The Lockout & the Raptors: Players approve CBA, Owners too! (1944)

[GarbageTime]

*WARNING LONG*

I don't mean to break everything you said down here and I don't mean to attack it (so i hope you don't take it that way), but I think what you have said is the general feeling amongst fans... and I will have a point at the end that will hopefully make it all come together.

I completely agree about your argument about superstars. That is a problem and there's really nothing to be done about it except to clone Michael Jordan, Bill Russell, Larry Bird and Magic.

Well there comes times in life where trying to fix a problem you can't solve ends up leading to different, new, unique or additional problems.

If the biggest problem with parity in the NBA is lack of superstars, then trying to solve the problem of parity by balancing spending seems like a practice in futility. But maybe more importantly; if the problem with parity is the lack of superstars, then giving up a season, to solve the problem of parity through balancing spending, seems like a waste.

I do disagree about the spending, though. I don't think there is a direct correlation between spending and winning, but there is certainly a correlation between keeping a winning team together and making them contenders and spending. Eventually any contender will have to start paying out if they want to continue to be one. It's inevitable. Even San Antonio, which has been one of the best managed franchises in pro sports, had to make a decision in order to continue to be contenders. They chose to pay the tax. I think that speaks volumes.

and

Obviously simply spending money will not automatically make you a contender, but if you want to be one and stay one, eventually you'll have to pay through the nose

I think this debate also needs to put the idea of spending into context. Can we say just spending into the tax is enough to be a spender? Or are we talking more LA and Dallas 90 - 100 mil dollar spending? If we are talking the 'LA-ish' spending... well there are only a couple teams who actually do that. If the goal is to prevent that... a hard tax at high level (80 -90 mil range) may not really be an issue. If we are talking about just spending into the tax type spending (70 -75 mil range which the vast majority of spending teams go into)... well how many teams are completely incapable of doing that?

I think this brings up an important point. Whats the correlation between winning and making money (and therefore being able to 'spend')? To be honest I'm having little luck finding anything on it (everything is the correlation between payroll and winning). So we may have to use some anectodal evidence.

The Spurs, in a relatively small market have been capabale of spending. The Sacramento Kings in the early 2000s had the biggest payroll in the league (at one point) and were profitable.... today they have the lowest payroll. The Cleveland Cavaliers for years with Lebron James were one of the top spending teams throwing money away like it was trash..... today they claim to be incapable of competing with the 'big markets'.

I would really love to have some statistical evidence to back that up, but all I can say is that it would seem that a superstar not only means wins, but that they (and the winning they provide) also means $ aswell. So how many teams, when they have a superstar, are actually incapable of spending? I'm willing to bet that very few (if not none) of them are. That the simple fact of the matter is too many teams haven't been in the right situation to spend (ie. have a superstar). I can even add the inverse to this aswell; the teams that have spent, and continually won, how many didn't also have superstars?

So will a team need to spend to 'maintain' success? Probably yes.... but, will they also be incapable of doing it? Probably no.

(beyond that, and I won't get into it in detail, it also brings up the issue of revenue sharing.... how much would greater revenue sharing allow teams that don't currently have a superstar or are not in 'good markets' maintain a reasonable bottom level of spending/profitability, until they obtain their superstar?)

And if every team has an overpaid player (which is pretty much true) then everyone is on a relatively level footing. Besides, it's simply not realistic to say that GMs need to stop giving signing bad contracts. You might as well say that players need to stop having career years in the last year of their contract. The chance of either not happening are pretty much the same for the exact same reason.

But that has to assume that all 'overpaid' players are the same. Its one thing to over pay Kleiza or Luke Walton at 4, 5 or 6 mil a year a year, its another thing to over pay Gilbert Arenas at 22 mil, or a 90 year old Shaq at 22 mil, or Rashard Lewis at 18 mil, or Bargnani at 10 mil (*cough* had to slip that in there), or worse have combinations of those guys.

The amount of money any player is over paid, and their usefulness compared to what another player could do, both effect wastefulness. I'm not overly concerned with those guys that are making a few mil too much....they will, as you said, always exist. But its those guys who are either literally or close to crippling franchises. How big of an impact are they having on 1) winning and 2) profits? How much worse will those contracts be under a more restrictive system?

So lets take Gilbert Arenas for example. Would Otis Smith be opposed to trading Gilbert for a minimum wage player? (if able to ofcourse). I highly doubt it. Gilbert is not only easily replaceable, but he also eating away at a huge chunk cap space (and therefore flexibility). On top of that he is eating away at profitability (spending 20+ mil on what amounts to almost nothing does that). A Gilbert Arenas for Patrick O'Bryant swap likely has little to no impact on wins or revenues but a huge difference in profitability. On the other hand a Gilbert for Paul Pierce swap (ie. a player with a compareable salary yet much better) likely has an impact on wins, and impact on revenues but no difference on costs.

