Chapter 958
Borrow $5 million in exchange for NBA commercial rights!
Lin Haoran could understand what the NBA commissioner was saying.
If he controls eight teams, he will have absolute power in the NBA, far exceeding that of other team owners.
This clearly disrupts the balance of the alliance; it's not just a matter of rules, but also a matter of interests.
However, controlling only one team wouldn't be of much significance to Lin Haoran.
He laughed and retorted, "Mr. O'Brien, even if I bought one of the teams, would that save the league? As the NBA commissioner, you should be more aware of the league's current predicament."
Changing ownership of a team is merely a drop in the ocean and doesn't solve the fundamental problem.
Larry O'Brien remained silent.
He knew that what Lin Haoran said was true.
Even if a team is taken over by an extremely wealthy owner, that team can only be saved.
The remaining dozen or so loss-making teams will eventually collapse or disband.
The first domino was held up, but the others continued to fall.
To be honest, Larry O'Brien knows very well that if it weren't for his efforts to maintain a semblance of stability, the league would have fallen apart long ago.
But he is already 65 years old, and his energy is not what it used to be. He doesn't know how much longer he can hold on.
He needs someone to take his place, or rather, to save the alliance to which he has poured countless efforts.
But he doesn't know if his successor can pull the NBA out of its slump.
If, after his retirement, the next president is not capable of leading the alliance out of its predicament, then all his hard work over the years will have been in vain.
Lin Haoran continued, "To be honest, I'm not afraid to tell you that the reason I want to acquire multiple teams is because I'm confident that I can help the NBA get out of its current predicament."
On the contrary, if I were to just acquire a team, I would feel like I was just throwing money away. What if I just acquired one team and another team couldn't sustain itself and had to disband because there was no new owner to take over?
Once one team starts doing this, the entire league will fall like dominoes, one after another, and then all the money I invested will truly be wasted.
Larry O'Brien let out a deep sigh.
He certainly knew this principle.
However, the league owners each had their own agendas. Teams in large markets were unwilling to pay for teams in small markets, and teams in small markets were powerless to save themselves.
He, the CEO, was caught in the middle, facing a dilemma.
Lin Haoran picked up his wine glass, took a slow sip, and looked through the red wine in the glass as if he was thinking about something.
The lights in the private room were soft and warm, and the old-fashioned wall clock on the wall ticked softly, indicating that it was getting late.
“Mr. O’Brien,” Lin Haoran put down his glass and said calmly, “Actually, I’ve always had an idea, but I didn’t know if I should say it. Once this idea is successfully implemented, I can guarantee that it will definitely revive the NBA and expand its influence.”
Larry O'Brien quickly bowed slightly: "Mr. Lin, please go ahead. I am very grateful that you are willing to talk to me about these things."
"Give me all the commercial rights of the alliance for 40 years. I only want 40 years of commercial management rights, and I have the absolute right of first refusal to renew the contract after it expires!" Lin Haoran said calmly with a smile.
All of the league's commercial rights, including broadcasting rights, sponsorship rights, merchandise licensing, etc., would be handed over to Lin Haoran, which would be tantamount to handing over the NBA's economic lifeline to him.
This is far more advantageous than controlling multiple teams. Controlling teams is subject to league bylaws, while controlling commercial rights is equivalent to controlling the entire league's purse strings.
Without money, team owners are nothing.
In other words, in the future, these bosses will all have to act according to his wishes.
This is true rule, not based on equity or voting, but on the economic lifeline.
If he can acquire the commercial rights to the NBA, then he will essentially have indirect control of the NBA.
The most direct benefit is that the NBA's revenue will continue to rise over the next few decades, and the 10% commission alone will amount to hundreds of billions of dollars.
In addition, another key benefit is that it essentially controls the fate of the league, which is naturally more powerful than team owners!
No matter how powerful a team owner is, it all depends on where the money comes from.
For example, you decide the salary cap; the higher the commercial revenue, the higher the salary cap, the happier the players, and the more indispensable the team owner will be to you.
