Author Topic: Al Horford has been mediocre. He doesnt deserve his salary  (Read 16384 times)

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Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #75 on: January 28, 2018, 06:44:37 PM »

Offline fairweatherfan

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And if they remove the max team cap, LeBron is worth whatever someone is willing to write a check for. It doesn't mean that's his fair market value. If I pay $300 for a piece of bread it doesn't mean that's the going rate for it.

A lot going on here but this is literally what fair market value is.

A component of fair market value implies the individual is doing what's in his best interest. Me buying bread for that price isn't in my best interest. You cannot even begin to discuss "best interest" in terms of an investment until you look at the balance sheet (profits). Writing a blank check is not conducive to a good investment. Now, I've shown you an owner who is 40 mil in the hole each year. You want to double the deficit? Sure, go ahead. The valuation *will* drop. Not even close to the definition of best interest, especially for the league. All of these caps are perfectly calculated to extract the most amount of money for the players that the teams can afford and for all sides to live in harmony. Therefore, LeBron is making exactly the best money that he can make. It's the other guys who are overpaid.

And yet nevertheless, if someone was willing to pay LeBron far more than the max and he was willing to take it, that's by definition the fair market value for his services.

The idea that fair market value involves forbidding parties from deciding what their own best interests are, and that the cap is some perfect harmonization of maximum mutual value is so bizarre that I don't even know where to begin with it, but overall I think you may be conflating the idea of fair market value with a strong bias toward ownership.

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #76 on: January 28, 2018, 06:45:11 PM »

Online Erik

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Having a player like Lebron drives ticket sales higher, It allows for ticket price increases. He is a major factor for jerseys, clothing, and other paraphrenalia sales increasing. He about guarantees a trip to the Finals and given a team makes about an extra $5-10 million per playoff home game, he is responsible for that extra sales revenue.

His contract is also the best player commodity a franchise can own. Having him under contract could drive up franchise value by hundreds of millions of dollars.

None of this is true for a max player like Horford. Therefore, Lebron is underpaid compared to another max player like Horford because of the extra revenue he creates and extra asset value he provides to the franchise.

I agree with everything that you just said, although is should be worth noting that all of those things that you claim he boosts are already factored into a 40 million dollar deficit for the basketball team.

The part we disagree on is whether or not it's because Horford is paid too much or because LeBron is paid too little.

Another point that I glossed over earlier, the Knicks are #1 profitable team -- with Carmelo and without. The Lakers are #2 -- with Kobe and after he retired. There is only so much a star player can do. While LeBron drives up the Cavaliers franchise, it is much smaller than you realize. The market is the single most driving force for profit, and it is largely unchanged regardless of what kind of roster a team has. For example, in 2016, the Cavs were the 12th most profitable team, behind dumpsters like New York, LA and Chicago (1,2, and 3, respectively).

A player like LeBron can transcend a market by attracting "bandwagon fans" to buy memorabilia, increase ticket sale prices, making him more valuable to own than Horford. He is also not married to the team. He has a contract. No one buying the franchise is going to consider his relatively little worth to a team to be anything more than the contract that he's signed under.

https://www.forbes.com/sites/baileybrautigan/2016/03/21/where-all-that-money-comes-from-nba-team-valuations-visualized/#49b76bf444fd

This chart visualizes it much better than I can say.

Some of you also mentioned that the franchises are at an all time high profitability. This is, again, not due to the athletes, but more to do with the expanded TV deals and how these franchises have been able to profit off the internet.

And if they remove the max team cap, LeBron is worth whatever someone is willing to write a check for. It doesn't mean that's his fair market value. If I pay $300 for a piece of bread it doesn't mean that's the going rate for it.

A lot going on here but this is literally what fair market value is.

