Instead of obsessing over where Jose Juan Barea is going to sign as a free agent, we are left to sift through the aftermath of my four-part series on how to end the NBA lockout.
That can only mean it's time for a rare phenomenon, the likes of which there is never time to pull off during a normal, frenzied, free-agent summer: a mailbag.
Many of you stepped up with thoughtful, intelligent comments on my series of pieces on the split of revenues (Part I), the cap (Part II), revenue sharing (Part III) and most of all, contraction (Part IV). And many of you came forward with ignorant comments that exposed the incredible, unwavering tendency among the Average Joe public to blame players for the work stoppage when it was the owners who locked them out.
So let's get to the particularly ignorant and disturbing emails first, then move on to intelligent dialogue:
|Considering the NBA makes about $930M a year in TV money alone, Dwyane Wade is underpaid. (Getty Images)|
Sorry, Larry. A career in janitorial science may be in your future, as $14.2 million is six times $2.3 million according to second-grade math. But to your point, in 1993-94, the NBA was in the final year of a four-year, $275 million national broadcast rights contract with TNT, which works out to $68.75 million a year. In 2010-11, the NBA was in the fourth year of an eight-year, $7.4 billion national broadcast rights contract with ABC/ESPN and TNT. That's roughly $930 million a year -- a multiple of 13.5 times the '93-'94 amount. So two points: 1) By your own logic, NBA salaries have not kept pace with the growth of national TV revenue, and 2) If there weren't a salary cap, players like Wade, LeBron James, and Kobe Bryant would be worth $35-$50 million a year to their teams. Wade and LeBron at $14 million a year each is a steal.
No, congratulations PLAYERS, as it is THEY who want their cake and to eat it also!!! Have YOU seen any of them pony on up to start a team, let alone a franchise???? Of course not, as long they are to receive their millions from us fans.
Thanks to Jay for reading and for being one of my most frequent emailers. But allow me to enlighten you: When the Golden State Warriors were sold to Joe Lacob and Peter Guber for $450 million, did NBA players -- current ones or retirees -- get a penny of the equity they had helped build in the franchise? Answer: Nope. This is why the players believe it is unfair for owners to claim the interest and depreciation expenses in asking the players to take a massive pay cut when they don't receive any equity when that debt is liquidated and the franchises are sold.
I hope the NBA loses the 2011-12 season. It's already way too expensive to attend an NBA game. Feeding the players' greed will only cause the cost for fans to rise. Maybe if these guys go a year without a paycheck, they will begin to realize that there are some things that are more important than money and themselves.
Thanks for weighing in, Lonnie. But let's not forget that the work stoppage was imposed by the owners in the form of a lockout; this isn't a strike. Further, please read my piece on contraction for some of the reasons it has become so expensive to attend NBA games. Many of the costs factored into your ticket price come from the debt, operation, maintenance and renovation of arenas, many of which were paid for with public money that came from YOU. Many of the owners keep every penny of game-day revenue while the city and/or state governments bear the burden of paying for the building. But I get it ... the players are greedy.
Extract all their pie-in-the-sky profits from the players ... who better to extract from? The spoiled brats have no more right to their employers' earnings than I do! It isn't welfare! I could live on a fraction of the average salary for the rest of my life, and they complain about it! And you defend them? What planet are you from, Ken?
I'm from planet Earth, Doug, where some very rich people decided that owning NBA franchises would be a rewarding experience. If not for the boondoggles, taxpayer money and tax breaks, land grants, and other gross misallocations of public property and funds, those owners would be forced to make an honest living in real businesses that are required to report their earnings and expenses to the public. People buy tickets and sit on their couches to watch the players in sports, not the owners.