Who gets on TV and who gets made famous is up to you. Whoever you want to promote, just make them do a lot of live broadcasts, and they can instantly become a superstar.
You have a huge say in broadcasting, sponsorship, and rule-making.
You have a huge influence over whether the team can relocate or expand!
Moreover, besides these, there are many, many other hidden benefits.
For example, it doesn't require acquiring multiple teams, it doesn't violate the one-person-one-team rule, it doesn't involve being accused of team monopoly, and it doesn't involve being subjected to intense scrutiny from Congress.
Because obtaining commercial rights would only grant Lin Haoran exclusive partnership with the NBA, it would indirectly provide him with political security, rule security, identity security, huge profits, and top-tier, covert power!
This is the smartest, safest, and most sustainable way to maintain control!
In short, by acquiring the NBA commercial rights, Lin Haoran doesn't just own a few teams, but the future of the entire NBA.
He doesn't own eight teams, yet he can make all the owners, presidents, and star players revolve around him!
If successful, Lin Haoran will be the supreme ruler of the entire NBA league!
Larry O'Brien gasped. This demand was even more outrageous than acquiring eight teams. At least acquiring teams meant operating within the league's framework, but taking away the commercial rights was tantamount to uprooting the NBA's cash cow.
Moreover, the most outrageous thing is that they also want 40 years of commercial rights!
“Mr. Lin, this…” Larry O’Brien’s face turned ugly. He picked up his glass and took a sip, trying to cover up his embarrassment. “The league’s commercial rights are the lifeblood of all the bosses. I can’t possibly persuade them to hand over such important power.”
You should know that although television broadcasting contracts are only worth less than $2000 million a year, they are still a significant source of income for these business owners.
However, upon hearing Larry O'Brien's words, Lin Haoran was somewhat disdainful, asking, "A television broadcasting contract worth less than 20 million US dollars a year?"
He couldn't help but sigh, "Everything in the NBA is so cheap these days. Teams are cheap, and even the most crucial television broadcasting rights are so inexpensive, less than 20 million US dollars a year."
You should know that in the era before he traveled here, the NBA league alone had $120 billion in broadcasting rights per year!
The NBA of today and the NBA of the future are worlds apart.
But precisely because of this, now is the best time to enter the game.
Once the NBA truly rises to prominence, these powers will no longer be easily attainable by him.
Lin Haoran continued, "Mr. O'Brien, I only want the commercial rights. I'm not taking away the money that belongs to the league. I'm just handing over the commercial management rights of the NBA to manage."
To put it bluntly, I'm just working for you bosses. The higher the alliance's business revenue, the more money you bosses get. I only earn management fees. It's a win-win situation, so why not?
Most importantly, the very survival of the NBA is now in question. But if you entrust me with the commercial rights, I am 100% confident I can pull the NBA out of its current predicament and multiply the wealth of all the owners.
Larry O'Brien remained silent.
He had to admit that every word Lin Haoran said hit the nail on the head.
The NBA is indeed on the brink of collapse. Without strong external intervention, the league could very well collapse completely in the next few years.
Rather than clinging to that pitiful business right and waiting to die, it's better to take a gamble and hand this hot potato over to someone capable.
"I'd like to know, Mr. Lin, how you brought the league back to life, and how you resolved the funding issues?" Larry O'Brien asked in a deep voice.
Even he can only barely keep the NBA from falling apart; he has no ability to revive it.
Lin Haoran confidently declared that if the alliance's commercial rights were handed over to him, he could revive the alliance, which left Lin Haoran both hopeful and skeptical.
Lin Haoran laughed and said, "The biggest problem in the league right now is actually funding. Banks are refusing to lend money, and team owners are unwilling to continue investing. Other problems can be put on hold, but funding is the most urgent issue."
Without money, the team can't even pay its players' salaries, so what's the point of talking about games, a brand, or a future? Am I right, Mr. O'Brien?
