8.07.2008

Gin For All Relatives



I don't think LeBron will go to Europe. Even after the $50 million. And even after the revelation that part ownership could be an option. But as Ballerblogger observes, "If the NBA's collective bargaining agreement allowed it, you can bet that James would negotiate an ownership percentage in the Cavs, or the soon-to-be Brooklyn Nets, or the New York Knicks."

Maybe the NBA would be willing to go without a superstar (or two) for a year (or two). It would be a rotating vacation plan, with players drawn overseas for a variety of reasons—in addition to the money of course. Kobe as the internationalist, Bron the businessman, Melo, in a bizarre version of staying real, going where his game fits best. What fascinates me, though, is that this could bring about a change in the CBA to make stars richer—and empower them—without destroying the salary cap system.

Step back for a second, factor in his invention of the three-year max deal, and all of a sudden LeBron not only the most supernatural figure since MJ, but one whose singificance involves an entirely different order of innovation. Because, let's be honest, "the next MJ" was only ever so much about on-court style. LeBron plays nothing like Jordan; the issue has been finding a player whose off-court stature didn't just seem like a reasonable facsimile of the man himself.



When I wrote about the eschatology of 2010, it was partly based on LeBron's aura on the court, but also how large he loomed in the league's economics. But I don't think I did enough to emphasize how intentional that economic impact was.

James may be messianic in that vague, "Basketball Jesus" sense (in retrospect, doesn't Ray Allen's acting job seem more about LeBron than anything Ray ever was?), or in the ways he alters the formal parameters of the game. Increasingly, though, I've begun to think of him as that kind of figure when it comes to the business of basketball. Hired his boys when everyone said it was stupid. The mini-max. And now Europe, which could be about money—or it could be about altering domestic revenue streams for athletes. Whose to say this couldn't become the model for many, or all, players, not just LeBron or Kobe? That's how Vitamin Water so easily recruited all those celebs; it's not unsustainable in the way that cap-less mayhem—here or abroad—is. And the best part is, it's at once uber-capitalistic and vaguely socialist.

It's funny that, as we're all busy trashing Bron for his lack of balls on the world stage, he's showing he's nothing less than a reformer when it comes to NBA labor practices. Thinking outside of the box and willing to go right at the CBA. That may be a rose-colored, overly generous version of things, but the potential's certainly there. And for LeBron to lead, all that has to happen is for others to follow.

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18 Comments:

At 8/07/2008 6:53 PM, Blogger R. Lobstah said...

"it's not unsustainable in the way that cap-less mayhem—here or abroad—is. And the best part is, it's at once uber-capitalistic and vaguely socialist."

I may be getting your reference wrong here, so please correct me if I did. I'm assuming that you are associating the NBA players with labor and in bargaining for ownership stakes you are referencing the labor's control of the means of production.

Your position still leaves the coaches, scouts, marketing, sales and bean counters out of the ownership equation. So, we still have social stratification.

In this case you have the elite players becoming members of the ownership elite and all of them still subservient to the broadcasters. Maybe LeBron can buy stocks in Viacom and become part of that elite, too.

I don't see how a middling talent can hold out for ownership stake.

At what point does ownership become so spread out that company policy and planning become convoluted (Atlanta Hawks). My guess is that ownership stake and salaries would become untenable sometime before the bean counter gets stock options in his contract.

I'm thinking this is very, very, very vaguely socialist. I would respond to some of these issues with seeing how players like having non-guaranteed contracts.
That would be uber-Capitalist.

 
At 8/07/2008 7:19 PM, Blogger Bethlehem Shoals said...

It's a slippery slope. If Europe offers it, and better money, and can tempt or be used as leverage with LeBron, why couldn't they with, say, the 2012 equivalent of Antawn Jamison? And then, if the NBA really decided that was the best way to stabilize its talent base, then it would be like stock options.

 
At 8/07/2008 9:23 PM, Blogger BallerBlogger said...

One thing I failed to mention is that the Cavs, Nets, or Knicks would be foolish not to offer him equity in their teams if that's what it took to get him in uniform. But if teams began to offer ownership percentages, then they'd almost certainly have to sign players to career binding contracts.

Cheers.

 
At 8/07/2008 9:32 PM, Blogger Bethlehem Shoals said...

That's true, unless they were basically stock in the team, and could be liquidated or converted if the event of a trade.

