The Lockout and America: An Economy Story.




Dallas Mavericks fans, after waiting for their championship for over a decade, deserve to see whether their team can bring back their core and repeat. They really do.

It doesn't necessarily look like they're going to get that, as of today. That's a huge, huge shame.

It seems to me, however, that there is a new wrinkle. It seems to me that, for once, public sentiment is on the player's side.

 

Now look, the owners have always had the power in lockouts. That’s because, rich as the players are—and some of them are very rich—the owners are way richer.  Obviously. Also, while the players aren’t getting paid because they’re not plying their craft, the owners are because they are.  The owners are businessmen, and business doesn’t get lockouts.

In fact, if David Stern isn’t straight up lying to us, and owners are operating at a substantial loss, the longer the lockout is the richer they get.

So maybe the question is why was public opinion so against the players, last time, as much as it is why is it with them, now.

On a certain level, maybe there’s lots of reasons. Maybe the fact that the league is being represented by a lot of serious people, Derek Fisher,  Paul Pierce, etc., etc. who have so far come off as impressive businessmen, and impressively on task. Maybe it's the financial management classes that have been arranged, and other obviously necessary information seminars aimed at the current lockout, sure, but also at the future.

Maybe it’s Delonte West, working at a furniture store, something no owner will ever have to do. Maybe.

I think it’s because, as a nation, we’ve had to learn some tough lessons these last few years.

 

I think I will hear no argument if I describe politics in America as politics. This is especially true of money politics. America has, from its founding as a republic breaking free from a monarchy, had an anti-elite bent. But who are elites?

Without going into actual partisan politics, I think it’s fair to say that Barack Obama was successfully branded as an elite while George W. Bush was not. This is despite the fact that Bush came from a family with lots more money and privilege, miles more power, and had, if anything, a better education.

A similar stance is reflected in the bent of the American people’s attitude towards financial regulation of businesses. Most people agree that it was the banks and wall street that screwed everyone, but a much smaller percentage wants to do anything about it in terms of regulation. My suggestion as to why this is the case—and I promise I’ll stop talking about politics in a second—is that the American people are no friends to the super-rich, but implicit in the idea o the American dream is that everyone should have a shot at BEING super-rich.

Which is a long way of saying, we don’t mind the money we mind the attitude. Bush seemed like us, Obama doesn’t. Those champagne-swilling, caviar drinking Wall Street CEOs who get 350 million bucks for getting fired don’t seem like us, but you could give us 350 million dollars and we still wouldn’t be them.

So it’s not hard to see why, last time, prevailing opinion was against the players. After all, the owners are hard-working businessmen who love sports, paid their dues and made their way. The players are twenty year old kids who play a game, live out their youths the kind of way we always dreamed we would spend ours, and spend their money in ways so flashy that deep-voiced guy from "Homes of the Rich and Famous" won’t even talk about them.

But something has changed, mostly the economic collapse. We learned more about CEOs in the last five years than we knew in the last forty, namely that if Monta Ellis is getting into one of his five Mercedes’, dressed in a mink coat, Robert Sarver actually owns five Mercedes MADE of mink, and he gets into them wearing a coat made of what happens when you successfully mate a mink with a bar of solid gold.

We learned that congress doesn’t think making a million dollars is a lot of money.

We learned a lot more about the physical costs of athletic play. True, not so much in basketball as in other sports, but we learned about concussions and long-term mental illness, we learned about players not being able to pick up their kids because of their backs, knees and feet, about Bill Walton’s fused ankles. About the average life expectancy for an NFL lineman being around 50 or less.

Donald Sterling made his money with apartment complex that he refused to rent to black people because he thinks they’re smelly.

Clay Bennett schemed for months to deprive Seattle of a team. In 2011 he was named chairman of the NBA’s relocation committee.

Apparently all that is what it took for the American audience to sympathize more with (predominantly) black athletes than with white owners.

That being said, the latest move is bound to throw public opinion into balance again. I’m not an economist, so I can only put this into general terms but one of the things the owners and players have been arguing about is revenue sharing. As of yesterday, the owners had finally put a 50-50 split on the table.

50-50 is an extremely fair-sounding number. Even if you knew that last year the players had 57% of the revenue and that that number certainly didn’t exist because the players were so powerful, it sounds fair and it would mean basketball so it’s hard not to see the players as the ones who are being stubborn now. My guess is David Stern had 50-50 in his head the whole summer.

I can’t tell anyone how to think, but all I can say is keep in mind four things. One, the players are not asking for more than the owners have been giving them. They’re asking for less than the owners have been giving them—they’re just asking for less LESS than the owners want to give them.

Two, a 50-50 split sounds fair until you realize that for every one owner (obviously) there is a team full of players. The owners—the 30 or so of them—get 50 percent of the revenue split between them. The players, the 450 or so of them (15 people on 30 teams) get 50 percent split between them.

Three, I have certainly heard the argument that the owners are the reason that there is an NBA and the players are expendable. I doubt it. If Robert Sarver and Donald Sterling hate being owners so much, Larry Ellison would take their teams in a minute. If you replaced Kobe Bryant with, literally, a replacement-level player, that would probably hurt Jerry Buss’s investment even more than not getting a good deal from the players.

If that’s not true—if the Lakers value has nothing to do with Kobe Bryant—than the owners would win the argument of who is more essential to the league, but they would lose a more important argument which is that they’re losing money. Many economists suspect this to be the case, as Malcolm Gladwell recently wrote  .

And fourth if the players are spoiled rich kids, the owners are ten times that. If the fact that the Players Union, representing only millionaires with big endorsement deals, has no recourse to taking a much worse deal form the owners other than de-certifying and letting their nearly equally rich and powerful agents sue David Stern with their nearly equally rich and powerful lawyers, what chance does any of us have?

Lehman Brothers went down in 2008. Last week, Bank of America  announced a five dollar monthly fee to use its debit cards. You know why? Because that’ll encourage you to use credit instead. Then you won’t pay your credit card bills on time, and that is a HUGE money-maker for those guys. There’s not a thing that you can do because B of A is much richer and more powerful than you are.

The owners are going to see how much they can take away from the players, because they can. Not because they need the money—they had it a few years ago, to sign Rashard Lewis to a 30 billion dollar deal or whatever—and not because they’re being treated unfairly. You know how many free agents would be on the new Brooklyn Nets if Prokhorov could spend however much he wanted? All of them. He already can’t. No one’s making the owners compete in this marketplace besides the other owners,and there are already a lot of rules in place to protect them from competing too much.  As Gladwell points out in his article, the Miami Heat could not exist without a salary cap--no one could compete in a real open market for all three of the best players on the market one year, and two of the best in the game.

If we’ve really come to the point that a victory for NBA players is a victory for the little guy, that’s a real shame. It looks to me, though, like we have. I want basketball to start on time, or near to on time, more than I want—well, a lot of things. Dallas Mavericks fans, more than anyone, deserve to see what their team can do next year.

But if it’s between that and another situation in which the richest guys get to do whatever they want because no one can stop them--even if all it means is that other rich people are a little less rich--I don’t know what I’ll root for.  I really don't.

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