Tuesday, October 26, 2010

Welcome to the 2010-11 NBA season: Plenty of business issues to consider


The National Basketball Association season begins tonight with the much ballyhooed Miami Heat visiting Boston to meet the Celtics and on the left coast the two time defending NBA champions Los Angeles Lakers will host the Houston Rockets. The highlight of the off-season focused on Pat Reilly resigning Dwayne Wade and at the same time picking up the two most talked about free agents LeBron James and Chris Bosh.

As far as NBA commissioner David Stern is concerned – it is all good news when it comes to the Miami Heat heading into the NBA season.

“I think that in USA Today there was a big front page article about everybody looking forward to either seeing the Miami Heat or seeing them lose, depending upon what city you're in, or seeing them win if you're a fan. And I think that's team has generated spectacular interest, and all in all it's been very good for the NBA.”

While the Miami Heat are set to benefit from their free agent harvest, the same cannot be said for the Cleveland Cavaliers franchise and their fans. The Cavs had the best regular season record last year, had James the two time league MVP before being ousted by the Celtics in the second round of the NBA playoffs.

Stern did his best to spin the Cavs short-term future positively. “I think they have a lot of players who would like to demonstrate that they can be part of a winning team, and they're players of some accomplishment who may well have been overshadowed, shall we say, by one of the most glamorous players and best players in the league.

“But I think for the fans of Cleveland, they had that player and they had him for seven years as a result of the NBA draft and his renewed contract, and now, let's go, everybody on board, and let's see how the team can do without that player. And I'm kind of thinking they'll do better than most people are expecting.”

LeBron James’ decision to move to South Florida was the right basketball move for the NBA’s best player that said, what message did LeBron leaving for South Beach send to NBA fans?

“I think under any system, we're probably going to have something that allows a team to have a financial edge in keeping a player. But then it becomes up to the player, whether he wants to take advantage of that or not. So I think we'll keep something like that going, but I wouldn't claim that that's the be all and end all, but here we are. And I think that LeBron and D Wade and not D Wade but Chris Bosh demonstrated that there are some things that are more important to our teams and our players than money.”

That remains to be seen but the Toronto Raptors historically have never demonstrated any ability to keep their players. From Damon Stoudamire, to Vince Carter to Tracy McGrady, try as they might have the Raptors have not been able to build a team though the players they have drafted. Not quite the message any league wants sent to a teams’ fans and sponsors. Stern for his part completely dismisses any notion the Raptors are facing any real challenges.

“I think that you've got a committed ownership group, an extraordinary president of basketball operations, a pretty good roster that's made good use of its draft picks and free agent signings, and I think you're being much too negative, which is your prerogative and maybe even your job, but I don't agree with all of your premises.”

Stern is just doing what a commissioner should do spinning a story the best way he can. But the bottom line is that the Raptors play in a hockey town. While the Raptors are filling Toronto’s Air Canada Centre for the most part, the message Bryan Colangelo’s Raptors had better deliver this season is a winning team that will challenge come playoff time.

It was a ten years ago that the Raptors Canadian cousin, the Vancouver Grizzlies left for Memphis. One franchise failed, but with the Raptors inability to build a contender despite drafting many of the ‘right players, does David Stern ever sit back and wonder if it made any sense to expand to Canada in 1995?

“Oh, my God, absolutely not. Those are only the questions I get from Canada. I need to pump you up a little bit. We are so lucky to have Toronto -- this most diverse, thriving, international city -- that I can't even imagine where that question would come from, really.”

The Cavaliers and Raptors both lost their franchise players, players they had been building their foundations around. The Denver Nuggets face the same challenge this season with the near certainty the Nuggets are going to lose Carmelo Anthony this year or at seasons end through free agency. Is it in the best interests of the NBA to consider enacting a teams’ ability to put tag a player a ‘franchise player’ like the NFL does? In the NFL a franchise player is paid a great deal of money but that player is unable to move to another team.

“I think that the franchise player is an interesting concept. I think it's going to come up in our collective bargaining. But leaving that aside, I think the players are entitled to get the benefit of what they bargained for. And the union bargains for free agency; the players serve out a certain contract length and have come into a system that provides that free agency. And it's hard for me to buy your premise that somebody who has played for a certain number of years under a contract and is a free agent is thereby dictating where he's going to play. He's exercising his rights that were given to him by the collective bargaining agreement to sign a contract with another team.

“And just as in many cases, players sign a contract and they can be traded. Those are the rules of the game, and they're bilateral.”