Lets take this a step further and include the idea of superstars leaving teams. One could argue, much like people have with Dan Gilbert, that Otis Smith made moves to try and improve the Magic and keep Dwight. But what did he do? (simplifying it here) Gave up Rashard Lewis for Gilbert. Gave up Vince for Jason Richardson. Gave up Pietrus and Gortat for Hedo. I mean I look at that and have to ask... WTF? Not only did he give up more short term cap flexibility... he gave up the best value contracts, and arguably the better players (overrall), in the deal. How is that possibly going to 1) keep Dwight 2) help the franchise if Dwight leaves? This is what I was trying to get at the other day with Dan Gilbert and Lebron (which I'm not sure you were part of). Taking on Shaq, Mo Williams, Ben Wallace, Antoine Jamison is not helping the franchise improve, is actually making the team worse both long and short term, and is therefore reducing the chances to keep Lebron and is putting the team in a worse position going forward.

What did these guys do? They spent, they made and took on bad deals, the end result is losing their star player (and therefore wins and money) and have now crippled their teams until those contracts expire or they can get rid of them and then starting again from scratch.

We can look at Milwaukee as well. A team that gave Michael Redd (a good player but definetely not a superstar) a max contract. He unfortunately gets injured, but they draft a few quality guys work a good system, and then decide to go out and spend on Drew Gooden and Corey Magette. Again I ask WTF? At best they are asking for not getting a good draft pick all while having little to no chance at contention. A team that is paying an non-superstar, superstar money.... and then adding those mid to above normal bad contracts on top of that.... just to be a middling team. These guys are simply asking to lose money.

I also want to touch on guys having 'career years'. While that will obviously increase a players value... there is nothing demanding a GM/Owner still makes a long term decision based on a short term result. So if a player has an average to above average career, then a career season during his contract year, why should GMs and Owners not be responsible for looking at the body of work, a players history and their 'trajectory' (so to speak) rather than just the most recent experience? Its not as if there isn't an extensive history in all sports of players only being 'good' at convient times. Its the owners or GMs responsibility to take that into consideration when deciding on a value for that player. If what that player demands is higher, or what another team is willing to offer is higher, then the responsible thing to do may be to simply to let that player walk away.

These ideas combined, to me, is the crux of the issue. The lack of superstars and the inefficient spending and how both of those ideas effect winning, profitability and therefore parity. Teams having the ability to spend competitively (although perhaps not obscenely) but are not currently in the right situation, are doing it the wrong way and/or at the wrong time. A harder cap doesn't fix that, hell no cap doesn't fix that. So whats the point of trying to implement a different economic system that doesn't change where the real problems lie?


And perhaps most importantly to put this in perspective of the current lockout: Given what I've said, at some level the simple question has to be asked - is the potential loss of a season worth what 'balanced spending' will or will not offer?


To me the answer is an easy no.


As a side note I did come across this statement (no idea who it was and lost where it came from)

Yes, agreed. Money buys you wins only in so far as you use it to buy better players.

I don't think its a complete statement, but its a simple statement that probably applies to this whole debate.

(I hope that all came together)

[mcHAPPY]

*WARNING LONG*

I don't mean to break everything you said down here and I don't mean to attack it (so i hope you don't take it that way), but I think what you have said is the general feeling amongst fans... and I will have a point at the end that will hopefully make it all come together.



Well there comes times in life where trying to fix a problem you can't solve ends up leading to different, new, unique or additional problems.

If the biggest problem with parity in the NBA is lack of superstars, then trying to solve the problem of parity by balancing spending seems like a practice in futility. But maybe more importantly; if the problem with parity is the lack of superstars, then giving up a season, to solve the problem of parity through balancing spending, seems like a waste.



and



I think this debate also needs to put the idea of spending into context. Can we say just spending into the tax is enough to be a spender? Or are we talking more LA and Dallas 90 - 100 mil dollar spending? If we are talking the 'LA-ish' spending... well there are only a couple teams who actually do that. If the goal is to prevent that... a hard tax at high level (80 -90 mil range) may not really be an issue. If we are talking about just spending into the tax type spending (70 -75 mil range which the vast majority of spending teams go into)... well how many teams are completely incapable of doing that?