But practically speaking, you're right about the lifetime contract thing. On the surface, that makes it the opposite of the short-term max deal. Then again, both give the player more power.

 
At 8/07/2008 10:51 PM, Blogger R. Lobstah said...

I don't think it gives the player more power if all the players start getting ownership. Who takes the lead then, the owner with 40% coupled with two or three players that make up another 11% against a Lebron with 20% and some of his players who have their %? Getting paid by a secure company is more empowering then owning a floundering one. I can see the situation getting ugly fast.

 
At 8/07/2008 11:21 PM, Blogger Joshua R said...

Getting paid by a secure company is more empowering then owning a floundering one. I can see the situation getting ugly fast.

Indeed. Especially in that all teams are not equally profitable. Take Memphis for instance - they're losing money to the point that they have to shed payroll. Sharing in team ownership would seem to benefit the very rich (the Lakers, the Knicks, potentially the Nets) the most, with some kickback for middling teams and a rock bottom of Heisley lead crap floundering. Sounds kinda familiar actually.

 
At 8/08/2008 1:35 AM, Blogger Walton's Wisdom said...

I wouldn't be surprised if the NBA instituted some sort of profit-sharing system in the near future. Stern, in spite of all his annoying tendencies, is an innovator of sorts. He embraced the globalization movement wholeheartedly -- and while you could argue that MLB had an influx of foreign players long before the NBA did, the Association is leaps and bounds ahead of its American professional counterparts in terms of international appeal growth rate.

I wouldn't be unhappy profit-sharing came into play. After all, it's the players who put fans in the stands and generate the revenue for their franchises. I don't see a problem with them reaping the benefits of growing fan bases and escalating merchandise sales. Further, as success leads to interest (and revenue) wouldn't the variability tied to profit-sharing give players further incentive to win?

 
At 8/08/2008 2:54 AM, Blogger R. Lobstah said...

"After all, it's the players who put fans in the stands and generate the revenue for their franchises."

I thought the ushers put the fans in the seats. How about the marketing department? What about the people who financed the building of the arena? What about the people who built the seats? What about the people who broadcast the games? What about the camera guy. If not for them, the players would have no venue, no seat, no coverage, no interest. No business is begun if the owner, the one who took the risk in the first place, the one who had to hustle deals, get the money together, foster interest, go through the fallow period etc... that person does not go through the struggle if he knows that one day he'll have to hand his company to the jonny come lately workers.

Its the franchises who generate the interest in the players.

 
At 8/08/2008 10:40 AM, Blogger avery said...

@ Lobstah:
It works both ways, right? if you had the right guy in the right situation, he'll be your biggest marketing force...look at B. Davis in new orleans. Talented guy, didn't want to be there, almost killed the franchise, after shinn almost killed it in charlotte as an overbearing mobster to the public.

 
At 8/08/2008 12:21 PM, Blogger Browny said...

Beth,
I hate to say it but you have over thought this one. Lebron is not the reformer, Childress was, Lebron merely addressed the possibility of pursuing options that were made available by someone else (Childress). Assigning genius to an anticipated action is at once presumptive and speculative. It is akin to applauding an expected crossover dribble before it is executed based on the assumed audacity of the ball handler.

 
At 8/08/2008 12:37 PM, Blogger Z said...

In the sense of physically pointing someone to their seat, yes, the ushers put fans in their seats. Anybody can do that. Same goes with the marketing department, the camera guy, broadcasters, etc. Lebron, and a handful of others, make it all possible and a lot less risky though.

Allowing for player-ownership could get real tricky, real fast. Only a handful can create the kind of interest and revenue that would allow them to ask for it, but even then only in certain situations.

Without Lebron, where would Cleveland be? Would Dan Gilbert have taken the risks, hustled deals, gotten the money together to purchase the Cavs is Lebron hadn't made them arguably the leagues biggest draw? Certainly, Lebron could ask for ownership in that situation, but with the Knicks? They're the highest valued team in the league, even in their current state. Or the Bulls, the most profitable team in the league for several years running, even in their post-Jordan years. What incentive would they have to give a player, even one like Lebron, ownership if they can be obscenely profitable without him?

Each team is built differently. The Cavs should offer Lebron majority ownership. Paul Allen has allowed The Blazers to rely on Pritchard. Built around young talent, no one player could reasonably expect ownership on a team built around upwards of 6 core guys.