Ken, you are, quite frankly, a ___ idiot. Your contraction list is basically a list of what teams have been struggling lately. When talking contraction, why don't you go further into your research to find out Glen Taylor is the chairman of the board in the NBA? He is the Timberwolves owner and one of the richest owners in the NBA. Additionally, he is looking to upgrade the Target Center and has no intention of contracting OR moving the team. Go check revenues when they were a playoff team. If you want to get to the facts, check revenues of winning teams vs. losing teams. Contract the Heat because they have the most fair-weather fans in all of sports and can't even sell out a playoff game unless they have the most hyped Big Three in sports history. I'm not even going further than this because really, your entire article is worthless, and I now think less of you as a sports writer for writing it. You clearly have no clue about pro sports and it boggles my mind they paid you to write this drivel.
At first I thought this email might have been from Mark Cuban, but the email addresses didn't match up. Mark, I'm well aware that Glen Taylor is very rich, owns the Timberwolves and is the chairman of the Board of Governors. But if he's so wealthy and benevolent, why doesn't Mr. Taylor reach into his pocket to pay for the $155 million renovation of Target Center that he's demanded? Instead, the city of Minneapolis is still on the hook for $78 million of the debt it assumed when it took over the building in 1995. In addition, the city pays $12 million a year in interest and operating expenses to run the building, is contractually obligated to pay the team for any arena-related revenue shortfalls, and will have $50 million sucked out of its operating budget for the next 10 years just to keep the place from falling apart. The politicians haven't even gotten to the $155 million needed for the renovation, but I doubt any of it will be coming from Mr. Taylor.
Why not just leave New Orleans alone. You seem factuated with us losing a team. What if we continued to say you need to be fired? How would that make you feel? For once in your life, print something positive about New Orleans, or just leave us alone.
|More on NBA Lockout|
Part IV: Most logical fix for NBA would be simply to get smaller. Read >>
Factuated? Leonard, you helped make my point that Louisiana should be spending its money on education instead of the Hornets, a hopelessly debt-ridden sports team to which the state paid at least $10 million in recent years to cover part of the relocation fee and revenue shortfalls at New Orleans Arena.
Louisiana does not rank last in the nation in median income. Please post a correction in your next article.
Mark: You're right, and I stand corrected. According to Money Magazine, Louisiana had the 10th-lowest median income in the United States based on U.S. Census Bureau data. I misread the table in the article.
Ken, aren't you contradicting yourself? In your first installment, you argue that the players should give back money in order to have leverage when negotiating other aspects of the agreement, like the cap. And then in the second installment you argue in favor of a hard cap. Why do the players go for any of this?
Thank you, David. You make a fair point, so let me explain. The goal here is compromise. The players and owners are both going to have to give. My revenue proposal freezes player compensation at 52 percent of basketball-related income (BRI) for two years, giving the struggling teams a chance to improve their bottom lines through temporarily reduced player expenses and changes to the cap that will make it easier for them to get out of bad contracts and reward players who deserve it. As for the hard cap, the NBA already has a hard cap for all intents and purposes; the ceiling is set by the luxury-tax line, which only eight teams exceeded last season. The new hard cap would be phased in, giving high-paying teams time to readjust their books. But a hard cap starting at $60.9 million, which would begin to increase again with revenues starting in Year 3, is vastly better for the players than the $45 million hard cap the owners initially proposed and the flat $2 billion-a-year in salaries they recently proposed over the life of a 10-year CBA. Thank you for your point, and for recognizing just how much the players are being asked to give up in this negotiation.
I read your article on revenue splits in the NBA. My first question is, why are you counting interest and depreciation in your numbers? Correct me if I am wrong, but those are losses that a team is allowed to deduct under GAAP but it's not actual money they are losing or spending on actual expenses. It's interest on the purchase price of the team and depreciation of the roster. They are accounting allowances, not costs. My second question is, why should the players take a decreasing percentage of an amount that doesn't change the $3.8 billion you keep using? Not to mention, according to Nate Silver in his article, "Calling Foul on N.B.A.'s Claims of Financial Distress," independent estimates of the NBA financial condition reflect a league that has grown at a somewhat tepid rate compared to other sports, and which has an uneven distribution of revenues between teams but which is fundamentally a healthy and profitable business. The key word for me in that statement is independent. Why should the players take a $194 million pay cut in Year 1 and a salary freeze in Year 2? What are they getting in return? You said negotiations are about compromise. So far in your plan, I don't see the owners compromising anything.