A component of fair market value implies the individual is doing what's in his best interest. Me buying bread for that price isn't in my best interest. You cannot even begin to discuss "best interest" in terms of an investment until you look at the balance sheet (profits). Writing a blank check is not conducive to a good investment. Now, I've shown you an owner who is 40 mil in the hole each year. You want to double the deficit? Sure, go ahead. The valuation *will* drop. Not even close to the definition of best interest, especially for the league. All of these caps are perfectly calculated to extract the most amount of money for the players that the teams can afford and for all sides to live in harmony. Therefore, LeBron is making exactly the best money that he can make. It's the other guys who are overpaid.

And yet nevertheless, if someone's willing to pay LeBron $100 million per year and he's willing to take it, that's by definition fair market value.

The idea that fair market value involves forbidding parties from deciding what their own best interests are, and that the cap is some perfect harmonization of maximum mutual value is so bizarre that I don't even know where to begin with it, but overall I think you may be conflating the idea of fair market value with a strong bias toward ownership.

I think you're the one confusing a very basic principle.

If I have an item to sell thats worth $50 and one person out of 100 offers me $100 for it and the rest offered me $50, it has a fair market value of $50, even though I made $100.

Just because you rip someone off doesn't mean thats the fair market value.

"To establish FMV, it must be assumed that prospective buyers and sellers are reasonably knowledgeable about the asset, that they are behaving in their own best interests, that they are free of undue pressure to trade and that a reasonable time period is given for completing the transaction.

If we remove large/small cap teams from the discussion and focus strictly on the Cavs, if someone wants to pay LeBron James $100 million to play basketball, the team will be losing $100 million dollars a year. It's a bad investment in which only someone that has no incentive to make a good investment will do... someone with a hobby or infinite amount of cash. It doesn't indicate fair market value because it's not what a completely rational person would pay for the item.

On a large market team, an owner can afford a $100 million salary for LeBron James. A smaller market owner, like Cleveland, cannot. That's a big reason why the league has to establish a salary cap so that the average franchise can be profitable and competitive.
« Last Edit: January 28, 2018, 07:22:17 PM by Erik »

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #77 on: January 28, 2018, 07:05:42 PM »

Offline nostar

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These threads are nonsense.

- He anchors the best defense in the league
- He posts 13/8/5/1 per game averages
- He was picked by the coaches to be an all star this year
- His coaches, both current and old, rave about him

The stats don't look crazy until you look at what company he's keeping. Only two other players are averaging at least 13P, 8R, 5A, 1B: Cousins and James. For all of those guys scoring more points, Al shoots 44% from 3 and averages less than half of their turnovers. Those guys eat usage while Al is more efficient as a complimentary player.

I bring up the coaches because, well, they are paid a lot of money to be better at this than we are.

Say he's not flashy, or not an alpha 1 or 1A, or that he had an off night. That's all fair game. But Horford is, by the metrics and by the eye test, a great player.

That said, I'm pretty tired of him backing shorter guys down just to spin and fade for a 12-15 footer. It's a shot he can hit, it's just one of his worst selections for any player.

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #78 on: January 29, 2018, 09:35:40 AM »

Offline Moranis

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Having a player like Lebron drives ticket sales higher, It allows for ticket price increases. He is a major factor for jerseys, clothing, and other paraphrenalia sales increasing. He about guarantees a trip to the Finals and given a team makes about an extra $5-10 million per playoff home game, he is responsible for that extra sales revenue.

His contract is also the best player commodity a franchise can own. Having him under contract could drive up franchise value by hundreds of millions of dollars.

None of this is true for a max player like Horford. Therefore, Lebron is underpaid compared to another max player like Horford because of the extra revenue he creates and extra asset value he provides to the franchise.

I agree with everything that you just said, although is should be worth noting that all of those things that you claim he boosts are already factored into a 40 million dollar deficit for the basketball team.

The part we disagree on is whether or not it's because Horford is paid too much or because LeBron is paid too little.

