Heisler column: Historic Blunder, anyone?

Optimism on life support, or anyone up for a Historic Blunder?

Of course, NBA players would be out of their gourds to reject 50 percent of revenue because it’s not 51 percent, a difference of, oh, $400 million over 10 years … compared to the $780 million they lose in a 50-game season … or $2 billion if there’s no season.

Who lets these guys out without babysitters?

Of course, that also applies to the owners who are threatening to shut down for the same 1 percent.

It’s one thing to fight to the end when you have to, like the destitute NHL in 2004.

It’s another thing to get a massive giveback with NBA players ready to go from 57 percent to 51percent of basketball-related income, then go to war for the last 1 percent.

NBA owners are now agreed that Commissioner David Stern promised them too much.

It’s true.

On the other hand, there’s a good reason why Stern promised so much while expecting to end this short of a cataclysm.

Despite the NBA’s issues—thin operating margins, rich-market dominance—its future is so bright with TV rights fees heating up, it needs shades, not blinders.

This fight goes back to the 2008-09 season, the fourth season of the old labor deal, at which point no one had cited any $250 million annual losses.

With the economy melting down, Stern, the owners and everyone running anything in America thought they would have to reconfigure all deals.

Billy Hunter was so agreeable, he appeared with Stern at the 2009 All-Star Game in Phoenix, offering to discuss a new deal there and then (“We all understand that we live and benefit from the success of the NBA.”

The NBA decided to wait for crunch time, taking the “crunch” literally.

Stern told his owners he’d fix this without taxing the rich, as they always had with revenue-sharing about 10 percent of baseball’s, as Portland’s Paul Allen and the Knicks’ James Dolan, whose luxury taxes financed small-market losses, pulled back.

Stern wanted to cut the players’ 57-43 share to 50-50, giving himself bargaining room by starting with the owners at 57 and the players at 43.

That was so transparent, NBA officials complained that union people weren’t even taking it seriously.

Meanwhile, something no one on either side expected happened.

The economy recovered, at least as it affected the NBA.

With a glamor-market rebirth as the Lakers and Celtics won three titles and met in two Finals, revenue fell off once, in 2009-10… by 1.7 percent, after the NBA said it might drop 12 percent.

With LeBron James’ move making Miami the most controversial NBA team ever, last season’s BRI jumped to a record $3.8 billion.

For three years, Stern let the thunder roll ahead of his campaign as it never had, with modern media living for sensation and doomsday scenarios.

In fact, if the players did owe the owners some relief … and big markets owed small ones some relief … things were turning up.

The Lakers’ new 20-year $2.5 billion deal with Time Warner heralds a new day with zooming local TV rights.

Insiders say Laker profits, which used to be in the $45-60 million range, will go north of $150 million when the new deal starts in 2012-13.

If small markets won’t come near that, they’ll get more than they did… one reason why Phil Anschutz’s AEG, which owns Staples Center, offered to finance a new arena in Sacramento.

This is the league they want to shut down?

Stern had always had absolute control of his owners. Even with heat from the small-market guys — Donald Sterling of the Clippers told him he would have fired him at one meeting — Stern expected to be able to get them in line once again.

Had they made a deal two weeks ago when they could have played 82 games, it might have happened.

Now Stern is demanding the players take the offer or he’ll roll it back to 47 percent of revenue, cut existing contracts, etc.

In other words, it’s now or never, or at least not before January.

It’s not that the players won’t consider the offer, and may even accept it.

The problem is Stern playing to his hard-liners, talking to 400 players, half of whom have Tony Montana posters, like they’re punks.

How nuts is this?

Consider some hard-line owners, who are like the fake needy President Ronald Reagan had in mind when alluding to “the truly needy.”

The list starts with Allen, the richest and biggest taxpayer ever, having once written a check for more than $50 million.

Then there’s Sterling, thought to have made at least $100 million in 11 seasons in Staples Center while appearing in the playoffs once.

Others include San Antonio’s Peter Holt, another taxpayer whose stars are now in their declining years, and Minnesota’s “hard-pressed” Glen Taylor, another billionaire who just gave Rick Adelman a five-year $25 million deal.

Hey, there’s nothing that says owners can’t lose their minds. It’s why they want to be owners.

It happened in baseball, over and over, finally with horrible consequences.

Today, the union, not the commissioner, runs baseball, which, alone among major U.S. leagues, has no salary cap.

Commishes tried to put in meaningful steroid testing, which might have headed off the scandal that followed, in the ’80s, but that was a no-go for the union, too.

How did the union get so powerful?

Baseball owners declared war in shutdown after shutdown.

Fighting for survival, the union went from a dissension-riven band with stars like Carl Yasztremski and Mike Marshall splitting off, to a superb, united fighting force, run by hard-nosed lawyers Marvin Miller and Don Fehr.

By 1994, the commissioner was Bud Selig, the likeable owner the other owners elected to stop telling them things they didn’t want to hear from outsiders like Peter Ueberroth and Fay Vincent.

Selig let the players start that season without a contract, handing them control of the calendar.

On Aug. 12 with the post-season nearing and leverage swinging to them, the players struck.

Selig lost his World Series, made peace the next spring amid fears of treble damages from the union’s anti-trust suit and hasn’t challenged it since.

Good luck, NBA. If no one has the sense God gave a goose, you’re all going to need it.

Mark Heisler is a regular contributor to SheridanHoops. His columns appear each Monday.

