The NBA pivots on parity
April, 20, 2011
By Henry Abbott
Ronald Martinez/Getty Images Sport
Sports are most exciting -- and evidently most profitable -- when no one knows who's going to win.
Last week we mentioned a project we have in the works: the Idea Machine. When we get it going, some of the ideas generated will be lighthearted, such as the new NBA awards on which we collaborated with TrueHoop's readers. Others will turn an eye toward improving the game in more fundamental ways.
In that spirit, some thoughts about where the NBA might be going, based on conversations with some of the NBA's leading lights:
The opening days of the 2011 playoffs didn't just feature good, intense basketball. They also featured -- this is crucial -- shocks.
Essentially nobody picked the Grizzlies or Hornets to win Game 1 on the road, but alas, late Sunday, there were the West's top seeds, the mighty Spurs and legendary Lakers, beaten.
Amazing basketball is often not enough to push the NBA to the top of a crowded entertainment landscape. But a stunning outcome here or there does the trick every time.
The truth is that because of those surprises, the NBA playoffs matter far and wide; nothing quickens the hearts of fans like Cinderella stories. It's not just that unbiased fans like underdogs. It's that it's fun to watch any event when you have no freaking idea what's coming next. When uncertainty rules, it's not just a good game, it's a good party. And who doesn't like a good party?
All this excitement has led all kinds of smart people to ask: How dumb would the NBA owners be to shut this down because of labor strife this summer? There are superbly conditioned and intelligent young stars all over the league, delighting fans by playing their hearts out getting sweaty, scuffed and bloody. A lockout not only deprives the world of their tremendous efforts, but (if past pro sports labor disputes are any guide) sours fans on those same players, who look spoiled and unlikable when taking a "hell no we won't play for those paltry millions" stance.
Meanwhile, just by keeping the lights on, the NBA is poised to have a hell of a decade.
Insight from the front lines of labor talks: One of the key things that may inspire a lockout is the league's desire to set the stage for much more excitement.
Locking out players to create more thrills?
If you talk to the central characters in the talks, including NBA commissioner David Stern, Players Association executive director Billy Hunter and NBA deputy commissioner Adam Silver, besides all those hundreds of millions of dollars the owners will insist on from the players, a key issue in these talks is a team-by-team hard cap.
Hunter is adamantly against it, calling it the most important of all issues, and he implies it's one on which he has no intention of bending.
He says a hard cap would effectively end guaranteed contracts which he calls "the lifeblood" of professional basketball.
"We've had that right for years, and it's not something we're trying to give up," he explains.
The league, meanwhile, would like to convince people that a team-by-team hard cap is no sneaky tactic to undermine players' financial security, but is instead a way to inspire the kind of parity that delights fans of some of the world's most lucrative sports, including NFL football and NCAA basketball. It's a way to create the kind of excitement that has rocked the NBA in recent days.
The league has long had policies designed to help teams keep their players. But think about that. The Lakers and Heat have more than their fair share of stars locked up, and as long as that's so, the Grizzlies and Sixers of the world will be playing uphill in their title quests.
It's simple, and harsh: You can either have the best players stay with the best teams for a long time or you can have meaningful parity.
The league is switching sides in that battle right now. They have converted to the religion of player movement (high priest: LeBron James), of empowered underdogs and a level playing field. The league is trying to reinvent itself to make more games meaningful. They'd love the Players Association to come along -- because as much as the league and the union are adversaries when it comes to carving up revenue the revenue pie, they're partners when it comes to baking the biggest pie possible.
Research suggests that more uncertain outcomes lead to more certain income, or ... more pie.
There's a reason that the TV deals for the NFL and the NCAA basketball tournament both dwarf the NBA's. In just about every game of the NFL season, and in just about every game of the NCAA tournament, you simply must watch to know what'll happen. It all matters. You wake up the morning of the game with almost no ability to pick any winners. That's the kind of thrill-ride that leads to enraptured fans and huge TV income.
By encouraging roster stability, the NBA has been discouraging that uncertainty -- leaving some fan bases with perennial title hopes, but others with little to cheer for. That's a lost opportunity to capture the hearts and minds of those many fans more interested in great storylines than well-executed plays. (If sports are at their best when you have no idea who's going to win, then they're at their worst when a strong team like the Bulls meets a weak team like the Timberwolves. 48 minutes of garbage time, anyone?)