Another point that I glossed over earlier, the Knicks are #1 profitable team -- with Carmelo and without. The Lakers are #2 -- with Kobe and after he retired. There is only so much a star player can do. While LeBron drives up the Cavaliers franchise, it is much smaller than you realize. The market is the single most driving force for profit, and it is largely unchanged regardless of what kind of roster a team has. For example, in 2016, the Cavs were the 12th most profitable team, behind dumpsters like New York, LA and Chicago (1,2, and 3, respectively).

A player like LeBron can transcend a market by attracting "bandwagon fans" to buy memorabilia, increase ticket sale prices, making him more valuable to own than Horford. He is also not married to the team. He has a contract. No one buying the franchise is going to consider his relatively little worth to a team to be anything more than the contract that he's signed under.

https://www.forbes.com/sites/baileybrautigan/2016/03/21/where-all-that-money-comes-from-nba-team-valuations-visualized/#49b76bf444fd

This chart visualizes it much better than I can say.

Some of you also mentioned that the franchises are at an all time high profitability. This is, again, not due to the athletes, but more to do with the expanded TV deals and how these franchises have been able to profit off the internet.

And if they remove the max team cap, LeBron is worth whatever someone is willing to write a check for. It doesn't mean that's his fair market value. If I pay $300 for a piece of bread it doesn't mean that's the going rate for it.

A lot going on here but this is literally what fair market value is.

A component of fair market value implies the individual is doing what's in his best interest. Me buying bread for that price isn't in my best interest. You cannot even begin to discuss "best interest" in terms of an investment until you look at the balance sheet (profits). Writing a blank check is not conducive to a good investment. Now, I've shown you an owner who is 40 mil in the hole each year. You want to double the deficit? Sure, go ahead. The valuation *will* drop. Not even close to the definition of best interest, especially for the league. All of these caps are perfectly calculated to extract the most amount of money for the players that the teams can afford and for all sides to live in harmony. Therefore, LeBron is making exactly the best money that he can make. It's the other guys who are overpaid.

And yet nevertheless, if someone's willing to pay LeBron $100 million per year and he's willing to take it, that's by definition fair market value.

The idea that fair market value involves forbidding parties from deciding what their own best interests are, and that the cap is some perfect harmonization of maximum mutual value is so bizarre that I don't even know where to begin with it, but overall I think you may be conflating the idea of fair market value with a strong bias toward ownership.

I think you're the one confusing a very basic principle.

If I have an item to sell thats worth $50 and one person out of 100 offers me $100 for it and the rest offered me $50, it has a fair market value of $50, even though I made $100.

Just because you rip someone off doesn't mean thats the fair market value.

"To establish FMV, it must be assumed that prospective buyers and sellers are reasonably knowledgeable about the asset, that they are behaving in their own best interests, that they are free of undue pressure to trade and that a reasonable time period is given for completing the transaction.

If we remove large/small cap teams from the discussion and focus strictly on the Cavs, if someone wants to pay LeBron James $100 million to play basketball, the team will be losing $100 million dollars a year. It's a bad investment in which only someone that has no incentive to make a good investment will do... someone with a hobby or infinite amount of cash. It doesn't indicate fair market value because it's not what a completely rational person would pay for the item.

On a large market team, an owner can afford a $100 million salary for LeBron James. A smaller market owner, like Cleveland, cannot. That's a big reason why the league has to establish a salary cap so that the average franchise can be profitable and competitive.
Profitability and franchise value are different things though.  In 2009/2010, the Cavs were worth around 475 million.  Then James left and in 2011, the value fell to 355 million and then below 330 million the following season.  The new TV deals started to kick in and the team went up to 435 and 515 in 2013 and 2014.  James came back and the team valuation spiked all the way to 915 million, then 1.1 billion, and last year was worth 1.2 billion.  I suspect the team is probably worth a bit less this year, but if James leaves this summer it probably falls back into the 700 to 800 million range (about what the Wolves were valued at last year). 

You see a player like James, may not lead to a profitable season (especially with the luxury tax), but he absolutely leads to significant value for the owner and the franchise.  James is obviously the extreme example of this, but star players lead to victories and victories lead to increased franchise value.