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  1. Jeff Libman says

    Hey Mark Heisler, if you come out swinging like this telling the players that they are making a dumb decision, you should at least know why they didn’t take this deal. It was because of system issues, not the money issue. The words “system” and “competitive balance” don’t come up in your article. That’s the reason we have a lockout. So all your financial context is useful, but you misrepresent the choice the players made and fail to capture the small market owners’ motivations.

    Color me not impressed.

    • ignarus says

      competitive balance is an issue solely between good teams and bad teams. the players have no stake in that fight, nothing to gain.

      asking them to give up money and freedom so bad team owners can challenge better ones is a punk move, and it’s an issue that they can easily solve with local television and merchandise revenue sharing.

      the nhl wasn’t making money and most football players are emminently replaceable, and are replaced every couple of years.

      basketball doesn’t work like that. no team filled with college players who didn’t get drafted could hope to compete with even the worst NBA team. Hasheem Thabeet was a big deal in college because of his size, but in the NBA he can’t even get on the court because he doesn’t have dominant size anymore.

      ———

      this is a really, really good article. stern is smart enough to be terrified of the players decertifying. the nhl owners in the league don’t understand that there’s no actual comparison to be made with their lockout.

      ————–

      it’s also worth mentioning that Stern sold teams for inflated prices to owners presumably with promises of cleaning up in the next CBA.

      • kray28 says

        The competitive balance argument is a travashamockery anyway…nothing but a red herring. Even Silver knows that a hard cap doesn’t necessarily ensure parity. And that ignores the fact in the NBA, parity has historically coincided with mediocrity. Dynasties and superstars instead helped the game grow into a major American Pro Sport. The one decade where it has more “competitive balance”…the 70s where a bunch of small market teams one championships, was one of its worst decades. The 00s are a good example of why small market success is not a good thing for the NBA. This past decade effectively small the Lakers and Spurs split titles….when the Lakers played, the rating were through the roof, when the Spurs played, no one watched. The Spurs sweep of Cleveland the 2007 Finals was one of the lowest rated Finals in NBA history. They Spurs 2005 Finals win over Detroit wasn’t much better. Meanwhile, the Lakers/Celtics Finals in 2008 and 2010 were huge ratings bonanzas.

  2. says

    Very interesting article – whatever anyone feels, it must be acknowledged that the owners grossly miscalculated the breaking point of the players. Whether or not the owners get what they want, the point is that they completely and totally handled this negotiation the wrong way.

    Perhaps if Stern and the other owners had treated the players like partners and presented their changes as improving the game – while also addressing the fact that they needed a financial break – they could have made it to the finish line without invoking a potential armageddon (a.k.a. dissolution of the union).

    Perhaps if all the owners were willing to split local TV and gate revenues, there wouldn’t be any ‘hard-liners’ opposing a 50-50 split.

    And perhaps if the union had embraced new leadership years ago and replaced Hunter with an attorney more experienced in labor law, they wouldn’t have been so slow to adopt a legal strategy with a snowball’s chance in hell of success.

    Oh well.

    • ignarus says

      it’s tough to imagine that the owners could have ever presented the players with a reason why they’d want to give concessions on system issues when they simply have no stake in a “parity” or “competitive balance” fight, when that’s something that can be covered 100% by revenue sharing.

      the players were extremely accomodating in offering to cover the league’s stated losses, despite the fact that those losses included interest on loans taken out to finance team acquisitions.

      offering to meet stern at 50-50 when 53% was generous was the ultimate good faith negotiating stance taken by the union (largely against the wishes of its membership) and the owners spat on it with ultimatum after ultimatum.

      it’s like they didn’t notice that these new superstars were willing to take less money for more control and thought they’d somehow get them to willingly ceded control for nothing at all in collective bargaining. lebron, wade, and bosh took shortened contracts to give themselves more leverage over their teams’ management and to allow themselves to get out early if things weren’t going well and they wanted to be free agents.

      sure, THOSE guys are going to willingly let the owners push them around for the sake of letting MJ’s awful team compete with the real franchises.

      ugh.

  3. FrankVogelisGOD says

    Good call on saying the lockout would be over last week by both you and Sheridan. Don’t you ever get tired of being wrong all the time?

  4. David says

    Selig didn’t lose his world series in 1994 – Montreal did. It had the best team in baseball that year and even one title would have given what city a bit of baseball heritage for her first time. Not that the owners or players in any sport give a rat’s rear about the fans.

    • ignarus says

      In MLB, maybe they give you a rat’s ass, maybe they don’t. In NBA, you get one HECK of a rat’s ass (er, Kevin Durant) and then David Stern STEALS it from you so his buddies can bring it to Oklahoma City.

      Seattle’s “we got screwed” feeling >>>>>>> Montreal’s “we got screwed” feeling

      • Vince says

        The Expos were freaking 74-40 when the lockout hit (in other words a probable 100 win team). They had 5 All-Stars that year, not even including Pedro Martinez, Larry Walker or Moises Alou. The team was never the same after that. Imagine if the Sonics Finals team in 1996 never made the playoffs due to the lockout. It was basically the same thing, except worse since that was one of the best teams in MLB in the past 30 years.

        The Expos got bamboozled Clay Bennett style with the assist from Bud Selig. Montreal got screwed with the owner Jeffrey Loria who bluntly decided from his purchase of the team in 2000 that they couldn’t play at the stadium at all. He moved the entire Expos staff to his new team – now the Miami Marlins – because he knew the team was going to contract/be relocated.

        The Expos basically got screwed from a potential championship when they were the best team, and they lost their team. Yeah, Seattle has more history with pro basketball than Montreal with pro baseball, but the “screwed” feeling is closer than you might expect.

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