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Wednesday, September 21, 2011
Updated: September 22, 10:42 PM ET
David Stern's flawed NBA lockout logic

By Howard Bryant
ESPN.com

After dueling displays of solidarity, NBA owners and players reportedly planned to meet Wednesday even as regular-season games are being threatened by David Stern's lockout.

Kobe Bryant
Lakers-Celtics Finals: Nothing gets fans more excited.

The NBA commissioner has adopted a tactic perfectly suited for today's age of shrinking media, anger toward labor and multimillion-dollar athletes: Use the authority to repeat his position until misinformation becomes truth.

Stern has benefited from a disturbing lack of accountability, a familiar blueprint the powerful have used throughout history to justify incorrect political positions, unnecessary wars, greed and corruption with the often-successful hope that the public will lack the interest and stamina to call them out.

Saying it doesn't make it so, and little to none of Stern's rhetoric holds up to scrutiny. He justified the lockout by stating the dominance of big-market teams threatened competitive balance. To curb this dominance, ownership is demanding a hard salary cap and a cap on the length of guaranteed contracts. Stern said NBA teams have lost as much as $300 million because the league's financial system is fatally flawed, and the only remedy to ensure the league's future is to reduce the percentage of money -- 57 percent in the expired deal -- allocated to player salaries.

It all sounds reasonable enough, except that player salaries and big-money teams aren't the primary threats to the NBA. Instead, the real threats are the revenue disparity between owners and the discipline or a lack thereof (the ultimate salary cap) to control spending.

Publicly, the league is tapping into that special vein of the fan psyche to turn them against the players. Many Americans maintain a love-hate relationship with themselves when it comes to being an employee -- they would gladly trade salaries with the lowest-paid athlete yet resent players who stand up for themselves. Most fans would probably consider themselves underpaid yet tend to align themselves with management when players assert themselves, an offshoot of the shut-up-and-play mentality." ("The players are getting 57 percent! They're just employees. That's just wrong!")

If anything, the NBA has many reasons to be optimistic about its future even without reform. For the first time in its history, it has inherited a perfect storm of positive developments that only Stern's bullying and the owners' greed in the form of a protracted work stoppage can destroy:

1. The Boston Celtics and Los Angeles Lakers are not only good at the same time but also have played one another for a title twice in the past four years. The Lakers are the one true dynasty in the NBA, flush with cash, well-run, with an enormous pedigree and, most importantly, the greatest advantage: geography. Virtually everyone young and rich would love to live and play in L.A. -- especially during the age of celebrity when athletes seem to make records and movies nearly as often as jump shots. The Celtics, meanwhile, are the NBA's version of the Green Bay Packers. They are the link to the historical roots of the game, tying together the glorious past and ambitious future. Free agents have shunned Boston, but the trade market is robust. When the NBA's greatest rivalry is strong, the league is at its very best.

2. The teams in big television markets are in powerful positions. The Chicago Bulls won 62 games last season and landed a spot in the Eastern Conference finals. The third-biggest media market in the country behind Los Angeles and New York, Chicago has the league's 2008-09 rookie of the year and now most valuable player in Derrick Rose, suggesting a bright future with championship potential for years to come. With the addition of Carmelo Anthony, Amare Stoudemire and a playoff appearance, there is more energy around New York basketball than at any time since Pat Riley gave way to Jeff Van Gundy. The Knicks have star power and high energy, and for the first time in years began believing they could beat anyone.

3. In addition to having the game's signature rivalry revived and the league's top television markets all enjoying an upswing, the game's best, most marketable young player, LeBron James, has played in the NBA Finals twice. Through orchestrating his way to the Miami Heat, James increased the level of interest in him and his new team. (Who would have thought that was possible?) The league not only has rivalries flourishing, but also its best individual talent has played at a championship level every season rather than languishing on a bad team. The Heat and James move the ratings needle.

Kobe Bryant
Lakers-Celtics Finals: Nothing gets fans more excited.

4. Television ratings are up. Interest in the game is up. The league expected a double-digit drop in revenue as the economy crashed two years ago, but that anticipated shortfall never occurred. In fact, revenues did not decrease but remained flat.

Yet Stern and the owners are blaming the players, without proving loss, while shutting the game down.

"Competitive balance" is a term to which Stern refers frequently, suggesting that the top teams in the biggest markets are controlling the game, both in the standings and on the balance sheets. Where the NBA is concerned, however, "competitive balance" is nothing more than a buzzword to justify its greed.

Since 2000, teams in the country's top 10 television markets have not dominated the NBA. Along with the Lakers, the most successful team in the league has been the San Antonio Spurs, who happen to be in the 37th-largest television market. A top-10 market has won the past four NBA titles, but only the Lakers (second-ranked market, shared with the Clippers), Mavericks (fifth), Nets (first, shared with the Knicks), Celtics (seventh) and 76ers (fourth) have reached the Finals since '00, while the Nets, 76ers, Clippers, Knicks, Wizards (ninth), Warriors (sixth), Bulls (third) and Hawks (eighth) have all had five or more losing seasons over the past 11 years. Neither the Sixers (four coaches in three years) nor Nets (36-128 over the past two seasons) have made the NBA Finals in nearly a decade.