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #79 on: January 29, 2018, 10:17:46 AM »

Online Erik

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Profitability and franchise value are different things though.  In 2009/2010, the Cavs were worth around 475 million.  Then James left and in 2011, the value fell to 355 million and then below 330 million the following season.  The new TV deals started to kick in and the team went up to 435 and 515 in 2013 and 2014.  James came back and the team valuation spiked all the way to 915 million, then 1.1 billion, and last year was worth 1.2 billion.  I suspect the team is probably worth a bit less this year, but if James leaves this summer it probably falls back into the 700 to 800 million range (about what the Wolves were valued at last year). 

You see a player like James, may not lead to a profitable season (especially with the luxury tax), but he absolutely leads to significant value for the owner and the franchise.  James is obviously the extreme example of this, but star players lead to victories and victories lead to increased franchise value.

I fully understand that a player like LeBron James can alter perceived franchise value temporarily. But remember that franchise value means nothing until you sell. And just as you've admitted, the moment he's gone, the perceived value drops. It's not exactly a sound investment when you're losing money every single year and one of the reasons the company has been valued so high could leave at the end of the contract. An owner would have to be nuts to overpay that much for an asset that provides no guaranteed future revenue for the team. That's one of the reasons why a CBA has to be put into place otherwise who the hell would want to buy an NBA team other than ridiculously rich people that don't care about losing money? Build a winning team just to sell and collect profits?

A company like Google doesn't have that problem. The valuation is based on profits on current IP and expected profits of future IP. They can pay someone a boatload of money to develop new products and build IP. When that person leaves, Google keeps the IP. When LeBron James leaves, all you're left with is debt and a tanked value. That's a reason why Gilbert is shopping the Cavs before LeBron leaves. Imagine if LeBron leaves and he's been losing money every single year and then the valuation just drops to back to before. Now imagine if he was getting paid an extra 60 mil a year like the guy was mentioning as a fair value for LeBron.

Yes, I am 100% on the side of the team owners in this debate because it's a no-brainer. There is no way in the world that you can convince me that the athletes are underpaid when I can see the balance sheet. Where is all this money that LeBron James has made for Dan Gilbert? He won't see any of it unless he sells while LeBron is under contract. And anyone buying the Cavs now will know that the value is based on the assumption that LeBron is probably gone. So in reality, he hasn't made him jack.
« Last Edit: January 29, 2018, 10:23:38 AM by Erik »

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #80 on: January 29, 2018, 10:23:20 AM »

Offline KGs Knee

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Profitability and franchise value are different things though.  In 2009/2010, the Cavs were worth around 475 million.  Then James left and in 2011, the value fell to 355 million and then below 330 million the following season.  The new TV deals started to kick in and the team went up to 435 and 515 in 2013 and 2014.  James came back and the team valuation spiked all the way to 915 million, then 1.1 billion, and last year was worth 1.2 billion.  I suspect the team is probably worth a bit less this year, but if James leaves this summer it probably falls back into the 700 to 800 million range (about what the Wolves were valued at last year). 

You see a player like James, may not lead to a profitable season (especially with the luxury tax), but he absolutely leads to significant value for the owner and the franchise.  James is obviously the extreme example of this, but star players lead to victories and victories lead to increased franchise value.

I fully understand that a player like LeBron James can alter perceived franchise value temporarily. But remember that franchise value means nothing until you sell. And just as you've admitted, the moment he's gone, the perceived value drops. It's not exactly a sound investment when you're losing money every single year and one of the reasons the company has been valued so high could leave at the end of the contract. An owner would have to be nuts to overpay that much for an asset that provides no guaranteed future revenue for the team. That's one of the reasons why a CBA has to be put into place otherwise who the hell would want to buy an NBA team other than ridiculously rich people that don't care about losing money? Build a winning team just to sell and collect profits?

