Tag Archives: David Stern

Gladwell on what’s wrong with the NBA

In Grantland, Malcolm Gladwell (the patron saint of jordoncooper.com) writes,

And let’s not forget Mikhail Prokhorov. How does he feel about buying into the financial sinkhole that is professional basketball? The blog NetsDaily recently dug up the following quotation from a 2010 interview Prokhorov did with the Russian business newspaper Vedomosti:

"We have a team, we’re building the arena, we’ve hired professional management, we have the option to buy into another large project, the building of an office center. For me, this is a project with explosive profit potential. The capitalization of the team will be $700 million after we move to Brooklyn. It will earn approximately 30 [million]. And the arena will be worth around $1 billion."

Let us recap. At the very moment the commissioner of the NBA is holding up the New Jersey Nets as a case study of basketball’s impoverishment, the former owner of the team is crowing about 10 percent returns and the new owner is boasting of "explosive" profits. After the end of last season, one imagines that David Stern gathered together the league’s membership for a crash course on lockout etiquette: stash the yacht in St. Bart’s until things blow over, dress off the rack, insist on the ’93 and ’94 Cháteau Lafite Rothschilds, not the earlier, flashier, vintages. For rich white men to plead poverty, a certain self-discipline is necessary. Good idea, except next time he should remember to invite the Nets.

Gladwell says in this piece that owning a NBA franchise is not an investment but rather a luxury good.

The rationale for the NBA lockout, from the owner’s perspective, goes something like this. Basketball is a business. Businesses are supposed to make money. And when profits are falling, as they are now for basketball teams, a business is obliged to cut costs — which in this case means the amount of money paid to players. In response, the players’ association has said two things. First, basketball teams actually do make money. And second, if they don’t, it’s not the players’ fault. When the two sides get together, this is what they fight about. But both arguments miss the point. The issue isn’t how much money the business of basketball makes. The issue is that basketball isn’t a business in the first place — and for things that aren’t businesses how much money is, or isn’t, made is largely irrelevant.

Basketball teams, of course, look like businesses. They have employees and customers and offices and a product, and they tend to be owned, in the manner of most American businesses, by rich white men. But scratch the surface and the similarities disappear. Pro sports teams don’t operate in a free market, the way real businesses do. Their employees are 25 years old and make millions of dollars a year. Their customers are obsessively loyal and emotionally engaged in their fortunes to the point that — were the business in question, say, discount retailing or lawn products — it would be considered psychologically unhealthy. They get to control their labor through the draft in a way that would be the envy of other private sector owners, at least since the Civil War. And they are treated by governments with unmatched generosity. Congress gives professional baseball an antitrust exemption. Since 2000, there have been eight basketball stadiums either built or renovated for NBA teams at a cost of $2 billion — and $1.75 billion of that came from public funds. And did you know that under the federal tax code the NFL is classified as a nonprofit organization?  Big genial Roger Goodell, he of the almost $4 billion in television contracts, makes like he’s the United Way.

But most of all professional sports owners don’t have to behave like businessmen. For every disciplined and rational operator like the Patriots’ Robert Kraft or Mark Cuban, there is also someone like Washington Redskins owner Dan Snyder. Snyder was a brilliant entrepreneur, who at the age of 36 sold Snyder Communications — the marketing company he built from scratch — for an estimated $2 billion. He has subsequently run the Redskins like a petulant 14-year-old fantasy owner. Snyder Communications was a business. The Redskins are a toy. The former he ran to solely maximize profit. The latter he runs for his psychic benefit — as a reward for all the years he spent being disciplined and rational. And it is one of the surreal qualities of professional sports that they are as welcoming and lucrative for those owners who chose to behave like 14-year-olds as they are of those owners who chose to behave like grown-ups.

The Financial Times recently interviewed Diego Della Valle, the chief executive of the Italian luxury goods manufacturer Tod’s. Della Valle owns the celebrated Italian football club Fiorentina. "I ask if the decision to buy the club was made from the heart, or for business reasons," the Financial Times interviewer writes. Della Valle replies: "With football, business reasons don’t exist." Exactly.

