Oct 18, 2012 3:52 pm

Forklift wrote:I'm pretty sure the Buss's have other sources of income besides Lakers, but even so a team eating up so much money can be kinda depressing. Props to the Buss's for trying to give us Rings after Rings! :jam2:


Not like most owners who own teams as a hobby. The Lakers are more of a mom and pop organization. That is worth a billion.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby V.V.V.V.V. on Thu Oct 18, 2012 8:27 pm

Just postin in the spirit of Captain Obvious. :man11:

By the way, now that it's been spelled correctly, NO ONE has the right to ever use the phrase "juggler knot" again.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby D.B. Cooper on Thu Oct 18, 2012 8:58 pm

LakerFan1235 wrote:
V.V.V.V.V. wrote:I don't know if any of you guys have TWC, but they basically created a Laker channel that runs 24/7, with games, repeats of games, behind-the-scenes shows, and of course commercials round the clock. That station is going to make TW billions, especially if they offer it as part of a luxury package of spurts channels, which they may do in a year or two.

I bet the Lakers get a huge bonus from them if they win a championship.

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Re: Lakers Continue To Be An Economic Juggernaut

Postby dmaul on Fri Oct 19, 2012 7:59 pm

It disgusts me that the Buss family has to share their wealth with the rest of the stiffs in this league. They put in the hard work and had the smarts and saavy to make a big market team successful (not a given, by the way) but they're forced to operate under this socialist model. It's not analogous to rich people in this country paying a lot of taxes that go for public programs and services to benefit the other 99%, mostly lower and middle class. In this case, the money is going to other rich people and in a lot of cases, the other owners of the league are far wealthier than the Buss family.

The Lakers are a mom and pop shop and it would be sad if they had to report this money they're giving back to the league as income. It should be a tax deduction. This wouldn't be as bad if say the league gave all that money to charity, used it to buy tickets for disadvantaged youth to come to NBA games in all 30 cities, started a scholarship program, had the players build houses or wells in third world countries, anything other than handing it to the sniveling, whiny owners like Dan Gilbert et al.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby Kasumi on Sat Oct 20, 2012 9:00 am

^^^ I agree and disagree. The difference here is that without the other teams, the Lakers wouldn't exist. After all, who would they play? It's in each team's best interest that other teams stay solvent and relevant and with a relatively even playing field. If a team could spend without constraint and signed a team of all All-Stars, then played against JV-talent teams, who would want to watch that?

Yes, the Lakers are extremely successful because they're a team with some great business executives willing to draw the money in from marketing, TV deals, etc. And they understand the concept of winning teams making more money, therefore they're willing to spend to win. This is a concept their stadium partners, the Clippers, never seemed to grasp.

But other than LA & New York, what other team has the population, wealth and geography to bring in the same kind of income?

I do, however, think it's being taken too far. In its current system, the league is penalizing the successful teams and rewarding the unsuccessful teams. Owners more interested in money than winning (Donald Sterling?) would be content to ride the waves and live off Lakers handouts - which is indicative of our current social economic problems.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby therealdeal on Sat Oct 20, 2012 10:35 am

Kasumi wrote:I do, however, think it's being taken too far. In its current system, the league is penalizing the successful teams and rewarding the unsuccessful teams. Owners more interested in money than winning (Donald Sterling?) would be content to ride the waves and live off Lakers handouts - which is indicative of our current social economic problems.

Well said.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby Phil XI on Sat Oct 20, 2012 3:10 pm

Freaking communism. Redistribution is for pussies. Make your own [Swearing is not permitted at Clublakers. You must edit this post prior to submitting.] money Cleveland. Expand too large and then make them share. [Swearing is not permitted at Clublakers. You must edit this post prior to submitting.] Saperstern and his [Swearing is not permitted at Clublakers. You must edit this post prior to submitting.]. Contract back to 24 and let's get this league back on track. Kill the JV franchises!
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Re: Lakers Continue To Be An Economic Juggernaut

Postby dmaul on Sat Oct 20, 2012 4:37 pm

Kasumi wrote:^^^ I agree and disagree. The difference here is that without the other teams, the Lakers wouldn't exist. After all, who would they play? It's in each team's best interest that other teams stay solvent and relevant and with a relatively even playing field. If a team could spend without constraint and signed a team of all All-Stars, then played against JV-talent teams, who would want to watch that?

Actually, the last thirty years have shown that you don't need parity for the league to be successful. The NBA is not the NFL. The NBA is a superstar and superteam driven league. When you have superteams, the fans are more interested. There have always been garbage teams in the league and there always will be. If you expand you'll just dilute the talent pool and increase the number of bad teams. So the Lakers can be mega successful and you can have lots of bad teams and it's still good for the league, still good for ratings.

I'm not saying teams should be able to spend without constraint, like MLB, but even if they did there is no guarantee of success. There have been lots of teams in recent memory in the top 5 payroll wise with nothing to show for it - New York, Portland, Dallas for many years, etc. The bottom line, if you don't have a smart front office you're not going anywhere no matter how deep your pockets.

The answer is not to restrict spending with absurd and complicated tax rules. The answer is to contract the league and get rid of all the garbage teams and garbage talent. Admit it, there are plenty of players that shouldn't be in this league, plenty of teams that have no business being in the NBA. But every team has at least one or two decent players so if you got rid of a few teams and consolidated those players that's where you'll get your competitive balance.
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Re: Lakers Continue To Be An Economic Juggernaut

Postby Ariza3 on Sat Oct 20, 2012 4:57 pm

Their $100-million payroll is the NBA's largest, they currently owe $30 million more in luxury taxes, and they're projected to pay $49 million next February for revenue-sharing dues from last season, according to NBA documents. Don't cry too much for the Lakers, though. The team makes up to $90 million in annual ticket sales and is starting the first year of a TV deal with Time Warner Cable that pays them $120 million more this season. Los Angeles Times


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Re: Lakers Continue To Be An Economic Juggernaut

Postby Kasumi on Sat Oct 20, 2012 4:58 pm

dmaul wrote:The answer is not to restrict spending with absurd and complicated tax rules. The answer is to contract the league and get rid of all the garbage teams and garbage talent. Admit it, there are plenty of players that shouldn't be in this league, plenty of teams that have no business being in the NBA. But every team has at least one or two decent players so if you got rid of a few teams and consolidated those players that's where you'll get your competitive balance.


Agree. There are too many teams and I would definitely support contraction. And there's not to say that a small-market team with a relatively low payroll can't be successful, just look at San Antonio. However, few teams have the fortune to have an owner, GM, scouts, coach and superstar at the caliber of the Spurs and the talent is far too diluted. The Spurs aside, with league contraction and unlimited spending, where would those superstar players go? It's guys like Sessions that run from the Lakers in favor of a garbage team, the great players go to great teams. There does need to be some economic parity, though not to the current extent.

p.s. - In your example of top payroll teams, don't forget that Dallas did win a championship. New York and Portland are simply examples of bad GMs combined with bad fortune/injuries.
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