I think this brings up an important point. Whats the correlation between winning and making money (and therefore being able to 'spend')? To be honest I'm having little luck finding anything on it (everything is the correlation between payroll and winning). So we may have to use some anectodal evidence.

The Spurs, in a relatively small market have been capabale of spending. The Sacramento Kings in the early 2000s had the biggest payroll in the league (at one point) and were profitable.... today they have the lowest payroll. The Cleveland Cavaliers for years with Lebron James were one of the top spending teams throwing money away like it was trash..... today they claim to be incapable of competing with the 'big markets'.

I would really love to have some statistical evidence to back that up, but all I can say is that it would seem that a superstar not only means wins, but that they (and the winning they provide) also means $ aswell. So how many teams, when they have a superstar, are actually incapable of spending? I'm willing to bet that very few (if not none) of them are. That the simple fact of the matter is too many teams haven't been in the right situation to spend (ie. have a superstar). I can even add the inverse to this aswell; the teams that have spent, and continually won, how many didn't also have superstars?

So will a team need to spend to 'maintain' success? Probably yes.... but, will they also be incapable of doing it? Probably no.

(beyond that, and I won't get into it in detail, it also brings up the issue of revenue sharing.... how much would greater revenue sharing allow teams that don't currently have a superstar or are not in 'good markets' maintain a reasonable bottom level of spending/profitability, until they obtain their superstar?)




But that has to assume that all 'overpaid' players are the same. Its one thing to over pay Kleiza or Luke Walton at 4, 5 or 6 mil a year a year, its another thing to over pay Gilbert Arenas at 22 mil, or a 90 year old Shaq at 22 mil, or Rashard Lewis at 18 mil, or Bargnani at 10 mil (*cough* had to slip that in there), or worse have combinations of those guys.

The amount of money any player is over paid, and their usefulness compared to what another player could do, both effect wastefulness. I'm not overly concerned with those guys that are making a few mil too much....they will, as you said, always exist. But its those guys who are either literally or close to crippling franchises. How big of an impact are they having on 1) winning and 2) profits? How much worse will those contracts be under a more restrictive system?

So lets take Gilbert Arenas for example. Would Otis Smith be opposed to trading Gilbert for a minimum wage player? (if able to ofcourse). I highly doubt it. Gilbert is not only easily replaceable, but he also eating away at a huge chunk cap space (and therefore flexibility). On top of that he is eating away at profitability (spending 20+ mil on what amounts to almost nothing does that). A Gilbert Arenas for Patrick O'Bryant swap likely has little to no impact on wins or revenues but a huge difference in profitability. On the other hand a Gilbert for Paul Pierce swap (ie. a player with a compareable salary yet much better) likely has an impact on wins, and impact on revenues but no difference on costs.

Lets take this a step further and include the idea of superstars leaving teams. One could argue, much like people have with Dan Gilbert, that Otis Smith made moves to try and improve the Magic and keep Dwight. But what did he do? (simplifying it here) Gave up Rashard Lewis for Gilbert. Gave up Vince for Jason Richardson. Gave up Pietrus and Gortat for Hedo. I mean I look at that and have to ask... WTF? Not only did he give up more short term cap flexibility... he gave up the best value contracts, and arguably the better players (overrall), in the deal. How is that possibly going to 1) keep Dwight 2) help the franchise if Dwight leaves? This is what I was trying to get at the other day with Dan Gilbert and Lebron (which I'm not sure you were part of). Taking on Shaq, Mo Williams, Ben Wallace, Antoine Jamison is not helping the franchise improve, is actually making the team worse both long and short term, and is therefore reducing the chances to keep Lebron and is putting the team in a worse position going forward.

What did these guys do? They spent, they made and took on bad deals, the end result is losing their star player (and therefore wins and money) and have now crippled their teams until those contracts expire or they can get rid of them and then starting again from scratch.

We can look at Milwaukee as well. A team that gave Michael Redd (a good player but definetely not a superstar) a max contract. He unfortunately gets injured, but they draft a few quality guys work a good system, and then decide to go out and spend on Drew Gooden and Corey Magette. Again I ask WTF? At best they are asking for not getting a good draft pick all while having little to no chance at contention. A team that is paying an non-superstar, superstar money.... and then adding those mid to above normal bad contracts on top of that.... just to be a middling team. These guys are simply asking to lose money.

