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Is it possible the NBA could soon turn into an international
league with teams in countries besides the US & Canada? As long
as Mickey Arison owns the Miami Heat, I would say, "maybe."
Cruise ships and the companies that own them, like Arison's Carnival
Cruise lines, are the perfect example of what happens when
corporations decide they've had enough of onerous local tax and labor
laws. I've already proven how NBA franchises in endorsement-friendly
Chicago & Los Angeles and tax-friendly Texas and Florida have an unfair advantage in winning NBA championships over the rest of the
league, but what if Arison wanted to stack the deck in his favor even
60 Minutes did an excellent story a few years ago
on all the US businesses that are re-locating either their corporate
headquarters or much of their production facilities and other assets
outside of the US, to avoid paying taxes in this country, which the
story indicated will soon have the highest corporate tax rate in
the developed world (Hooray! The corporate fat cats are finally
paying their fare share! Hey, where did all our jobs go?).
With that in mind, would it seem unreasonable that the Miami Heat
might soon relocate to one of Mickey Arison's cruise ships, which
would allow the team to re-name themselves the "Panama
Heat," to reflect the country where the ship is likely
registered, pays taxes and subjects itself to what I'm sure are
rigorous safety and workplace regulations?
Don't think that idea is too far-fetched. Consider the evolution
that has taken place in the record business in the last 30 years.
They went from vinyl to cassette tapes to CDs to mp3s, the last
of which can be produced without erecting a single factory
anywhere. Cut an album, upload it to iTunes on your kid's
laptop and call it a day. Do you really need a 20,000-seat arena to have an NBA team?
Carnival's cruise ships already have theaters with seating
for nearly 2,000 people and Royal Caribbean built a ship
with a theater the size of a soccer field onboard. With
advances in television technology, from HD to 3D, the way spectator
sports make money may also be changing. Fans may prefer to stay
home and watch the game, rather than battling traffic and shelling
out big dollars for tickets, food & parking.
From an owner's perspective, I'm sure there will come a point in
time when they will lay the numbers out and weigh the pros and cons.
How much does it cost to build, operate and maintain a 20,000-seat
arena? How many nights a year can I fill it up and
how much money is left over after all the expenses (including
taxes) are paid? How much would it cost them if they slashed
their seating capacity from 20,000 to 2,000 and moved all of their
home games to a cruise ship?
The TV revenue would still be there and although that may
eventually become everyone's largest revenue stream, would that be
enough to cover payroll? Here's another thought- fans who
wanted to watch a home game on the ship would only be charged $20,
although a $2,000 cruise ship vacation package would also be
required, but not deemed by the NBA to be a part of "BRI,"
aka Basketball-Related Income. That means Mickey Arison would
only have to split the $40,000 gate receipts with the players, while
he pockets the remaining $4,000,000 those passengers/fans spent to
get to the game.
The bottom line is, people with wealth, whether they are
corporations or individuals will find a way to minimize their
exposure to taxes. NBA players figured this out a long time ago
and that is why the Texas and Florida teams are very popular
destinations for free agents (shoe money-driven major markets
excluded). US corporations have done the same thing and I don't
see why it would be inconceivable for professional sports franchises
to join that group. I'm sure Adam Silver will do a great job of
packaging it as "globalization of the sport."