A company like Google doesn't have that problem. The valuation is based on profits on current IP and expected profits of future IP. They can pay someone a boatload of money to develop new products and build IP. When that person leaves, Google keeps the IP. When LeBron James leaves, all you're left with is debt and a tanked value. That's a reason why Gilbert is shopping the Cavs before LeBron leaves. Imagine if LeBron leaves and he's been losing money every single year and then the valuation just drops to back to before. Now imagine if he was getting paid an extra 60 mil a year like the guy was mentioning as a fair value for LeBron.

Yes, I am 100% on the side of the team owners in this debate because it's a no-brainer. There is no way in the world that you can convince me that the athletes are underpaid when I can see the balance sheet.

I'm guessing you also cannot be convinced that 1+1=2

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #81 on: January 29, 2018, 10:35:24 AM »

Online Erik

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Profitability and franchise value are different things though.  In 2009/2010, the Cavs were worth around 475 million.  Then James left and in 2011, the value fell to 355 million and then below 330 million the following season.  The new TV deals started to kick in and the team went up to 435 and 515 in 2013 and 2014.  James came back and the team valuation spiked all the way to 915 million, then 1.1 billion, and last year was worth 1.2 billion.  I suspect the team is probably worth a bit less this year, but if James leaves this summer it probably falls back into the 700 to 800 million range (about what the Wolves were valued at last year). 

You see a player like James, may not lead to a profitable season (especially with the luxury tax), but he absolutely leads to significant value for the owner and the franchise.  James is obviously the extreme example of this, but star players lead to victories and victories lead to increased franchise value.

I fully understand that a player like LeBron James can alter perceived franchise value temporarily. But remember that franchise value means nothing until you sell. And just as you've admitted, the moment he's gone, the perceived value drops. It's not exactly a sound investment when you're losing money every single year and one of the reasons the company has been valued so high could leave at the end of the contract. An owner would have to be nuts to overpay that much for an asset that provides no guaranteed future revenue for the team. That's one of the reasons why a CBA has to be put into place otherwise who the hell would want to buy an NBA team other than ridiculously rich people that don't care about losing money? Build a winning team just to sell and collect profits?

A company like Google doesn't have that problem. The valuation is based on profits on current IP and expected profits of future IP. They can pay someone a boatload of money to develop new products and build IP. When that person leaves, Google keeps the IP. When LeBron James leaves, all you're left with is debt and a tanked value. That's a reason why Gilbert is shopping the Cavs before LeBron leaves. Imagine if LeBron leaves and he's been losing money every single year and then the valuation just drops to back to before. Now imagine if he was getting paid an extra 60 mil a year like the guy was mentioning as a fair value for LeBron.

Yes, I am 100% on the side of the team owners in this debate because it's a no-brainer. There is no way in the world that you can convince me that the athletes are underpaid when I can see the balance sheet.

I'm guessing you also cannot be convinced that 1+1=2

Your posting would be much more effective if you skipped the ad hominen with every post. Not sure what exactly your problem is, but this will be the last time I reference you. Good day.

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #82 on: January 29, 2018, 12:11:01 PM »

Offline PhoSita

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I couldn't possibly disagree more.

Max is what you have to pay for a veteran multiple time All-Star in his physical prime with a track record of anchoring very good teams.

The Celts have gotten plenty of value out of him, as well.  Last year he was a top 2 player for a team that won 53 games, got the #1 seed in the conference, and made the conference finals.

This year, he's playing even better, and he's still a top 2 player on the team with the best record in the conference.

How anybody can complain about paying max for that type of player is beyond me.


The mistake people always seem to make is they think that because there's this artificial maximum set on contracts, that therefore the value of the best player in the league is set at that maximum and everybody else's contract value has to be proportioned relative to that maximum.

Obviously that's not how artificial caps on market prices work.  The whole point of setting that artificial maximum is to raise the average salary of all of the other players.  In a league without maximums the very best players would be paid a huge portion of the cap and everybody else would make way, way less.

