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Wednesday
Aug152012

Fixing The "Haves and Have Nots" Problem of the NBA

NBA.com told us last November that “Restricting the flow of solid free-agent role players to the biggest-spending teams was a core value of the owners' ‘competitive balance’ claims.” For the millionth time, David Stern and most of the owners are humongously full of crap.Now that Dwight Howard—one of the game's biggest difference makers on defense—has joined the Lakers, who had just added Steve Nash—one of the game's biggest difference makers on offense—in trades that cost the already loaded LA franchise very little in terms of swapped value, only the most idiotic of fans could continue to think the NBA is a fair league in which every franchise has a chance, and it's not just a collection of a few “have”s and many “have not”s. The five clubs that comprise New York (Knicks, Nets), Los Angeles (Lakers, Clippers), and Miami (Heat) have added such an unbelievable glut of talent through free agency and player-forced trades over the past 14 months, even under the rules of the new CBA that supposedly should help competitive balance (which we exposed in November as total bollocks), there's no denying that a majority of teams can never compete on a year-to-year basis with the few that hold the right combination of tons of cash, cool city appeal, and smart front offices (the Knicks, Nets, and Clippers don't exactly fit this last category yet).

 

In fact, the Lakers and Heat are the only two clubs in the entire NBA that carry this trio of qualifications to allow for near-annual Finals expectations, and LAL really takes the cake in a way we've never seen in NBA history. The only other teams that have a chance of attracting top-end talent and/or the means to regularly trade every part of their future (draft picks, young role players on their way up) in order to get elite-level help in the present are the Knicks, Nets, Clippers, Mavericks (huge ownership money and intelligent front office), Bulls (NBA royalty, decent city for player marketing, and intelligent front office), and the Celtics (NBA royalty).

 

Great luck + great GM's = a few outliers
You may point to the recent success of the Spurs, Suns, and Thunder as a rebuttal, but all three of those are extremely special cases. Those clubs each lucked into the addition of a tremendously talented player (Duncan, Nash, and Durant) who each has an ego-less, humble personality that doesn't require constant big-lights attention, values loyalty, didn't feel it was their place to make demands of their ownership or to issue thinly-veiled threats to leave, and whose apparent goal is not to be part of a large-market club that has the ability to assemble a super-team. Considering two of those franchises also happened to have masterful GM's who made multiple amazing draft picks that set them up for success, plus the Suns' abysmal ownership eventually did break Nash's aging spirit to the point he wanted to be dealt to a real contender, I think you'll agree we're not talking about a blueprint that other clubs can follow.

 

Sure the Hornets lucked out and landed big-time talent Anthony Davis in this past draft, but no matter how much he turns around the successes of New Orleans, we've already seen enough things to indicate he's a marketing-minded baller with green and gold in his eyes who wants bigger things for himself; there is no way he becomes the superstar we expect and remains in NO any longer than LeBron or Dwight remained in Cleveland and Orlando. And that is only part of the reason most teams are screwed when trying to compete on a continued basis with the big-money, cool-city, smart-minded ways of a few teams at the top like the Lakers and Heat.

 

More advantages that benefit the few
Part of the problem with having the guise of 30 teams all competing for the same prize is that there are only a few super-rich teams that can continually take on incredible debts and trade every piece of their future for stars right now with huge contracts. Small teams can be held hostage by superstars near the end of a contract (Denver and Carmelo, Orlando and Dwight, etc), or they can't take on bloated contracts that will eat into their ability to win for years if the value they'll get from it only exists in the short-term (like Joe Johnson's deal – the Nets are basically paying him $90 million for one or two decent years before buying him out with the new “stretch exception” or amnestying him before his four years are up). Most teams can't afford to constantly think so “right now” with little worry about the future; the safety net of a wealthy franchise that is willing to pay ridiculous sums later to clean up whatever future financial mess they create now is a rare tool that un-levels the playing field in a way that most fans never truly recognize.

 

We might see that the big teams seem to always get the favorable end of trades involving superstars and can easily restructure their payroll whenever they want in order to take on even more high-priced players, but we need to also see that it's all steeped in the concept that they're rich enough and willing enough to eat the losses later...year after year after year. Very few clubs can do this. Plus if the richest teams later want the draft picks they traded (for an idea of how freely some clubs are able to purge future picks for players now, the Lakers have already traded 6 picks over the next 3 drafts), they can always just buy them back. It's a nice luxury that few teams have, and the luxury gulf between the few and the many is only exasperated by players like Carmelo and Dwight who are far more interested in marketing opportunities and endless clubbing options than building their own legacy.

