Inside The Nba Essay

401 Words2 Pages
Inside NBA’s revenue sharing The article discusses how the NBA’s revenue sharing plan works and the impact it will have on the league. Once the plan is fully integrated by the “2013-2014 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 leagues neediest teams, each which could receive up to $16 million a year as part of the plan. The plan is intended to make certain teams more competitive. The new plan shifts from the old plan that relied on luxury tax revenue to fund the limited revenue sharing. The new plan is “rooted in a philosophy of including locally generated dollars from the big-market, high revenue teams to be spread among the low-revenue teams.” The plan requests that all teams contribute an annually fixed percentage which is predicted to be roughly 50 percent of their total annual revenue but they are allowed to subtract certain expenses such as arena operating costs, into a revenue sharing pool. Although every team has to contribute there is a plan to protect the high revenue teams so that they don’t have to pay over 50% of their revenue. Including this revenue sharing teams also share national revenue from TV and sponsorship at around $30 million for each team. When the plan is implemented the shared revenue will grow from $60 million last season to roughly $200 million when the plan is fully implemented. The plan received mixed reactions but the league believes that in the end it is for the best of the league. This new revenue plan is going to hold teams responsible for meeting expected local market revenue standards. “The new plan calls for small-market teams to generate at least 70 percent of the leaguewide average in total team revenue in order to receive full

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