Accept this fact: The NBA isn't the Real World

The "Basketball for Thought" is a commentary by Kris Gardner.

October 1998

The rhetoric being bandied about by both sides in the NBA labor dispute is bordering on the absurd. Recently, NBA Deputy Commissioner Russ Granik proclaimed, he was "bowled over" that the players' association stated they couldn't meet for nine 9 days. Russ, give me a break. Commissioner David Stern postponed any possible meetings in August because he wanted to go on vacation for about 10 days! Lately, both sides are mentioning the possibility of no season whatsoever. This may be posturing by both sides; but, get an agreement because this is ridiculous.

The owners insist on a hard salary cap while the players refuse to accept a hard cap. Let's cut to the chase: a hard cap is not going to guarantee cost certainty. If anyone believes that, go look at the NFL. The NFL';s salary cap is "hard" in the sense that teams aren't allowed to exceed it; however, teams with creative financial people utilize loopholes such as prorating signing bonuses over the length of a player's contract even though the player receives the money up front. As a result, each season teams ask their star players to take "pay cuts" in order to have enough money to sign rookies or re-sign key free agents. The base salary for the stars may decrease; but, they still receive their money.

Surely, it can be assumed, if some sort of hard cap is instituted in the NBA, agents or creative financial planners for some NBA teams will find similar loopholes. No matter how much David Stern tries to reach a new agreement which eliminates any possibility for loopholes, someone will find or create other loopholes.

The big market NBA owners don't really care about the smaller market owners. Yes, a salary cap levels the playing field in theory; however, the reality is teams with large streams of revenue (re: the Bulls, Knicks, Lakers, etc.) have a greater ability to sign star players than, say, the Bucks, Kings, or Clippers. Agreeing to a hard cap won't change that fact.

The NBA is not the real world no matter how badly owners, players, and fans try to rationalize it to suit their specific cases or arguments.

In the real world, competition is a good thing. However, supply and demand and the market dictate economics. Consequently, if a business can't compete, the owner must either declare bankruptcy, fold the company, or sell to a competitor. The NBA is not going to allow teams to fold and David Stern frowns very strongly on owners trying to relocate franchises. Why?

Expansion fees. The latest expansion teams, Vancouver and Toronto, each paid $125M to join the league which the existing owners gladly split amongst themselves. Despite paying the huge entry fees, neither team was allowed to have the top pick in the Draft nor operate at 100% of the salary cap until this coming season (if there is a season). The NBA hasn't had quality depth in 10 years and the quality of play has declined accordingly.

The owners aren't going broke and I doubt 15 teams lost money last season like the owners' side claims. Obviously owners are taking more risk than the players by running and operating franchises; however, let's be realistic: Stern and Granik can state the players are incorrect on their claims owners are asking the players to help them from themselves; but, the bottom line is the owners write the paychecks.