 

What can be done? Look to the EPL
So what can the NBA do to even the playing field and give 30 teams a real chance to compete if they have competent front offices making their decisions? They can put a hard cap in place so the Lakers can't simply go $30 million over the cap each year and pay whatever luxury tax that doesn't affect a franchise that makes $150 million a year just in local TV revenue. This would certainly help, but they'll still be able to attract the best GM's, best coaches, and elite players willing to take a pay cut to join together on the court and in the clubs (which would never happen in Minnesota, Memphis, etc.), plus they could still take on crippling contracts that are easy for them to get rid of through buyouts, the new “stretch exception," and amnesty. Obviously a hard cap can only do so much, and unfortunately it still allows these teams to take on more big contracts now that would be toxic for other teams down-the-road.

 

This is why I propose we stop pretending 30 teams in David Stern's TV-ratings-driven incarnation of the NBA are on equal footing; only a few are even capable of consistently putting a contender on the floor, and although all of those clubs don't do that (New York Knicks, anyone?), they're the only ones capable of making it happen from year-to-year and era-to-era.

 

Let's create a two-tiered NBA reminiscent of the English Premier League (EPL), the world's most powerful soccer organization. There are only a handful of teams each year that have any business being called contenders, and most of the time it's the richest ones that are also in the best cities to have fun in, for marketing themselves in, or for being part of a rich basketball history. We get some other clubs floating in and out of this group, usually due to phenomenal luck landing a key draft position in a key draft (Cleveland with LeBron, SanAn with Duncan, etc.), but they usually don't remain contenders. So what we need is two groupings for the playoffs: one for the teams that inherently hold all of the advantages to attract free agents and lopsided trades—plus the teams that can compete for a shorter time period with these clubs—and another for the majority of the league.

 

NBA-8 and NBA-22

There will be 8 teams each year who are in the NBA-8 (for lack of a better name, and that avoids any A/B, better/worse terminology), and the remaining 22 in the NBA-22. Just like the EPL and most other soccer leagues in Europe, there will be relegation and promotion; the bottom two finishers in the NBA-8 will move down for the next season, and the top two finishers in the NBA-22 will move up. This doesn't mean we're changing the regular season and having an 8-team league. Instead all of the teams still play together exactly like they do now, but the NBA-8 group has their own 8-team playoffs for a championship and the top-8 finishers of the NBA-22 group has their own playoffs for a championship. Notice that 16 clubs still make the playoffs, but the post-season now takes only half as long to complete, alleviating one of the biggest gripes about it.

 

A team in the NBA-8 that's fallen to 7th or 8th in their standings can still avoid relegation if they go on to win the NBA-8 championship, thus sending the 6th-place team down in their place. Similar deal with being promoted from the NBA-22; if you aren't one of the top-2 finishers but win the championship, you will move up and the 2nd-place NBA-22 finisher will remain in your place.

 

This way you have 8 teams battling each other for a championship in each tier that are basically on equal footing. Sure the Knicks or Clippers may languish in the NBA-22 for years despite having the resources to be an NBA-8 mainstay, but this is where an utter lack of front office chops will make for even more blog/sports show fodder. At the same time, franchises like the Spurs, Thunder, and Pacers will become absolute media darlings during their time up in the NBA-8, the newest Davids to the continual Goliaths, and this media attention will create more marketing opportunities for players on these teams, which further helps diminish the attractiveness gulf between them as free agency destinations.

 

But still...

A hard salary cap with a very close hard floor (e.g. $70-75 million window) will certainly help keep the Lakers and the occasional few others from lapping everyone else in the willing-to-blow-tens-of-millions-over-the-cap category. Every team must commit to spending that much money per year, or the owner must sell immediately and never return to the NBA. Billionaires can't stop lining up to acquire clubs – this won't be an issue. This hard cap/floor pairing will obviously move up as the NBA's Basketball Related Income (remember how freely fans tossed around the “BRI” term just 9 months ago?) rises each year.

 

In addition, we need to let GM's spend whatever they want on players, but a franchise can never have 2 players' salaries combine for more than 50% of the payroll, and 3 can never top 60%. I say let the GM's spend whatever they want within the window because that becomes part of the strategy for how to assemble a team. To help keep GM's accountable, no contract can be bought out in any way. The player you spent too much on totally flops and no one will trade for his 8-year deal? He still takes up a roster spot and his money is on the books as part of the payroll. He decides to retire and it's not due to an obvious and recent injury that's ending his career? He's still on the roster and on the books. The only out is for a player who sustains an obvious career-ending injury after the contract is signed that in no way is connected to any previously known injuries. You can't sign Greg Oden for 5 years and try to amnesty him because his knees go out.

