The NBA officially cancelled the first two weeks of the NBA season on Monday. There will be more games cancelled before this labor dispute is settled. You may as well get used to that fact.
Some people believe my writings suggest a bias toward the owners. In a sense that is true because I am a fan of both the NBA and the Memphis Grizzlies. As such, I am going to support whatever measures ensure both the leagues success and the teams success in this city. However, I am not a supporter of the positions taken by some of the owners.
Thats right. There is a split among the owners, and I am most definitely NOT on the side of one group of owners in this situation.
But some people dont understand why. To fully appreciate my position, you need to see the leagues cast of characters the way I do. This entire debate is being driven by four factions.
So who are the different factions at play in this situation?
First, you have the players. The players are currently united behind their union in demanding that little to no real salary reduction happens. That is a great deal for them. They can demand whatever they want for their services, can move wherever they want to play and if they dont want to practice hard, they have guaranteed contracts. Its not hard to understand why they dont want to give up what they have had.
Second, you have the large market owners. The large market owners (LMOs) are people like Jerry Buss (Lakers), James Dolan (Knicks), Jerry Reinsdorf (Bulls) and a few others. These power players have teams in large markets, making it relatively easy to sell tickets and they benefit from extremely lucrative local TV deals that they dont share with other teams in the league. They would love to keep more money than they already make, but they really arent willing to push the players that hard because they are as much beneficiaries of the current system as the players.
Third, you have the small market owners. The small market owners (SMOs), such as the Grizzlies Mike Heisley, dont have the same business model to pay huge contracts to players and give their teams a chance at breaking even financially. To even make the playoffs, most SMOs must throw financial principles to the wind. If they give up the goal of competing for a championship, they can survive economically by trading away players who could command large contracts in exchange for draft picks and cash to offset the losses from the day to day operations. Memphis fans know how horrible that makes you feel as a fan.
Finally, you have the sports agents. They are the real wildcard in the negotiations. The agents are trying hard to stop the players from giving up any money. These seven super-agents, the new gang of seven I suppose, have thrown confusion in the mire with letters to players begging them not to acquiesce to the owners demands at all. No change is their party line, and if you believe them, it would be better to decertify the union and let the agents negotiate on behalf of the players than accept any cut in salary and benefits. Luckily, this gang of seven is not gathering a lot of support among the players, but that could change if the union negotiates more and more concessions to get the players back to work.
So Where Does That Leave Us?
Given these four different camps involved, I am most definitely on the side of the SMOs. The league is not set up under the present arrangement to allow small market teams to compete regularly. San Antonio and Cleveland are the only small market teams to make the NBA finals since 2000 and they both won the lottery to get there. Cleveland subsequently lost their home town son LeBron James as well. Does anyone believe the Cavs will be back to the NBA Finals anytime soon unless they win the lottery again?
The league isnt that competitive even among the larger markets. The Lakers and Celtics have been to the NBA finals a combined 52 times. The 76ers have been only 9 times and they are in 3rd place on the all-time list. Those two teams have won 33 NBA titles. The rest of the league has won 32 in total.
This is not a competitive league. Something needs to change to make the league more competitive. Competition is what brings fans out to the games and that makes all four camps more financially secure. Something needs to happen to make regular season games appear important.
Notice I am not saying that the SMOs need to change the system so that they can make money regardless of how poorly the team is run, but there needs to be more than a 25% chance in the lottery as well. Winning the lottery helps a lot, but there also needs to be a way for small markets to recruit and keep players without throwing all financial concerns out the window.
What I am saying is there needs to be a dramatic change in the way the NBA is run. Only the SMOs seem to understand that.
This isnt about greed. Okay, okay — its not solely about greed. This is also about making the league more enjoyable for the fans, more profitable for the teams and more lucrative for the players and agents. Like so many things in life it may hurt now, but youll feel better later. For most fans, it hurts right now, but if the medicine works youll feel much better in a little while.
The SMOs position is simple. Either force the players to make concessions that enable every team to compete on equal footing (which the players rightfully hate) or force the large market owners to come to them to make a deal (which the LMOs hate as well). The key is that both sides fighting against the SMOs position are losing a ton of money holding out. The SMOs likely are losing too, but not significantly more than they lost when the league was playing — and some may even lose less. Even Stern admitted that some teams actually would lose less money during a lockout than they would by playing.
In other words, the SMOs have no incentive to make peace.
Who cares if the fans are upset in the short run? Small market fans dont support their teams when they are playing anyway or at least not like large market fans support in general.
Sure, population is an excuse, but to be honest do you think owners care what the excuse is? If they lose $20 million playing and lose $15 million not playing there isnt a lot of incentive to get the players back on the court. The incentive is to hold the line until they can make a profit and that is exactly what the SMOs are doing.
I dont believe the SMOs are concerned about which side has to give them that ability either. The SMOs could be playing both the players and the LMOs in these negotiations. Either the players will need to come down on their demands or (and I hope this is what happens) the LMOs will offer more balanced revenue sharing to the SMOs so everyone can compete on an even level. The SMOs wont allow the status quo to remain.
The SMOs are definitely preventing an agreement from being reached, which punishes fans in the short run, but they also are protecting the fans in the long run by this position. The LMOs cant reach a deal with the players with the SMOs holding out and the players wont accept the type of deal that the SMOs will approve. It is my hope that the LMOs will realize their only option is to offer a deal to the SMOs to share in a meaningful way the revenue produced by the league that the LMOs benefit in disproportionately due to the size of their local markets.
Then, the players will have to accept their share of the cuts as well. I dont believe revenue sharing alone is enough to balance the competitive tide in the league, but it will go a long way towards curbing outrageous spending by some owners without forcing artificial caps on the players. Its the caps that the players object to after all.
So, if that compromise occurs all sides, including the agents, will be able to reach an agreement. Until that happens, it likely wont occur.