Al Horford is not a top 10 or top 15 player, but he's arguably top 20-30, which makes him extremely valuable and absolutely worth the price the Celtics pay.
« Last Edit: January 29, 2018, 01:46:33 PM by PhoSita »
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Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #83 on: January 29, 2018, 01:47:21 PM »

Offline Boris Badenov

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Profitability and franchise value are different things though.  In 2009/2010, the Cavs were worth around 475 million.  Then James left and in 2011, the value fell to 355 million and then below 330 million the following season.  The new TV deals started to kick in and the team went up to 435 and 515 in 2013 and 2014.  James came back and the team valuation spiked all the way to 915 million, then 1.1 billion, and last year was worth 1.2 billion.  I suspect the team is probably worth a bit less this year, but if James leaves this summer it probably falls back into the 700 to 800 million range (about what the Wolves were valued at last year). 

You see a player like James, may not lead to a profitable season (especially with the luxury tax), but he absolutely leads to significant value for the owner and the franchise.  James is obviously the extreme example of this, but star players lead to victories and victories lead to increased franchise value.

I fully understand that a player like LeBron James can alter perceived franchise value temporarily. But remember that franchise value means nothing until you sell. And just as you've admitted, the moment he's gone, the perceived value drops. It's not exactly a sound investment when you're losing money every single year and one of the reasons the company has been valued so high could leave at the end of the contract. An owner would have to be nuts to overpay that much for an asset that provides no guaranteed future revenue for the team. That's one of the reasons why a CBA has to be put into place otherwise who the hell would want to buy an NBA team other than ridiculously rich people that don't care about losing money? Build a winning team just to sell and collect profits?

A company like Google doesn't have that problem. The valuation is based on profits on current IP and expected profits of future IP. They can pay someone a boatload of money to develop new products and build IP. When that person leaves, Google keeps the IP. When LeBron James leaves, all you're left with is debt and a tanked value. That's a reason why Gilbert is shopping the Cavs before LeBron leaves. Imagine if LeBron leaves and he's been losing money every single year and then the valuation just drops to back to before. Now imagine if he was getting paid an extra 60 mil a year like the guy was mentioning as a fair value for LeBron.

Yes, I am 100% on the side of the team owners in this debate because it's a no-brainer. There is no way in the world that you can convince me that the athletes are underpaid when I can see the balance sheet.

I'm guessing you also cannot be convinced that 1+1=2

Your posting would be much more effective if you skipped the ad hominen with every post. Not sure what exactly your problem is, but this will be the last time I reference you. Good day.

I think the issue is this: you've claimed that Lebron James is overpaid. It's a consensus in the sports worlds, and basic economics as well, that a player making the max can only be underpaid, and that Lebron is one of the clearest examples of such a player, being the best player of his generation.

There was a bit of confusion above in terminology, to be fair. Most of us on this board are thinking of "market value" as the concept in economics - which is by definition the price. So by that definition Lebron can only be underpaid if he's making the max.

You, however, have asserted another standard: "fair market value." That's different because it assesses value using some (frankly, nebulous) standard of what is "reasonable" or "rational." In other words it allows for the possibility that markets can mis-price assets.

But here's the thing: you then go on to assert that YOU know that James is over-paid by that standard, when that goes against the collective wisdom of all the smart money. Lebron could receive a max offer from any team in the league, and would receive more than that if teams could bid above the cap. He's received multiple max offers, over and over in his career. (We call that a "market test.")

So, are you really claiming that owners and GMs, all of whom have a vested interest in making the best business decisions about their players and teams, are somehow mis-valuing not just any player, but the single greatest player of his generation? That you know more than all of them put together? I mean, what can they possibly be getting wrong about it?

It's just absurd.

Your fallback is this argument about cash flow. Other posters have pointed out that franchise values belie the claim that these teams are losing money. So you try to wave away those values as being wrong, or not being tied to decisions about players. (A more natural explanation is that simply looking at net income and trying to impute franchise value based on some discounted cash flow model is not right here, perhaps because accounting net income is a poor measure of true current or future expected "profits" in this industry.)

