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09-30-2003, 10:09 AM
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Originally Posted by degroat
The CBA would have to be written to where it would be fraud if teams make those business decisions.
However, it is very hard to prove that a decision is being made because of these reasons. In the example I provided, a team could easily claim that they expected the revenue streams of the PPV to exceed the revenues of a local broadcasting deal. It is very hard to enforce.

If you take a look at the Kings financials, you see some areas where it seems like the Kings are being subsidized by the Lakers. They both receive an equal amount from luxury box revenues, and there is a piggyback agreement where arena advertisers (which is primarily driven by exposure from the Lakers) are forced to also advertise during Kings games. When I first saw this, I was a little taken aback, until I realized that the NBA develops a salary cap on the basis of league revenues. By funnelling money from the Lakers to the Kings in a very subtle way, the Lakers are influencing their payroll level. If ever challenged on it, they will say that both teams get an equal share of revenue because they both play about the same amount of games. It's very hard to argue what should be the fair breakdown. Bringing in an independent arbitrator to evaluate what it should be becomes extremely expensive, and even with that, all you're getting is a guesstimate of what the figure should be.

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