The rubber hits the road with deals like the Lakers' 2009 contract with Lamar Odom. The capped-out champions were in no position to make Odom their franchise's top priority -- not with Kobe Bryant, Pau Gasol and Andrew Bynum to pay. But their pockets are so deep that they were able to pay him a lot anyway, making the best team in the league even better. Score one for franchise stability.
Last week deputy commissioner Silver -- the league's point person on CBA issues -- said the NBA's goal in collective bargaining is "to create a system in which all 30 teams can compete for a championship and, if well-managed, have the opportunity to make a profit."
In the terms of the league's last proposal to the players, not only would the Lakers have been prohibited from going over the cap to keep such talent on their bench, but they also would have written generous revenue-sharing checks to a team like the Hornets so that they might be able to sign Odom or someone like him.
The goal of all that: More shockers. More teams in the title mix. Less certainty. Oodles of middling teams with a real shot at something special. More fans glued to TVs all over the world.
Revenue sharing is tricky
If we need more close games, and the Lakers' advantage is money, couldn't the Lakers just give the Hornets some money and leave it that? Why make a hard cap when revenue sharing can do the trick?
Yes, that could be part of the solution, kind of. Part of the Lakers' advantage is income. But the rest is having the front office smarts and tenacity required to win.
Just imagine a hypothetical NBA owner not consumed by the quest to win, but who treats his team as an income source. How much do you want to reward a freeloader like that?
Major League Baseball wrestles with that. They have robust revenue sharing, but have not found the NFL's level playing field, nor its ratings. In some markets freeloading owners simply pocket those revenue-sharing dollars. When that happens, the system designed to encourage all teams to strive for titles instead does the exact opposite, rewarding a few of them for guaranteeing mediocrity, predictability and long-term disappointment.
The NBA says that at the moment eight of 30 teams make money. Perhaps those eight owners could be convinced to help out the other 22 in the name of a stronger league. But even after hashing out the tough details of all that, is there anything about writing those checks that would make the most mismanaged of those 30 teams smart and dedicated to winning? Wouldn't many teams still be condemned to mediocrity?
A hard salary cap addresses that by reducing the damage poorly run teams can do to themselves, especially when paired with another NBA proposal, to shorten guaranteed contracts. If the likes of Gilbert Arenas, Rashard Lewis and Eddy Curry had simply signed shorter contracts, they may still be in the NBA today, but on tiny, market-appropriate contracts -- while the big dollars they're earning now would be going to more productive players.
Taking money from players, giving it to owners
Yes, that's a huge part of what the NBA wants. They have been frank that they literally want the players to make less money -- $800 million a year is one number that has been discussed -- and the owners more. The two sides both know that, and it's no secret they will be negotiating a bigger share for owners. How much more? That's the crux of the negotiations.
And I can hear what you're thinking. A hard cap is just more of that. Dress it up with talk of competition, but it is sure to reduce salaries every which way. It takes free-spending owners like Mark Cuban or Jerry Buss and turns them into mere Maloofs. There's a reason the Players Association has had zero interest in all this. They see it simply as a way to inflate franchise values at the cost of the players' financial stability.
So, here's an idea: To allay the union's fears that a team hard cap will ultimately cost players money, put it in writing. Guarantee that the players will receive their share of "basketball-related income" every year. Let's say the two sides negotiate that players will get 53 percent of basketball-related income. The hard cap for each team would be 1/30th of that. And the league could simply agree that there will be not only a maximum salary, but a minimum, too.
And while it's the best-kept secret in sports, this is what they already do, right now. Yes, indeedy, there has been a league-wide hard salary cap in the NBA for a decade. No matter how much individual players negotiate, what they actually receive as a whole is in fact capped -- hard-capped -- at 57 percent. (Some of those players that you have heard make $12 million a year have contracts that say $12 million, but they actually make just $11 million if that's what it takes to bring player income to that magic 57 number.)
Guaranteeing players a minimum percentage means that if all those Busses and Cubans suddenly get frugal, it need not hurt players as a whole. They'll make the same, as a group, as they would without a team-by-team hard cap.
Unless, of course, the players make more. Remember the whole idea is that a hard cap would inspire more close games, more shocking outcomes, more sex appeal on television, bigger TV deals and therefore more revenues all the way around. With a guaranteed fat percentage of increased league revenues, the players would benefit from all that as much as anyone, and in theory could make more than ever.
In other words, maybe there could be a delightfully surprising outcome for players, too.