“It’s not practical, possible or prudent to have a full season now. We’re going to have to recalculate how bad the damage is. The next offer will reflect the extraordinary losses that are piling up now.”
–NBA Commissioner David Stern
“Derek [Fisher, NBA Players’ Union President] and I made it clear that we could not take the 50-50 deal to our membership. Not with all the concessions that we granted. We said we got to have some dollars.”
–Union Executive Director Billy Hunter
Pity the poor multi-millionaires, on both sides. For 20 months, they’ve dickered, postured in public, and agreed in secret to dicker again. Talks broke off again last Friday—the second time in eight days—after the owners insisted on a 50-50 split of “basketball related income” (“BRI”—compared to 41-59 under the Collective Bargaining Agreement that expired July 1) and a hard or “flex” cap on player salaries.
Meanwhile, in general, their fans are turning, in disgust, to the NFL and possibly—perish the thought—“minor” sports played everywhere else in the world. Here in Sacramento, the stalemate threatens to deprive our Mayor, Kevin Johnson, a former NBA player, of his most hype-able—some would say singular, as in not plural—achievement on which to run for re-election next June: keeping our NBA Kings from leaving for Anaheim or Las Vegas. (His term paper on the nut and vig necessary to provide a new, downtown arena to mollify the league and owners is due in March. A shortened or lost season, with accompanying lost revenues, would make that problematic.) My lobbyist confreres prepare to mourn the potential loss of a staple client divertissement when in town—suite seats. While the overall entertainment value of watching a losing team play can be questioned, it beats the Hell out of sitting around drinking, answering questions, and being asked to speculate on risk and failure.
With each passing press duel, the image of the league and its principals, suits and shorts alike, are tarred a little more. If this keeps up much longer, they’ll wind up sandwiched somewhere between investment bankers and Members of Congress by Christmas.
While the Joint Select Committee on Deficit Reduction prepares to report, I thought I’d lend a hand. Like Chris Farley in Tommy Boy, I…have…a…plan.
After a careful S.W.O.T. analysis (it was cheap but effective, since I served as my own facilitator), I propose a year-long program of collaborative, locally-based infrastructure renewal, beginning now and enduring through at least next September, called the National Building Administration, or NBA.
Here’s what we know:
Operating an NBA franchise is, at present, mostly a losing proposition. Last season the league’s teams paid $2.02 billion in salaries. That’s against television revenue last season of a billion, give or take; $1.2 billion from licensed products; and the rest from ticket and concession sales and other associated receipts. After other expenses, the bottom line for 2010-11: 22 of 30 teams had combined losses of $300 million, due to two factors: lack of revenue sharing among large and small market teams and the players’ “soft cap” salary structure and BRI share under the expired collective bargaining agreement (CBA).
- Under the expired CBA, the NBA owes $6.5 billion in BRI to its players, which adds up to roughly $18,129,005.53 per player in the league today.
- Traditional collective-bargaining Kabuki theater or not, even if the parties come to agreement on “systemic” changes to the agreement, it’ll likely take a month to jump-start the remainder of the season. (That’s based on most recent lockout experience.)
- Players stand to lose $340 million in salary payments, just for November.
- Together, the leagues and clubs have cut 400 jobs in the past four months. Our Sacramento Kings employ about 150 full-time and 550 part-time workers.
- Seven NBA teams play in markets where they are the only major professional sports franchise: Memphis, Oklahoma City, Orlando, Portland, Sacramento, San Antonio, and Utah. While those franchises have sustained or increased their value over time, an extended lockout will affect their market economies more deeply, in terms of lost jobs and incomes.
- In 14 NBA franchise cities, the unemployment rate is equal to or exceeds the latest estimated national average of 9.1%.
- Ten days ago, mayors of 14 NBA franchise cities (six with higher-than-average unemployment rates)—including Detroit’s Dave Bing, another former NBA star, and ours—sent a joint letter to Stern and Fisher, pleading with them to come to terms.
- At least one city, Memphis, is already “evaluating its options” for suing the league and the Grizzlies for lost revenue earmarked to repay the city for bonds used to build their arena.
Of all 30 NBA venues, almost two-thirds were built with public funds, and 20 are at least 10 years old.
What we have here is the ideal metaphor for the current policy/political stalemate over solutions to our economic problems, with a couple of key differences. First, the similarities:
Management v. Labor.
