As Silly as It Sounds, the Big Winners in the New NBA Deal Were the Fans
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The specifics aren't out yet, and in some cases are still being negotiated, but with a handshake deal agreed to, writers are drawing conclusions.
In the rush to name winners and losers, a lot of writers seem to be missing the bigger picture. They have named David Stern as the big winner, and the players as the losers. While Stern did land a good deal for his owners and the players collectively turned over just under $300 million per year back to the owners, the biggest winners were the fans.
A tiny portion of writers have named the fans as the big winner, but none of those writers seem to recognize the right reasons. The fact that there will be an NBA season this year is great, but in the grander scheme even that pales in comparison to other reasons.
The fans really are the big winner because this deal promises to create a better and more stable league.
The NBA teams claims to have lost about $300 million in total last year under rules where the players were contracted to get 57 percent of basketball-related income. The new deal has the players getting 50 percent of BRI. Practicing simple math, one would think that alone should allow the average team in the NBA to break even if all conditions were to stay the same.
But a lot of the debt was a combination of deficit spending by a few wealthy teams, short-term losses due to lengthy, guaranteed contracts in the face of a lingering recession and probably some creative accounting to make the owners' position look worse entering the negotiation.
Remember that some NBA owners are willing to run a team at a deficit to improve their chances of winning; the NBA thought that subjecting those owners to a luxury tax in the last agreement—a dollar for dollar penalty over a certain threshold for teams that grossly exceed the team cap—would keep the wealthier owners and the larger markets from buying titles, destroying competitiveness and distorting finances throughout the league.
That only worked to a certain degree. Some teams were still willing to spend more than they reportedly made, and those teams consciously incurred losses likely to distort the size of the alleged problem.
When the country slipped into a recession in the last days of the Bush administration, it became much harder to generate revenue for the NBA. Large businesses nationwide were failing and/or had trouble continuing to borrow operating capital. Advertising budgets were slashed nationwide, workers lost their jobs, families were reduced to surviving on a single income and could not afford NBA tickets.
Combine that with long-term, guaranteed contracts for a number of players, and you had teams with fixed expenses and possibly some trouble paying the talent.
The recession has been going on for years now. While the stimulus spending might have prevented the country from sliding into a second Great Depression, the economic advisers in the Obama administration have not come up with much to pull the country out of it.
As a fan looking at contracts on NBA rosters today, it appears NBA teams understand that this recession may linger for awhile. Teams have borne their bad contracts and have been much more careful about signing unproven players to long-term deals over the last few years.
There is a lot there to suggest that the worst is behind the NBA. Still, per Forbes's team valuation estimates, between one half and one third of NBA teams were losing money.
There were talks of league contraction being a possibility in the future. Add to that the fact that one of the NBA teams is currently league-owned, and two more were recently sold at very buyer-friendly prices.
There were reasons to believe the owners' issues weren't the product of just creative accounting.
The new deal makes it much harder for NBA teams to fail. The deal apparently not only has the "player contribution" to the owners' bottom line, but also offers better revenue sharing and is also supposed to make the luxury tax more fearsome—a step that should reduce competition for poorer teams' best players.
NBA fans in small markets like Minnesota or the league's lone Canadian team, Toronto, can probably breathe a sigh of relief as this probably means the end of any contraction talk.
This deal makes it harder for really bad management to destroy a team's ability to survive in a smaller market.
It is apparently going to increase the valuation of NBA teams. That will make owning a franchise more appealing and could actually lead to expansion, allowing more fans access to NBA games and more opportunities for players.
Player Contracts and the Nitty Gritty
The owners apparently landed some concessions to shorten the length of certain player exception deals. That may be bad for individual players, but it is great for fans and most of the NBA.
How many times have fans seen their teams sign a one-year wonder to a long-term deal only to see the player get injured or prove to be unable to compete in the new team's system?
This baggage destroy a team's ability to compete until their contracts expire and they become tradeable assets.
Any new rules that shorten those deals make the implications of a bad signing much more easy to manage and by reducing the length of those deals, will probably make ending deals a little less valuable in the future.
I think it is a good thing if there are fewer borderline all-stars traded for ending contracts. The shortening of the deals and the better financial implications suggest this kind of trade may be a lot less common now.
