Monday, October 10, 2011

The NBA Lockout: Millions Here, Millions There

Posted By on Mon, Oct 10, 2011 at 8:50 AM

Here’s hoping that, within hours of you reading this column, the NBA’s owners and players come to an agreement on how best to split their immense fortunes ... in time to salvage a full 82-game regular season. Among the league’s 30 franchises, none has more of an interest in building upon the conclusion of last season than the Memphis Grizzlies. To rain on the parade of last spring’s remarkable and unexpected playoff run over a few percentage points in a league-wide revenue split would be shameful. If played as scheduled, opening night at FedExForum — November 5th against Charlotte — would be the kind of welcome-back party this city has never seen before.

I’m not going to pretend to understand the financial landscape of the NBA beyond the broadest of brush strokes. The league claims 22 of the 30 franchises lost $300 million over the 2010-11 season ... and yet franchises balance their books differently. Is the mortgage on a parking garage an asset? A liability? When and where exactly does a franchise measure profitability? When revenue exceeds expenses for a season? Or when measured against the lifetime of player contracts? Not the kind of math fans want to study.

But I can recognize a fat contract when I see one. And the NBA is overloaded with contracts far exceeding the value of the players cashing the fat checks. Let’s look at one example, a comparison of two longtime teammates.

click to enlarge nba_finals_game_5_los_angeles_lakers_v_orlando_i8xiys0zhnpm.jpg

Kobe Bryant is one of the two most famous active basketball players on the planet. (Derrick Rose may be the reigning MVP and Dirk Nowitzki may be a reigning champion, but the league’s biggest stars remain Bryant and LeBron James.) Last season Bryant played in 82 games for a total of 2,779 minutes. He’s scheduled to earn $25,244,493 when and if the 2011-12 season. Based on last year’s mileage on the court, Bryant is to earn $9,084 per minute played.

Now, let’s look at the contract for Luke Walton, like Bryant a Los Angeles Laker (and currently an assistant coach for Josh Pastner with the Memphis Tigers). Walton played in 54 games for the Lakers last season with a total of 484 minutes on the floor. A valuable reserve for two championship teams, Walton is just that: a reserve. He’s scheduled to earn $5,680,000 for the 2011-12 season, or $11,735 per minute played last season.

Whatever accounting skills you have, however you define break-even, this is lousy math. As a player who sells tickets merely by showing up, Bryant is a rare entertainment force. The argument could be made he earns every penny of his contract. The argument could actually be made that he’s underpaid. Take Bryant off the Lakers and try selling season tickets with Pau Gasol as the face of the franchise.

But Luke Walton? (I hate to pick on the guy. Best I can tell, he’s a class act with a passion, like his father, for playing basketball the right way.) The argument could be made that Walton (1.7 points and 1.2 rebounds per game last season) is an interchangeable part. If the Lakers replaced him with another former University of Arizona player, Houston’s Chase Budinger (9.8 and 3.6), would L.A. drop precipitously in the standings? No chance. Budinger is scheduled to earn $884,000 this season.

The NBA’s greatest source of revenue is, of course its players, the stars (and supporting casts) we cheer throughout the winter. Its greatest expense is also those players, most of them with salaries that would make Bill Russell blush. Here’s hoping the league — those writing the checks and those cashing them — figure out a way to work in harmony. Those of us enduring a recession that won’t seem to end need our well-paid heroes to cheer.

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