Owners have funny ways of cutting costs

October, 31, 2011
10/31/11
4:32
PM ET
Abbott By Henry Abbott
ESPN.com
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Chad Ford and Marc Stein have done a lot of hard work looking at how different teams are likely to deploy the upcoming, agreed-to-in-principle amnesty clause.

The clause gives every owner the right to pay off one player to go away. Owners won't wriggle out of paying the player, but they will wriggle out of any affiliated luxury taxes, while gaining cap room.

It's a very popular clause with fans, because it's a chance to reset all those bad contracts owners and teams have offered in the past.

It also exposes absurdity on the part of NBA owners.

Their representatives David Stern and Adam Silver have been banging the drums for so long. Owners need profits! They were $300 million in the hole last year, and even though player costs have been stable -- vague other expenses have skyrocketed -- it's the players who'll have to make the owners whole. Players simply need to play for less money.

And that argument has carried the day. The players opened negotiations with concessions and the next CBA will not likely include anything at all that is better for players than the last CBA. And the reason the lockout persists is that owners want not just a little more money, but a lot more money and far stricter controls over their own behavior.

They want to make sure, right now, that they won't get tempted to spend later.

Meanwhile, the 20 players the plugged-in Ford and Stein project will be cut are due nearly $500 million combined over the rest of their current deals. Those NBA owners will likely, as a league, pay an extra $500 million just to tweak rosters here and there.

In other words, before all the kings' horses and all the kings' men have put the league's economic model back together again, owners have already asked themselves: Would they like the right to pay players an extra $500 million to be a bit more competitive?

And to that they have said a resounding "Yes, we'd love to!"

I've been among those insisting the owners really are feeling at least limited real financial pain. Some have sold teams at losses, something you'd never do if those losses were only accounting tricks. But this is not making it easy to argue with those who say NBA owners are just faking this financial injury.

They not only agreed to an amnesty clause, but they have agreed to make it more flexible than ever (employable any time over the life of the deal) and -- this is huge -- they have agreed not to count amnesty dollars toward players' total share of BRI. [CORRECTION: That last sentence is incorrect and the explanation is here.] In general, owners have perfect protection against spending crazy amounts on players. All players together share a certain percentage of league revenues. But to pay these players to go away owners will have to dig deeper. These players are guaranteed every penny even if it takes all players together over the players' to-be-determined share.

The owners' position is that they need to spend far less on players. Meanwhile, they are enthusiastic about this exciting opportunity to spend a lot more on players.

And it's not even clear that $500 million will make teams much better.

For instance, consider Rashard Lewis, the overpaid poster child of this clause. He is owed more than $43 million in the next two seasons. As an average NBA power forward, he's just not worth that kind of cash. Among power forwards, he had the NBA's 63rd best player efficiency rating last season.

But consider that he can actually play NBA basketball, and did so for 32 minutes per game last season. No, he doesn't rebound very well, but he can shoot and pass, and he doesn't turn the ball over very much. He can be part of a really good team, which we know because he recently was in Orlando.

If Wizards owner Ted Leonsis pays Lewis to go away, though, then Leonsis will be both out $43 million and in need of somebody who can play 32 minutes a game at power forward. There aren't a ton of those players around. Appropriate free-agent candidates include Glen Davis, Dante Cunningham, Craig Smith, Carl Landry or Jason Smith. By PER, Smith is the best of them, with the 42nd best PER. But he'd like to be paid too. Which means Leonsis will have paid Lewis' $43 million, plus another $5 million or $10 million over the next two seasons to have similar work to what Leonsis would have already paid Lewis for.

Would you pay $10 million to replace Rashard Lewis with Craig Smith and a bit of cap space?

Not if money were tight.

Henry Abbott | email

TrueHoop, NBA

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