Bank loans and sports are not an unlikely pairing. A family of four might take out a bank loan to afford the personal seat licenses on their season tickets. The NBA secured a line of credit for franchises that were reportedly losing between $15-$20 million annually (see Orlando Magic).
But never before have I’ve seen a pro sports team take out a bank loan to secure a free agent.
The Jazz are not strapped for cash. But the parameters of the offer sheet are such that Milsap would receive a $5.6 million signing bonus and $4.7 million in first-year salary [$5.6 + $4.7=way too much money for an undersized power forward], and if the Jazz were to match, they would have to come up with those funds by Friday. Unlike the Blazers, whose owner Paul Allen is worth a recession-busting $10.5 billion, the Jazz are a small market team for whom $10 million cannot appear overnight.
There’s no doubt that the Blazers knew the Jazz would have trouble matching. With certain franchises losing money, it’d be bad business for franchises that are turning a profit to not take advantage.
But this monetary muscling only accelerates disparity in a league that is becoming increasingly top-heavy. The possibility that Dwayne Wade or LeBron James might change zip codes has every non-contender cutting payroll. Teams that are looking to win this year should be able to capitalize, but it’s looking like fiscal restrictions might narrow that championship-caliber caste even more.
From the small-market perspective, is the loan a future equalizer? For most teams, probably not. The days of low-interest rates are as gone as Ed McMahon, and most teams just can’t afford to pay a player and the bank for the same contract.
If you’re a Cleveland Cavaliers or a Los Angeles Lakers fan, this is great news. You might be able to sign a David Lee or a Raymond Felton on the cheap.
If you’re a Sacramento Kings or Milwaukee Bucks fan, well…There’s always next year.