Point-counterpoint with Bill Simmons, hipster economist.
Kanick is and has been conflicted about Bill Simmons. I remember when he was breaking new ground with ESPN. Intelligent smart funny takes about sports. Willingness to break ranks and make some observations on the innate conflicts created when multi-billion dollar sports media ‘does journalism’ on multi-billion dollar sports industry.
It was edgy at the time. I liked him.
I didn’t care that there was an axe to grind: he wanted to be a Globe sportswriter, but that damn Bob Ryan just wouldn’t retire. I found his analyses, pro basketball in particular, knowledgeable and informed and with unique insight. I found him funny. Didn’t care that his best buddy on his podcast answered his phone, ‘Complex litigation, John speaking.’ You goes to Holy Cross, you makes friends with such as. World keeps spinning.
And I didn’t care about the provincial Boston bias… ‘Hey he’s a fan just like us.’ Hell I respected it. It was great to find a national guy willing to stay loyal to his home, his teams; to own his tribalism. ‘One of us’ had a seat at the table.
But slowly, or not really slowly, he became mainstream. Hacky. I’m listening to Dave Dameshek why again? Mike Lombardi gets a spot as your NFL guy when… wait a sec, did you see his record in Cleveland, Bill? The ‘Us Magazine Fantasy Celebrity League‘ concept was pretty fresh at the time… but why is Dave Jacoby talking to me about it? How is he a pop-culture expert and what the fuck does that even mean? And puh-leeze with Gladwell and the other guy. Klosterman. Ugh.
One would be hard-pressed to construct a more hipster group to run with. (Lombardi, to his credit, excluded.) When you become a trend slave, it becomes impossible to lampoon them.
But whatevs. Choices are made, ambitions are followed, no judgements here, just observations. There have been talking heads forever and will be in the future. It’s only a problem when their isolation in a world of other talking heads and industry insiders leads to new found wisdoms that they feel compelled to share as fact.
We’ve got a problem in this vein this week.
The friend of the working man.
Simmons cranked out a ‘list’ blogpost Friday: The Best Bargains in the NBA. A list of good NBA player contracts. Standard ESPN formula; nothing new there. He assures us he’ll have a ‘bad contract’ list for us next week. Can’t wait.
But it was surprising to read Simmons come after NBA ownership with nasty, broad-brush, character attacks. Considering the egg-shells he normally walks on, it was a bold (but of course, safe) expression of his opinion of NBA owners.
It seems like only yesterday when they [NBA owners] were playing the panic card right before 2011’s travesty of an NBA lockout kicked off. Their financial infrastructure was busted. (Or so they claimed.) Just about everyone was losing money. (Or so they claimed.) Things couldn’t keep going the way they were going. (Or so they claimed.) They had to get player salaries under control, or else. (Or so they claimed.) And we bought it. All of it.
Seem a little angry there Bill. The CBA with the players was expired. That’s usually when new ones are negotiated. So a negotiation ensued. Sorry if you missed a few games to write about there Bill. College b-ball sucks, huh?
The anger seems especially misplaced when you consider Stern’s NBA generated $5,000,000,000 in the 2010-11 season. The players new CBA gives them half of this. $2,500,000,000. $2.5B divided by 390 players, $6.4MM/year. Kanick readers have these facts. It’s bizarre that such easy to find data doesn’t find its way to Bristol unless you factor in that Bristol is first-and-foremost in the jock-sniffing business. And business is good.
Here’s what really happened. The owners knew that rights to live sporting events had become television’s most important advertising commodity in the DVR Decade. They knew that their broadband business was exploding, that they might have as many as three other networks with 24-hour sports channels waiting for ESPN’s TV contract to expire in 2016. They knew they had a waiting list of billionaires for their available franchises, as well as many of the most marketable superstars in all of professional sports under their domain. And they knew they needed to do a better job of “fixing” their year-to-year costs, which was the quickest way to increase the value of their franchises.
Not for nothing, but the opportunity to capitalize in the DVR Decade is predicated on continuing to provide a good product. Allowing more super-teams and creating more talent imbalance among franchises harms the product which remains ‘Competitive Sporting Event.’ We’ve covered this.
