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BY SEAN P. HAYDEN
Times Sports Writer | Friday, August 01, 2003 | (No comments posted.)
It's all about the money.
Like you didn't already know that.
But very few of us actually know why it's all about the money.
Mostly, we don't know for one of two reasons: First, we don't care; or second, the economic landscape of sports today is such a slippery slope that we know that even if we tried to figure it out, we'd be as confused as Dick Jauron on game day.
Without actually following the paper trail, we are far more comfortable sitting back and complaining about our local franchise or the superstar who left town for a bigger contract.
That doesn't work for local native Dan Rosenbaum. The former LaPorte three-sport standout is an economics professor at the University of North Carolina-Greensboro and is considered in many circles to be the nation's foremost authority on the NBA's luxury tax system.
Yawn. Big deal. Right? That's what you're thinking.
But truly, Rosenbaum's is an entertaining story. A Bulls fan, the economist in Rosenbaum wondered why, in all his research into the issue, he never read anything about the distribution system of the luxury tax.
In other words, just what the heck was the NBA doing with all that money it collected from teams who exceeded the salary cap.
"I didn't figure David Stern would just take all this money and flush it down the toilet," Rosenbaum said.
What he found was that a team was taxed, dollar-for-dollar, for every cent it spent over the salary cap. Last season, that translated into 16 teams and $175 million, with Portland forking over $50 million to the league.
Teams get the money back according to their standing in relation to the salary cap. Any team below or at the salary cap received a full share ($175 million divided by 29 teams), while those who spent more than $3.7 million above the cap received zero. Any team in between received a prorated share.
All of this was Rosenbaum's discovery, through many phone calls to the league office, the NBA Players' Association and various national sportswriters.
For all his work, Rosenbaum, who as a sophomore picked off three passes in a game against Merrillville, is frequently cited on ESPN.com, has served as an adviser to a couple of NBA teams and was involved in three strategy sessions with the NBPA in its efforts to shape the next collective bargaining agreement.
The NBPA flew Rosenbaum from Greensboro to New York City three times.
"It was very, very bizarre," Rosenbaum said. "I met Billy Hunter and their entire negotiating team."
Rosenbaum offered tax advice to them but stopped working for them when they wanted him to sign a confidentiality agreement, which basically prohibited him from researching or writing about the NBA's tax system any further.
The scholar and rogue agent in him declined to do business. So now he's a free agent, checking in on ESPN.com every now and then.
Believe this, it won't be long before he's on somebody's payroll full-time.
Sean P. Hayden can be reached at shayden@nwitimes.com or (219) 462-5151, ext. 362.
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