One of the causes for this current NBA labor dispute is the inability of small market teams to remain profitable.Â A soft cap that was tied to a luxury tax incorporated into the previous collective bargaining agreement has not generated the kind of revenue sharing between small and big market teams that the league imagined.Â Instead of a level playing field, teams such as the Knicks, Lakers and Mavericks have been able to spend as they see fit for the best talent available, or in the case of the Isaiah Thomas era Knicks, the most dysfunctional talent available.Â Owners and players alike agree that changes are needed, but the two sides are miles apart on exactly who should bear the brunt of responsibility for these changes.
I’ve long been an advocate of contraction, something unlikely to occur.Â Now I would like to offer another prescription for the NBA’s economic woes.Â It’s time that the league consider abolishing the rule that prohibits active players from becoming part-owners of a team.
Comprised of about 400 players the NBA is a small league compared to its counterparts Major League Baseball and the National Football League.Â NBA players are more recognizable than their peers in other sports and a dynamic player is infinitely more capable of transforming a team’s fortunes in terms of ticket sales and victories.Â Think about how many promising young quarterbacks whose careers were derailed because they played behind poor offensive lines.Â Compare that with the sellouts enjoyed by the Raptors at the Air Canada Center during Vince Carter’s tenure even though most of those Raptors’ squads were middling at best.Â Fans flocked to see Carter play in ways that NFL fans in say, Carolina, would never flock to see David Carr–or Indianapolis fans to see Peyton Manning were he not leading them to the playoffs year after year.
The NBA is as much a white shoe law firm as it is a sports league.Â NBA players are key revenue drivers, or to continue the law firm analogy, NBA players are the ones who bring in the clients (fans) to the arena.Â One way that law firms retain their top lawyers is by making them partners.Â Law firms do this not only as a way of acknowledging the work done by a particular attorney, but to also ensure that they don’t strike out on their own as their client lists build up.Â And in turn, lawyers accept these offers to become partners because it saves them the costs that they’d incur if they started their own firms.Â Under the current system NBA teams provide their attorneys (the players) with a great platform to build up their client rosters (i.e. endorsement deals) but can’t offer them anything beyond a higher salary when a player decides he wants to take his services elsewhere.
Take last year’s LeBron saga.Â One of the supposed drawbacks to staying in Cleveland was that LeBron could make more money in endorsements by signing with the Knicks or Bulls.Â More endorsement money for LeBron didn’t necessarily translate to more revenue for the Cavaliers, and vice versa, continued high octane ticket sales also wouldn’t translate to more money for LeBron.Â Did it really make sense to limit the Cavs to being able to pay LeBron as much as Atlanta paid Joe Johnson?Â LeBron is infinitely more valuable to the Cavs than Joe Johnson is to the Hawks so why should he be held to the same standard?
What if Cleveland had been able to offer LeBron a 3% ownership stake in the franchise, a 5-10million dollar cash investment in his branding firm LMR, and HR/back-end support for all of LMR’s ventures as long as LeBron remained a Cavalier.
Granted, there’s no guarantee that LeBron would have taken this offer, but if such a deal had been on the table, it would have made things more interesting.Â After all would Miami have been able to afford LeBron, Wade and Bosh if Cleveland and Toronto had been able to extend such lucrative options to their marquee players.
Who knows, maybe LeBron works out a deferred compensation package with Cleveland, and lures JoeÂ Johnson or Ray Allen to help him in his quest for the title.
As it stands now the current NBA salary structure is incapable of really addressing a player’s value to a particular team or franchise.Â The problem isn’t that Gilbert Arenas or Rashard Lewis make 17million dollars a year.Â No, the problem is that teams are hamstrung in their ability to appropriately compensate the players who are its economic engines. Moreover, teams continue to see every player simply as an employee when clearly there are a handful of players who are not simply employees, and for whom an argument can be made that they deserve to be partners in their respective franchises. Â Its unconscionable that Kobe Bryant wasn’t consulted by the Lakers before they decided to hire Mike Brown.Â Bryant didn’t deserve to have the final say, but he did deserve to have a say, as did Derek Fisher, Pau Gasol and Lamar Odom for that matter.
But maybe Bryant prefers to be a Laker employee and would rather not integrate his other ventures with the Lakers brand.Â There are other players, namely Dwyane Wade, who has shown an interest in being a manager and recruiting talent for their teams.
Ironically, the biggest drawback to this proposal is not that it would create another salary-tier among players but rather that given the financial straights of many NBA franchises a player is better off simply accepting the max-contract than venturing into an ownership stake.Â Really, would you flock to become part owner of the Kings right now?