The minimum age for players is reportedly close to being raised from 19 to 20. That will be great for college basketball (which I enjoy) and the NBA. Anything the Players' Association did to sell out incoming young players (keeping them in college) is good for the fans.
Today teams draft raw, undeveloped talent and then pray they develop. The most talented seven-footers rarely stay in college for more than a year or so. They jump to the NBA, sit on the bench for their rookie deal and then, for the most part, are cut.
The NBA is no place for big men to learn how to play—college is a great place to get the daily fundamental work.
In the days before the NBA allowed underclassmen, it was widely accepted that most incoming big men would still need four years in the NBA after four years in college before they would be ready to play a starter's minutes.
The absolute dearth of quality centers in the NBA directly parallels the NBA allowing younger and younger players to enter the draft. For a fan like me who grew up playing center, most NBA games are barely watchable these days as play in the interior is at by far its worst level in the last 40 years.
Elite talents playing multiple years in college allows those players to face teams that have spent an entire offseason watching film on them and coming up with strategies to frustrate them. Those players will either learn to adjust, as they will be required to do in the NBA, or their lack of development will be exposed in front of NBA scouts.
The NBA draft is designed to be a chance for really bad teams to add ready-to-go talent. With the minimum age at 20, the talent will be more tested and the odds of a bad team picking a developed contributor will be a little better.
That is just great for the fans.
At 20, rookies will be a little more mature. We may hear less of awkward transition stories about irresponsible teens suddenly becoming multi-millionaires. Kids will have to go to college or the semi-pros for a year or two and discover their adult identity before getting their fat checks.
LeBron James was considered an exceedingly mature and level-headed guy when he came out, but his actions in airing "the decision" suggest he surrounded himself with bad advisers who destroyed his personal brand. Perhaps he could have used a few years of college to become his own man.
Fans and NBA owners are tired of having their teams' futures in the hands of boys who were handed multi-million dollar checks at 18.
For a fan, a decision by a flighty young player with star talent who lacks the guts of a Dirk Nowitzki to carry a team on his own can be frustrating. No fan wants to see a young star be someone else's caddy. No fan wants to see their favorite is not man enough to carry the load and wants someone to carry the burden of leadership instead.
For a team, it not only wrecks their ability to compete, it can also destroy their ability to survive financially.
Putting those decisions into the hands of players who have been the star of a college team for a couple of years could lead to better decisions for the teams of the league.
Plus, there is the fact that most 19-year-olds are not ready to start or even contribute in the NBA.
Considering that the NBA is not going to develop them, why does it make sense to give them a roster spot instead of a player who has become a star in the developmental league. Why not give the slot to someone who can contribute and has earned his way in?
How does it make any sense to bring in players who aren't ready to play?
Then there is talk of trade restrictions possibly being eased. The way the early reports are coming in, it may be that the only (?) restriction would be a team's willingness to deal with a much more aggressive luxury tax.
For fans who love this subject and love to see good, balanced trades made, this is a good thing. It seems likely to open the doors for more trading deadline deals by playoff teams for "the missing piece."
Players Secured Everything That Matters for Future Players
The players may have lost the financial battle this time, but it only is a "hardship" for this crop of players. The deal isn't awful by any means. The PA has done a pretty good job of securing their ability to negotiate a more lucrative deal next time.
It is a lingering recession. The idea that the players would win this round of negotiations was ridiculous.
The player's income is still directly tied to BRI—not giving that up was a key for the PA. The percentage may be lower than players want today, but the precedence remains. That concept is not something the next batch of players will have to fight to recover next time.
The players successfully resisted a hard salary cap. A soft cap means that if the economy takes off while this deal is in effect, the rich teams will become far more willing to brave the luxury tax to get "the missing piece" for their teams, driving the total money up.
The players were able to retain guaranteed contracts, even if they may be a little shorter than they were before; players retain their security.
They landed a few other concessions they wanted, and for me as a fan, I think that was enough. It is admittedly self-centered, but I am not losing any sleep over a small portion of players losing 10 to 25 percent of their salary potential if it means a better product on the court, easier trading rules, shorter toxic contracts, no contraction and a great reduction in the chances of teams moving because those teams cannot break even in small markets.
Can I get a high five?
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