Work Stoppages? They're A Comin'

While articles have steadily trickled out over the past few months that sports hasn't been immune to the current economic "crisis," such as with a lot of NFL clubs cutting back on front office staff, I don't think the true brevity of the situation hit home for me until I real this article Bill Simmons did for espn.com. Bill Simmons can be very hit or miss, but I thought this to be a very good read for two reasons. The first being the state of NBA Clubs' finances at the trade dead-line, and the second being the spectre of a 2010 lockout.

On the first count, it was Simmons claim that the most valuable trading chip for NBA franchises at the trade deadline wasn't a player, or a draft pick, but instead the expiring contract of Raef LaFrentz. As Simmons writes;

You know who was mentioned in more "Where do you think he's going?" scenarios
than anyone besides Amare Stoudemire? Raef LaFrentz's Expiring Contract. That thing got mentioned so
many times it could have hired a PR staff and an agent. Here's the kicker: Raef
can't play. He's a basketball invalid. He has been injured since something like
1973. Portland's insurance company repays the Blazers 80 percent of his salary,
making him a cap figure and little else. In the No Benjamins Association, that
makes him a freaking commodity. Teams wanted to dump clearly superior players on
Portland at the deadline just to get Raef's insurance money. Phoenix would have
traded Shaq for Raef and Channing Frye's expiring contract in a heartbeat. Jersey
supposedly offered Vince Carter and two protected No. 1's for Raef's contract, and
Milwaukee supposedly would have given up Richard Jefferson and either Joe Alexander or a future No. 1 for it. Incredibly, the Blazers
turned everyone down. And this is a team bankrolled by Paul Allen.

But before we go there, lets backtrack a little bit. If you recall, everyone finally became aware of this economic mess right around September/October of last year-that's when the proverbial shit hit the fan and everyone realized what a mess we were in. What's striking about that timeline is, that's after people/corporations had paid for their season tickets/ticket packages for both the NBA and the NHL. In other words those leagues got their big money up front, but are fully aware that while the economic hammer hasn't hit them yet, it's coming. The decline in walk-up tickets sales and game spending paints a particularly nasty picture of what's coming next season, when those season tickets are most likely cancelled and revenues slashed accordingly. And that's in addition to many NBA franchises already struggling. As agent David Falk put it in a recent New York Times article;

....the N.B.A. and its players are heading for a profound labor battle.The
nation’s economy is buckling. Too many teams are losing money. League revenue is
flat, and the salary cap is about to shrink for only the second time in its
history.

And that's an agent admitting that. As to what he thinks the NBA is going to seek to do?

Falk said he believed Stern, the commissioner, would push for a hard salary
cap, shorter contracts, a higher age limit on incoming players, elimination of
the midlevel cap exception and an overall reduction in the players’ percentage
of revenue. And, Falk said, Stern will probably get what he wants.

“The owners have the economic wherewithal to shut the thing down for
two years, whatever it takes, to get a system that will work long term,” he said
in an extensive interview to discuss his new book. “The players do not have the
economic wherewithal to sit out one year.”

And that, my friends, is a recipe for a lockout of the highest order. The NBA has experience an unprecedented level of growth and popularity over the last 20 years as players like Magic, Bird, Jordan, Kobe, Shaq and untold others have entered the public conciousness. The problem is, the economics have caught up with them. Huge guaranteed contracts to underperforming players have bloated payrolls while a lot of smaller market teams are playing in aging arenas, and when those smaller market teams get bad the fans stop coming. You want to know the cause of the problems? Look no further than the aforementioned contract of Raef LaFrentz, who as a spare part recieved a 7yr $70m back in 2002 (from Dallas). The NBA is littered with contracts like that, bloated contracts for marginal players, and now that the growth is slowing and incomes contracting, there are a lot of clubs in trouble. If you'd prefer a more concrete example of how dire things are becoming, the NBA just borrowed $175m as a fun to assist financially strapped clubs.

Regardless, it is expected that within the next few years somewhere between 3-8 NBA franchises will move to new cities, be purchased by new owners, or-if it gets really bad-beg the NBA for a bailout. As Simmons put it;

Franchise Hot Potato hinges on five factors in all, although only three
need to be in play. You need a team with a dwindling fan base and/or bailing
sponsors and suite/courtside customers. (I count 11: Indiana, Memphis,
Milwaukee, Sacramento, New Jersey, New Orleans, Miami, Orlando, Minnesota,
Charlotte and Philly.) You need a team trapped in an aging stadium that can't
drum up local money for a new one. (I count three: Sacramento, Jersey and
Milwaukee.) You need an owner who purchased his team because he was worth a ton of money ON PAPER … only now, he's worth significantly less and might even be
worth $10 for all we know. (Consensus candidates for this list: Phoenix, Hijack
City, Jersey, Memphis, Indiana, Atlanta, Milwaukee, Charlotte … and,
surprisingly, Sacramento and Cleveland.) You need cities with NBA-ready, modern
arenas either finished or about to be finished that would love nothing more than
stealing a team. (Definitely Kansas City, Anaheim, San Jose, Louisville, Tulsa
and Pittsburgh; possibly Columbus, St. Louis; and just for fun, let's throw in
Montreal and London.) And you need a struggling team that can actually extricate
itself from its lease.

The last "need" is easier said than done, as the Grizzlies would tell
you -- owner Michael Heisley would leave treadmarks fleeing Memphis if he
weren't tied to FedEx Forum through 2015. Then again, Hijack City owners McClendon and Clay Bennett showed us a nice blueprint for weaseling out of a lease in Seattle last year, a strategy best described as, "make up selfish reasons to leave, make your move, leave a trail of broken hearts, bastardize the integrity of the league, then make everything OK by just paying everyone off because the city will be
greedy enough to accept a cash settlement right away over fighting you in court
for the next six years." Thank you, fellas. You guys will be remembered as the
Lewis and Clark of Scumbag NBA Owners.

It's going to be an interesting next couple of years, and I'm not sure there's anyway around a work stoppage. Too many teams are hemorrhaging money, and too many players are doing too well for themselves to give it up. But that's not the end of it.

You see, the mighty NFL-while proving far more resilient than any entity outside of US Treasury Bills and rotgut booze-is also feeling the pinch. First the league office began to cut staff, and now most NFL clubs are cutting staff as well. On top of that, you've got brand new mega-stadiums opening this upcoming season in New York and Dallas and rumors abounding that the clubs are having trouble selling them out, or atleast selling them out at the price they want. And that's just for the first year, what happens in years 2-5? 5-10?

And as though it were planned, all this is occuring as the NFL nears the end of it's collective bargaining agreement. After the 2009 season, the 2010 season is an un-cappead year, meaning there will be no more salary cap. And 2011? Well if we get there without a new CBA, its just question of strike or lockout. Before his death the notoriously soft negotiator and NFLPA President Gene Upshaw swore that if the NFL ever went un-capped again, it would never go back. And now with DeMaurice Smith, an attorney (and an outsider, with no NFL ties) in charge, the NFLPA has announced that it's serious about that.

Now all of this economic mess could somehow blow over in the next year, but I wouldn't count on it. Instead, I'd suggest getting your fill in now....as we may face an excruciating year or two with out the NBA, NFL, or god forbid-both.