My point was that it could get real confusing real fast, and as I've already talked my way through multiple arguments for and against player-ownership I think I've proved it. I'm lost.

 
At 8/08/2008 12:49 PM, Blogger Z said...

*money together to purchase the Cavs IF Lebron hadn't....

 
At 8/08/2008 2:16 PM, Blogger R. Lobstah said...

Z,
I get your point regarding what LeBrin brings to Cleveland and how that could, maybe even should, dictate what he can get out of ownership. Majority ownership? I guess the market might dictate that as well but I doubt he'd be able to negotiate a takeover of the Cavs.

 
At 8/08/2008 2:28 PM, Blogger Walton's Wisdom said...

Lobstah,
I certainly get what you're saying, but I still believe that teams will never sell tickets or merchandise without having marketable players in the first place. Marketing campaigns may bolster sales to some degree, but I'm fairly certain Lebron and others would sell jerseys and tickets regardless. That said, it's team management that signs those players and by no means should a smartly-constructed team be overlooked.

I know profit-sharing could get tricky, but it's food for thought nonetheles...

 
At 8/08/2008 2:44 PM, Blogger Z said...

Lobstah,
Majority ownership was meant to be a joke, but in the case of that franchise it's kind of reasonable.

Walton,
Do you (or anyone) know how the CBA is structured in terms of profit-sharing? I know nothing about it, but is there anything built into it for the union to get a share of profits for retirement, benefits, etc?

Obviously, players generate a bunch of revenue, and get paid handsomely, but they're locked into their deals, aside from performance-based incentives. Maybe the next step is incentives based on a teams profitability, provided you hit performance incentives as well (# of games played).

 
At 8/08/2008 2:54 PM, Blogger Browny said...

What if the team is operating at a loss, will the players be willing to share that as well?

 
At 8/08/2008 3:24 PM, Blogger Walton's Wisdom said...

Z: I'm no expert on the CBA, but I know that the majority of benefits (e.g. pensions, medical, etc.) are funded by the NBA teams themselves. I believe each team remits $1.1M annually to the NBPA to fund these benefits programs. I'm not positive, but I don't think any of the benefits are funded directly through profit-sharing. If you are interested, the NBPA website has the agreement in its full text available at http://www.nbpa.com/cba.php . This is a huge document that is somewhat difficult to navigate, but probably has all the info in it.

Browny: Good question about the sharing of operating losses. What may make sense is to offer players their base salaries plus "stock options", similar to employees of corporations. These options would have fixed strike prices of sorts, whereby they could be exercised only if the team reaches stated levels of profitability (since NBA teams do not have publicly traded stock with market-driven values). In other words, players would not be penalized if profitability was not achieved, and these options would be "in the money" if profitability occurred. I would only advocate such a system if the "options" represented a relatively small portion of their overall compensation package, as a pure profit-sharing system would have to be structured like corporate stock and employees (players) would share in the risks associated with ownership.

 
At 8/08/2008 5:21 PM, Blogger R. Lobstah said...

I'm pretty sure you're all aware of Magic's use of "we" when talking about the Lakers. LeBron got beat to the revolution considering that Magic did get a share of the Lakers. It was all under the table and had to wait until he retired, but there is that.

Granted the league managed to sell more merch once the Jordan era came and the obvious connection to Jordan's charisma as selling tool is made. Some analysts like to credit satellite and cable technology for the opportunity Jordan, Nike and the NBA had to spread their brands and consider it likely that any very charismatic super-star could have made the contributions that Jordan did if he wasn't there to do it. That said, the league was pretty healthy through the 80's when it was marketing teams rather then individuals.

What happens if another Yao comes through and the Chinese (CBA) team, with the backing of the Chinese State, decides to hold him out until they can get some shares in the team who drafts him? Yao does have to pay his Chinese team a share of his salary. So, why not a share in the team? Suppose they can't get a Knicks, Lakers or Boston to agree to give up ownership and but now you have added leverage for syndacits (The State, the Chinese Team, the player, his team), rather then individuals, to make what amounts to hostile take-overs of teams. The NBA wants the China market. It wants to keep the Chinese government happy, they need a player to appeal to that market and certain teams (granted ones not likely to get a high draft pick) are given to the wolves. There are many permutations of this ownership free for all.

How the hell did I turn into a conspiracy advocate?

 

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