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NBA Lockout: Spending Caps, New Revenue And Taking Sports Out Of The Context Of Planet Earth

NEW YORK - JUNE 04:  George Maloof talks during the Maloof Money Cup ribbon cutting ceremony on June 4, 2010 at Flushing Meadows Corona Park in the Flushing neighborhood of the Queens borough of New York City.  (Photo by Jared Wickerham/Getty Images)
NEW YORK - JUNE 04: George Maloof talks during the Maloof Money Cup ribbon cutting ceremony on June 4, 2010 at Flushing Meadows Corona Park in the Flushing neighborhood of the Queens borough of New York City. (Photo by Jared Wickerham/Getty Images)
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I'm a big fan of Marcos Breton, Sacramento Bee columnist. His career speaks for itself. He's a fiercely talented reporter, writer and thinker. I met a number of local media folks back in college in group settings -- seminars, informal shop talks and the like -- and he was one of the few who did not disappoint. (Dan Weintraub was another who didn't disappoint. I'll withhold the names of those who did.)

Breton has acolumn today about why Sacramento Kings fans should root for owners in the ongoing NBA lockout. Below the jump are some snips -- though you should go read the whole thing -- and some notes as to why I disagree with him.

Here's the central reason as to why Breton thinks Sacramento should be rooting for the owners:

[L]iving and working in Sacramento, one of the smallest of the NBA's small markets, I want the owners to win. I want the owners' desire for spending controls to prevail. I want the league to combine real revenue-sharing between big teams and small teams, along with restrictions that would make it harder for big-money teams to spend smaller ones into oblivion.

Here's another strident claim:

You can build all the arenas you want, but unless the NBA fundamentally changes the way it does business and tilts its financial rules, small markets such as Sacramento will always be in trouble.

Here's the thing: spending controls aren't going to help the Kings that much, and a new arena will certainly help the Kings a great deal.

If the owners get a harder cap (via a restriction on cap exceptions or a highly punitive luxury tax), team payrolls will even out some. But as a result, the cap will be higher. A harder cap doesn't just inject payroll parity: it injects expense parity. So a championship-level squad with LeBron and Wade will have a similar payroll to a rebuilding/rising team. The salary floor will raise to ensure that teams get to whatever revenue split emerges from the talks, the cap will raise. The Kings and rebuilding small-market teams won't be able to get away with such low payrolls. There won't be another $45 million payroll ever.

With the 57 percent split, players made $2.1 billion last season. If you had the stricter hard cap and perfect payroll parity, each team would -- after removing $140 million off of the top for benefits -- have $66 million payrolls. But there is no way that the Kings could have spent an additional $19 million last season and been a championship contender. Even if the hard cap better disperses talent, the Kings wouldn't have landed a LeBron or even Amar'e. Maybe they'd have gotten Boozer or Gay. Does adding even a guy at that level turn the Kings into a playoff team? No.

And without a winning team, revenue isn't going to go up much. Under a hard cap, expenses even out. Revenues don't. High-revenue teams in L.A. and New York make tons of loot and have to pay smaller payrolls. Maybe the Lakers have to lose Bynum or Odom. They still have Kobe and Pau. Meanwhile, small-market teams like Sacramento and Charlotte continue to see low revenues unless they land a star that takes them toward the top of standings. Meanwhile, they are forced to take on additional expenses. The hard salary cap is not a panacea for low-revenue teams unless it drastically redistributes talent. There's nothing that suggests the NBA's proposals for a harder cap will drastically redistribute talent. Nothing.

What can help a low-revenue, small-market team more than a harder cap, though? A new arena. I present to you the Orlando Magic, who have made a killing on the partially-funded-by-the-public Amway Center. (The Amway Center is 1 years old, by the way.) The prospect of the Amway Center basically allowed Rich DeVos to spend huge amounts of money to surround Dwight Howard with talent. DeVos used to be a "no luxury tax" guy ... until the Amway Center was approved. He's got a sweetheart deal, and that ridiculous new revenue allows him to get his payroll up around those of the Lakers and Mavericks ... without taking major losses.

Sacramento doesn't have the corporate base of Orlando and is an even smaller market in terms of potential audience, but the general logic applies: with an arena that makes its team money instead of costing it money, there is higher revenue and similar expenses. (If the Sacramento arena goes forward, the owners of the Kings will almost assuredly make a substantial amount more revenue than they currently do independent of the team's quality, and with lower or constant expenses.)

Breton mentions revenue sharing as an important tenet of "evening the playing field"; insomuch as money matters, yes, revenue sharing will help. But who said there must be a hard cap and an owners' victory to get revenue sharing? In fact, David Stern has detailed the league's revenue sharing plan and otherwise kept it out of the lockout fight. Better revenue sharing will happen, or Stern will be publically lashed repeatedly for failing to deliver.


The bigger issue I have with Breton's column is that he ignores what he usually hits out of the park: the context of America and the world in a story otherwise about sports.

Labor issues are labor issues, whether it is teachers or government accountants or basketball players. There are degrees and differing narratives and, yes, issues of context and scale. The NBA lockout is not just the Wisconsin public labor battle writ large: they are different beasts. But at their core, labor battles are about the struggle for fairness in employment.

NBA owners are trying to shove Draconian pay cuts down the throats of the players. Yes, I know well that basketball players will remain some of the most highly paid employees in the world, even at the pay levels the owners suggest. But they are that well-paid because people pay a lot of money to watch them play! Players only make money so much as the league makes money. That's the point of the revenue split: when the league's revenue is skying, players benefit. When the league's revenue goes flat or dips, player salaries go flat or dip. This is built into the system.

Of course, when the business is booming -- almost 5 percent growth for the NBA last year -- employees bristle at being told to take a massive paycut. When employees concede to a level of paycuts and are told it's not nearly enough, they bristle even more. When they are treated like children by the boss, they do not respond by submitting. Why should we want them to? Why should we root for them to be beaten back by the strongman tactics of The Man? Why should we -- call us the 99 percent, the working class, the common man ... whatever -- hope that management wins by keeping employees from their jobs?

This is why I can't root for the owners. Stern could propose lining K Street with gold bricks, instituting Free Taco Fridays at McKinley Park and build the freaking Taj Mahal of arenas at the Railyards, and I still couldn't root for owners. For me, this lockout is about so much more than the strength of small-market teams in the NBA. It's about so much more than whether the Kings will be able to afford a supporting cast in 2013 for the All-Star duo of Tyreke Evans and DeMarcus Cousins. This is about labor rights and fairness in negotiations. This is about Big Money being a bully. This is about that which has Wall Street on fire.

I understand fully if folks feel differently, and I encourage you to disagree below. Not everyone views labor issues like I do, and even those who do won't necessarily extend those to the NBA lockout. I understand, and I don't begrudge anyone their opinion. But these are my feelings, my rationale for refusing to root for owners no matter what good it could possibly do for my favorite team. This is why I won't cheer if the union's back is broken and David Stern holds up a golden belt. I can't do it, and I hope I've made clear why.