Perhaps Stern is articulating a "Lakers" problem in the same sense that for years Bud Selig and baseball's owners wanted to curb the Yankees, even though the sport traditionally has been at its most profitable when its most legendary teams are performing well. The Lakers maintain financial, geographical and emotional advantages over virtually every other team in the NBA, the Celtics included. They can pay players and attract free agents. Yet the long-term advantage of restricting the league's greatest asset is unclear.

The most honesty from the owners and Stern came in their initial position last season. They are seeking "cost certainty" via a hard cap and they want greater profits. They want the NFL model because the system does virtually all the work in reeling in salaries and greatly reduces player leverage in contract negotiations.

The true point of a hard cap is to reduce the number of long-term, guaranteed contracts. Since a team would be foolish to guarantee a long-term contract knowing it only had a fixed amount to spend each season without exceptions (the Bird and mid-level, for example), fewer players would have these deals. The owners would not be stuck paying as many large sums to injured, benched or cut players years after they made significant contributions in a game.

This would more closely align the NBA with the NFL model and the myth that football's hard salary cap creates parity. But football's cap doesn't create championship-level parity. Since 2000, 44 teams have played in the conference championships, but just 10 of the league's 32 franchises account for 68 percent of the games (30 of 44 appearances), while just three -- Pittsburgh, Philadelphia and New England -- account for 34 percent (15 of 44) of appearances.

In the NBA during the same period, nine of the 30 franchises account for 75 percent of conference finals appearances, with just three -- San Antonio, Detroit and the Lakers -- accounting 39 percent (17 of the 44) of appearances.

At first glance, it might appear the NBA lacks the parity of the NFL. In the NBA, 16 of those 44 conference finals appearances were made by teams located in top-10 television markets. What does this suggest about Stern's argument that big-money, big-revenue teams are controlling the standings?

In the NFL, the league of the vaunted hard salary cap and far less guaranteed money for its players, 20 of the 44 teams in the NFC of AFC title games came from top-10 TV markets -- and there isn't even a franchise in Los Angeles, the second-biggest market in the country.

Expand this analysis to the top-15 television markets (even though Stern vacated 15th-ranked Seattle for 45th-ranked Oklahoma City) and nine different NBA franchises have played in conference finals. In the vaunted NFL, where every franchise has a chance, that number is 11.

The real differences, of course, are money and acumen. In football, two big markets and a small one -- New England, Philadelphia and Pittsburgh -- also happen to be the best-run organizations. The same is true in basketball with two big markets -- Detroit and Los Angeles -- being as well-run as San Antonio. The contracts that the Knicks and Hawks have given out, meanwhile, are entirely self-incriminating.

A hard cap doesn't influence the standings, it only makes it easier for undisciplined owners to keep the money. Ask the Detroit Lions, who play in the 11th-biggest TV market but haven't made the playoffs since 1999, or the San Francisco 49ers and Oakland Raiders, who play in the sixth-biggest market but haven't been over .500 or made the postseason since 2002. Stern knows this. And if he doesn't, there's always Google.

The real problem is not the players and the money they receive, but the owners and whether they care to share their future riches with one another. The league has a burgeoning revenue stream -- local cable fees -- that is widening the gap between franchises. A new revenue-sharing deal between the owners would create more equity.

There is also the long-lost deal the NBA cut with the old owners of the forgotten Spirit of St. Louis of the ABA, which as a buyout for the ABA-NBA merger agreed in 1976 to pay Ozzie and Dan Silna (the brothers who owned the franchise) one-seventh of all future NBA television revenue, in perpetuity, by the four surviving ABA teams. The NBA is haunted by this deal, and because of it, the Lakers and others receive more from the league's television contract than the Indiana Pacers (25th-ranked TV market), Denver Nuggets (18th), San Antonio (37th) and New Jersey.

Rose
MVP Derrick Rose has the Bulls well-placed for a title run.

Meanwhile, Stern and the owners focus more on the players than why the financial gap between the teams grows greater -- because it is easier for the paying public to be offended that a 23-year-old with a jump shot can earn so much than it is for those fans to understand revenue sharing and cap complexities. Just as in football over the past decade and baseball (where disparities led to the infamous 1994 strike), local television money will ensure a new wave of powerhouses.

Baseball, instead of confronting the gap cable money was creating between its teams, attacked the players and illegally imposed a hard salary cap. The cap was eventually overturned by now-Supreme Court justice Sonia Sotomayor. (But even with that precedent, it sure looks like this is the playbook Stern is reading.)

The Lakers' local television deal is immense, with the club reportedly standing to earn roughly $200 million annually. The Celtics have doubled their cable television fees, the Rockets have a strong cable television position, and the Knicks have raised ticket prices and are in the midst of a massive, two-year renovation of Madison Square Garden. There are five NBA teams -- the Knicks, Bulls, Raptors, Nuggets and 76ers -- that own their arenas and television networks.

The league has the stars, the rivalries and the interest. It has over the past several years reduced the amount of future guaranteed money teams are responsible for by imposing greater discipline in the form of better contracts. It has many of its best markets on the upswing and has been able to tap public money for renovating (or relocating) franchises. And instead of taking advantage of what is looking to be a special moment in time, the commissioner and his owners have decided it isn't enough.

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. He can be followed on Twitter at www.twitter.com/hbryant42.

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