As to your first point, Otis, the players do not believe they should accept a drastic pay cut to atone for losses that include the kinds of non-operational expenses you mention. Your point is right out of the players' playbook, and it's hard to argue with, in my opinion. As to your second point, the NBA has loudly refuted the conclusions in Nate Silver's article, but the basic point comes back to whether you should look at net revenues including interest, depreciation and the like or strictly operational cash flow in evaluating how healthy the NBA is as a business. As for what the players are getting in return, they are willing to accept a reasonable pay cut in return for keeping some level of guarantees and will continue to fight against a hard cap. Your email concisely sums up why we are in Day 20 of a lockout with no end in sight.
Wouldn't extending rookie scale by a year, pushing out the second contract later into a player's NBA career, solve a lot of this dispute? Couple that with lower annual increases and shorter contracts -- all of which could be phased in -- and current players wouldn't lose a dime during their current contracts.
Very thoughtful and valid idea, David. Especially the part about lower annual increases and shorter contracts. In fact, as I pointed out, in many cases it would make more sense for teams to sign players to contracts that decline in base salary over time. Depending on age and mileage, the performance of players typically declines over the life of contracts, but the 8 percent and 10.5 percent raises allowed by the previous CBA have often taken contracts that started out reasonable and made them toxic.
It is so easy to call for contraction. Has anyone thought about how much it will cost? This is not one company that closes a store. This is a league with 30 different companies and each will have to be bought out. Not only that, but the NBA will face lawsuits from local communities or states that have used taxes to entice teams or build arenas. It was the owner of the Minnesota Twins who said, 'Give me $200 million and you can dissolve the Twins,' and that was 20 years ago. Any owner of an NBA team will want hundreds of millions of dollars to go away.
Jay: That's exactly why my list of contraction candidates gave heavy consideration to penalties for breaking the arena lease. Sacramento and Milwaukee don't have arena leases to break or significant arena debt to be paid off, thus lowering the total cost of buying out those owners. The penalty for breaking the lease in New Orleans is only $10 million (compared to, say, $42 million for the Timberwolves and perhaps more than $100 million for the Grizzlies or Bobcats). In addition, the NBA already owns the Hornets, so the other owners wouldn't have to buy themselves out.
|Whether by moving or contraction, Kings fans fear the future of their franchise. (Getty Images)|
Excellent point. With the recent flurry of NBA teams affiliating with D-League teams, a record nine NBA teams now have D-League affiliates -- and the trend will continue. It's a win-win for teams that want to develop players who learn the offensive and defensive systems used at the NBA level, taught by like-minded coaches. Further affiliation among NBA and D-League teams would facilitate my idea to have three hybrid roster spots on NBA rosters. With certain agreed-upon restrictions, each team would be able to shuttle three players back and forth from the NBA squad to the D-League affiliate. Those players would be paid a lower minimum salary than the current NBA pay scale dictates, but a salary that is a multiple of the current paltry D-League wage. It's a cost-saving measure for owners and a win-win for players who want meaningful development opportunities.
Ken, I have been saying for years that the NBA needs to contract, because there just isn't enough talent for 30 teams. Every sports league is going to have its bad teams. But the problem with the NBA is that there are only a handful of teams each year that have a chance at the NBA title, and about 20 teams have no shot on opening night. I believe the NBA should contract to about 20 teams, and that would make the game better overall. Plus the bad teams would be able to build quicker because there are only two or three impact guys in the draft every year -- sometimes one or two players. Teams that are stuck at the bottom of the league who don't have a LeBron or Tim Duncan coming out of the draft are doomed for years to be a bad team. And fans like me aren't stupid to spend money on tickets for a team that doesn't have a shot before the season even starts.