“Job Creators” v. Use of Tax Funds.
Continued lack of resolution will have a demonstrable effect on local employment, economies, and tax bases.
Affects a statistically significant number of Americans, and more visibly, factoring in the sports media.
What sets these circumstances apart from other potential job incubators? I see two circumstances:
Both factions represent the 1%, rather than the rest of us stiffs in the 99%.
By virtue of their wealth and celebrity, they are politically, culturally, and socially powerful.
So, here’s my four-point plan:
- First, the two sides agree to scrap their negotiations and call it a season, thereby defusing the “us v. them,” labor-management issues.
- They join hands, go to Congress, and petition for a bail—uh, I mean, stimulus package. A one-time taxpayer loan of, say, $10 billion—a rounding error on what the big banks got to redeem their sins, and a fraction of what saved the Big Three and two million auto worker jobs—would be used to wipe the slate clean for a year.
- All current debt would be paid, including BRI shares owed to players, outstanding venue bond and construction costs, and individual team losses for prior seasons, on a taxation-neutral basis.
- In exchange, they agree to partner with banks, investors, other capital sources, and regional and municipal governments to preserve and create local jobs by dedicating their arena assets, time and influence, and combined purchasing power to worthwhile projects.
I see all sorts of tax-incentive-fueled possibilities. (C’mon; they’re not going to simplify the IRS Code in an election year, if only to avoid depriving them of a made-to-order promise to run on next year.) A few examples:
- Local Employment Clearinghouses. Arenas stand idle during daylight hours on weekdays, and most every local knows where they are and how to get there. Players could put away the video games and fill their days organizing, transporting, and supervising platoons of 20-somethings in baggy clothes in local construction; renovation; infrastructure repair; weatherization; and green-energy projects, both investor-funded and those for which there are still ARRA stimulus funds available.
- Job Skills Training Centers. People could meet potential employers, get retrained for high-tech jobs, and get job hunting counseling in five-figure increments.
- After-school Programs. As local governments and school districts slash affiliated after-school programs, players could use their skills to get those future ticket and gear buyers up and moving on a more organized basis and at greater scale. Laid-off teachers could provide the necessary academic brainpower, and strapped parents wouldn’t have to scramble and pay for day-care. (And it would be totally safe, given the constant glare of publicity and the fact that those guys don’t exactly resemble your run-of-the-mill Registered Sex Offender.)
- Cross-cultural Enrichment. Teams could use those vacant game dates to host theater, symphonies, ballet, and other forms of entertainment completely foreign to their fans. Might also expose the other side to the joys of head-banging metal, arena motocross, and monster truck rallies.
- Low-Cost Housing. Luxury box or SkySuite? Think “Shared Efficiency Loft.”
- Flea Markets. With the growing popularity of “pop-up” retail, why not bring the people to the bargains? Move over, Rose Bowl!
- “The Housing Challenged.” First step in a centralized campaign to “rebrand” the homeless. Centralized shelter and food that’ll take some of the pressure off faith and nonprofit based facilities and local officials being hounded by business owners to relocate the problem. Bonus: those acres of paved parking could revolutionize recycling redemption.
- “Occupy The Paint!” In most franchise cities, it’s an easy trip from the downtown financial district to the arena. What better way to unclutter the town square without gassing or cracking heads, and provide shelter and basic necessities for a nominal fee? Put those SWAT and sheriff’s buses to better use!
- Sports “Infrastructure.” What with all the increased activity, “do-good” public relations bonanza, combined with normal wear-and-tear: new arena, baby!
- Miscellaneous. Ladder and scaffolding purchase and leasing? BIG savings.
Imagine harnessing the power of E!, TMZ, and the Kardashians for good, bringing millions of new eyes and ears to the plight of the aliens among us who have never auditioned for American Idol, nor enjoyed the benefits of cosmetic surgery. Imagine LeBron, Duane, and all their peers—errors in spelling and judgment aside—flooding Twitter with messages of economic hope and inspiration to their fellow citizens under 78 inches (198.1 centimeters, in case Kobe and Carmello are still abroad) tall. Imagine giving our elected representatives the unique and dizzying opportunity to vote on a major jobs program balanced with tax incentives that’s supported both by loyal contributors and celebrities, on the same side.
I say—Let’s get to work!