But again: it's an incredible thing to assert.

Sum it all up, and it comes across as if you think you just know more than the collective wisdom of all the talent evaluators and business minds in the sport.

I think that is what has led to the frustration people have expressed.

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #84 on: January 29, 2018, 02:45:00 PM »

Online Erik

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But here's the thing: you then go on to assert that YOU know that James is over-paid by that standard, when that goes against the collective wisdom of all the smart money. Lebron could receive a max offer from any team in the league, and would receive more than that if teams could bid above the cap. He's received multiple max offers, over and over in his career. (We call that a "market test.")

1) I never said LeBron is overpaid. I said that he is fairly paid and the rest are overpaid.
2) The problem is that while there may be an owner in a big market team or significantly wealthy to the point where losing 100 mil a year means nothing to him for his team he loves (hobby, not investment) to win a lot of games, it's not fair to the league as a whole because there are teams that just cannot afford to pay that much. They can't even pay the current salaries (14 teams are in the red). So while he may have a market value of 100 mil for some people, a sane person looking at it in terms of an overall investment in a small market team would never make that deal. Now imagine what happens when Russell Westbrook and company find out LeBron is making 100 mil. It will be total chaos and the league will go bankrupt. It's not the kind of thing where the more you pay someone the more revenue it will bring. You'd essentially be ensuring that all teams are in the red for the foreseeable future.

So, are you really claiming that owners and GMs, all of whom have a vested interest in making the best business decisions about their players and teams, are somehow mis-valuing not just any player, but the single greatest player of his generation? That you know more than all of them put together? I mean, what can they possibly be getting wrong about it?

It's just absurd.

Not at all. I am in agreement with the owners when they negotiated the fair salary max for a player. We both agree that the best player should not make more than X amount of dollars for the reasons that I have stated throughout this thread. You guys are the ones who think that you know better than the GMs. You want to side with the players, who want an unrealistic amount of money, because about half of the teams in the NBA are running in the red. It doesn't make a whole lot of sense to me (and the GMs) to raise salaries to compound that problem.

In an ideal economical situation, the 2nd best player will not get a max contract. He should be paid at least $1 less than the #1 player. The problem is that there aren't enough "stars" to go around and it's a star-driven league (competitively) so "Tier 2" players will be able to get the max on bad teams and contending teams willing to go financially broke to attempt a championship. Thus, they are *overpaid*.

Your fallback is this argument about cash flow. Other posters have pointed out that franchise values belie the claim that these teams are losing money. So you try to wave away those values as being wrong, or not being tied to decisions about players. (A more natural explanation is that simply looking at net income and trying to impute franchise value based on some discounted cash flow model is not right here, perhaps because accounting net income is a poor measure of true current or future expected "profits" in this industry.)

But again: it's an incredible thing to assert.

Sum it all up, and it comes across as if you think you just know more than the collective wisdom of all the talent evaluators and business minds in the sport.

I wasn't sure that the "fallback argument" was mine. I don't really need a fallback argument because I'm quite content with the first one. It's unfortunately the place that we had to go to to clarify a few things about just how much these athletes are earning for their teams. As I stated, franchise value means zero until you make the sale. It's all about cash flow. A normal business cannot sustain being in the red year after year. Fortunately these wealthy owners boot strap the operation. Gilbert uses his Quicken cash to pay for LeBron's championships. The problem is if the value tanks due to the star that was propping it up leaves, you never really gain anything other than inflation and external growth of business (better TV deals, enhanced market, etc).

On a side note (I'm sure this where we'll end up debating next), if there's anyone to be thankful here it's LeBron. He's been given his choice in players, Gilbert has gone deep into luxury for years, and he's been getting paid max money while building his brand as a "winner," all at the expense of Gilbert. Although I don't know what goes on behind the scenes, I'm really not sure how LeBron is a victim here financially. I hear on ESPN things like "LeBron is p---ed that Gilbert has made a ton of money off him and now he's going to sell the team." Well, that's bull. Gilbert can only make money off this shindig once he sells the team (because he's operating at a net loss).

