Top
Close
Follow Us ON

© 2017 SportsBlog.com Presents: Legends Corner- Featuring continuous and compelling blogs written by NBA veterans, Legends Corner is the content hub for some of basketball's most legendary players.

Advertise Here Flag

Could an NBA Franchise Leave the United States?


Mike Ehrmann/Getty Images

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 more?

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."

Load