SBD/Issue 31/Leagues & Governing Bodies

Stern Talks Contraction, Says NBA Is Committed To Small Markets

Stern Notes No Specific Teams
Tagged As Contraction Candidates

NBA Commissioner David Stern during a conference call Friday said the league is "committed to small-market teams," and added he hopes a new CBA will result in more "robust revenue sharing," according to Don Walker of the MILWAUKEE JOURNAL SENTINEL. Stern said that "any talk of contraction has to be discussed in the context of contract negotiations with the players association and whether there are markets that 'cannot make it in the current environment.'" Stern did not single out any franchises and added, "We are working hard to maintain all of our teams and add a few." He indicated that the "issue of a new revenue-sharing model was being discussed internally" and with the NBPA. He noted that one possibility would be a model that "establishes performance standards in terms of sales and sponsorships, and profitability" (MILWAUKEE JOURNAL SENTINEL, 10/23). Stern said the idea of contraction "has to be discussed in the context of collective bargaining." He added, "I'm not spending a lot of time on it. ... But I think that’s a subject that will be on the table with the players as we look to see what’s the optimum way to present our game, and are there cities and teams that cannot make it in the current economic environment" (N.Y. TIMES, 10/23).

DON'T YOU WORRY 'BOUT A THING: Stern during his conference call discussed the Kings' ongoing search for a new arena and said, "My optimism on there being a new building (in Sacramento) has faded completely. We really tried hard, the Maloofs spent a good deal of money.... And frankly, it wasn't meant to be. I don't have any more good ideas." In response, Kings co-Owner Gavin Maloof said, "We're not contracting. That's not going to happen. No way we'll fold -- and no way we're selling" (SACRAMENTO BEE, 10/23). Stern also noted Memphis "shouldn't be" worried about NBA contraction when asked specifically about the Grizzlies' future. In Memphis, David Williams noted despite the Grizzlies' "attendance struggles and reported financial losses over the years, the team is widely considered on sound financial footing because of owner Michael Heisley" (Memphis COMMERCIAL APPEAL, 10/23). Meanwhile, Stern was asked by ESPN's Jim Rome how many franchises could be considered "failing enterprises" right now, to which Stern said, "None." Stern: "There are some losing money, and we're hoping that this season will show a turnaround in many of them, if not all of them. But the overall sum of money that the league is losing is not going to be eradicated by one successful season" ("Jim Rome Is Burning," ESPN, 10/22). 

Hunter Claims Owners' Current Position Will
"Inevitably" Result In A Lockout

JUST THE BEGINNING: Stern indicated that "murmurs of eliminating teams and a lockout will persist in the coming season" as the NBA "tries to find ways to trim salaries by $750 million to $800 million while getting the players union to somehow sign off." In Denver, Benjamin Hochman noted the new CBA "likely will change the way teams play their players -- and keep their players." NBPA Exec Dir Billy Hunter in a statement said, "The players and the union would prefer to work towards attaining a fair deal that addresses concerns raised by both sides and improves the game. But, if the owners maintain their position it will inevitably result in a lockout and the cancellation of part or all of the 2011-2012 season. The players and union will prepare accordingly." Stern responded to Hunter's comments, saying, "I don't believe that Billy wrote that because he wouldn't threaten me with a lockout. All I can say is -- that's what negotiations are for, and we're looking forward to our next negotiating session. It's classic negotiating rhetoric" (DENVER POST, 10/23). When asked if the NBA's current business model is viable, Stern said, "I would say the league is viable as long as you have owners who want to continue funding losses. But it's not, in the long term, a sustainable business model that we're happy to be supporting" (DAILY OKLAHOMAN, 10/23).

