Home » Nba, the distribution of revenues must maintain the balance between large and small

Nba, the distribution of revenues must maintain the balance between large and small

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The breakdown of revenues in Nba starts from a basic concept: balance. What must exist between the big market and the small market, in order to make all the 30 franchises available competitive. The reason why i Golden State Warriors they have gone from being a historically losing franchise to one of the superpowers of American basketball; the same goes for i Toronto Raptors champions in 2019 for the first time in their history. In summary: all clubs allocate a percentage of their revenues to a mutual fund and receive 1/30 of this amount. Those who put more receive less and vice versa.

The contract signed in the NBA

According to the agreement signed in the last collective agreement, the wages of the players must be paid with a percentage that varies between 49 and 51.2% of the “Basketball related income“(Bri), or the revenues deriving from the basketball activity. The rest (from 48.8 to 51% of total revenues) goes to the owners of the deductibles. The BRIs include national and international television rights, box office, advertising, sponsorship, merchandising, betting and proceeds from its assets.
The projections of the BRI affect the threshold set by the NBA for the salary cap, amounting to $ 109.14 million for the 2020/21 season. The more revenues increase, the more the salary cap is raised, but this mechanism has not been adopted for the current championship: in the 2019/20 season, due to the pandemic and of the “cold war” with China, turnover fell by 10% (from $ 8.3 billion in 2019), but the salary cap remained unchanged.
What happens in normal conditions, therefore, is a first division of revenues between owners and players, approximately half each. Therefore, once the wage bill destined for basketball players is removed, a part of what remains ends up in the cauldron of revenues to be redistributed.

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The calculation of payments

The formula adopted by the NBA to calculate how much the 30 teams must pay takes into account the television audience, which determines which franchise can be considered one “small market“(And therefore must pay a lower percentage) and which instead is a”big market“(Intended to pay a higher percentage).
A team can pay a contribution equal to 50% of its revenues, excluding certain operating costs from the calculation.In this way, small markets (which are not able to have local television revenues as remunerative as those of the big markets) are guaranteed a distribution fair national and international revenues.

How it works in football

In Nfl revenues are divided into national (television, merchandising, 40% of the box office, sponsors) and local (60% of the box office, concessions, corporate sponsors). In 2019, the 32 teams of the professional football league shared a total of $ 9.5 billion in combined revenues. About two thirds of this figure, according to what was declared by Mark Murphy, CEO of Green Bay Packers, “It comes from television, or national revenues, and is enough to cover the costs of the players.”

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