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Friday, October 21, 2016

Oct. 16 (Bloomberg View) — Kobe Bryant for president.

That’s the call coming from various corners of basketball media, who think the Los Angeles Lakers star should be the next head of the National Basketball Players’ Association after a compelling post-practice interview with the Los Angeles Times in which he opined that players should fight owners for their “fair market value.” With the NBA just inking a nine-year, $24 billion contract extension with TNT and ESPN, speculation abounds as to whether the lucrative television rights will spur yet another lockout after the 2016-17 season, when both sides can opt out of the current collective bargaining agreement.

While some more optimistic sportswriters perhaps naively hope a work stoppage can be avoided, the general consensus is that 2017 will see another round of contentious negotiations. Admittedly, the prospect of Bryant leading the union during those talks alongside newly elected NBPA executive director Michele Roberts is intriguing. He’s always been seen as more of a thinking man than your average athlete, and his LA Times interview shows a strong grasp of the issues confronting a union that was strong-armed into losing power and revenue share in the last round of CBA talks.

Bryant addressed the perception that players are overpaid, noting that fans tend to overlook just how much money the owners take in. The latest CBA, ratified in 2011, reduced the players’ share of basketball-related revenue from 57 percent to 50 percent. The new television deal will raise the league’s annual revenue by up to a billion dollars, meaning that 7-percent difference will end up costing the players about $70 million collectively.

“It’s very easy to look at the elite players around the league and talk about the amount of money they get paid,” Bryant said. “But we don’t look at what the owners get paid, or how much revenue they generate off the backs of these players.

“Now you have a TV deal that comes out and you look at it almost being up a billion dollars from the previous one,” he continued. “It’s going to be interesting to see what happens in this next labor agreement … I’m sure they’ll try to lock us out again, and harden the cap even more.”

The increase in television revenue would likely raise the league’s “soft” salary cap — which allows teams to pay a luxury tax for crossing the payroll threshold — and maximum contracts would go up accordingly. But the owners have been pushing for years for a hard cap, which would effectively limit player compensation across the board while eliminating the advantage the soft cap gives wealthier teams that can afford to pay the luxury penalty.

In November 2013, Bryant signed a two-year, $48.5 million guaranteed extension with the Lakers, drawing the ire of fans who wanted their star to take a significant pay cut to give the team more flexibility in building a roster around him. Fans are much more willing to cast blame for their team’s losing on the face of their franchise earning his market value — or, more accurately, as close to market value as the CBA allows — rather than the billionaire owners who collectively decided to limit their payrolls. (We see this more broadly in a society that has simply accepted astronomical executive compensation at the expense of growing income inequality and relatively stagnant wages.)

But let’s not forget that the Lakers were valued at more than $1.3 billion in January — and that’s before the $2 billion sale of the Los Angeles Clippers to Steve Ballmer, which is sure to raise team values throughout the league. According to Grantland’s Zach Lowe, the Lakers made $100 million in profit last year despite paying a league-high $49 million toward revenue-sharing and posting their worst season on the court in recent memory.

Let’s also stop comparing Bryant to other franchise players whose willingness to take a pay cut adds to the perception of his selfishness. Sure, Tim Duncan took a 54 percent cut in 2012, and has yet another ring to show for it. And the Miami Heat’s now-dissolved Big Three of LeBron James, Dwyane Wade and Chris Bosh each left $15 million on the table in 2010 in order to play together, winning two titles as a result.

But James reversed course this past off-season, signing a two-year, max contract to return to the Cleveland Cavaliers that allows him to renegotiate once the new television deal kicks in and take advantage of the increase in the salary limit. ESPN’s Brian Windhorst reports that in light of the deal, James could be the face of the union’s push to eliminate max contracts altogether and allow superstars to earn their proper worth. The owners paint the various salary limitations as a way to further competitive balance, but the truth is that NBA parity is a myth, “a Trojan horse to soften the image of the league as it continues to chop into player salary,” as SB Nation‘s Tom Ziller put it.

Since max contracts were enacted in 1999 in response to Michael Jordan’s $33.1 million deal the previous year — which was at the time higher than both the salary cap and the average team payroll, and remains the highest single-season NBA salary — just six of the 30 teams have been crowned NBA champions. At least one of three usual suspects — the Spurs, Heat and, yes, Lakers — has appeared in every single NBA Final since 1999.

Doing away with max contracts in the NBA would prevent the same teams from stacking talent to maintain their dynasties. According to Dallas Mavericks owner Mark Cuban, the league would consider getting rid of max contracts if the players relinquished their right to guaranteed contracts. Cuban calls that a “trade-off”; I call it a workaround for the owners to find another way to exploit their players for even more profit. (Just ask any NFL player who suffered a career-ending injury how he feels about non-guaranteed money.)

The 36-year-old Bryant would be the perfect person to advocate for fairer compensation for individual superstars relative to the revenue they’re generating, but there are significant obstacles. For one, Bryant has never made it a priority to be liked throughout the league, while current NBPA president Chris Paul of the Clippers commands respect and popularity among his fellow players.

There is also the fact that the union is starkly divided between superstars such as Bryant and the NBA’s journeymen, and the owners have done a great job of selling the idea of max contracts as necessary to properly compensate those players whose names don’t top jersey sales and whose faces aren’t plastered on billboards around town. Uniting the NBPA is paramount to any chance the players as a whole might have in going up against the owners in three years.

The NBA has been incredibly successful in using old-school corporate tactics, getting its workers to quarrel among themselves and shaping a public narrative to deflect attention from the league’s enormous cash flow. In the last round of CBA negotiations, the owners effectively played poor in arguing for a 50-50 split of basketball-related income, but that’s a wildly creative interpretation of the facts. Nine teams posted losses last season, but except for the foolish Brooklyn Nets, no team lost more than $13 million. There’s plenty of money in the $4 billion league, and it’s just going to increase once the new television deal kicks in. (Roberts, for her part, is dogged on this, telling blogger Chris Sheridan that the players “want to be respected for the fact that they are what makes this game successful, and one of the ways to show that is to allow for fair compensation.” She also curtly dispelled any notion that the owners were somehow cash-poor in the last round of negotiations, stating bluntly, “teams weren’t losing money.”)

So how can the NBA prove that its supposed commitment to competitive balance isn’t just lip service meant to funnel more money to the owners? Ziller of SB Nation doesn’t think uncapping salaries is realistic, so he proposes a novel, somewhat tongue-in-cheek idea: Cap team profits. If the league believes that stealing from the rich to give to the poor has worked well with the players, why not extend the practice to its franchises? As Ziller notes, the Bryants and Jameses of the league are making much less than they should be, the argument goes, because you need to fill out rosters with role players who don’t command as much pay. Similarly, the Lakers and other wealthy teams need low-revenue teams to round out the league. Big-name owners should have to make the same sacrifices as big-name stars for the supposed good of the league. And while we’re at it, let’s throw in a salary cap on front-office executives, too.

It’s an absurdist argument for an absurdist system existing in an absurdist corporate climate that places the burden of an industry’s economic health on the labor force while attributing a disproportionate amount of its success to its executive class. But sports owners are only as valuable as their checkbooks, and general managers are only as valuable as the players they put on their court. Maybe Kobe Bryant is the guy who can help make sense of it all.

Photo: TheDailySportsHerald via Flickr

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  • adp3d

    It’s millionaires vs. billionaires…squabbling over advertising revenue. Hard to empathize or sympathize with either.