I also want to touch on guys having 'career years'. While that will obviously increase a players value... there is nothing demanding a GM/Owner still makes a long term decision based on a short term result. So if a player has an average to above average career, then a career season during his contract year, why should GMs and Owners not be responsible for looking at the body of work, a players history and their 'trajectory' (so to speak) rather than just the most recent experience? Its not as if there isn't an extensive history in all sports of players only being 'good' at convient times. Its the owners or GMs responsibility to take that into consideration when deciding on a value for that player. If what that player demands is higher, or what another team is willing to offer is higher, then the responsible thing to do may be to simply to let that player walk away.

These ideas combined, to me, is the crux of the issue. The lack of superstars and the inefficient spending and how both of those ideas effect winning, profitability and therefore parity. Teams having the ability to spend competitively (although perhaps not obscenely) but are not currently in the right situation, are doing it the wrong way and/or at the wrong time. A harder cap doesn't fix that, hell no cap doesn't fix that. So whats the point of trying to implement a different economic system that doesn't change where the real problems lie?


And perhaps most importantly to put this in perspective of the current lockout: Given what I've said, at some level the simple question has to be asked - is the potential loss of a season worth what 'balanced spending' will or will not offer?


To me the answer is an easy no.


As a side note I did come across this statement (no idea who it was and lost where it came from)



I don't think its a complete statement, but its a simple statement that probably applies to this whole debate.

(I hope that all came together)

I'm not sure the biggest problem is a lack of superstars. The 2004 Pistons showed that a great team effort can overcome superstars.

I think a bigger problem, and one that is addressed with the owners contract offer, is the limiting of superstars joining up with one another via free agency. To do this, the league is looking at limiting the financial benefits to the player in a sign and trade or traditional free agent signing (4 years, 3.5% raises vs. 5 years, 6.5%).

Players have the opportunity, assuming the team they wish to play for has the cap room, to play where they want - they just might not get the most money they could get by playing elsewhere.

The idea of the total amount of dollars spent is also not the issue as BRI is a percentage of revenues anyways. The real issue is the distribution of the dollars. By limiting teams above a certain threshold, again, players are forced with a choice of location and top dollar amount. Giving teams financial incentive to sign players in less desirable markets helps disperse talent. This is no different than the engineer who leaves Calgary with a salary of $200K to earn $400K in Qatar.


No matter the system, making the most of one's resources is essential to success.

[GarbageTime]

I'm not sure the biggest problem is a lack of superstars. The 2004 Pistons showed that a great team effort can overcome superstars.

I think a bigger problem, and one that is addressed with the owners contract offer, is the limiting of superstars joining up with one another via free agency. To do this, the league is looking at limiting the financial benefits to the player in a sign and trade or traditional free agent signing (4 years, 3.5% raises vs. 5 years, 6.5%).

Players have the opportunity, assuming the team they wish to play for has the cap room, to play where they want - they just might not get the most money they could get by playing elsewhere.

The idea of the total amount of dollars spent is also not the issue as BRI is a percentage of revenues anyways. The real issue is the distribution of the dollars. By limiting teams above a certain threshold, again, players are forced with a choice of location and top dollar amount. Giving teams financial incentive to sign players in less desirable markets helps disperse talent. This is no different than the engineer who leaves Calgary with a salary of $200K to earn $400K in Qatar.


No matter the system, making the most of one's resources is essential to success.

The Pistons are the only team in the last 30 years that can claim that... and even so, I personally have no problems qualifying Ben Wallace in his prime (perhaps the best defensive player in the history of the sport and what the core of Detroits success was based on) as a superstar. But I'm sure the Ben Wallace is a debate for another time and another place.

As for superstars joining up... there are, both theoritical and real, limits to it right now. The owners are ofcourse adding more restrictive rules to prevent it. But again, will those rules actually prevent it? (if another summer of FA arives like last offseason, I hardly doubt GMs won't plan for it again... and then we have to consider a players desires outside of just salary (location, endorsements, weather etc))

And most importantly is giving up this season worth POTENTIALLY preventing it? (something that has, atleast to date, been a very rare occurence)

As for the distribution of dollars... I tried to address that when I tried to point out the relationship between winning/superstars and $s. And beyond that whats more important than having dollars to spend is spending them right.

But I do want to mention:

Giving teams financial incentive to sign players in less desirable markets helps disperse talent

does limiting a teams ability to spend, and therefore offer financial incentives, improve their ability to sign players? Does not 'capping' a teams ability to spend in turn also limit their ability to offer said financial incentive? (ie. if you only have $10 mil of cap space and a player wants $15 mil... a team's ability to offer incentive is effectively capped). Beyond that, does 'capping' a teams ability to spend not also limit their ability to, atleast if done right, improve their team and thereby improve also offer additional incentive (ie. success) for said superstar, and potentially earn the team more money?

