How Small-Market Owners Can Win The NBA Lockout

By Tom Ziller - NBA Editor

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Aug 24, 2011 - As the NBA lockout slouches toward Labor Day without a shrug of progress -- we are literally exactly where we were on June 30, except almost two months closer to the supposed start of the season -- all eyes are on the National Labor Relations Board, where a judgment in favor of players could throw this business for a loop. Or it could just wave the impasse onto the next red light, where a federal court will like be asked by the NBA to block an NLRB injunction lifting the lockout. If this thing is decided in the courts, it won't be decided until we're all far too old to remember what a basketball even looked like. Keep in mind that Oscar Robertson filed his famous lawsuit against the NBA in 1970, and it wasn't settled until 1976.

In the meantime, no matter what the courts do, someone is going to start to hurt. The conventional (and probably accurate) belief is that players will panic and begin offering up concessions as soon as they miss a few paychecks. But SI.com's excellent Sam Amick offers up another murmured suggestion.

There is one reason, and one reason alone, why the players aren't rolling over in this labor standoff: the expectation/belief/hope that the owners will be divided at some point in time. [...] The hoped-for fracture might start with Jerry Buss or Donald Sterling in Los Angeles, or Jerry Reinsdorf in Chicago, or James Dolan in New York. In the eyes of so many players and the folks who represent them, someone from a large market will eventually raise his hand and ask out of this lockout game. This owner would explain how the old system worked just fine for his team and how it's no longer in his best interest to support this cause. He would be followed by a few more of the fattest cats whose finances are just fine, and then there would be weeping from small- and mid-market owners who have dreamed of a system makeover.

Amick goes on to disavow the theory on account of the incredible unity and resolve owners have showed to this point. The Kool-Aid is strong, in other words, and the chance of a fracture public enough to give the players an opening is remote. But we can dream, right?

As we've argued in this space, the fight that is the NBA lockout is not really players vs. owners. That's a proxy battle for the fight that goes down every offseason and every trade deadline: it's owner vs. owner.

Under the current system, owners of high-revenue teams and a select few others have untold advantages over their low- and mid-revenue rivals. There are now seven NBA owners who can and will comfortably spend well more than their competitors to win: the Lakers' Jerry Buss, the Bulls' Jerry Reinsdorf, the Knicks' James "JD" Dolan, the Mavericks' Mark Cuban, the Heat's Mickey Arison, the Blazers' Paul Allen and the Nets' Mikhail Prokhorov. All but Buss are billionaires; Buss happens to own a team that just signed a $5 billion local TV deal. (It should be noted that no one has told Reinsdorf he's allowed to spend money on his basketball team in both odd and even years. But given that United Center is actually a gold factory that happens to also have a 20,916-seat gym, he'll figure it out eventually.)

These owners play by a different set of rules than the other 23. This isn't to say that the league's other billionaires -- Stan/Josh Kroenke of the Nuggets, Tom Gores of the Pistons, incoming Joshua Harris of the Sixers -- can't play the same game. This isn't to say fabulously wealthy Herb Simon (Pacers) or Glen Taylor (Timberwolves) couldn't join the spendthrift club. But they have shown no inclination to do so, and owners of sports franchises don't usually get more generous with their money over time. The opposite happens. (Note that there are a couple of borderline cases -- Rich DeVos in Orlando, for instance -- that have spent enough in certain years to merit consideration for the high-rollers club. DeVos and Wyc Grousbeck of Boston are judgment calls, to be sure.)

So those few owners who might actually want to field a season? They are severely outnumbered by one-shy-of-two-dozen who, to a man, have huge investments in getting a brand new economic structure for the league. The aforementioned Grousbeck is said to be one of the fiercest advocates for playing hardball ... even though he has a team with one more season left in it. The new owners -- there are seven from within the past two seasons, six if you set the terrifyingly rich Prokhorov aside -- either bought into the league at premiums while expecting a more profitable future, or bought debt-ridden teams that could very well have been underwater at the time of sale. (Like Mike.) 

And then there are the small-market owners. There's some overlap: the Blazers are No. 21 in the NBA in market size, No. 22 for the United States overall, but Paul Allen spends like he's a Steinbrenner. Michael Jordan and his Bobcats fit every low-end category you can find, from "unsuccessful" to "unpopular" and "unprofitable" to "probably unsustainable." On the balance, these owners have more to gain from a new economic system than any other subgroup of owners. The Lakers will always be profitable. But a downward shift in the players' revenue split and a harder cap? That's the difference between profitability and losses for a lot of these teams. 

Here's the twist: even if the owners are tightly committed to making the players squeal through November and December ... those big money owners are still going to want to find a way to end this lockout before ending this season. Jerry Buss can count the number of remaining opening nights he'll have Kobe Bryant for on one hand; Arison can do the same for the LeBron-Wade duo. Dolan's shareholders just spent $850 million to rebuild Madison Square Garden. Mark Cuban finally has a championship to defend. Mikhail Prokhorov has one year to convince his superstar to stay (and help recruit a second superstar). Jerry Reinsdorf finally has a true heir to Jordan. The time is now for these owners, for their teams.

But the other 20 or so owners, many content to wait it out? Now they have the leverage. Now they have the hurting players and the high-revenue owners begging for resolution. For once, the little guys -- and I use that term as loosely as metaphorically possible -- have all the power.

It's at this point that the less-blessed (by will or circumstance) owners exact their pounds of flesh ... from the players and the high-dollar owners. That probably means a hard cap, that probably means something close to a 50-50 revenue split. If the quiet majority is smart, it also means a robust revenue sharing program and stronger protections helping teams keep homegrown talent. Keep in mind that Taylor (Minnesota) and Peter Holt (San Antonio) have the most powerful positions on the Board of Governors and David Stern's ear. This is the best chance the "little guys" of the NBA's ownership ranks have of getting a more favorable system in place. If they play their cards right, and if the players don't cave early, they'll have it.

The Hook is an NBA column that runs Monday through Friday. See the archives.

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