NBA Armageddon: Hardline owners may permanently fracture the league

You want a good picture of why the NBA may well be on the cusp of losing an entire season?  Are you still harboring thoughts that supposedly greedy players are at fault?  Read this piece by Adam Wojnarowski.  Got it now?  The owners aren’t negotiating at all.  In fact, the clear implication is that a group of hardliners are more than willing to lose the season and gut the league’s economic structure in order to expedite a higher sale price for their franchises.  That is frankly pathetic.

I’ve been very critical of David Stern over the years, justifiably I think, but even I’m not willing to believe he would approve of threatening the league’s future viability to provide a quick profit for a handful of owners who are planning to flee the league.  I don’t believe for an instant that he had the flu on Thursday when he failed to show up for the most important negotiation ever.  Given the way it turned out, I find myself actually being on Stern’s side, for once.  I want to believe that his absence was a tacit disapproval for the direction things were going on the owners’ side.  Wishful thinking?  Maybe, but Stern now has a chance to redeem himself in my eyes, and many others, by fighting these forces allied to damage the league for personal gain.

The reality is that it only takes 16 of the league’s 30 owners to ratify a new CBA.  How big is that group of hardliners exactly, and how many of them are willing to toss an entire season so Paul Allen and his pals can make a slightly bigger buck when they sell their teams as soon as the lockout is over?  If Stern can get 16 guys together and cut a deal with the players they all can support, this lockout could end soon and to hell with the hardliners and their demands.  You want out?  There’s the door.  We’re just not going to allow you to steal the fine china, silverware and anything else not nailed down as it hits you in the ass on your way out.

This latest twist is a microcosm of what’s wrong with our entire economy right now.  Business leaders actively cutting costs to the bone, past the point where it could actually be beneficial, for no other purpose than to increase the value of their own personal holdings.  They don’t give a damn for the people who work for them, or for the long-term fortunes of the company, so long as they can cash out high.  It’s somebody else’s problem to clean up the wreckage left behind.

It’s these kinds of people that have thrown off the entire delicate balance of our economy, and possibly, our society as a whole.  Profit today as high as possible no matter the costs to anyone else.  It’s become standard operating procedure in far too many industries.  That mindset has taken over the financial sector and even the government to a degree, so it’s not surprising that it would rear its ugly, destructive, self serving head in the high dollar professional sports realm.  It also makes it even more impressive that the NFL avoided having its labor negotiations hijacked in a similar fashion given how wide-spread this kind of activity is these days.

I can’t say the players are totally without fault here.  That Kevin Garnett-Dwayne Wade act of a couple of weeks ago may well be the most assaninely counter-productive thing I’ve ever seen.  Well, before the owners crap on Thursday, anyway.  But I do get the impression the players genuinely want to negotiate and reach a deal.  The owners don’t. 

When Allen stands up and says that he thinks the owners have made too many concessions already, remember this: their side hasn’t made any concessions at all.  Not one.  This isn’t about a fair and equitable deal where both sides gain something.  This is a debate on exactly how much the players will walk away from.  Everything decided in this negotiation will be a concession the players make from the previous deal.  Every single thing.  However this turns out, the owners will not make any concessions in any way during this process.  It’s entirely a matter of how much they stand to gain.

And still, the players have already offered giving back between $2-$3 billion over 10 years and that number is so distasteful to the owners that they walked away from the table rather than discuss it further.  The owners–the hardline bunch anyway–aren’t interested in an equitable deal, or competitive balance or any kind of partnership with the players.  They want to do nothing but cut costs as low as possible.  The short term value of their franchises put above the product, the league and everyone employeed directly and peripherally by or because of the NBA.

I hope Stern did what I suspect and called in sick out of protest.  I hope he still has the gumption to fight this kind of insidious rot growing out of control inside the league he’s spent so long nurturing into a $4 billion a year enterprise.  I hope he fights the good fight for the future of the league as a whole and not just the immediate profit of filthy-rich parasites like Allen.

I really do.

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

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.