The NBA will see a slight increase in revenue this season, but the actual results from 2008-09 are, according to commissioner David Stern, "lower than we had projected." The league also expects revenues to be down again in 2009-10, mainly because of the struggling economy and the lowering of ticket prices by teams adjusting to the recession.
But the notion that the league with the greatest global reach of any of the four major pro sports in the U.S. is in a financial crisis or that any of its teams are in trouble was quickly dismissed by Stern Thursday during an annual meeting with the Associated Press Sports Editors at the NBA offices in Manhattan.
"We have no teams that are in any trouble," said Stern, who earlier this season celebrated his 25th anniversary as commissioner. "Our owners are substantial people who are used to, in many cases, funding operating losses. It's not their preference and we're striving hard to increase revenues collectively and to ultimately have a collective-bargaining agreement and a revenue-sharing agreement that allows every club, if well-managed, to be profitable."
Stern's comments were in response to a report last month that 12 teams had borrowed $200 million from a league-run credit facility. Stern said the low-interest loans were offered to teams that wanted to pay down debt or get out of a higher-interest loan from another creditor. Despite reports that several teams - the Sacramento Kings, Indiana Pacers and Memphis Grizzlies, to name a few - are suffering debilitating financial losses this season, Stern insisted the credit line "was not an emergency fund."
Not this time, but there is the potential that teams again will need to reach out a hand in two years, when the league's collective-bargaining agreement with the NBA Players Association is set to expire. While fans are talking with great anticipation about the free- agency summer of 2010, teams are concerned about 2011.
Stern and union president Billy Hunter are trying to get an early start on the talks, which are expected to begin this summer. Stern will put together a labor relations committee sometime next month. The league does have the option to extend the agreement through 2011-12, but there is widespread belief that the 30 teams will decline that option.
Though Stern would not get into specifics about what changes need to be made to the current agreement, it is believed that some of the critical issues will involve increased revenue sharing, decreasing the length of guaranteed contracts and the mid-level exception.
Said Stern, "There are some robust discussions yet to be had between us and the players association."