Larry O'Brien nodded without interrupting. Every word Lin Haoran spoke felt like a nail piercing his heart.
That's the situation in the NBA right now. You can't cook without rice. No matter how capable the commissioner is, he can't conjure up money.
As for other image and reputation issues such as rampant drug use, racial prejudice, and brawls on the field, these can be gradually changed. However, once the funding chain breaks, the entire league will collapse instantly, without even a chance to make changes.
Lin Haoran continued, "As long as you hand over the alliance's business rights to me, I can solve the alliance's funding problem. But before that, I want to know what the alliance's actual financial situation is right now?"
Larry O'Brien remained silent.
He picked up his glass, took a slow sip, and avoided eye contact, seemingly unwilling to confront the issue.
But Lin Haoran's gaze was like a nail fixed on his face, giving him no room to avoid it.
“Mr. Lin, the alliance’s financial situation is indeed very bad.”
Larry O'Brien put down his glass, his voice low and deep, as if squeezed from the depths of his throat, "The year is almost over. The total revenue for the entire 1982-83 season was only $1.18 million."
Lin Haoran didn't speak, but listened quietly.
拉里·奥布莱恩继续说道：“全联盟年度亏损在1500万到2000万美元之间，23支球队里，有17到18支在亏损。
Only a few big-city teams like the Lakers, Knicks, 76ers, and Celtics are truly making money, and even then, they don't earn much. Meanwhile, the deferred salaries owed to players plus the loans owed to banks have exceeded $8000 million.
Many teams have negative cash reserves and have to rely on personal loans from owners or short-term bank loans to pay salaries. This situation frequently occurs during the season: payday arrives, the team has no money, and has to urgently borrow from the league.
Lin Haoran frowned slightly.
He knew the NBA was in a bad situation, but he didn't expect it to be this bad.
"What about the television broadcasting contract?" Lin Haoran asked.
Larry O'Brien gave a wry smile: "CBS's television broadcasting contract was signed four years ago, in 1978. The total revenue over those four years was $7550 million, averaging less than $2000 million per year!"
Moreover, the contract could be terminated at any time. CBS was very dissatisfied with our ratings and often re-broadcast the finals at 11:30 pm, or even not broadcast them at all.
They felt the NBA was a 'drug league, a black league, a violent league,' and were unwilling to invest resources in it.
What about ticket revenue?
"The average ticket price is $9.88, but the average audience is only 1.01. Many arenas can seat 1.8 to 2 people, but often only half are occupied. In smaller markets, it's even only a third. Ticket revenue can't even cover the venue rental."
Lin Haoran picked up his wine glass, took a slow sip, and said nothing.
Larry O'Brien continued, "Sponsorships, merchandise, overseas markets—these are basically zero. Businesses are afraid of the NBA's negative image and dare not sponsor us. There are no jersey ads, no big-name sponsors, no globalization, no overseas broadcasts, and the sales of trading cards and merchandise are pitifully low."
"What about the cost?" Lin Haoran asked.
“Cost is the biggest problem,” Larry O’Brien sighed. “Without a salary cap, a luxury tax, or a revenue sharing system, teams with money can spend like crazy, while teams without money can only sell their key players and tank.”
The average annual salary for players has risen to $24.6, with top-paid players like Moses Malone signing a 6-year, $1320 million contract, earning $220 million annually.
Do you know how much the 76ers' owner spent on the team? $1000 million. He spent more on signing one player than he bought the entire team.
Lin Haoran couldn't help but shake his head.
The NBA of this era is indeed a distorted market.
Player salaries are out of control, teams are suffering heavy losses, and the entire league is on the verge of collapse.
"The scariest thing is that four teams have been on the market for a long time and they just can't be sold." Larry O'Brien's voice grew lower and lower. "Two months ago at the owners' meeting at the Coronado Hotel in San Diego, California, we even discussed disbanding the four teams to reduce salary expenditures and keep the league afloat."
This issue almost passed the vote.
"Almost?" Lin Haoran asked.