 

So GM's can make any contracts they want for players within the $70-75 million cap window and the 50%-60% parameters, but they're stuck with them at that point. To help encourage teams and owners to select GM's that aren't David Kahn-esque (which happens because so many owners use their clubs as a vanity piece in their investment portfolio and only care about the bottom line and how it affects future business connections, two things team success often has little connection with), we'll implement an old Bill Simmons idea. A piece of his plan was designed to offer protection to fans against clubs that can’t get their acts together. He wanted a rule that hits the owners right in the pocketbooks if they continually give fans a bad product; non-playoff teams can’t raise their season ticket prices, teams missing the post-season two years in a row have to give 5% off renewals, and so on all the way up to 50% off if a team misses five straight playoffs. I bet that would quickly get ownership to look at what their GM’s are doing to win games, and hopefully force owners who only care about their money to do what's in the best interest of the club anyway.

 

Through some restructuring of a league that David Stern expanded way too far ($) and by putting some things in place to make GM's and teams accountable, the NBA can create a much more level playing field that doesn't continually benefit the very few who have far more advantages than the majority.

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Reader Comments (10)

Good post but one that wouldn't have been written if the NBA didn't conspire against the Lakers lat year with the CP3 deal. SMall market teams do not mean the owners are poor. Jerry Buss isn't remotely near the top of the wealthiest owners. He just spends his money to win. Maybe other owners, those worth MUCH more than BUss should do the same.

August 16, 2012 | Unregistered CommenterJamesD

An owners' net worth and his willingness to dump it into his basketball team, often just one small piece intended to help improve other parts of a much larger portfolio, are two different things. Most of these owners have teams so that they have better business connections, especially with cities and states, and could give a rip about spending more to make a winner that won't necessarily make them more money. That's a major problem when we consider competitive balance. Plus there's the fact that even if someone like Paul Allen wanted to spend as much as the Lakers, he still couldn't attract the free agents or players demanding trades to Portland, so he'd end up having to spend $1 for 80 cents worth of talent. Keep in mind that LeBron, DWade, and Bosh are all getting less than max money right now, something that couldn't happen on about 28 other teams in the league.

August 16, 2012 | Registered CommenterZachariah Blott

And the CP3 trade was shot down because a group of noisy owners called total BS on it (especially with the NBA owning the team that was willing to take a major bath on the deal for the benefit of the Lakers = humongous conflict of interest), not because the NBA/Stern actually wanted to get in the way.

August 16, 2012 | Unregistered CommenterZachariah Blott

So basically you are saying some owners get into the business not to win but to make money and enhance other businesses etc. SO why then frame the issue as "have and have nots"? The issue is why sell teams or give franchises to owners who don't make winning a priority? Your EPL model, while creative in thought, doesn't truly apply because the issue of owners who choose profit over winning is not addressed. Keep in mind just as the small market teams have gotten lucky with draft picks, so have the Lakers.

Magic,was a no brainer and yeah circumstances behind the trade to get that pick favor big markets. Worthy was a shrewd move,. LA chose "fit" over talent. Dominque was simply a better player. Kobe, west, Bynum, fisher were all passed over by 1 or more teams. These 3 players, thecore of the last 2 title teams, were all drafted 10th or lower.

The problem would best be solved by awarding teams and franchises to owners like cuban or prokorov who at least give off the appearance that winning a title is as important as profiting.

August 17, 2012 | Unregistered CommenterJamesD

@JamesD
Always good to hear your input even though we rarely see eye-to-eye, or you just like playing Devil's Advocate, since it really makes me think and justify my opinions.

The part of my article that directly addresses the profit > winning owners is Bill Simmons' idea, one of the best I've ever heard to help make a sport better for the game itself and the fans. Hit owners in the wallet who aren't helping their clubs win. But you also have super rich owners who simply won't spend the money on this one investment of theirs, assholes like Phoenix's Bob Sarver. They have a bunch of other stuff to invest in, and this one thing that lots of locals love isn't it. But these owners are spread thin and don't make their money from hoops, nor can they really, like someone like Jerry Bus who's in the right city for both hoops history and a free agency destination, so he's ABLE to make significant money back on his outrageously high investments (payrolls). So much of this comes down to what owners/franchises are ABLE to accomplish. Again, Paul Allen can dump all the money he wants into rosters, but Portland can only attract a certain level of player and will end up overspending to get decent players. They know this and eventually are beat into financial submission and stop the spending. Even San Antonio is notoriously cheap in this way despite winning 4 titles on the back of Duncan. Without having hit the Duncan lottery, they'd never have a chance to remain consistently relevant for this long like the Lakers can do fairly easily, especially with an owner who has the resources set aside just for basketball. A lot of these guys have so many businesses, they don't have the available cash to dump into basketball - it's easy to do that in the right destination cities though. There's where the massive disparity exists.

