Supreme Court Ruling Could Consolidate NBA Power: Bad for the Kings, Bad for Fans

My dalliance in law matters has been mostly limited to the recurring Supreme Court of the NBA posts, in which I assign the SCOTUS judges to their NBA coach doppelganger. (Now accepting nominations for presumptive justice Sonia Sotomayor. Mark Jackson wins by acclamation if Minnesota hires him.) But there's now a Supreme Court issue which actually hits to the heart of the NBA: the case of American Needle vs. the NFL.

I wrote about the issue as it pertains to the NBA at length Sunday for FanHouse. In short, the NFL is attempting to get the Supreme Court to rule that the NFL is a single entity instead of a collection of 32 separate and competitive businesses, that the interests of the NFL teams are completely connected and as such the NFL should not be liable to antitrust litigation. ESPN legal analyst Lester Munson raised huge red flags with a long, exhaustive and alarming piece published Friday, noting that the NBA has filed an amicus brief in support of the NFL's position and will likely reap the spoils of a ruling in the NFL's favor.

Those spoils: complete power over labor.

Collective bargaining could be completely removed from the table if the NFL gets its way. Munson says the leagues could institute whatever salary restrictions they wanted, which would surely mean that whatever the NBA will push for in the 2011 CBA negotiations it will get. A harder cap, a higher age minimum, shorter contracts, a smaller portion of revenue earmarked for player salaries and benefits ... you name it, the NBA will take it.

The only recourse for the players? To strike, or to threaten strike. Sounds like fun, right?

But wait! Shorter contracts, a more solvent league, more solvent team revenue ... that would actually help the Kings, right? We can do better if the Supreme Court rules that the NFL and other leagues constitute single entities, right?

Wrong. Two power bases in the NBA defend small market teams: small market owners, and labor interests. As we note constantly, the NBA's system favors the major market teams. The lack of serious revenue sharing in the NBA creates situations like the one in which we find ourselves today, where the Kings were on track to lose $25 million this season before spinning out gobs of salary for little return ... all while the equally atrocious Clippers probably made money, just because of location -- corporate sponsors, TV contracts, a better arena arrangement. There's almost nothing meritocratic about revenue in the NBA. The size of your market almost completely explains your revenue, especially in comparison to the NFL.

But labor -- the players, the players union and the agents -- supports small markets. It's about money: if more teams have it, players have a better chance of landing a good contract. If Sacramento, Memphis and Milwaukee had better revenue streams right now, David Lee wouldn't be cursing his forebearers and crossing names off his Christmas card list. In fact, Billy Hunter, head of the players union, has said one of the concessions the NBPA will be fighting for in the 2011 CBA negotiations is better revenue sharing. And better revenue sharing is the single biggest change that could help the Kings financially compete with the Clippers, Lakers, Suns and Warriors.

The NBA, again, favors the major markets ... and it's easy to see why. When the Knicks and Lakers and Celtics and Bulls are better, the ratings are better. When Staples Center and Madison Square Garden are full, they are the most lucrative buildings in the league. You can market the Celtics in Bangladesh a helluva lot better than you can market the Kings there. Sure, the league likes some parity (17-win teams are bad for business) and the fortunes of the teams in the smallest markets do matter to David Stern and Co. But it's a secondary interest, and it will always fall behind No. 1.

In talking about revenue sharing, it is very simple to discern the combatants: it is Big Market Teams vs. Small Market Teams. Perhaps the greatest profit comes in allowing the larger markets to keep all their revenue and investing it in improving their product. A 5% revenue boost for the Knicks might add more future revenue than a 5% revenue boost for the Kings. But the players would rather have as many teams as possible hitting the luxury tax, as many teams as possible able to dole out mid-levels every year and max contracts on a wink. So, in this, the most important of financial factors which could work for or against our team's solvency, we're on the side of the players.

And the players could get destroyed by the Supreme Court decision.

Munson argued that the NFL already has four votes in the bag, with the others all up in the air. The case will be heard before the Supreme Court next spring or summer. It has spooked me a great deal.

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