Wyc getting blasted for CSNNE deal

July 21, 2011

Celtics owner Wyc Grousbeck is catching more flak for the pending TV deal with CSNNE:

Here you have Grousbeck, owner of the Celtics, negotiating a media rights deal that presumably is favorable to the Celtics franchise. On the other hand, he is the acting chairman of the NBA's planning committee, which is overseeing the NBA's attempts to overhaul its revenue-sharing system. In other words, Grousbeck has to know how the league is planning on building its revenue-sharing system, which is a system that will likely redistribute local broadcasting rights like the one he just signed with Comcast.

Which is the more likely scenario - that Grousbeck would use his inside knowledge of the league's revenue-sharing negotiations to structure a deal that benefits his team the most, or one that benefits the league the most? It would be one thing if the revenue-sharing system were already in place and he just negotiated a deal using that system as his parameters. However, this isn't the case at all. The system isn't even instituted yet; so Grousbeck built his TV deal first, knowing that he as the chairman would have a leadership role and active input in protecting his deal later on.

Loud City (Thunder Blog)

While Wyc leads the NBA Planning Committee, I doubt the other owners will allow him to craft a plan that unfairly benefits his team. I'm confident what happens in those meetings is being passed along to all owners and they'll be smart enough to detect any wrongdoing.

SB Nation's Tom Ziller chimes in too:

Now talk to me about competitive balance. The Celtics have been great to the team's fans by investing heavily in the product on the court. No doubt that, altruistically, Grousbeck would invest a portion of the CSNNE equity stake's spoils back into the Celtics. But it belies the competitive balance angle completely, because that kind of money isn't available to smaller market teams, and that kind of power of leading the creation of a system around your circumstances.

It'd be like if Spurs owner Peter Holt ran the competition committee and pushed through a system to ban dunks.

Again... I refuse to believe the owners of small market teams would allow the league to craft a deal that doesn't benefit everyone.

112288

Maybe I'm missing something, but this seems silly. If I was in Wyc's position, I'd want to know what kind of regional TV deal I could get so that I know how to address the revenue-sharing situation.

Whether he can only get $20 million a year from the TV deal, $200 million a year, or (more likely) a figure somewhat above median but well short of the metropolis franchises in New York, Chicago, and LA, why not go into the negotiations with the knowledge of how much CSNNE will pay? As a league representative in the negotiations, that gives him more real information instead of guessing about what money is available for revenue sharing. As the owner of his team, that allows him to approach the negotiations with an eye on ensuring that his team isn't put into an unforeseen disadvantage, something I can guarantee the other 29 owners are doing.

Unlike, say, Donald Sterling, I'd say Wyc is capable of balancing league-wide needs with those of his team, especially if he's sensible enough to recognize that the overall financial health of the league benefits the financial health of his team in the long run. I don't see why negotiating the CSNNE deal automatically undermines his credibility in the CBA negotiations, which is the implication in the article 112288 posted. And I don't think he can insert a clause that says a portion of the contract isn't subject to revenue sharing. What is he going to do -- have CSNNE cut him a check directly? He may be from Boston, but he's not Frank McCourt.

Outside

This article offers an explanation of how this deal will effect the franchise going forward.

If there is a hard cap, this deal will make Wyc even richer, but won't help the club sign players. If the deal is sorta similar to the current one, where going over the cap will result in luxury taxes, then Wyc will be able to afford them and sign big name players (D12?).

http://basketball.realgm.com/wiretap/214810/Report_Celtics_CSSNE_Equity_Stake_Income_Wont_Count_Toward_Salary_Cap_Player_Salaries


bob

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Business is good for tax lawyers and accountants..

Bob,

Thanks for the link. I guess they did figure out a way to keep part of the deal out of the revenue-sharing pie.

Smart move by Wyc.