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NBA AM: Is Contraction an Option?
Posted By Alex Raskin On August 15, 2011 @ 9:07 am In All,NBA | No Comments
Why have negotiations gotten so volatile?
Obviously we’re discussing the NBA lockout specifically, but it seems like every facet of American life now involves two parties threatening each other’s existence as much as they’re exchanging terms. The financial meltdown of 2008 and the debt crisis of 2011 have taught us that the possible destruction of our economy isn’t just a dire prophecy—it can be a bargaining chip too. And over in the NFL, which is just coming out of its lockout, Giants veteran Osi Umenyiora reportedly threatened to have elective surgery on his knee to pressure ownership into renegotiating his contract (he has since backed off this threat and will practice with the team today).
Since when is the country so flippant with the proverbial nuclear options? And why are we more inclined to burn something to the ground than to compromise?
Well the NBA might not be immune to the trend, because the subject of contraction as an answer to the league’s financial woes has surfaced once again.
As many of our readers have heard by now, commissioner David Stern went on the “B.S. Report” podcast with Bill Simmons recently to discuss the lockout situation (HOOPSWORLD’s Joel Brigham did a great job of analyzing the interview in the NBA Sunday), and, naturally, the subject of unprofitable teams was addressed.
“(Contraction) is not a subject that we’re against,” Stern told Simmons. “In fact, when you talk about the revenue sharing, a number of teams have said that if you have a team that is perpetually going to be a recipient, aren’t you better off with the ability to buy them in? Because between the revenue sharing and the split of international and the TV money, we could almost buy them in with their own money.”
But how realistic is contraction and does the subject have any place in the current collective bargaining negotiations? In the past, the union has opposed such a drastic measure because it would eliminate 15 jobs per team, but Stern claims the union is more open to the extreme measure now that the league is supposedly unprofitable.
“The players actually have been heard to suggest that as well, which was interesting because that means they are suggesting that we eliminate 30 jobs (if two teams are eliminated), or the potential for 30 jobs. So we’ve said to the players, you know, ‘Give us the right to contract, let’s agree upon what the basis will be. Let’s make this deal and then let’s continue to look at the subject.’”
Thankfully, Stern didn’t sound like he was in a rush to contract and the topic could even be saved until after the CBA is hammered out.
“If you look for volunteers,” Stern said, “there aren’t many teams raising their hand.”
“I do represent 30 owners,” he continued. “(To an owner) ‘I’m here to tell you that I think you should go out of business and no longer own a team’ is something that needs to be done pursuant to a plan. We’ll see how that works after we make a (CBA) deal and the revenue sharing deal.”
As always, the contraction talk has centered around three teams—the Hornets, Kings and Bobcats—but Stern isn’t convinced that those markets (particularly New Orleans) are on death row.
“New Orleans is actually going to be a top-15 grossing team when it has its 10,000 season tickets and the like,” Stern said. “Together with an expression of support from the state, it’s going to be an interesting team that I’m not sure is a candidate for contraction.”
Even Sacramento, with its tenuous grasp on the Kings, could salvage its situation.
“I just don’t want to get involved in discussion of individual teams,” Stern continued. “Right now we’re working very hard with (Sacramento) Mayor (Kevin) Johnson who has put together a plan to that seems to suggest that a new arena would be a huge economic incentive—$7 billion over 30 years—and has been able to generate support for the project from the entire region. So let’s see how that goes before we start talking about contraction.”
As far as the Bobcats are concerned, their situation seems to be set in stone, so it may not be worth it for the NBA to cut its losses in Charlotte.
“We have a long-term lease of a brand new building and we have a very unfortunate launch of that expansion franchise,” Stern said. “Michael Jordan is leading—what’s the opposite of excavation? He’s digging out, but he’s building up the franchise. Sponsorships are up, tickets are up, an unfortunate TV deal is being reworked on an ongoing basis. I think Charlotte will be a candidate for revenue sharing in its current format, no question about it. North Carolina—we’re going to abandon it and say they’re not supporting basketball?”
Of course, contracting teams means buying them from their current owners, which is immediately more expensive to the rest of the NBA than a regular profit-sharing program. And from a business perspective, eliminating two franchises won’t build confidence among sponsors.
What makes the topic of contraction different from, say, the debt debate or Umenyiora’s contract situation with the New York Giants is that, thankfully, no one is in a rush to make this decision. The league might have its financial issues, but it isn’t clear that contraction is a solution, so until it is, both sides will work to reduce expenses and share revenue.
“It’s a source of some heated discussion internally and across the table with the players,” Stern said of contraction. “And we understand it.
“We’ll examine all of that but our individual owners are very committed to their cities,” he added.
It’s Only Business
It’s hard not to take things personally, especially when billions of dollars are on the line. That’s why it wasn’t much of a surprise that Stern sounded somewhat condescending while explaining the league’s position to Simmons.
“We’ve said to them, ‘The average salary is over $5 million,” Stern said. “’We think we can keep your compensation including benefits at that number. That about makes you the highest-paid union in the world and we’re going to keep it at that while we grow our way out of this.’ And the players throw around words like ‘greedy,’ ‘arrogant,’ and a variety of other things that would tend to enflame things. And I think our owners have been remarkably calm because the logic of where we’re going is hard to disagree with. We need a reset in the amount of compensation. We need shorter contracts so we can align pay with performance. And we need to get a little more competitive. It’s not brain surgery.
“They’ve got a lot of education to do with their players,” Stern added.
Maybe he’s right (it wouldn’t be the first time), but it’s hard to imagine any player hearing that without feeling somewhat disrespected.
John Starks is a Hall of Famer in Oklahoma
Jimmie Tramel of Tulsa World wrote an interesting piece on former Knick John Starks’ enshrinement in the Oklahoma Sports Hall of Fame.
For those who don’t know, before Starks famously dunked on Horace Grant he played just two varsity basketball games for his high school before bouncing to four junior colleges and Oklahoma State. He was raised in near poverty on the Tulsa area and remembers times when there wasn’t enough food to go around.
Now that he’s written an autobiography (John Starks, My Life), he hopes some of his life experiences can help others.
“I prayed about it before I opened myself up,” he said. “Writing the book, it was kind of cathartic to put things on paper and you see what you have really been through in life.”
Starks will be inducted into the Oklahoma Sports Hall of Fame on Tuesday, along with another former OSU basketball player, billionaire Boone Pickens.
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