I understand that you are taking this from the perspective that limiting another teams (lets say LA) ability to spend, limits the players incentive from LA and that is a real incentive/restriction, but it also limits the incentive said players current team can offer. This also can become much more impactful if a team needs to, or has a history of needing to, 'overspend' to attract talent (.......Toronto.........)

But I think it has to come back to the question that still needs to be asked. Is all that worth a lost season or more?

I've said from the start I'm all for the elimination of the sign and trade, the 'Melo rule', greater revenue sharing, a stronger tax (although not quite as strong as is being presented) etc. But I still find it almost impossible to support any of those if its at the cost of a season or more. Ofcourse the other option is to find a way to keep those system changes and owners giving something back on the BRI side to make it work.

[Hugmenot]

Someone versed in modern finance and industry should be able to appreciate the terms capital, ingenuity and know how. Simply put, the players are missing all three. Otherwise we would be talking about this new and exciting start up league right now.

That's not fair. Michael Jordan had enough capital to purchase a NBA franchise. Given the financial state of that franchise, I will concede your other two points.

But let's go back to MJ for a second and try to guess if his perspective changed when he moved from the playing field to management/ownership. Hmmm, given he is now one of the hardliners, I would guess that's a gigantic YES...

That's one reasons why I believe the players owning the teams is just a fairy tale. If the current crop of NBA players purchase the teams, will be they so pro-players once they are no longer players? No, they will look out for their own best interests and maybe much more harshly than the current crop of owners. Why? Because the current crop of owners are billionaires and can absorb some short-term losses as long as there is an end to the losses. I have serious doubts about the average NBA player being able to afford $100,000+ losses a couple years of a row after his playing days are over.

[mcHAPPY]

The Pistons are the only team in the last 30 years that can claim that... and even so, I personally have no problems qualifying Ben Wallace in his prime (perhaps the best defensive player in the history of the sport and what the core of Detroits success was based on) as a superstar. But I'm sure the Ben Wallace is a debate for another time and another place.

As for superstars joining up... there are, both theoritical and real, limits to it right now. The owners are ofcourse adding more restrictive rules to prevent it. But again, will those rules actually prevent it? (if another summer of FA arives like last offseason, I hardly doubt GMs won't plan for it again... and then we have to consider a players desires outside of just salary (location, endorsements, weather etc))

And most importantly is giving up this season worth POTENTIALLY preventing it? (something that has, atleast to date, been a very rare occurence)

As for the distribution of dollars... I tried to address that when I tried to point out the relationship between winning/superstars and $s. And beyond that whats more important than having dollars to spend is spending them right.

But I do want to mention:



does limiting a teams ability to spend, and therefore offer financial incentives, improve their ability to sign players? Does not 'capping' a teams ability to spend in turn also limit their ability to offer said financial incentive? (ie. if you only have $10 mil of cap space and a player wants $15 mil... a team's ability to offer incentive is effectively capped). Beyond that, does 'capping' a teams ability to spend not also limit their ability to, atleast if done right, improve their team and thereby improve also offer additional incentive (ie. success) for said superstar, and potentially earn the team more money?

I understand that you are taking this from the perspective that limiting another teams (lets say LA) ability to spend, limits the players incentive from LA and that is a real incentive/restriction, but it also limits the incentive said players current team can offer. This also can become much more impactful if a team needs to, or has a history of needing to, 'overspend' to attract talent (.......Toronto.........)

But I think it has to come back to the question that still needs to be asked. Is all that worth a lost season or more?

I've said from the start I'm all for the elimination of the sign and trade, the 'Melo rule', greater revenue sharing, a stronger tax (although not quite as strong as is being presented) etc. But I still find it almost impossible to support any of those if its at the cost of a season or more. Ofcourse the other option is to find a way to keep those system changes and owners giving something back on the BRI side to make it work.

The Pistons no doubt are the exception to the rule. I only mention it because they are an example of a team overcoming the superstars. I also should have said there can only be one winner per year per season. Even if teams take a turns being champions that is only one banner per 30 years. That is not realistic or what I mean by the idea of competitive balance. Having franchises capable of winning 50-55 games and making strong playoff pushes, for me, is competitive balance. You don't need true superstars to achieve that level of success and, once in a while, the underdog (like the Pistons) will prevail.

Like you said on the superstars there will still be potential for them to join up. I've got no problem with that. If a player is willing to risk upwards of $30M guaranteed, that is their choice.

Is this worth a lost season is a very valid question and I agree the answer is no.

