NBA Owners Apparently Emboldened By Wall Street Bailout Mentality
I thought this New York magazine story was illustrative about how big business in general operates now: If you can manage to creative a narrative that simulates a loss, you can force lesser beings to eat those losses , even if they’re only theoretical. Is this a great country, or what? If you’re wondering why the NBA is canceling preseason games and might very well cancel its season, you only have to head downtown. The Zuccotti Park protesters’ motivations are diverse, but it’s probably fair to say that what has really turned Occupy Wall Street from a meeting of the usual vegan anarchists into a larger cause is not the mere existence of banks, or even that they were bailed out, but the fact that they’re crying about taxes and regulations so soon after being saved from self-inflicted bankruptcy. In other words, they want the freedom to make whatever stupid decisions they please along with the guarantee that they will never have to suffer the consequences. Which is essentially what is happening in the NBA right now too. Actually, what Commissioner David Stern (who represents the league’s owners in their collective-bargaining dispute with the players) is up to might be even more audacious than what your Citigroups and AIGs got away with. Because at least we know that those companies did lose a ton of money . While the league asserts that its teams lost a collective $300 million last year, the NBA’s finances are opaque. It’s very much up for debate whether the league is losing money at all. Its self-reported revenues are rising faster than player salaries, and it’s hard to see why other expenses would be so onerous—of the nearly $2.1 billion spent on stadium construction and renovation since 2000, a Holy Cross study found, $1.75 billion was financed by taxpayers rather than ownership. And every time someone sells an NBA team, he sells it for much more than he bought it for . (A guy named Chris Cohan bought the Golden State Warriors before the 1995 season for $119 million, guided the team to the playoffs exactly once over the next sixteen years, then sold the team for $450 million two summers ago.) It seems that what losses there are would have to be largely the result of individual owners’ incompetence. Despite all that, according to writer Tom Ziller, the league’s most recent offer calls for a permanent yearly cut to player salaries of either $240 million or $280 million, depending on which beat reporter’s version of the owners’ offer you’re using. The players, then, would be locked into essentially paying for 80-plus percent of the owners’ losses, which may not actually exist and, if they do, owe at least partly to the awfulness of an economy that will eventually improve. (It will!) Meanwhile, bear in mind that owners do not have to give out big contracts to bad players if they don’t want to. Any team losing money can cut payroll. And that won’t necessarily affect on-court performance, because, as always in sports as in life, you don’t have to spend the most to be the best: The Oklahoma City Thunder paid its players $58 million and won 55 games last year, while the Toronto Raptors paid $70 million and won 22 (financial data provided by ShamSports.com). So here’s what the owners are saying to the players: “We’ve made so many poor spending choices lately that we’ve lost money, even without having to pay for our own facilities and even as the NBA has grown more popular. And we’d like you to give up enough money to make it almost a certainty that we never lose money again, even if we make all these same mistakes for a second time and the economy never improves.”
NBA Owners Apparently Emboldened By Wall Street Bailout Mentality
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on October 22, 2011. Filed under