But… if the owner’s are just so much suck… why didn’t the players start their own league Bill? What the hell? Why would they willingly agree to play for a:
… slew of narcissistic rich dudes … who get to sit courtside 41 times a year and stroll around with [their] chest puffed out. [They] fly by private jet to every owners’ meetings and every league event, measure [themselves] against your wealthy counterparts, maybe even feel a little validated as it’s happening. … It’s the ultimate ego purchase.
You sure you want to open up the narcissism can o’ worms Bill? Not sure if you’re in are in Boston this weekend for the MIT Sloan ‘We’re math geeks who like sports,’ thing, but isn’t that your new-age Chautauqua? Isn’t that where you go to measure yourself against Peter King and Mark Stein and Andrea Cramer? Did your chest puff out? Did you feel validated? Narcissism comes in all forms Bill.
But back to the ‘why’ behind NBA players willingly re-entering into an exploitative CBA with such loathsome narcissists… ah an answer: Billy Hunter and his jedi mind tricks.
To say that Hunter didn’t have the players’ best interests in mind would be an understatement; it’s going to take years, and probably a few lawsuits, to determine exactly how negligent he was. But you know what? Trying to line his family members’ pockets was more shady than purely destructive; sheeeeeeeeeee-iiiiiiiiiiiiiit, that was just a bad Clay Davis impersonation. Giving the owners a 50 percent revenue share, shorter contracts AND significantly harsher luxury-tax penalties? That’s a whole other story. He squandered just about any leverage the players had.
Err. Hate to point this out Bill, but… free will. I know. It’s a bitch. The players voted for the contract. I guess the majority thought 50% of $5,000,000,000 was good. For the majority of players $6,000,000/yr is better than $0/yr Bill. Thought you went to Holy Cross?
It’s that ‘majority of players’ thing that you’ve always seemed blind to. Your next Samardo Samuels article will be your first. But that paltry NBA minimum salary of $473,604 is pretty meaningful to guys like him. And they still get to vote. What’s up with that? AINT THAT A BITCH?
Billy Hunter had the majority of players’ best interests in mind. You hate that. The majority of players don’t get to quit on their teams and pick their next landing spot (Carmelo, Dwight Howard). The majority of think six million a year on average is good, even if they have to play in Milwaukee to get it.
Skipping past the ‘best bargains’ contract review. Because we don’t give a shit.
We care about rookie Dion Waiters showing every sign of being comfortable leading an NBA team and all that implies. We care about Tristan Thompson continuing to grow from athletically-gifted to complete-NBA-power-forward. We enjoy the shit out of Kyrie Irving’s obvious emergence as the best point guard in the league and discomfort it creates for talking heads like Simmons.
We care about the teams and how players contribute to teams’ winning. We can do without hipster contract talk that frames performance in a monetary context because it:
- is boring;
- reminds us that all these delightful players may (probably will) leave their current teams;
- accepts player movement as a fact of life and views it as a good thing. I.e., Yes Bill we know: ‘no one should have to play in that shit-hole Cleveland.’ Got it.
Get back to us when you grow balls enough to say on ESPN: Kyrie Irving is better — much better — than Chris Paul.
O! The exploitation of LeBron James!
Back to the piece. Simmons closes with a flourish and in a predictable way: a sloppy LeBron tongue kiss.
1. LeBron James (Heat): 2 years, $36.6 million
Here’s your MVP. Actually, this is always your MVP, as long as he’s playing 39 minutes a night, slapping up 27-8-8s, shooting 55 percent, playing four positions and defending the other team’s best guy. Just stop. Stop bringing up anyone else. He’s the greatest player in 20 years.
Glad to see the ‘Who’s better LeBron or Kobe?’ thing is finally dead. It was old three years again when LeBron was still in Cleveland.
For the purposes of this column: If the NBA operated with an open market like baseball does, and teams could spend whatever they wanted without any real fear of the luxury tax, then LeBron would earn more than four times what he’s making right now. You heard me … $75 million per season. That’s not a misprint. The Lakers, Knicks and Nets would pay him that without blinking. Think of what you’re getting: He drives up your courtside prices, your suite prices, your cable ratings (Miami’s jumped 34 percent last season) and your sponsorship packages; he makes you the league’s most relevant franchise; he guarantees you 10-12 playoff home games every year; and oh yeah, you might win a few championships, too.