I think the owners (remember Stern is just their mouth piece) should have made the offer and said nothing else. They pushed it too hard and their deliver did imply an ultimatum. They could have allowed teams to go in to the tax to offer a full MLE (as had always been done) or allow to go in to the tax via trade later in the season.

[Hugmenot]

The Players should own the league, the Fans should own the teams. The Tycoons can go to hell. Simple.

Players are employees. In your scenario, fans are employers.

I don't understand what role the league plays in your scenario. I cannot imagine them negotiating a CBA with the NBPA as players would be sitting on both sides of the table and the owners not be represented. I cannot imagine them negotiating television contracts unless the league is responsible for a large portion of the player contracts. What is the league authority in your scenario?

[slaw]

Interesting interview with Kevin Murphy, NBPA economist for the CBA negotiations. RTWT, but there are some interesting asides:

KM: In certain cases, it's relatively straightforward. In cases like this, there's more room for disagreement. All those moving parts, people can put them together in different ways. Everybody has their own vested numbers, so everybody shapes their numbers in their own direction. If they think 'it' could be between 6 and 12 and 6 is good for them and 12 is good for us, they'll say 7. That's not like making stuff up, that's just saying, 'I'm going to be cautious.' I usually try to say, 'I can't tell you for sure, but it's going to be between 6 and 12.' What's the consequence if it's 6? What's the consequence if it's 12?

NBA.com: Given the numbers that are out there now -- the owners offering 50 percent of basketball-related income (BRI), the players seeking 52.5 -- it seems like a small gap to close.

KM: Saying that and getting one are two different things. You can sit there and say, 'We're only X apart.' But the other guy can say, 'Well, it's only X, why don't you move?' And you say, 'It's only X, why don't you move?'

NBA.com: That's what the owners say they want: A chance for good management to make a difference.

KM: That's a different issue. The problem is, just about for every [owner] who spent a lot and they won a lot, so you're moving them closer to the average, there's some [owner] who spent a lot and didn't win a lot and you're moving them in the other direction.

KM: I would say the primary disagreement is not over the accounting numbers. It's what you include and how you interpret the numbers. For example, the accounting picture of the NBA isn't very different from what it was five years ago or 10 years ago in terms of ratio of revenues to costs and all the rest -- it's changed very little. Which immediately tells you, wait a minute, if the underlying financial picture is similar today to what it was five years ago or 10 years ago, and people are paying $400 million or whatever for franchises, and you're telling me that these things lose money every year, something's missing, right? These people aren't stupid, right? These guys are worth billions of dollars. So why did they pay all this money for franchises that, it looks like, lose money?

Let's say the NBA is a $4 billion revenue business -- that's not exactly right but it's close enough. Then let's say you lose $200 million. That's 5 percent. OK, my franchises are worth -- let's make it simple, 2½ times revenue, which is well below Forbes [valuations] -- that's $10 billion. Now let's say it's appreciating at 4 percent a year. I'm getting $400 million in appreciation even though I only have $200 million in losses. I'm getting better tax treatment on the $400 million that I'm making, and I deduct at a higher rate the $200 million that I'm losing. Suddenly this picture doesn't look so crazy any more

NBA.com: The owners will say there's been a franchise bubble not unlike the housing bubble. A number of them bought high and don't think they'll see the equity growth.

KM: The fact is, guys have not done well over the last few years as asset prices generally have gone down. I don't doubt that. But to say that you lost money in the worst asset crash in memory -- and franchises haven't gone down nearly as much as many assets have gone down -- that's not telling you you need concessions going forward.

http://www.nba.com/2011/news/feature...phy/index.html

[Apollo]

That's not fair. Michael Jordan had enough capital to purchase a NBA franchise. Given the financial state of that franchise, I will concede your other two points.

Ok, so one guy out of thousands. The most wealthy basketball athlete ever could afford to buy the controlling share in a bottom dwelling franchise. That doesn't help the guy's point but duly noted. I did forget the exception. Anyway, isn't it interesting that of a places the players could choose to file they pick his stomping ground, North Carolina? I'm sure there is no connection.

But let's go back to MJ for a second and try to guess if his perspective changed when he moved from the playing field to management/ownership. Hmmm, given he is now one of the hardliners, I would guess that's a gigantic YES...

That's one reasons why I believe the players owning the teams is just a fairy tale. If the current crop of NBA players purchase the teams, will be they so pro-players once they are no longer players? No, they will look out for their own best interests and maybe much more harshly than the current crop of owners. Why? Because the current crop of owners are billionaires and can absorb some short-term losses as long as there is an end to the losses. I have serious doubts about the average NBA player being able to afford $100,000+ losses a couple years of a row after his playing days are over.