August 17, 2012 | Unregistered CommenterZachariah Blott

@Zach

As you I am an avid reader of SImmons. Been so since he was the Boston sports Guy. I saw that post and thought it was good, just like I thought your tweaks were creative. If owners are spread thin, perhaps they shouldn't be awarded a franchise.

Each city is unique and the owners who the NBA gives the franchise should demonstrate the ability to capitalize on what each market has. ANd, while no city has warm weather like Miami and LA,thoseother cities don't ]have earthquakes and hurricanes. So its all about how you sell what you have. Its also how you run an organization and treat players. Mark Cuban for example uses his resources in creative, player appreciative ways that makes his team attractive to play for.

Paul ALlen needs to develop a model that works for Portland. My guess is with the strong fan base (and the ample supply of greenery-hint, hint), nike and adidas close by, he can attract players its just going to require creativity.

I'm always reminded of baseball when Carl Pohad, twins owner I believe, used to complain about Steinbrenner spending. Pohad was worth like 3.4 billion, and complaining he was in a small market. The hypocricy is sickening.

August 20, 2012 | Unregistered CommenterJamesD

Stern has let the worst possible owners in and has allowed them to turn this into a league where profits are far more important than the product. I agree that many owners shouldn't get franchises, but an example like Cuban doesn't work well as a rule of what's possible because his team is in a super huge city that's growing at a rate much faster than other huge cities and that's in one of the fastest growing states; there are a lot of reasons a for players to feel they can market themselves there, particularly since Cuban draws so much attention, plus he's dumping tons of retirement money (so he's not just rich on paper like a lot of owners who own X% of some huge company) into making it a cool environment. His biggest franchise player ever was gotten through the draft and is a cool/loyal enough guy to want to stay, and Cuban basically overspent on a bunch of B+ players to surround him with. Other rich owners can't really mimic this unless they also draft an equally HOF-worthy player who's equally willing to stay and in a city that's at least big enough to be a real draw for marketing. Most other cities cannot even be pitched to players as well as Dallas, especially to young millionaires who like sunny weather or clubs or fast living, and Dallas only really worked because of the acquisition of Dirk. Most players don't want to hang out in Portland, Toronto, Minnesota, etc, and no amount of hyping some angle is going to change that.

August 20, 2012 | Registered CommenterZachariah Blott

So Phoenix is a 'small market' and Dallas a 'big market'?

http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population

Dude, just accept the fact that the owner and front office are what makes or breaks a team not their location.

August 25, 2012 | Unregistered CommenterArne

Small and large market doesn't just mean which place has the most people in the city.
1) Dallas metro area has 6.4 million people. Phoenix metro area has 4.3 million.
2) Dallas is growing faster than Phoenix. Not only that, of the 20 largest cities, 8 have grown by 2% or more in the past year and 6 are in Texas, and this includes Dallas and Ft Worth, which is right down the road.
3) Phoenix is a much older, whiter, and conservative city population-wise, which never does well for basketball marketing.

Dallas is a place that younger people who like the NBA can identify with (Phoenix is still seen as a giant retirement community) and it's much more on the rise in its growth and the growth of its surrounding area and state. Plus a lot of NBA players are from Texas, so there's a more logical reason to sign there than Phoenix. When you look beyond just city populations, you realize Dallas has a far better chance to attract talent than Phoenix. Add in what a dumbass of an owner the Suns have (which you're more likely to have in an undesirable NBA location like Phoenix), and they have no chance to consistently compete as a contender compared with even Dallas, who is down a few tiers from the big dogs.

August 25, 2012 | Registered CommenterZachariah Blott

Sketch of Plan for Parity:

After NBA Finals, these things happen in order:

1) Each team gets to frachise tag 5 players…these recieve good raises…

2) Veterans with more than 10 years may sign with whichever teams they chose for any size contract…

3) NBA Lottery/Draft…all rookies receive 1 year guaranteed contracts…

4) NBA Veteran’s draft…all players unsigned at this point…3 rounds for this draft…1rst round players get slight raise…2nd round salary same as last year…3rd round slightly less than last year…

5) All remaining players now sign for any team for league minimum deals…

September 9, 2012 | Unregistered Commenterulilibre

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