NBA should consider contraction
League's financial problems could be solved by cutting teams that cause them
The rainbow that spans a bitter year of sports labor conflict comes courtesy of the two previously most unlikely allies: Major League Baseball and the Major League Baseball Players Association.
Baseball, led by commissioner Bud Selig and union executive director Michael Weiner, has navigated labor negotiations without a work stoppage for the third time in a decade. More importantly, it is baseball, with its ponderous, important history of eight work stoppages and truest capitalist model of the four major sports, that actually has delivered on its promise after the devastating 1994 strike never to lose the public again.
It is a promise that the rest of the sports world has not kept, particularly the National Basketball Association, with its second in-season lockout in 13 years. The NFL locked out its players this year and caused months of consternation but ultimately didn't miss any regular-season games. As for the NHL, its last negotiation went so poorly that an entire season was lost and the players are just now trying to scramble to regain their dignity.
If the NBA wants to save its season and its dignity instead of trying to push the players to the wall, it needs to consider a serious downsize. At least a half-dozen franchises could be folded. When the league was Magic and Bird, it consisted of 23 teams. Then it expanded to Charlotte, Miami, Toronto, Vancouver, Orlando and Minnesota and collected expansion fees from each. The league went back to cities that had failed at basketball -- Minneapolis and New Orleans. When Charlotte's initial franchise moved to Louisiana, the city that had failed was rewarded almost immediately with another expansion franchise (echoing what baseball has done in Washington, D.C. -- the Senators who moved and became the Twins, the expansion Senators who moved and became the Rangers, the relocated, renamed Nationals).
The NBA, commissioner David Stern in particular, must be bewildered by just how starkly the tables have turned in just less than 20 years. When baseball was mired in a strike and the game was on its knees, Stern was the king of the sports world, considered the best commissioner in all of sports -- the owners' man who still had the players' ear. Now in 2011, it is Selig who has shown how to keep a sport in business while the game's business is being done, while Stern uses overheated, inappropriate language such as "nuclear winter" to describe millions of dollars at stake over a bouncing ball.
While Stern tries to win the public with the false narrative that the players are the problem, the NBA is precisely where baseball was in 1994: not fighting so much with the players as much as it is fighting with itself and its system. The NBA has had the salary cap for years that MLB wanted but lost to the courts in 1994. The NBA's financial issues are internal, the big-market Knicks and Lakers against the little Bucks and Bobcats. The former represent free-agent destinations and lucrative television deals. The latter are bleeding and desperate, unable to generate the real revenue necessary to compete and just unattractive enough to keep players from looking for a better deal.
If the league is serious about its financial situation, it should consider the contraction of franchises that cannot compete. In baseball, the fight played out between big markets with the big-gate revenues and an eye toward a new, potentially lucrative money stream of local cable television revenues versus the small and the dowdy franchises that no one wanted to watch and no one wanted to play for.
When baseball struggled before the 2002 negotiation and again in 2007, the issue of contraction was floated as a solution. The Oakland A's were targeted, as were Tampa Bay and Minnesota. Perhaps this was never a serious solution, but it drove home to the players, owners and public that having a basketball team in Minneapolis -- or Boston or Syracuse or Fort Wayne, for that matter -- is not a birthright.
Baseball never took teams from owners and cities or jobs from players -- that kind of shared sacrifice was too difficult. Baseball realized that contraction -- real labor pain -- wasn't worth it, certainly not when the overall financial numbers of the game were positive. It found a way for both sides to agree.
The NBA has responded to a similar financial dynamic by blaming the players and the percentage of money they earn. With other options non-starters at the bargaining table, the solution to the NBA's problem is to dump the teams that are anchoring the league to the bottom of the sea.
The NBA isn't losing money; the Bucks, Kings, Timberwolves and Hawks are. If the league is serious about solving its labor problem, it should solve its financial problem first and shave off its deadwood. According to Forbes, the five most valuable teams -- the Knicks, Lakers, Bulls, Celtics and Rockets -- operated at a combined profit of $188.8 million in 2010, while the bottom eight -- the Hawks, Kings, Bobcats, Hornets, Pacers, Grizzlies, Timberwolves and Bucks -- operated at a combined loss of $71.2 million.
Stern and his owners are unwilling to confront the price of their own greed. They took the money -- $32.5 million from each team in the first round of expansion in 1989, $300 million from Charlotte in 2004 (and the team lost $20 million in 2010) -- and now the league is drowning in bad franchises.
From a business perspective, the top of the league looks terrific. The league's signature rivals, the Celtics and Lakers, are good again at the same time. The three biggest markets in the country -- New York, Los Angeles and Chicago -- are all excited about basketball, while the next few in Houston and Dallas, Boston and Phoenix are all in the top 10 in franchise worth. Two recent expansion teams, Miami and Toronto, are in the top 10 in franchise value. The first of the modern expansion teams, Dallas, founded in 1979, won the NBA title this past season.
In baseball, the small-market/large-market gap was slightly addressed by the imposition of a luxury cap and increased revenue sharing. Baseball dealt with the larger issue -- can Kansas City and Pittsburgh and Oakland compete? -- by not dealing with it at all. The Royals haven't made the postseason since 1985. The Pirates haven't won more games than they've lost in a season since 1992. The superpowers in Boston, New York and Philadelphia print money, and that's just the way it is.
The NBA's unwillingness to address the internal issues between franchises before dealing with the players is almost an instant replay of baseball in 1994. The NBA's proclaimed heavy losses are no doubt on their face accurate. The bottom third of the league -- also known as the source of the problem -- is composed of expansion casualties and ABA stepchildren. The Wolves, Bobcats, Hornets and Grizzlies are in the bottom six of team valuations, according to Forbes. Rounding out the final 10 are the Nets, Hawks and Pacers, and two teams -- the Clippers and Kings -- periodically profitable but rarely competitive.
Instead of the empty rhetoric of "nuclear winters" and the socialism of salary caps and "guaranteed profits," owners such as Mark Cuban should pave the road to reform with more capitalism. If Milwaukee, Minnesota, New Orleans and Charlotte can't make it, they should close their doors, just like every other failed business in America. You can't blame the players for that.
Howard Bryant is a senior writer for ESPN.com. He is the author of "The Last Hero: A Life of Henry Aaron," "Shut Out: A Story of Race and Baseball in Boston" and "Juicing the Game: Drugs, Power and the Fight for the Soul of Major League Baseball." He can be reached at Howard.Bryant@espn.com.
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