Posted by: natehughart | October 27, 2011

The NBA lockout: Why is it still in existence? My Soapbox continues…..

I suppose the title says it all today. I’ve been on my soapbox all day it seems like. First, I go off on Twitter about why the cops hitting a US Military Veteran during an Occupy Rally in Oakland is missing the point. (I’m not arguing the Vet deserved to be hit. My point really was that nobody deserves to be in that position regardless of an Active Duty status or no.) Then I go off on Sandy Sheedy (who is admittedly deserving for her stupid poll alone), and now this. I’m having a trifecta kinda day I suppose.

The lockout. I could take this any number of ways. But just read this piece by Ken Berger of CBS Sports (who has been the major winner of the lockout), Adrian Wojnarowski of Yahoo Sports, and importantly, Steve Aschburner of NBA.com’s interview with Kevin Murphy (the economist for the NBPA; yes you read that right).

Aschburner’s piece has generated response from a number of outlets, and with good reason. It’s a pretty important piece, and, honestly (to my surprise), pretty frank on a couple of key points.

NBA.com: When do the rosy growth projections of 4 percent used by both sides take a hit from fans’ backlash to this lockout?

KM: If we get a deal here soon, I think the long-term consequences will be minimal. The longer it goes, the more substantial the risk. I think everybody’s taken a hit to some extent. It might not show up in the financial numbers right away, but I don’t think this has been good for either side. Both sides have looked not so good at times, comical at other times.

I’ve tried to stay out of it. This is the first interview I’ve done. I don’t think it does any good to throw crap around, spin everything that comes out — and there’s been a lot of that going on. It wears thin on me, I’m sure it wears thin on fans too.

The bolded stuff caught my eye, and frankly the whole thing actually caught my eye. You have a member of the NBPA negotiating team actually publicly admitting that it’s pissed fans off for having extended this lockout. And, worse, the way it’s gone on. That the whole negotiating nonsense is wearing thin.

Some of this could be damage control and spin from a player negotiating representative.

I’m not going to call the billionaires club an exploitist group of fantastic perfect clown assholes. I’ve done that already. But there are a couple of points I do want to make before the start of the season comes (I’m betting an agreement happens Sunday–too much going right seemingly, but I’m also so wary of typing that so I’ll hedge and say with the way this negotiation is possible so I’ll make my bet a 51-49% possibility) and we get carried away with the season.

******

As to why the owners weren’t willing to negotiate in July, August or even September? No incentive too. You can’t make the other side move if you can’t scare them. This was the owners attempt to scare them. And, not surprisingly, it didn’t work. Wasted time. As Tom Ziller mentioned this morning (and eloquently–the Hook has been a close 2nd winner of the lockout IMO). All 4 months of this. October with all the idle empty threats? Even dumber.

The NBA and these owners have done us a large favor. None of those people involved haven’t acted nobly (although that’s the claptrap they will sell to the public if there is a deal made this weekend) and while that’s pretty true of Derek Fisher and Billy Hunter, they have largely escaped the wrath of the media (who is rightfully pissed off) simply because most media people covering this up front & personal recognize that Fisher/Hunter have been attacked from all sides and have managed to stick around to see this to the end.

I have never believed a full season would be lost. At worst a 50 game season, and, I pretty much a deal would get done sometime in late October. It’s not like that’s any great prediction on my part; any number of people did the same thing. A number of people guestimated where the most likely BRI will be (51.5% for the players, 48.5% for the owners–a fair gross percentage for both IMO) , and even a number of people have said that revenue sharing would be the toughest negotiating part of the whole process.

What a surprise. The owners, and I think even David Stern and Adam Silver to an extent, underestimate how much the bloggeoisie (bourgeoisie of media–aka bloggers) and the actual media itself understand exactly what the issues were. Stern tried his old rhetoric game, and got killed for it. Promptly. The owners realized that while fans may have sided with their idea in theory, fans would turn pretty quickly on the ownership and the NBA if many games got canceled. In truth, I think the NBA always knew this. David Stern and Adam Silver aren’t stupid people. Assholes probably, or perfect assholes honestly, but not stupid.

I think this whole lockout is a charade. A charade for other potential owners. THREE sales (the Pistons–which had taken awhile to fully happen–, the Sixers and the Hawks) have happened with a lockout looming or in full swing. What kind of league in financial trouble has THREE franchises (and with a fourth in the Hornets that could have been sold pre-lockout pretty easily).

A lot of NBA people have mentioned the turnover in franchises, but, let’s be honest, so what? There are still people buying these franchises which says a lot. How many NHL franchises were bought or even finalized a purchase during the lockout? None?

And, let’s point out something else. Bob Johnson paid 300 million for the expansion franchise. Michael Jordan then turned around and bought the majority shares (he already had minority shares) for 175 million plus another 100 million dollars in investments in the franchise Johnson had not made. Let’s point out something. First off, 275 million is not a bad number given how badly managed the Charlotte Bobcats were in Bob Johnson’s hands. Second, Jordan bought minority shares. Three, according to Forbes, Johnson didn’t pay handsomely for his first three rosters. Let’s say Johnson added a 100 million dollars of debt, the problem was the market and the lack of success in the Charlotte market after a year or two.