Very good point. Then there's the question of when does a players' stake in the thing begin and end? Where does his liability begin and end? What about players who get cut and can't find new homes? What happens in 20 years when the guys who somehow tossed in the original start up cost have long since retired but new players keep coming along and diluting their share in the business? I think in 20 years you would have 30 Michael Jordan type owners negotiating a new CBA with a bunch of disgruntled players who feel they aren't getting enough of the cake. That's assuming the hypotheitcal scenario could work, which I do not think is possible.

Players are employees. In your scenario, fans are employers.

I don't understand what role the league plays in your scenario. I cannot imagine them negotiating a CBA with the NBPA as players would be sitting on both sides of the table and the owners not be represented. I cannot imagine them negotiating television contracts unless the league is responsible for a large portion of the player contracts. What is the league authority in your scenario?

Perhaps the idea is for King James to sit atop mount Olympus and dictate orders to the peasants?

[Tim W.]

Not only that, as soon as they do sign that horrible contract, (which everyone knows is going to happen) a Hard Cap would make it that much more debilitating.

Look at it this way. A hard cap is like giving someone a finite amount of money and saying this is your budget. After that there's nothing more. A soft cap is like giving someone that AND a credit card, just in case he needs more money. If you have $100 to spend (and that's it), you're a lot less likely to spend it on something you don't need because you know once it's gone you've got nothing else to spend on food and bills. If you also have a credit card, you now have a way to buy that big screen TV. Now, logically, you shouldn't buy the big screen TV unless you have the money, but you can justify it because you can always pay the money back at some point.

With a hard cap, a GM is going to do the simple math and realize that he won't have the money to pay Kris Humphries $8 million a season and still have enough leftover to get the other players he needs. There's no justifying that when he needs to add more and better players, he can just pay to get more.

Now there are drawbacks to a hardcap and, as a fan, I don't like it, but it would most definitely curtail spending and all those outrageous contracts.

[Apollo]

Look at it this way, most of the teams in the league already have their own internal "hard caps". It's in their individual team budgets. Teams have been operating under a "hard cap" forever. A hard cap would simply align all those "hard caps" and thus helps to even the playing field. Like Tim said, most teams are going to be more cautious when they're speeding towards a concrete wall. Those who don't fall to the wayside to make room for better run teams. In a hard cap system it's all about management and not about management and money.

[GarbageTime]

Interesting interview with Kevin Murphy, NBPA economist for the CBA negotiations. RTWT, but there are some interesting asides:






http://www.nba.com/2011/news/feature...phy/index.html

Its actually an amazing read and covers so many things we have all discussed here. I will say that we do have to consider he is paid by the PA, but I think it should put alot of whats been going on in perspective.

Great find Slaw.

[slaw]

Now there are drawbacks to a hardcap and, as a fan, I don't like it, but it would most definitely curtail spending and all those outrageous contracts.

I give you: Vincent Levacalier (31 yrs old, 9 yrs, $8mm per), Illya Kovalchuk ($100mm till 2025). I'd also throw in Scott Gomez, Daniel Briere, Chris Pronger and Marian Hossa. I also present some wonderdful NFL deals: Stanford Routt, Paul Solial, Eric Weddle, Davin Joseph, etc.

There are others but, well, I think the point is clear and I grow weary of having to try and explain that the owners are full of crap over and over again. If you can't look at 30 years of history through the 4 major sports leagues and see this for yourself there isn't anything I can write that will change minds. There is a reason very smart, very rich people buy NBA teams: they are profitable in the long run. There is also a reason a lot of owners and GMs make the same mistakes over and over again: they aren't very good at their jobs. I am not waving the players' banner but don't expect me to buy into this garbage about how this is all for the good of the game cause it's nonsense. I learned my lesson from the 1994 MLB ordeal when the owners went and blew their brains out on signing free agents within days of the deal being signed. NHL fans learned the lesson from their last lockout when "poor" owners signed guys to 10 year deals for $100mm and now, not ten years later, are crying poor again even though they got everything they wanted last time. Looks like a new generation of NBA fans will be learning the same lesson soon.

[Apollo]

I give you: Vincent Levacalier (31 yrs old, 9 yrs, $8mm per), Illya Kovalchuk ($100mm till 2025). I'd also throw in Scott Gomez, Daniel Briere, Chris Pronger and Marian Hossa.

Sorry but what the heck does that have to do with anything? The NBA is trying to limit contracts to up to four or five years at the most. Even in the old system were we talking six years at the max.

