Business/Finance

Another modest proposal: how the NBA can make its small markets more competitive within the new CBA structure

A couple of weeks ago, as I was lamenting what looked (at the time) like the end of the road for the NBA 2011-12 season, I explained that the league was facing an especially nasty confound. You had three factions (players, big market owners and small market owners), and there was simply no common ground between two of them (the players and the small market owners). When all the motivations were factored in, it was simply hard to imagine a long-term accord that served everyone. Now that the parties have settled, I’m looking at the new collective bargaining agreement and trying to understand how it’s anything more than a band-aid on a sucking chest wound.

I see how the players won. They gave back a few percent of revenue but prevailed on several critical structural issues. The big market owners (BMOs) have to deal with some new luxury tax issues but they’re still positioned to spend big and dominate the league. The faction that was the problem all along – the small market owners (SMOs) – seem to have emerged just as screwed as they were going in, maybe moreso.

The free agent and trade chatter in recent days proves the point. Chris Paul is angling to escape New Orleans. Dwight Howard is going to leverage his way out of Orlando. The Nets, the Lakers, the Celtics, the Knicks and the Clippers are the main suitors for these talents, with SMOs being just as out in the cold as they have been for years. My own Denver Nuggets have massive amounts of salary cap space, but there isn’t even a whisper of a chance that any premier players are headed this way.

And that’s not the worst of it for the SMOs. Thanks to one of those structural issues, there’s not only a salary cap, but a salary floor – even the least profitable small market franchise has to spend 85% of the cap max on player salaries this season and next and 90% thereafter. Bill Simmons explains some of the implications in excruciating detail, and his analysis is well worth the read. The short version goes like this: the new salary structure is going to assure that a lot of players make more than they’re worth. And a lot of those bad contracts are going to land on SMOs, who can’t attract the top talent but have to pony up the cash anyway.

Say you’re the GM of the New Sactowaukee Grizcats, for instance. No franchise players are coming your way at any price. But you have to dedicate around $49.3M to salaries minimum, even if the players who will sign with you suck. And, by the way, you won’t be competing for any titles.

Congratulations, SMOs. Oh, and by the way, this is the hose job you got when the players didn’t have any leverage. As Simmons explains, just wait and see what happens in six years, when either side can opt out.

The players could exact their revenge six years from now, if the league is booming and the owners have a vested interest in NOT missing a single game. Hmmmm … guess who will have the leverage at that point? I could see the players threatening to strike before the 2017 playoffs unless they get a better deal. I could also see the owners quickly caving — because again, you never want things to stop when you’re makingmoney — with everything getting briskly resolved and the players gaining an appropriate raise. That’s how big business works. It’s all about the leverage. This time around, the players didn’t have enough of it.

To sum up, then, my point has been that SMOs can’t be competitive. At best, they’re like the “jobbers” of pro wrestling. They’re there for one reason only – to lose to the superstars.

Ultimately, what the league needs is an operating dynamic that makes everyone happy and that allows everyone to be competitive. This means:

  • Players enjoy freedom of movement – if the superstars want to congregate in sexy hotspots like NYC, LA and South Beach, so be it.
  • Big market owners can spend to win and reap the benefits of their investments.
  • Small markets can be competitive at the highest levels even though they can’t outspend the big markets or attract top players drawn to the big city nightlife.

How might this be accomplished? One thing is for sure, it won’t be a function of salary structures and CBAs. I explained in the last post what those problems are. What’s left? Simple: the rules. The laws dictating how the game is played on the court.

And the truth is that quite a lot can be accomplished relatively simply. The rules at present are as pro-prima donna as it gets. They favor isolations and make it very hard to defend a good two-superstar pick-and-roll system. How often do we hear about a player “taking over the game down the stretch”? That answer is closely related to how the game is marketed. We’re not encouraged to tune in as the Lakers face the Heat. We’re enticed by Kobe and the Lakers versus Miami’s Big Three. The Hornets don’t play the Clips, CP3 takes on Blake Griffin. The league has engineered its entire product around individuals, and it’s hard for me not to laugh myself just a little silly when the very star system they live by turns around and bites them in the ass, as it does every time a diva like Carmelo or LeBron holds a city hostage before finally taking their talents somewhere the lights shine a little brighter.

Want to minimize the impact that the divas can exert? Want to let them play by their rules but create a space where Toronto can compete on a level playing field? Sure. Change the rules to make it a team sport. Eliminate all the rules that limit what a defense can do, for instance. No more defensive three second calls. If the best way to take away the other team’s star post player is to pack the whole roster in the lane, fine.

A player like Carmelo benefits because he can hold the ball all night. You could implement something like the six-second call used in the NCAA at the NBA level. So hypothetically, you might implement a rule that no offensive player can possess the ball for more than five seconds without shooting or passing. That’s a little more gimmicky than I tend to like, but you could do it, and the sum of these rules would play to the strengths of an offense that was team-minded and it would put a crimp in the mojo of your superstar ball-hogs. New Sactowaukee may not be able to put the best player on the court, but they could perhaps put the best team on the court. Yes, talent and results do correlate, but hoops is one of those games where the whole can be more than the sum of the parts.

I don’t pretend to have a comprehensive answer here, and parts of what we might propose may not work in practice. But in principle, what the small markets of the NBA need is a competitive structure that increases their viability in the face of increasing player power that challenges the integrity of the game, both on and off the court.

It might work. If you’re a small market owner, it beats the hell out of where you’re going to be when the players opt out in six years.

Categories: Business/Finance, Sports

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