I think that is what has led to the frustration people have expressed.

There shouldn't really be any frustration. If you get angry because someone has an opinion, I really don't know what to tell you. Maybe learn how to walk away from certain discussions? I generally can't stomach more than a few posts in "Off topic // current events" because the overwhelming majority of posters are uncompromising liberals. I don't go about insulting their intelligence, though.

I am reasonably fair person. It may take a few posts for me to see the other side of the fence, but I would acknowledge it. So far, I haven't see 1 argument come close to make me change my mind. Show me how the money works and we can talk about raising salaries. You guys seem to be fixated on an individual player's contribution to franchise value, and while it's nice, it's tied to a 4 year contract for a relatively illiquid long term investment. It's like me being excited that the tax bill has increased my 401k value. Well, I won't see the money for 25 years from now, so I really didn't gain anything yet because Armageddon could come next year..
« Last Edit: January 29, 2018, 03:01:06 PM by Erik »

Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #85 on: January 29, 2018, 02:56:06 PM »

Offline JohnBoy65

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I never understood why so many fans get mad at what the Celtics do with their money. You see this over and over again. People complaining about the Celtics paying the tax, or giving this player this amount of money.

Some fans act is if they're the ones having to pay the salaries.
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Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #86 on: January 29, 2018, 03:06:10 PM »

Offline tarheelsxxiii

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Holy pedanticism.  Off the soapboxes, please.
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Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #87 on: January 29, 2018, 03:12:01 PM »

Offline Ilikesports17

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I never understood why so many fans get mad at what the Celtics do with their money. You see this over and over again. People complaining about the Celtics paying the tax, or giving this player this amount of money.

Some fans act is if they're the ones having to pay the salaries.
Money is an asset used to acquire players just like a draft pick.

Not sure how you don't realize that
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Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #88 on: January 29, 2018, 03:25:11 PM »

Offline Section301

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https://www.forbes.com/sites/forbespr/2017/02/15/forbes-releases-19th-annual-nba-team-valuations/#4e85ab807f03

"Three NBA teams, Cleveland Cavaliers, Los Angeles Clippers and Oklahoma City Thunder, lost money last season and all three were the result of excessive payrolls that triggered the luxury tax."

Three teams lost money, not 14.

Edit - considering that they just signed a 24 billion dollar TV deal, and that their agreement with the NBAPA guarantees the owners they never have to spend even half of that on salaries, I'm not certain that there should be too much concern over owners potentially going bankrupt.  Unnless they're fiscally foolish.  In which case they probably shouldn't be running multi-million dollar businesses.
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Re: Al Horford has been mediocre. He doesnt deserve his salary
« Reply #89 on: January 29, 2018, 03:33:01 PM »

Online Erik

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https://www.forbes.com/sites/forbespr/2017/02/15/forbes-releases-19th-annual-nba-team-valuations/#4e85ab807f03

"Three NBA teams, Cleveland Cavaliers, Los Angeles Clippers and Oklahoma City Thunder, lost money last season and all three were the result of excessive payrolls that triggered the luxury tax."

Three teams lost money, not 14.

Edit - considering that they just signed a 24 billion dollar TV deal, and that their agreement with the NBAPA guarantees the owners they never have to spend even half of that on salaries, I'm not certain that there should be too much concern over owners potentially going bankrupt.  Unnless they're fiscally foolish.  In which case they probably shouldn't be running multi-million dollar businesses.

http://www.espn.com/nba/story/_/id/20747413/a-confidential-report-shows-nearly-half-nba-lost-money-last-season-now-what

Not sure which story is correct.

My favorite quote:
"Teams in small markets are told we need to run our businesses better so we can make money," one ownership source told ESPN.com. "But teams in the largest markets can run their businesses poorly and still make money."

Just to be clear, my argument is for the current deal. If more money comes in, obviously the players can be paid more, with the best player making the most amount of money :)