NBA negotiations between the players and owners have not exactly gone well.
The national media is starting to whisper that an entire missed season is a real possibility (you probably already knew this for the past eight months, but chatter is up), and the lead mediator who was brought in last week to get things moving—George Cohen—said on Friday, “No useful purpose would be served by requesting the parties to continue the mediation process at this time.” He gave up, basically, and he’s no slouch.
Cohen is the man responsible for solving the NFL labor problems, which involved a lot more money, a lot more players, and a decertified union which only complicates these sorts of things. He got that whole thing worked out with one missed preseason game as the only collateral damage.
So this season is looking screwed with virtually nobody thinking there will be NBA games played before we flip the calendar to 2012. My tone throughout most articles about the lockout has probably made it clear that I fully support the players in this mess, but now that they’re starting to take some heat for bungling certain parts of the negotiations and for not wanting to take a salary cut during a huge recession, I feel it’s time to lay out why you’d have to be a soulless imbecile to support the owners in this fight.
1) The owners are blatantly lying about how much money they’re losing. How do we know? They won’t show anyone their books. They have accountants who keep all these numbers in easy-to-read formats, but the teams won’t show them to the union or the media while at the same time claiming it’s real bad, just trust us (but no need for details or specifics). Hey owners, here’s a real easy way to prove you’re not lying: show us your books. There’s only one reason not to, and that’s because we’d then all know how full of crap you are.
2) Even if some of the teams are losing money on paper, there’s a good chance it’s in a large part due to playing numbers with how much rent they pay to themselves in the arenas many of the teams own. If they own the arenas and want to look like the team is losing money, they can bump the rent up 500% - voila, the team is losing more money even though it isn't a loss of any kind to the owner. Simply opening the books will show us if that’s being done (it is, but at least then we’d know to what extent).
3) Even if some of the teams are losing money on paper, there’s a good chance it’s in a large part due to playing numbers with how much money they make from the local TV and radio rights since many of the teams own, at least in part, those entities as well. Again, open the books and we’ll see how screwy the numbers are on that front.
4) Even if some of the teams are losing money on paper, there’s a good chance it’s in a large part due to playing numbers with Roster Depreciation Allowance (RDA). It turns out teams can claim losses on the depreciation of the team talent, which is a huge farce since the players aren’t owned like company cars that lose value over time. Most players improve or are replaced by better ones. Even if the talent in the league only got worse over time (you buying that?), the owners don’t actually lose any money for depriciating players since they aren't owned assets that need to be sold later – that's why no checks are written for this RDA, yet owners can still claim it as a monetary loss. Deadspin explained how jacked up this was back in June.
5) Even if some of the teams are losing money on paper, there’s a good chance it’s in a large part due to playing numbers with made-up amounts of money put in the accounting simply to balance the books after a sale. Larry Coon, the salary cap guru, explained all this back in July while also pointing out that teams often are losing money through all sorts of other financial deals that have nothing to do with running an NBA team (loaning the owner money at low interest rates, borrowing money at high interest rates, etc.). Considering the players in no way benefit financially from any of these finaglings, the books should be opened so we can see how much of a team’s losses are tied up in this kind of junk so that the players aren’t penalized.
6) Owners don’t lose money by owning a team. It’s that simple. Say even after accounting for #2 through #5 above, a team legitimately is still losing money. Even in that case, the owner is still making money by owning that team; it’s one piece in an investment portfolio that maximizes the synergy between all the pieces. Many owners also own hotels, restaurants, malls, etc. near the arena that make gobs of cash, and they probably were able to have them built at some very nice tax breaks because of their position as team owners. Many owners use ownership of the team as political leverage to make business deals with the city, county, and state. Many owners use their notoriety as an NBA owner to cut other business deals we never hear about. We’re talking about billionaires here; they know how to assemble investments that work together to create more wealth (e.g. the team helps promote a theme park that is also owned by the owner).
7) In case you didn’t notice, there’s a huge recession going on that has been drilling a lot of businesses since 2007 (the Dow Jones still hasn’t come within 1000 points of where it was that year). Even if teams are legitimately losing money and not just through accounting trickery, that’s part of the normal business cycle that has been hurting thousands of large companies in the past four years. Changing the future system based on what’s happening now by taking from the workers in order to guarantee profits for the guy at the very top is not something anyone should support, no matter what the specific details are.
8) Correct me if I’m wrong, but shouldn’t a business have to actually make some good decisions to be guaranteed profits? We all recognize that there are plenty of teams that make stupid decision after stupid decision, usually just to make a short-term profit without an eye on the long-term success of the franchise (Exhibit A: Robert Sarver of the Suns), so I can’t say I feel real sympathetic when I find out that those same teams claim to be losing money. Don’t go signing non-All Stars like Rudy Gay to max contracts before complaining you can’t make money every year.
