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David Stern And Robert Sarver Think NBA Fans Are Stupid...Let's Hope They Are Wrong

The NBA lockout is not something we want to talk about but thanks to Robert Sarver and David Stern, we have to. 

The players want to play and make as much money as possible for doing it. We want to watch games and pay as little as possible to be entertained. The owners want to guarantee profits regardless of what kind of decisions they make.

It's a vision of American capitalism has gone radically askew but one that David Stern shamelessly touts.

"I don't think I am going to apologize for the owners wanting to make a profit. That's what capitalism is," Stern said in interview with NBA TV's David Aldridge.

"People say, 'Well they bought a sports team they should expect to lose money,' no, they shouldn't because when you spend the amounts of money that these franchises now cost and the losses pile up because the players salaries have gone up from a billion that we were arguing about in 1999, to $2 billion plus, I am not going to say, 'Oh we shouldn't make a profit.' The goal here is to make a profit."

See what Stern did there? He created a straw man about people saying owners should expect to lose money. No one is saying that. That's pure deception.  

He also blames the losses (which are still in question) on the increase in player salaries. That's pure lie. We'll get to that.

Most galling is his twisted view of capitalism. It's nothing close to the version I learned in 10th grade from an economics teacher who had the words "There's No Such Thing As A Free Lunch" posted in the front of class.

If the owners have money at risk and they make smart decisions then they should have opportunity to make money.

That's how I learned it.

But in Robert Sarver's world, as presented by David Stern, profits aren't a reward for risk and smart decisions. They see profits as an entitlement for their position in life as "owners". 

Note the three highlighted areas. 

If -- Many owners, including dear Robert Sarver, borrowed heavily to buy their teams so they don't have all the money at risk, the banks do. And do we really need to talk about the lending practices of the American financial system after the meltdown in 2008?

Stern and the owners claim they can't make money because of the increases in players salaries. This is a lie. This is not true. This is a blatant attempt to deceive us. Players's salaries increase when the league makes more money. If the league made less money the players salaries would decrease automatically.

Ask the person who owns the business you work for how much they would like it if your salary rose and fell depending on how much money the business made. It's a pretty sweet deal for the owner and one that eliminates the risk faced by most people who own a business that depends on human capital (people) to generate the sales.

They have other people's money at risk in a system where the cost of of the product decreases automatically if revenues fall. Where's the risk in that? 

And -- The list of dumb moves by owners and their front offices in giving out bad contracts is endless. Is Josh Childress a nice guy and a very good basketball player? Yes. Should he have been given a five-year, $34 million deal by Robert Sarver? No. 

The players aren't to blame for that contract. The agents aren't to blame. The fans certainly aren't to blame. But the owners who make these decisions want a system that guarantees they can't screw up.

That sounds more like socialism than capitalism to me.

Potential -- Since 2001 the players' salaries have increased 24% while NBA revenue has increased 28%. Sounds like a pretty solid business, huh, and one that fairly ties compensation for the "product" to the increase in your fan interest. 

Where it's gone wrong is the 43% increase in non-salary expenses since 2001. 

In his interview with the league-owned TV channel, Stern blamed fuel prices for this. David Stern knows that fuel costs don't account for that kind of an increase but he's betting you'll believe it.

This is the portion of spending the owners control but just like they can't control themselves with player contracts, it's even worse here. The bulk of the non-salary expense increase is interest payments from owners, like Robert Sarver, who borrowed money to buy his fancy toy. Now he wants to change the rules to protect himself from himself.

 

Stern told us what this lockout is about -- making more money for rich owners who borrowed money to buy teams and then can't trust themselves to make good decisions. 

I really hope that's not what American capitalism has come to. 

Additional reading:

NBA Lockout Has Made David Stern A Parody Of Himself - SBNation.com
Every time David Stern opens his mouth to talk about the NBA lockout these days, the laugh-o-meter gets pegged ... until you consider the damage the commish is doing to the game.

Twitter / @alanhahn: Amar'e tells Newsday "Sarv ...
Amar'e tells Newsday "Sarver, for sure" is a hardline owner and "probably the main guy who is pushing for this lockout." 

NBA Lockout Could Last Past Christmas If No Deal Is Reached Tuesday
NBA lockout talks couldn't save the season start: David Stern has cancelled the first two weeks of the season and ruled out the possibility of an 82-game schedule.

The player salaries lost to a lockout - TrueHoop Blog - ESPN
This is one reason the owners have an advantage in this labor dispute -- they have a longer window of time to recoup their losses. An average player is likely to be out of the league in a few years, but an owner can hang on to his team for decades.

The Point Forward " Posts Stern continues to skew facts in media tour " It is true, for instance, that the league has made several "concessions," but most of those concessions represent moves away from an initial proposal so aggressive as to be an obvious non-starter. 

Jonathan Abrams on the newest NBA owners and their impact on the NBA lockout - Grantland
"In most cases, you have sophisticated financial investors buying these teams. They are buying based on the terms they are getting. None of them are necessarily laying out a huge amount of cash. They are assuming debt, paying some cash, and assuming future losses. The fact that they don't have to go out of pocket too much makes it an interesting leverage opportunity."