Of all owners who deserved to lose money, it was probably Bob Johnson (the first black NBA owner) strangely enough. The Bobcats were poorly run as all newer franchises tend to be unless they get supremely lucky like Orlando did (with 2 #1 overall picks in 1992 and 1993 that became Shaquille O’Neal and Penny Hardaway). Whatever Jordan did in that sale, some of it saved Johnson money, and it’s not like Johnson payed a whole 300 million dollars for the time he owned the Bobcats. He took out the loan and payed part of it off. Jordan assumed that debt in his ownership, and took on investments in the franchise that Johnson didn’t want to undertake. You add in the minority shares that Jordan bought, and I’d be shocked if Johnson didn’t make 10 million or so (despite all the problems the Charlotte Bobcats have had) after all it was said and done. Not to mention the tax breaks the Bobcats were guaranteed to have.

Nobody is crying for Bob Johnson when you know exactly what happened in the Bobcats scenario.

In the case of a team like the Wizards, Abe Pollin, the owner of the franchise since 1964 (the longest tenured owner by far) died. That’s the reason the Pistons were sold. In the case of the Pistons, that was sold to another owner Tom Gores, and the Wizards were bought by Ted Leonsis (owner of the Washington Capitals and the minority owner of the Wizards) along with the Verizon Center itself. That’s why the purchase price was so high; it wasn’t just the Wizards itself. It was for all of the remaining shares AND the Verizon Center. Yet, this gets talked about as if Leonsis only payed 550 million–in loans–or so (I’m too lazy to look it up right now) for the Wizards and Wizards alone. And I left other stuff too like the Mystics (WNBA franchise) and the Ticketmaster franchise (hmmm noticing a trend?). Leonsis has cried poor nonetheless. I’ve even seen Washington DC claimed, get this, as a small market. A small market share of DC the Wizards may have, but there is nothing small or ineffectual about the DC market. DC is a legitimate top 10 market for a reason. Which irritates me because small market share has a lot of circumstances, and few of those have to do with the players.

I won’t go into the Pistons situation because frankly it’s as cut and dry as this. Bill Davidson died in 2009, his widow Karen Davidson inherited the team. Davidson bought the Pistons in 1974 for 6 million (yes not a typo) and Karen Davidson reportedly sold the Pistons along with the Palace of Auburn Hills (a building as old as Arco II) for about 400 million dollars.

Again, mitigating circumstances point out that unless the widow of a deceased NBA owner wants to run the team, then that team is getting sold. The fact that the Pistons were sold to new owners after their previous one’s was hardly a surprise. Ditto with the Wizards, and the situation of the Bobcats wasn’t that big of a deal. New owners happen all the time, and it just so happens the NBA has had a variety of owners coming in (although not as many as it seems when the NBA terms it) and owning “majority” shares.

Nobody saw the sale of the Sixers from Comcast Spectacor to Joshua Cox and his investment group for 290 million dollars. The issue, though, is that the Sixers were sold without Wells Fargo Center included. Comcast Spectacor sold the Sixers (they also own the Flyers) and kept ownership of the Wells Fargo Center. Not a bad deal yeah?

******

This is why the lockout irritates me. Owners make money on their franchises in multiple ways. Tax breaks, actual money made, public investments in arena’s, and who knows what else. Then there is the outside sources of income.

You know all this.

If this is sounding like a broken record, good. I just wanted to remind you that the NBA are not the only people of trotting out the same shit like we were listening to a Beatles record on acid.

******

Why has this lockout gone on so long? As far as I can tell, multiple reasons.

One is that the owners can’t get anything by not pushing for a deal. You do that by pushing a deal to the very brink then turning around and making a deal while acting like you saved the season. (This stuff writes itself I swear.)

Two is that the owners are sort of trumping up this labor fight so prospective owners take notice. If you don’t make what amounts to a good ole’ college try on the surface, and little else, you can’t claim you tried to get a favorable deal in your favor. The fact is the NBA owners knew this was going to happen back in July and decided they were going to pursue this for no other reason than using it as a public edict at how hard it is to change a revenue model with so many variables at play. Owners are going to sell their franchises at outrageous prices, and other owners will buy them yet again.

Wanna know why Bill Davidson bought the Pistons in 1974 for 6 million? Because they were worth that, and it was probably a winning deal for the outgoing owner Fred Zollner. What changed? Quite simply that the NBA has made a lot of money on National TV money since Davidson took over. (There wasn’t a whole lot of National TV money on the NBA in the mid 70′s.) That’s what created the value of these franchises. No more or less.

******

We are stuck on a merry go round right now of NBA litany. Which is stupid to the nth degree in of itself, but that’s the way it is.

We are stuck in a lockout because owners are posturing for future owners. (Yes really.)

We are stuck in a lockout because the players don’t want to personally finance massive profit for billionaire idiots. (Shocking.)

We are stuck in a lockout because the only way to get what you may get (unheard of) is to push things beyond where they need to go.

We are stuck in a lockout with the same shit being repeated over and over and over and over and over…….

******

Okay I think my soapbox is tapped out. Have a good day and don’t let the man get you down.


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