Larry O'Brien gave a wry smile: "Because everyone knows that once this starts, the dominoes will fall. Today four teams will disband, tomorrow eight might disband, and the day after tomorrow the entire league will be gone."
So everyone gritted their teeth and persevered, but how long they could hold on, nobody knew.
He looked up at Lin Haoran and continued, "Just as Mr. Lin said, the biggest problem for the league right now is the lack of funds, and the players have already threatened to strike."
The league owes them over $8000 million in deferred wages, and their patience has reached its limit.
If this issue isn't resolved before the start of next season, the players' union may announce a strike, and at that point, the NBA will truly be finished.
"Mr. O'Brien, you're asking me to buy the team? Aren't you pushing me into a fire pit?" Lin Haoran said this, but there was no anger on his face. Instead, he asked with a smile.
Larry O'Brien's face turned grim.
He opened his mouth, wanting to explain something, but found that he had no way to defend himself.
Lin Haoran is right. Given the current financial situation of the NBA, any attempt to acquire a team is like taking over a bottomless pit.
Unless you are confident that you can revive the entire league, the money you invest will be wasted.
“Mr. Lin, I…” Larry O’Brien’s voice trembled slightly.
Lin Haoran waved his hand, interrupting him: "Mr. O'Brien, you don't need to explain. I understand your difficulties and the league's situation. That's why I asked for 40 years of commercial rights."
Think about it, if I only take over for five or ten years, and I invest a lot of money and resources to revitalize the alliance, and then the authorization expires and the alliance takes back my achievements, what am I after?
I need enough time to recoup my investment and enjoy the fruits of my labor.
Larry O'Brien remained silent.
He picked up his glass, took a slow sip, and his mind raced.
Lin Haoran is right; commercial development does indeed take time.
The NBA is currently in a mess, and it will be impossible to turn it into a globally influential brand in less than ten years.
If given only five or ten years, Lin Haoran would indeed lack the motivation to invest his time and effort.
“Mr. Lin, 40 years is too long.” Larry O’Brien put down his glass and shook his head. “You need to understand that the league’s commercial rights are the collective property of all the owners. A 40-year authorization means that they will not be able to reclaim this power in their lifetime.”
Besides, if we hand over the commercial rights, wouldn't the league become a mere shell of its former self? At that point, the team owners would definitely oppose it collectively, and I have no way of persuading them to accept this condition.”
Lin Haoran smiled and said, "Mr. O'Brien, please don't rush. I haven't finished speaking yet. As I said before, I can solve the league's current funding problem. As long as the league agrees to my request, I can provide the league with a low-interest loan of $5 million."
This money can not only be used to pay the $8000 million in back wages owed to players, but also to subsidize teams on the verge of disbanding and help them through their difficulties.
The loan interest rate can be 2 percentage points lower than that of banks, and the repayment period can be extended to fifteen years. For the first five years, you can even only pay interest and not principal.
Lin Haoran's strategy was simple: throw money at it!
Besides, it's just a loan; the money will come back sooner or later.
With the NBA league on the verge of collapse, no bank is willing to continue lending to them. Therefore, although Lin Haoran's conditions are harsh, Larry O'Brien has very few options.
A $5 million low-interest loan is a lifeline for the NBA right now.
Larry O'Brien's breathing quickened.
$5 million, low interest, long term, with only interest payments for the first five years – this offer is practically a lifeline tailor-made for the NBA.
Those team owners on the verge of disbanding will probably be extremely grateful to Lin Haoran upon hearing this news.
In comparison, the alliance's commercial rights seem less excessive.
After all, if the NBA goes bankrupt and dissolves, its commercial rights will be nothing but empty words, worthless.
Entrusting the Alliance Business District to a business genius like Lin Haoran might truly revive the Alliance and greatly increase its profits!
Moreover, Lin Haoran was willing to take out $5 million to save the NBA in exchange for decades of commercial rights, which was a huge risk.
This deal doesn't seem to be a loss for the alliance. (End of Chapter)