(If only the NBA operated like MLB? Welp it would save time for everyone on playoff previews.)
Wow. $75 mill. Per season. $60 mill/yr bump, huh Bill? That’d pay for 120 minimum salary guys. That’d cut the pay from everyone else in the league. But who cares, right Bill?
Because –> Courtside seats. Suites.
That’s Bill Simmons’ world, not yours or mine. Your loyalty doesn’t matter. Corporate events and celebrities courtside, that’s what he thinks is important.
He’s forgotten that ultimately it’s you and me making it all possible. For example, LeBron makes, let’s say, $15MM in NBA salary. Forbes reports LeBron is getting $40MM/yr in endorsements. To say LeBron is underpaid and then to ignore the majority of his income and how it became available to him is willful ignorance.
Just who are these TV advertisers trying to reach again? Us. Simmons worries about courtside seats. To the extent that he still considers the common fan, he thinks of us as having infinite elasticity of demand. In this, he is full of shit.
And actually, that $75 million number might be low. Once a year, Forbes magazine breaks down the team value of every NBA franchise. This year’s report was especially fascinating — Forbes reported that the average value of the 30 teams had risen to $509 million, a 30 percent increase from last year, saying that “the increase is due to higher revenue from television, new and renovated arenas, and the NBA’s new collective-bargaining agreement, which reduced player costs from 57% of revenues to roughly 50%.” Translation: The owners didn’t just beat the players in that last lockout; they trounced them like it was one of those Cowboys-Bills Super Bowls.
So that’s more than a tad revisionist Bill. Not that anyone besides me remembers. But the owners were willing to bump the BPI split in exchange for restricted player movement. Hell, the players came in with 54.3% as their BPI proposal. By holding out for ‘player movement,’ Hunter was catering to the superstars (specifically, superstars’ agents) right from the start. Chris Paul has to get his, amirite? Fuck Michael Gee.
Anyway, in 2009, Forbes valued the Cavaliers at $476 million and the Heat at $364 million. Four years later, they valued the Cavaliers at $434 million … and the Heat at $625 million. Gee, I wonder what changed.
The Cavs were the worst team in basketball after LeBron left.
(LeBron James, you deserve a raise. A massive one. Just know that you won’t get it.)
Not to get all Detroit/auto-industry on you, but there’s ample evidence of what happens when assumptions are made regarding customers, price elasticity, product quality, and brand loyalty. You keep increasing the price and decreasing the quality of your product and your customers will find other options. The NBA’s business is, I repeat, Competitive Sporting Event. Embracing a system designed to create less competition is simply foolish.
We’ll look forward to a Simmons report talking about the number of players earning the league minimum. We’ll happily link to his expose on exploitation of players by their agents.
But we’re beyond tired of jock-sniffing articles perpetuating the viewpoints of agents in exchange even greater access to The Life.
The Atlantic and NPR get it.
Thank you twitter buddy Dave Arnott for pointing me to The Atlantic’s piece, LeBron James Is Underpaid—and That Might Just Make Him Richer.
That raises a third argument, which is that the NBA’s appeal is rooted in its egalitarian principles, which increase each market’s chance of winning the championship and makes the game more appealing to a wider audience. NPR’s Planet Money makes the case elegantly:
The salary cap makes it impossible for rich teams to hire all the superstars. That means even teams in smaller markets have a shot at greatness, which draws more fans to support those teams. More fans means more revenue for the league as a whole — and that means bigger paychecks for the players.
And this, Grier says, is why Lebron James has a reason to support the system. Playing in a more competitive league helps him make more money in other ways.
Not for nothing, but Simmons’ ‘LeBron is Underpaid’ theme seems shoplifted after seeing NPR and The Atlantic make the same case in the last month, no?
But. Yes. Egalitarian principles. Makes games more appealing to a wider audience. I guess I didn’t need all 2781 in that other post.