NBA PM: Will Greed Kill The NBA?
No matter which page of your morning paper (or morning tablet app) you started with this morning, you found one overwhelming message waiting to greet you. Whether you started with the economic news, political news, or the sports pages, you found the same primary issue staring you in the face: greed. Millionaires want to be billionaires, billionaires want to be trillionaires and trillionaires want more trillions. Why is it, do you suppose, that such a small segment of our population seems to steer absolutely every issue, from the way our country spends money to when and how athletes will play their chosen sports?
Setting aside the issues in the NFL, on Wall Street, and in Washington, D.C., let’s focus on our favorite sport: the National Basketball Association. Make no mistake about it, professional basketball is a wildly lucrative business. The NBA’s Basketball Related Income last season increased by 4.8% from $3.643 billion in 2009-10 to $3.817 billion in 2010-11. Total player compensation also increased by 4.8% from $2.076 billion in 2009-10 to $2.176 billion in 2010-11. In spite of this, the NBA claims the majority of its teams are losing money, as HOOPSWORLD contributor Larry Coon recently wrote:
The league contends that 22 of the 30 teams are losing money, to the tune of about $370 million per season collectively. The individual team owners are seeking a complete overhaul of the league’s financial model, and have submitted proposals to the players that feature a $45 million hard cap and rollbacks to existing salaries (reductions in existing contracts of 15 percent to 25 percent, based on the players’ starting salary) — a proposal the players association termed “a non-starter.” They have also discussed an alternative in which salaries are pegged near their present levels, so the players’ share of revenues declines over time as revenues increase over the next 10 years.
These two facts may seem to be at odds, but it is entirely possible for the league to show record profits while 22 of its 30 teams report losses. The Los Angeles Lakers generate more revenue with one home game than the Indiana Pacers do in three home dates, for example. It’s because of this skewed math that the players’ union is asking for a better revenue-sharing model as a solution to the NBA’s economic issues rather than a huge pay cut for the players. The players, after all, are the ones people pay to see, and no player has ever put a gun to the head of an NBA owner and forced them to offer a contract the team can’t afford.
In a famous scene from the movie “Dave,” Kevin Kline’s character, a presidential impersonator who is hired to be the President, is invited to take a look at the federal budget to see if he can find enough money to save a children’s program favored by the First Lady (Sigourney Weaver). Of course, with the help of a CPA pal, he has no trouble doing so. He quickly finds all kinds of pork and wasted spending (like $500 toilet seats for the military) that could easily be cut in favor of other, more necessary programs.
Why can’t the NBA take the approach?
NBA players certainly make a lot of money, but the amount they make is set in direct proportion to league revenues. If the NBA loses money, player revenues go down. If the NBA makes more money, player revenues go up. The real issue, then, is how money is distributed throughout the league and how individual teams spend money. As I have written in this space before, many league execs choose to live the same lifestyle as their players, only with the team footing the bill. Private jets and last-minute first-class travel, presidential suites instead of mere executive suites, thousand-dollar hotels instead of more reasonable options, and thousand-dollar dinners are the norm, and it’s all wasted money.
A good friend of mine was recently planning to take a nice week-long vacation to Florida, but when an unexpected car bill derailed his family budget he opted for a much closer, less expensive destination and a shorter trip. That’s what sensible people do when they have budget issues; they find ways to cut spending so that they don’t find themselves on the street and bankrupt. At no time did my friend consider cutting his son’s allowance to pay for the budget shortfall.
Why can’t the NBA and its teams operate the same way as us average Americans?
The simple answer is GREED. The league monkeys with its revenue numbers and its expenses to show less income, the teams spend irresponsibly and at the end of the day they’re asking the kids to make up the difference. As a result, the Players Association is threatening to de-certify the union as a means of forcing the lockout to end, the league has now filed an unfair labor practice suit against the Players Association, and it will only get uglier from here.
At the end of the 2010-11 NBA season, professional basketball was a wildly lucrative business. It’s unfortunate a group of greedy individuals who would like to squeeze a few more billion to add to their ever-growing pile are set to destroy the league at a time when it is at its most popular.
But then again, this is the new American way, isn’t it?
Durant Light’s Up Rucker
Kevin Durant made his Rucker Park debut last night, scoring 66 points with the greatest of ease. No more Mr. Nice Guy, as Durant shows a mean streak in this video that no NBA fan has ever seen. Check out Durant working his magic in Harlem in this video from The Big Lead:
Olajuwon: D12 Needs More Touches
Orlando Magic star Dwight Howard was in Houston last week to work with Houston Rockets Hall of Fame center Hakeem Olajuwon, and while the duo spent a great deal of time working on Howard’s shooting touch, Olajuwon offered some familiar-sounding advice at the end of the session.
Dwight Howard needs more touches.
The Houston Rockets offense, circa 1994, was always at its best when the ball ran through Olajuwon. His super-human offensive skill and the knack for passing that he developed later in his career made him something of a point center for the Rockets, and led the team to back-to-back championships. The offense started with Hakeem, who would either perform one of his nasty “Dream Shakes” or take advantage of the inevitable double-team and kick out to the open man.
As the Rockets did with Hakeem, the Magic have surrounded Howard with lots of great shooters, from Hedo Turkoglu and JJ Redick to Jameer Nelson and Jason Richardson. Too often, though, the Magic get into their offense without making sure Dwight gets the ball.
Getting Dwight the ball isn’t the only answer for Orlando, however. Howard bares his share of responsibility, too. He has to look for the good pass when the defense surrounds him and he has to knock down the free throws that often result from his low post catch. He improved dramatically in the first area, but still has a long way to go in the free throw department.
Last season the Magic converted on 62% of their plays in which Howard passed out of the post, which put them in the 70th percentile league-wide. His teammates connected on better than 49% of those situations, good for 1,149 points on the season. As a team the Magic got 89% of their offense from the half court set, putting them in the 76th percentile, with Howard providing the lion’s share of that offense. For all of his complaining, Howard also got the benefit of a lot of whistles, attempting a career-high 916 last season. The problem is he only connected on 59% of those shots, which is one reason he sought out Olajuwon this summer.
There are two primary areas where the Magic can improve next season, with or without roster moves. First, they need to improve their transition game, which accounted for a pathetically low 10% of their offense last season. Given that Howard is one of the best defensive rebounders in the world you would think the Magic would convert those missed baskets into some easy points on the other end. Second, Howard has got to improve his free throw shooting.
If Dwight were to shoot more like 70-75% from the line, as Olajuwon did throughout his career, he would make the Magic offensive scheme that much more effective, and even make it easier for head coach Stan Van Gundy to make sure every play runs through him.
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