LOS ANGELES -- Although several teams have taken a hit financially, Commissioner David Stern said Thursday the NBA has no plans to eliminate the luxury tax until the economy recovers.
With his team's player payroll projected to exceed $76 million, Hornets owner George Shinn could have to pay a luxury tax bill of more than $5 million next summer. The Hornets were one of the 12 teams that received loans from the league this spring. Since 2003, 17 of the league's 30 teams have borrowed a combined $2 billion since the league began establishing a line of credit for loans used by teams. "There's a difference between choosing to and having a need to," Stern said at his state of his league address before Thursday's Game 1 of the NBA Finals at the Staples Center. Other teams replace depth with less expansive debt and use it to renegotiate with lenders. No, there's no contemplation of eliminating or reducing luxury tax."
Stern said the Hornets have been profitable. Last month, the Hornets announced 80 percent of their 10,700 season-ticket holders from this past season have renewed.
"New Orleans is profitable, and they tapped in," Stern said. "I can understand you tap (into the league's line of credit) -- some teams do it to cover operating losses so owners don't dip into their own pockets. Some do it because it's a good idea. The money is inexpensive and the credit line is a good."
Regardless of the economy, Stern said there are always teams that fare better than others. But he expects another record year in attendance for next season. However, Stern projects that league revenue could go down as much as 10 percent next season.
"We're continually discussing issues of revenue sharing, but we do have an increased revenue-sharing program in, and we had a very good and robust discussion with the owners," Stern said. "I'm getting ready to schedule another executive session in the summer so we can come together and talk about all issues that are front and center. But we've always had owners who do less well, and they have issues about how they're going to fund their teams. But we're doing pretty well."
The Charlotte Bobcats continue to struggle at the box office and with their revenue intake. Owner Bob Johnson is interested in selling his majority share of the team, but Stern said he did not know if Michael Jordan would be interested in increasing his share to become the majority owner. Despite Johnson's problems, Stern said Charlotte, N.C., remains a good market.
"I'm sure whoever the next owner is will fully realize the potential of the market based upon a very good start that Bob has made in bringing Basketball back to Charlotte," Stern said.
The Hornets played in Charlotte from 1988 until 2002, when they relocated to New Orleans.
Stern did not rule out that in tough economic conditions like now, issues of relocation will surface.
"There's nothing hot right this minute, but I think that's a possibility," Stern said. "I mean, the question is how does the team do, how does it relate to the community, groups, day of game, season tickets, sponsorships, things like that. Our teams are working at it harder than they have ever worked before. I mean, there are meetings that we have, best-case practices, shared Web, where we have a site that as soon as a promotion goes up. So I think it's making us leaner, but it's also making us better."
In other league matters, Stern said he fined Cleveland Cavaliers forward LeBron James $25,000 for skipping last week's media availability after their Game 6 loss to the Orlando Magic in the Eastern Conference finals. The league initially decided not to fine James, but Stern said he thought James has a responsibility, sportsmanship, to uphold to the fans.
