Maybe it truly is a broken system. Maybe there is not much of a way to make money in the NBA anymore. The Charlotte Bobcats have already switched majority owners once and the guy who still makes more money than anyone in the NBA, 8 years after he retired, isn’t making any money with this team. There are teams making money, but they’re in the 4 big cities we have in this country and the other teams making money have won championships, have all the best players or don’t have any competition. Everyone else suffers.
I want to think that the ones who aren’t making money are either really bad at and unsuited for owning a pro basketball team or they can afford it. I don’t know if that’s the case really. Like the Clippers, for example. Their owner seems to be a real jerk; they’ve won the Draft Lottery 3 times; they’re in Los Angeles, the 2nd biggest media market in the country; they have only made the playoffs 7 times out of 40 years! That has to be inept management, but because they’re in Los Angeles, they make money somehow and float along in the league throughout the years.
Then there are the Paul Allens, Micky Arisons, Mark Cubans, Mikhail Prokhorovs, Richard DeVoses, Stan Kronke, Tom Gores and so on that literally have an NBA team on the side for fun. It’s not that they like pouring money down a black hole that is an NBA franchise, it’s that they can, if they want and it doesn’t hurt as bad. Then again, none of those guys got where they are by sheer luck; most are good businessmen but they can afford to have a team have some losing years. If you look at those that made the list of Forbes richest in the United States, 12 owners made the list and only 4 of those didn’t make the playoffs last season. Those 4, Cavs, T-Wolves, Clippers and Pistons, have had success and/or are set up for success.
When I talk about teams who have no competition that are making money, I think of Portland, Oklahoma City, Memphis and San Antonio. They don’t have other major sports teams in their cities to compete for the luxury box purchases of companies or season tickets or rabid sports fans in the area.
There are the teams who have had success and are recession proof because of those fans who were rewarded for years and will continue to come back because they are attached to these teams. By those I mean Boston, the Lakers (Clippers, same arena, don’t have success like them), Dallas, San Antonio and Detroit.
Owners are attached to their cities and their businesses. Even for Paul Allen, the Trailblazers are a business and a major part of his life. You can contrast that to the players.
The players come in, they sign guaranteed contracts before they play a game and then have a set amount that acts as a starting point if the team wants to re-sign them; they play and make money, a whole lot of money and yeah, they give up their bodies, their life, move away from family or uproot them whenever they’re traded or contract ends and that’s what they were born to do, but they walk away at the end of their stint with millions and millions of dollars.
If you’re an NBA owner, there is no guaranteed contract. In the model from the past 20-30 years, from the expansions that brought about the Charlotte Hornets, Miami Heat and Orlando Magic, the cities there built arenas and the teams were their tenant. For the Bobcats, they’re locked in for a 30 year contract. If the team were to break that contract, they’d basically have to pay for the team twice. They reap the benefits but are obligated to pay players no matter the results. An NBA owner is beholden to the city they operate in, the fans that support them, the league (other owners) and the players and their union. Players just play; not to trivialize it but that’s what it is, they show up and use the equipment, get the training they need (physical as well as educational), all provided by the owners. They pour their heart and souls into it, but players are transient.
Maybe there isn’t a good way to make money if you’re not the Knicks, Bulls or Lakers. I don’t know but I’m starting to picture a show I saw on CNBC about franchises, of all sorts, but mainly food related. I remember there was a particular ice cream chain that would demand that the owners of franchises, once they bought in, buy more equipment and supplies than they could use and then say “Go make us some money,” but would offer little support otherwise. I think this is what the NBA did with several teams in the late ’80s, up until today. “We’ve got this great product! Your city wants it! You can make money! Buy in and you’re the man!” Starting with George Shinn, the Magic’s initial group of the Hewitts and William duPont and the Arisons in Miami and Marv Wolfenson and Harvey Ratner up in Minnesota, NBA Commissioner David Stern might have started a weird trend that has things upside down today.
I’ll continue this look at the ownership and the league side of the lockout tomorrow. Then we’ll follow that with the players side in days to come.
Andrew Barraclough is Senior Editor for RobertoGato.com, a Charlotte Bobcats Blog on the Fansided Network. Follow him on Twitter @therobertogato and Like the site on Facebook.