If Bill Simmons Ruled the NBA

From Grantland

Greed in its rawest form. That’s the National Football League’s lockout. Both sides were like two billionaire drug cartels splitting up a massive cocaine shipment who got pissed off and just started shooting each other. "You took too much! I saw that!!!" They will settle next week and slink into the sunset with their kilos. We’ll forgive them immediately because we love football and just want our Sundays back. The end.

Stubbornness in its rawest form. That’s the National Basketball Association’s lockout. The owners want to "fix" the system without actually fixing it. The players want everything to remain the same even if that "same" makes no sense. Both sides spent the past few weeks poking holes in each other’s arguments, leaking unflattering tidbits to trusted writers and excreting code-word spin control BS like "we’re unified" and "we’re in this for the long haul." I never heard anyone say the words, "Hold on a second … what’s really wrong here?"

If you are a basketball fan, it’s a must read.  Also, check out this post on the New York Times calling into question the leagues cries of massive losses.

The week in bad ownership

In a week where the Washington Football Club/Racist Nickname asked the Washington Post to rename a sports news blog that covers the team and you also have Jerry Jones trying to intimidate the union in negotiations which lead them to decertify and sue the league, you would think the NFL would be a lock for bad owner of the week award.  Not even close as the NBA trumps them all with not only a worse owner but a commissioner that allows it.

Dan Snyder (while amassing billions) just comes across as incompetent.  Donald Sterling and his chief enabler, David Stern come across as worse. Here is how Yahoo! Sports Adrian Wojnarowski sees it.

Stern has long preached that coaches are too expensive, scouts too plentiful and perhaps no one has heeded the commissioner’s words like the Los Angeles Clippers’ owner. He has a history of hiring them cheap, and refusing to honor contracts. The NBA has a history of letting it go without protests.

Yes, Stern’s silence and inaction on Sterling’s despicable behavior has to be considered as some level of approval. Now, Kim Hughes tells the story to the Racine (Wis.) Journal-Times about how Sterling didn’t pay for his prostate cancer surgery as a Clippers assistant coach several years ago. Clippers players contributed much of the $70,000 needed to take care of the costs that weren’t covered by Hughes’ medical insurance.

And once Sterling fires those coaches and scouts, he often stops paying the balance of their contracts. He dares them to sue. Some can, and do. Some can’t afford the legal fight and end up settling for pennies on the dollar.

This happened with scouts Scott Wissel and Jerry Holloway a year ago. They made less than six figures a year, and the Clippers simply stopped paying them. Essentially, Sterling was telling them, “The season’s over, and so what if your deal runs October to October. It’s April, get lost and we aren’t paying you.”

Eventually, Holloway won a settlement, and Wissel had to fight more than a year to get part of his money. Where was the league office? Where was Stern’s indignity?

Then Stern goes off on Stan Van Gundy who is trying to figure out why his star player gets fowled 593 times this year.  Stern uses this as an excuse to chastise Van Gundy and publically humiliate him

Off to Stern’s Siberia. Stern wouldn’t stop there, because he gets such a charge out of humiliating those under him. Taunted Stern, “I see somebody whose team isn’t performing, whose star player was suspended, who seems to be fraying.”

No commissioner has ever been so emboldened to speak this way. Yet now, so much of Stern’s staying power is built on a far more flimsy baseline. Respect has eroded for him, replaced with fear and loathing.

“It’s a divisionary tactic to take away from the 593 fouls without a flagrant,” one long-time league executive said of Stern’s rant on Van Gundy. “The question is: Do you have to be mean and a bully to be a commissioner? As he’s gotten older, he has become more mean-spirited, and it shows in how he deals with his own staff, coaches and with the new-age owners.”

When Stern goes to Orlando’s ownership group, he knows it’ll soon be wondering how much of an impact Van Gundy’s mouth will have on Howard and the Magic in the playoffs. Teams tremble over retribution from Stern and fear it in the form of officiating.

Big and small markets. Winning and losing franchises. Great and lousy general managers and coaches. Old and new owners. They all agree: Don’t push Stern too hard because there will be a price to pay. Better off bowing, kissing the ring and shuffling past him.

In case you haven’t heard of Donald Sterling before, here are just some of the recent stories.  The recent stories about him grow more horrifying with each new revelation but don’t worry, there are a variety of stories from the past that seem to confirm an ongoing pattern and yet this man is allowed to own a NBA team when no other league on the continent would find his actions permissible. Well done NBA, well done.