The Grizzlies moved to Memphis. Now in their tenth year in Memphis, when the spectre of NBA contraction is raised, Memphis has to be at or near the top of any list. The Grizzlies finished 28th in NBA in attendance last year, averaging 13,485 fans per game. The Grizzlies finished 29th in NBA attendance during the 2008-09 season and the league’s bottom feeders average ticket price that year was $24.11, far below the NBA $49.47 average ticket price. The inability to sell tickets at less than average ticket prices on a consistent basis makes the Grizzlies franchise one the league has to be very concerned about, but not if you ask David Stern.

“I think the answer is it's been successful. I think we wanted to be, along with Michael Heisley and the ownership group, more successful. I'll be down in December to celebrate that 10th anniversary, and we're pleased with their response, and we're pleased in the community.

“You know, we need to work hard together to do what every team has to do, sell tickets and induce sponsors to support the team. And on the basketball side, to have the team win. Amongst those of us in the office who are fans, and there are a couple of us, you know, they're a much improved team.

“You know, I'm not sure let's see how we write the history of the Pau Gasol trade. I like Mark. I think he's doing a heck of a job. I like the team that they've surrounded him with. I like everything about them, whether it's there's lots of good stuff going on in Memphis. A lot of pressure on the team and the coach, but that's why it's a great game.”

Is David Stern talking the truth when it comes to the Grizzlies? – yes and no. Does anyone really expect the commissioner of the National Basketball Association to admit on the eve of a season that one of his franchises is staring at an uncertain future – of course not. But at the same time, one would be foolish to admit the NBA is serious about their financial future when teams that are losing so much money the Grizzlies face a very uncertain future in Memphis.

The Sacramento Kings face an uncertain future in the California city. The Kings play in the Arco Arena a facility it seems basketball fans no longer want to ‘experience’ an NBA game in. The Kings have finished 30th and 29th in NBA attendance the last two years and while their average ticket price is near $60 per game, owner Joe Maloof, Gavin Maloof want a new arena built.

The ARCO Arena, the facility the King’s currently call home is located in a once isolated area on the expanding northern outskirts of Sacramento. It was constructed at a cost of just $40 million, the lowest of any venue in the NBA. It is also the smallest arena in the NBA with a seating capacity (17,317).

In 2006, there was a campaign to build a new $600 million facility in downtown Sacramento, which was to be funded by a quarter cent sales tax increase over 15 years; voters overwhelmingly rejected ballot measures Q and R, leading to the NBA publicly calling for a new arena to be built at another well-known Sacramento facility, Cal Expo, the site of California's state fair.

The league’s attempts to work with Sacramento city officials to secure taxpayer funding for a new arena have failed. Is Stern concerned about the Kings future in Sacramento?

“I'm going to say that my optimism on there being a new building has faded completely. We really tried hard, the Maloof family has spent an enormous sum of money, people of goodwill from Senator Steinberg to the Governor to the Mayor Johnson, have joined in, and frankly it wasn't, I guess, to be, because we were missing an essential party. And so I don't have any more good ideas.

“Where we flow on that is right now, we've got a season to worry about, and I know that the Maloofs are spending their time feeling really good about their Rookie of the Year last year, their draft choice this year, their coach and the general makeup of their team, and their tickets are you should tell all of your listeners they should rush out because they may get shut out. The tickets are going like hotcakes. That's all I'm focusing on. I'm waiting for the we're all going to catch our breath to see what great ideas come out of Sacramento with respect to a new building for the Kings.”

That said – when Stern could not get a new arena built in Seattle for the Sonics the franchise moved to Oklahoma City (where the team is doing well). History has clearly demonstrated when it comes to David Stern he is a man of action and if there is not a new arena in Sacramento (or at least shovels in the ground building one) in the next three years the NBA will move the team…..either to Anaheim or Las Vegas.

Issues in Toronto, Memphis, Sacramento – what can be called small markets. The “C” word ‘contraction’ being talked about. Commissioner Stern, with the 2010-11 season set to begin tonight, does the NBA have an issue with small market franchises?

“I would say that we're committed to small market teams. We are going to have a new CBA eventually and we're going to have a more robust revenue sharing. The issue of contraction is one that has to be discussed in the context of collective bargaining with the players, whether if there are markets where there may not be buyers for teams that are looking to be sold, that raises the issue of contraction. But it's a sensitive subject for me because I've spent 27 years in this job working very hard not only to maintain all of our teams but along the way add a few.

“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. I'm not spending a lot of time on it.”

For SportsBusinessNews.com this is Howard Bloom

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