9) In a similar vein, it’s the teams’ faults for paying players these salaries. If a team is actually losing money and isn’t completely incompetent, they wouldn’t keep paying obscene amounts for players – maybe they’d even use some creativity and intelligence when putting their roster together. Don’t offer players those salaries, and they won’t be able to accept them. That’s all there is to it: players can’t make money unless owners offer it to them. You got guys like Gay and Joe Johnson being given max contracts by two smaller market clubs last summer at the height of all this “the owners are broke” talk, and it’s clear the owners are creating this problem they claim to have.
10) Even with the current system that the owners claim is broken, rich people can’t stop lining up to buy teams at amounts in excess of the team’s worth, sometimes by over $100 million. That means that even though the owners claim they’ve been losing money hand over fist for a while, there are plenty of buyers willing to offer tens of millions of dollars more for the team than it’s even worth. Long story short, if the situation is as bad as the owners claim, they have many easy outs since other rich people are really sure that investing in an NBA team will make them money (probably because they're aware of the first 12 points on this list).
11) Not only that, owners regularly make hundreds of millions of dollars just on the sale of their teams. Chris Cohan sold the Warriors last summer for $450 million, only 15 years after buying them for $119 million, and they’ve been to the playoffs only one time during his tenure. Players make nothing on the sale of the team, so there’s no reason the players should have to take a hit so that the owners can also make millions of dollars each year they have the team when they’re already raking in crazy dough when they sell it.
12) Owners get a lot more out of owning a franchise than simply an investment; it’s called psychic benefits and Malcolm Gladwell wrote all about it in August. You know it would be awesome to be the head honcho of a sports team, have your name and face associated with the club you love, know all the players, have front row seats, make all the important decisions, etc. And you would pay dearly for that opportunity, but instead we have a bunch of billionaires claiming that in addition to the hundreds of millions they make from selling their teams whenever they’re done with them in their portfolios, they also want guaranteed profits every year...for owning a sports team, which they get a huge emotional boner out of.
13) You like the league because of the players, not because of the owners. Of the 400 best basketball players in the world, probably 398 of them are in the NBA. The other two are in college or the ACB league in Spain, but the point is that the reason you love the league is the great player talent, so support them. You probably can’t even name more than 5 owners anyway, so I doubt you think the league’s popularity has anything to do with them.
14) Similarly, almost all of the owners ever were born with a giant silver spoon in their mouths while the vast majority of the players were born into middle- or low-income households and actually had to work hard to get where they are. Go check out the cushy lives guys like Utah’s Greg Miller lead and tell me you want them to have an easier time making more money.
15) Some fans have an issue with “thuggish” players making so much money because they get arrested occasionally for having guns, marijuana, or whatever on them. Trust me, the players’ indiscretions have nothing on the stuff many of the owners have been charged with and accused of – just go read up on Clippers’ owner Donald Sterling’s endless list of racist and sexist dealings in his professional life and tell me you got a problem with Michael Beasley’s recreational weed habit.
16) This can be a little tricky to understand, but there really is no reason owners should be losing money if the players are always taking home 57% of the Basketball Related Income. That is a set percentage, meaning for years the owners have been getting right around 43% of all BRI, and that BRI total keeps going up each year. So if the owners are always making 43% of the moolah, and that moolah keeps getting bigger (ticket sales up, TV viewership up, more visibility overseas, etc.), why are they now losing money? The only way owners could collectively be in the red is if they’re now mishandling that 43%, which seems to be a perfect reason to open the books and see what they’re doing with it (hint: personal vacations are probably one of the smaller issues).
17) The owners are not negotiating in good faith. NBA Deputy Commissioner Adam Silver recently said “As much as we would like to find a way for a so-called win-win for both parties…in terms of the future of this league, we don’t think it makes sense.” That helps explain why you might expect something like a compromise to happen in these negotiations, but the owners are currently refusing to accept anything less than 50% of the BRI after taking 43% for years. This means that they won’t even consider any system that doesn’t increase their take by at least 16%. They rolled out Portland owner Paul Allen on Friday to go into psychotic mode and say the owners should be getting 60% of BRI (for doing what that makes fans love the league again?), so I guess that means the owners assume it’s fair to say their starting position is getting 40% more than they did before. This isn’t haggling over the price of wrestling masks in Puerto Vallarta; you can’t just make up massive changes in the current system and claim you’re actually trying to bargain like rational human beings. And that's because they're not.
To be clear, I don’t necessarily agree with everything the players currently get or want, but I have to side with them during the lockout because the owners are being exceptionally greedy in all these dealings. They don’t enter my mind when I think of the reasons I like to watch professional basketball, and they’re trying to severely change the compensation for the people who do. I’m sure we all agree that NBA player salaries should be much smaller, but in the same vein owners should be making WAY less money for whatever it is they do (it’s called nothing – that’s why a bunch of guys who don’t know anything about basketball can do it).
I can’t support wealthy creeps who are trying to guarantee themselves even more wealth by slashing the talent’s payroll, and neither should you.