Chris, you have eloquently made the case for what is wrong with the NBA. The owners will tell you that 20 teams not having a chance on opening night is the very reason player salaries need to be drastically reduced and the system needs to change to improve competitive balance. In my opinion, the owners are too focused on pay cuts and not focused enough on competitive imbalance. To your point, they're also ignoring the question of whether the league has teams in the right markets, or simply has too many teams. Contracting 10 teams is way too drastic, unrealistic, and unnecessary. There's plenty of talent to go around; just not enough revenue or parity without contraction. I maintain that getting rid of two perennial underperforming teams would do the trick.
Bottom Line: Fans pay way too much at NBA games to see average basketball. We will pay to go see Kobe or LeBron. But who will pay the same kind of money to go see Rip Hamilton and Baron Davis? That is today's NBA: too many bad teams. If you want us to pay $60-plus a ticket, give us our money's worth.
I wouldn't hold your breath for ticket prices to come down under a new CBA, but I get your point, J. If you're going to pay top dollar, you want to see a top-notch product every night. For every Heat-Mavericks, Bulls-Celtics, or Knicks-Lakers game there are dozens of snoozers. That's why I think it's so important to give general managers the ability to pay top players what they're worth (or close to it) without compelling them to overpay players whose performance doesn't fit the contract. Along with that, teams should eventually be able to get out from under bad contracts without cap-killing consequences (like in the NFL). And to your point about the product not being worth $60 a ticket, the concentration of talent would be stronger and more teams would be viable if two sad-sack teams were eliminated.
From: Sactown Lifer
Despite a .438 winning percentage since the Kings moved to Sacramento, they sold out every game in 17 of 26 seasons. As far as I'm concerned, the Maloofs are bad businessmen. They can't even run the Palms. How can a our mayor, Kevin Johnson, raise more money in additional financial support in a couple of weeks with one hand tied behind his back than the Maloofs have raised in years? The Sacramento fan base is the best and most committed in the NBA. If the Maloofs can't financially survive for one more year while the arena plan is developed and the collective bargaining agreement is sorted out, then they should sell the team to someone who can survive: Ron Burkle. Sacramento will get a new arena. The Kings belong in Sacramento and I don't see the Kings going anywhere.
Sure, the Kings will get a new arena -- and people like you will be paying for it for decades to come, Sactown Lifer. There is no disputing the commitment of the fan base in Sacramento during the glory years when the team warranted support. A couple of points, though. Let's not blame the Maloofs for failing to get funding for a new arena. Right or wrong, the politicians for years resisted the use of public money, and there is still no guarantee Mayor Johnson will get all the boondoggles, er, money necessary. The case against contracting the Kings is a strong one. They are the perfect example of a team that was torpedoed by aspects of a CBA that punished them for spending in a futile effort to breathe the last few, elusive breaths in an era of competitive basketball. A more flexible CBA that gives GMs avenues to churn the roster faster and avoid the low points of the inevitable cycle of bad contracts would help teams like the Kings avoid the dubious process of trying to sell expensive tickets to watch a team that has no chance to win. But, if the arena funding falls through and the Maloofs can't move to Anaheim, a few million bucks to walk away would help them and the NBA.
It's all really simple: NBA contraction. Devilishly simple. The teams that have never appeared in the Finals in their entire history are disbanded. Who goes: Clippers, Hornets, Bobcats, T-Wolves, Grizzlies, Raptors. Notes: Denver won an ABA title. The Sacramento Kings won the NBA title in 1951 as the Rochester Royals. The OKC Thunder played in the Finals as the Seattle Sonics. Harsh, but it drops the hammer where it belongs, and reduces the league to a manageable 24 teams.
I don't agree with your criteria, Mike, but I see where you are going.
It would be nice if you could plug SonicsGate, the free online movie. It is a good reference in the context of the lockout. As a Sonics fan, we hope this lockout lasts a long, long time. Maybe then you and the other fans can know what it feels like. The way you talk about contraction is somewhat heartless and perhaps just getting a new commish and better rules might fix the league -- not punishing the fans even more. I did like the read and hope to hear more about the Sonics. Not more sweeping this under the rug.