NBA owners in battle for financial makeover
NEW YORK (AP) — NBA owners have their priorities, and playing games isn’t first on that list.
Instead, the league is looking beyond this month — and maybe beyond this season, if that’s what it takes — to implement an extreme financial makeover after years of sizeable losses. The goal, in the words of Spurs owner Peter Holt, “an opportunity to make a few bucks.”
Owners are determined to reshape the league by creating a system like the NFL or NHL, where spending is capped and small-market teams truly can compete with the big boys. But reforming the NHL’s financial structure required a lengthy lockout, wiping out the entire 2004-05 season. And the NFL is making money, not losing it.
After NBA labor talks broke down Thursday night, Holt was asked if owners might be willing to sit out a year to get the changes they crave.
“The competitive issues and the economic issues, certainly we don’t want to lose the season, I don’t think the NHL did either. It ended up happening,” said Holt, chairman of the owners’ labor relations committee. “There are certain things that we feel we must have.”
And that makes a lost NBA season a possibility.
That comes as no surprise to players’ association executive director Billy Hunter. He started to believe two or three years ago that owners intended to lock out the players so they could force through the changes they wanted. Now he doesn’t see enough owners who can stop it from happening.
He identified big-market owners Jerry Buss of the Lakers, the Knicks’ Jim Dolan, Miami’s Micky Arison and Dallas’ Mark Cuban as owners he believed were open to anything that could lead to games, but there were many more from the small markets “that were dug in, and I think they’re carrying the day.”
“And unfortunately. I think what we have to do is we have to miss more games for it to really set in,” Hunter said. “And that’s what I kept trying to tell them is that this thing is on a slippery slope and we’re already losing games, the first two weeks, and if we continue to go in that decline, it may become intractable to get people to move from their respective positions.”
The first two weeks of the season — 100 games in all — already have been canceled. And it won’t be long before more games are scrapped.
That’s in stark contrast to the NFL lockout, in which only the preseason Hall of Fame game was canceled. The NFL always insisted that it would play, a rallying cry that is absent from the NBA negotiations. Of course, the NFL players and owners were fighting over how to split billions of dollars of revenue whereas the NBA says it lost $300 million last season and that only eight of its 30 clubs made money.
“Different dynamic, I mean no doubt about it,” said Holt, who added his small-market Spurs lost money the last two years, which hadn’t happened before.
“We’re losing games, so there’s a cost to that. And we also were in a very different position. NFL essentially was fighting over how to divide more riches. We’re trying to figure out how to get our expenses down so we’ve got 30 teams that have an opportunity to make a little money, and so it’s a very different situation.”
One that could be crippling in many NBA cities, particularly a small-market one such as Memphis.
Ty Agee, president of the Beale Street Merchants Association, said the timing couldn’t have been worse for the city, Beale Street and the Grizzlies. After years of anemic play and small crowds, the team’s 2011 playoff run brought people downtown not only toward the end of the regular season, but into two rounds of the playoffs — an unexpected boost for a club that had never won a playoff game.
Now, instead of riding momentum and benefiting from more customers, businesses in the entertainment district are watching labor negotiations.
“I get nervous, and I get more and more frustrated,” said Agee, who owns Miss Polly’s Cafe. “All we want is for them to get their stuff together.
“It’s a double-edge sword for me because I’m a fan and a business owner.”
Commissioner David Stern has long warned that once games are missed, both sides might stiffen their proposals in hopes of recovering what’s been lost, which is why he said last week he feared games could be lost through Christmas without a deal this week.
After three days and 30 hours of meetings with a federal mediator, negotiations fell apart when union officials said they were told they must commit to a 50-50 split of revenues before owners would agree to discuss the salary cap system.
“Right now, they’re saying it’s got to be a precondition. If we’re going to meet, you’ve got to agree to accept 50-50. So as long as that edict is out there, then when are we going to meet?” Hunter said. “We’re saying we’re unwilling to meet unless we can talk about the system independent of the number.”
There is no indication owners will be prepared to go beyond a 50-50 split, and with players currently at 52.5 or 53, the sides are about $100 million apart on an annual basis.
Players seem willing to give on one of the issues if they scored concessions on the other — they’ve already offered to reduce their guarantee of revenues from 57 percent — but management has made it clear it must have both. That doesn’t leave much room for compromise.
Or a season.