FIRING BLANKS? In Boston, Gary Washburn wrote NBA players are "not going to be responsible for owners controlling their own spending, and with his latest attempt to paint the owners’ situation as destitute, Stern simply fired another public relations missile." Industry insiders contend that the NBA "can’t be foolish enough to institute a work stoppage after one of its most successful seasons in history" (BOSTON GLOBE, 10/24). CBSSPORTS.com's Ray Ratto wrote the "contraction myth is particularly laughable, even by a commissioner's standards." Ratto: "Do we doubt that contraction has been discussed? No, especially since revenue sharing is being discussed, and any rich owner will tell you that the fewer hands that are out, the less cash must be paid." But no NBA owner "has the scratch to pay off two, or four, or six owners enough money to make them whole again, let alone satisfy them." This is "rich owner-poor owner politics and has nothing to do with the players at all, except in using it as a Wiffle bat to ineffectually club the other side" (CBSSPORTS.com, 10/23). In Sacramento, Ailene Voisin wrote Stern's talk of contraction is "mere posturing and applying pressure on the Players Association as talks for a new collective bargaining agreement heat up." Eliminating teams is "not even a remote possibility" (SACBEE.com, 10/22). On Long Island, Alan Hahn wrote contraction talk is "rhetoric from the league." Still, Hahn noted "fewer teams means fewer jobs," and that is "not something the NBPA ... should prefer over the alternative: the same amount of jobs, just less money to go around" (NEWSDAY, 10/24). In N.Y., Peter Vecsey: "How dare Stern undermine the league's commencement exercises with scare tactics about shutting down operations June 30 and liquidating financially failing franchises" (N.Y. POST, 10/24).

Ford Believes Neither League
Nor Union Wants A Lockout

CAUSE FOR CONCERN: In Boston, Mark Murphy wrote Stern's comments about a lockout and contraction "are eye-opening, even if he may simply be setting the playing field" (BOSTON HERALD, 10/23). Wizards G and player rep Kirk Hinrich believes that the threat of a lockout "seems real." Hinrich: "From the sound of it, it is. Right now, as players, we're just trying to stay together. Me, personally, I'm trying to go about my business like I always would." Wizard G Nick Young: "It's most definitely nerve-racking because you don't know what's going to happen next year" (WASHINGTON POST, 10/23). Pacers G T.J. Ford: "It's a major concern for both parties: the athletes and the owners. I feel the NBA is at its peak right now. I don't think either party wants a lockout" (INDIANAPOLIS STAR, 10/24). Celtics C Shaquille O'Neal said that he "perfectly understood the concerns" Stern expressed. O'Neal: "I can tell you there are some franchises that I know of that are not making money because they don’t have the players, and in the economy that we’re living in, I understand. But also general managers have to start taking responsibility, too" (BOSTON GLOBE, 10/24). However, Jazz G and player rep Ronnie Price said, "Nothing's final yet. We'll be able to discuss these things and go over what we feel is right and what we feel is fair and hope that we can come to some type of agreement" (DESERET NEWS, 10/23). Hornets F David West also said that he "is not buying into all the pessimism." West: "I know what type of excitement that is going on now, and it’s not just involving the elite teams. The NBA is going to have one of their most successful seasons in a long time" (New Orleans TIMES-PICAYUNE, 10/23).

STILL FAR APART, BUT PLENTY OF TIME LEFT: Stern said the league and the union are "nicely far apart" in terms of labor issues, but he noted the two sides "had a good meeting, I thought, this past Tuesday." He said, "We've got one scheduled for the middle of next month. There will be a bunch before All-Star. It's too early to really say how far apart we are. I think we're going to hopefully start narrowing the gap in the next several sessions" ("Jim Rome Is Burning," ESPN, 10/22). 

AROUND THE WORLD: The WALL STREET JOURNAL's Steve Moore sat down with Stern for the paper's "Weekend Interview" feature, noting that China is "basketball's next frontier." Stern said, "If you read the newspapers in China, each day's discussion is about LeBron James going to the Heat, Amare Stoudemire to the Knicks, will Carmelo (Anthony) leave the Nuggets or won't he?" Stern noted the league has signed a partnership with Sina.com and is "talking to Dongfeng, the second-largest auto maker in China, that wants to use the NBA brand the same way car companies here do it." He added, "In five years, the retail sales of merchandise in China will be the equal of the retail sales in the United States for the NBA." But when asked about placing an NBA franchise in China, Stern said, "No. It's too impractical unless there is going to be such a thing as hypersonic transport. But I do think we could have teams in Europe" (WALL STREET JOURNAL, 10/23). Stern said of the globalization of the NBA, "The next step is only playing a couple of regular-season games in London in March and continuing to play what we call ... 'friendlies.'" Stern: "What's next for us is really more about grassroots, especially in China, as 300 million basketball fans get an opportunity to play the game more than they ever had" ("Mike & Mike in the Morning," ESPN Radio, 10/25).

MAN IN CHARGE: In St. Paul, Charley Walters reported NBA owners at a recent meeting in N.Y. re-elected T'Wolves Owner Glen Taylor as Chair of the NBA BOD (ST. PAUL PIONEER PRESS, 10/24).

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