Why I’ve Switched to the Player’s Side in the NBA Lockout

Posted: July 6, 2011 in NBA
Tags: , ,

A few weeks ago, I wrote a piece explaining why I believed the NBA owners had the better position in the then-upcoming labor battle.  Well, after some detailed reading in the matter, I have totally switched sides.  Don’t get me wrong, the owners have some valid points.  Many teams are losing money, and some changes in the league’s player salary structure do need to happen.  But the owners aren’t going for reasonable changes, they’re out and out trying to gut the players and wipe out any illusions that the NBA is a partnership of any sort.

First off, there is a major dispute about what the actual financial health of the league truly is.  The NBA is saying they lost $340 million this part season.  Many people who spend a lot more time than me pouring over obscure financial statements are seriously disputing that.  Forbes Magazine even suggests that the league as a whole actually turned a profit approaching $200 million in ’09-10.  That’s a far cry from $300 mil in the red.  So who’s to be believed here?

Well, I believe its somewhere in the middle.  I suspect that the overall league most likely is profitable.  I also believe that a majority of teams could be losing money, although not likely at the clip the league’s stating.  In case you haven’t been paying attention to the world in the past few years, accounting practices, particularly among large corporations and the financial sector, have become a little like alchemy.  But instead of turning lead into gold, they’re making gold look like lead on paper while still actually raking in the gold.

Either way, the league needs some changes, and it seems to me the player’s agree with that and have made offers to that effect.  However, what the NBA wants isn’t simply salary reductions, it’s salary Armageddon.  The NBA wants something close to $900 million per year chopped off player salaries, and a 10-year contract to boot.  In a stunningly arrogant position, David Stern rather smugly suggested they would guarantee the players $2 billion a year in salaries.  But that’s a hard ceiling.  If revenue continues to grow at the rate it has, by the end of a decade, the player’s share of revenue would fall from the current 57% all the way into the mid 30’s, if not more.  That’s not a legitimate plan, that’s flat out theft.

The player’s have rather correctly, argued that many of the losses that teams have incurred can be fixed with better revenue sharing models, but the NBA won’t even discuss such a thing in collective bargaining.  They insist, instead, that a CBA needs to be done first, then we’ll talk revenue sharing internally.  Uh-huh, and I’ve got a bridge in Brooklyn you can buy on the cheap.  The owners want everything to fix all of their problems coming out of the player’s pockets, and if they get it, what do you believe the chances are for any kind of substantive revenue sharing?  If you said zero, you get a prize.

The owners are behaving much like Congressional Republicans on this issue.  We want to solve our budget problems by cutting spending on you guys, while any suggestion of the top of the top earners giving back anything is off the table.  The example of the the Kings and Lakers makes the case eloquently.

Sacramento nets about $11 million per year in its local television contract.  The Lakers, on the other hand, just signed a new TV deal that will pay them in excess of about $150 million per year.  That revenue is not shared, so the teams keep every dime of that.  The Lakers had the highest payroll in the NBA last season, after the Luxury Tax, at about $110 million.  Their TV contract alone will pay their entire team salary and still have $40 million left over.  The Kings TV contract wouldn’t even cover the full salary of one All-NBA level player.  I don’t care how much you cut salaries, allowing that kind of disparity in revenue will never, ever make for a league where small markets can compete.

At first, I thought the players a little arrogant for stating that they didn’t believe they should be responsible for poor management decisions, but I’ve rethought that a bit, as well.  Let’s look at the Hornets, for instance. Stern and his cronies allowed a garbage owner like George Shinn to run the Charlotte market into the ground, then inexplicably let him haul the team off to an even less financially viable market in New Orleans.

After Hurricane Katrina, the Hornets played in Oklahoma City for a while, to packed houses.  Reason should have argued that the Hornets should have just moved there.  But no, they went back to the financial black hole in New Orleans, while Stern was busy allowing his carpet bagger buddy Clay Bennett to buy the Seattle Supersonics, poison what is a great basketball market, and then haul them to OKC.  To make matters worse, its been reveled that the Hornets franchise actually loaned their owner Shinn $35 million at well-below market interest rates at the same time they were borrowing nearly $100 million at much higher rates. How in the name of all things good and holy did the league allow that bit of borderline embezzlement to happen?

So, no, I’m not so much on the owner’s side anymore.  And don’t give me the line about Eddy Curry or Gilbert Arenas contracts.  Nobody other than Isiah Thomas thought it was a good idea to give Curry that kind of money.  Nobody outside of Washington thought it was good idea to give Arenas that contract, especially coming off a year where he barely played due to injury.  These guys bid against themselves.  You can’t even blame the system for that.

But, oh well, the NBA is still planning on breaking the players with the lockout.  The only difference is that I no longer have any sympathy for them when they suck the whole league down the drain in the effort.

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