I also present some wonderdful NFL deals: Stanford Routt, Paul Solial, Eric Weddle, Davin Joseph, etc.

Also, there are no fully guaranteed contracts in the NFL. For example, how much guaranteed money did Weddle get? I'm thinking half. So the worst case scenario was them dropping him immediately after signing him and being on the hook for less than $4M/yr out of a cap that's well over $100M/yr. And he's one of their stars and captains.

Yeah, management is going to make mistakes at times no matter the sport but your logic of if it can't be perfect then why bother doing anything is very flawed.

[GarbageTime]

Look at it this way, most of the teams in the league now have their own internal "hard caps". It's in their individual team budgets. Teams have been operating under a "hard cap" forever. The new CBA simply aligns all those "hard caps" and thus helps to even the playing field. Like Tim said, most teams are going to be more cautious when they're speeding towards a concrete wall. Those who don't fall to the wayside to make room for better run teams. In a hard cap system it's all about management and not about management and money.

But what that self appointed 'hard cap' is, regardless of the market, owner or team, changes from year to year, based on their situation.

Again I'll point to Cleveland. Where their self imposed 'hard cap' seemed to be somewhere in the 85 mil range. Now its likely closer to (or maybe even below) the leagues 'soft cap' range. If Lebron was still on the team, or they draft/obtain the next Lebron James, I guarantee their self imposed 'hard cap' changes again. What happens to Milwaukees ability and willingness to spend with a superstar? Sacramento? Toronto? Utah?

The idea that they can't afford to compete with anyone else is nonesense... they (Cleveland) did it for 4-5 years. Teams do it all the time when they have superstars. Teams that do it without superstars... lose. The reason some teams can't, or are unwilling to do it, currently is they lack a superstar which takes a lot of the risk of spend out of the equation.

So why should OKC, or Chicago, or Toronto or any other team be unable to spend, to build on what they have and what they have been doing (if they so choose to) because Cleveland (or Sacramento or whoever) currently doesn't have the balls or superstars to do it?

Bringing everyone else down to the level of the incompetent or weak... is just making everyone more incompetent and weak. That only makes the incompetent and weak look better, but it doesn't actually make them any stronger.

In a hard cap system it's all about management and not about management and money

again that comes back to the idea that money (salary) is one of the deciding factors in success. Which has consistently been shown to be inaccurate.

From Slaw's link:

NBA.com: One effect of equalizing payrolls is you incentivize good players to go where the money is available. But another might be paying good money to players who might not deserve it, just because more franchises have to spend on ... somebody.

KM: That's a problem. The other thing is, there is some relationship between pay and success but it's not nearly as strong as people think it is. Even if you were to completely equalize pay across teams, there still would be an enormous variation in strength of teams. In a statistical sense, the level of payroll of a team explains somewhere like 5 percent to 10 percent in the variation in outcomes.

NBA.com: That's all?

KM: That's it. I did a little experiment. All you have to do is take the overall distribution of win-loss percentages. Let them tell you what they think the relationship between salaries and wins is. They tell you 'This much spending is worth this many wins.' So then you take everybody's salary down to the mean or up to the mean. Then if you tell me you get an extra win for every $3 million you spend, I'm going to give everyone I'm moving up an extra win for each $3 million. Everybody I move down, I'm going to give one fewer win for each $3 million.

NBA.com: And?

KM: The relationship between salaries and the number of wins in a season is positive, but it's pretty weak. It certainly is not going to have a dramatic change in the distribution of outcomes. It might change who the winners are and who the losers are, but you're still going to have some teams that are much better than others. Because some people spend their money much more wisely than others do.

NBA.com: That's what the owners say they want: A chance for good management to make a difference.

KM: That's a different issue. The problem is, just about for every [owner] who spent a lot and they won a lot, so you're moving them closer to the average, there's some [owner] who spent a lot and didn't win a lot and you're moving them in the other direction.

The two biggest factors deciding how good a team is, and will be in any system, is management and luck.

[Hugmenot]

Perhaps the idea is for King James to sit atop mount Olympus and dictate orders to the peasants?

Sure, why not!

History is filled with examples of multi-billion corporations thriving shortly after putting individuals with no prior management experience at their helm. I can name you two dozen examples of the top of my head!

...

(Putting thinking cap on)

....

(Searching Google for an example)

...

OK, maybe there is no obvious example but I am sure they do exist! And it's unfair to say The King has no management experience because he played a major role in the organization of The Decision last Summer.

(Remembering the PR fallout)

We're doomed!

I'm all shook up
Mm mm oh, oh, yeah, yeah!