Hornets Beat: Schnapps Edition

By:
Published: August 8, 2011

I’m still not back in the good old US of A, and honestly my head has been pounding for days due to the relentless abuse that my shnapps-loving Swedish family has inflicted on my liver. As a result of that and ESPN’s Hornets themed 5-on-5 featuring Ryan, this edition of Hornets Beat is going to be a bullet filled solo affair which pertains almost entirely to the lockout. Next week we will return to our regularly scheduled programming.

I love schnapps. Schnappy, schnapps, schnapps. Here it goes down, down into my belly...

  • Full disclosure: My brain is working about about seven percent of it’s normal functioning capacity, so be prepared for at least something that probably won’t make sense even to me when I get back across the pond.
  • Season ticket holders pay between hundreds and in some cases hundreds of thousands of dollars a year to watch fully grown men play a game, and the NBA is seemingly likely to miss regular season games for the second time since I hit puberty roughly a dozen years ago. Way to go, guys! I’m really impressed by your ability to negotiate and compromise. I assume that whoever is involved in these negotiations had a hand in the recent US debt ceiling debacle as well.

  • Perhaps as players realize that the overwhelming majority of guys slated to make 1-10 million a year in the NBA next year are not able to secure contracts that pay even 20% of that by playing in Europe or anywhere else (while paying out of pocket for insurance as well), they will come to their senses and see that they have it pretty good in the states. For example, just having guaranteed multi-year contracts is a benefit that most teams around the world don’t offer, and even if they do, the teams are notorious for not following through on the guarantees if it’s in their best financial interest not to. Considering how many guys like Eddy Curry have “played” in the past decade, I think that alone is a huge concession by the owners.
  • That leads into another point–Just because the players were the clear winners in the last CBA shouldn’t mean that this next one is going to be the same way, or that negotiations should begin where the last CBA left off. The players seem to have that idea in their heads, and I’m about 90% sure that they think that way because guys like Billy Hunter have told them that. They seem to think that if they hold a hard line the owners will cave to another bad deal. I can’t really see that happening this time around.
  • The tiny concessions the Players Association have offered so far still leaves the CBA overwhelmingly favoring the players financially. The fact that players received well over 50% of basketball related revenues during the final years of the last CBA, and have offered a deal to the owners where they will again, strikes me as absurd since they comprise substantially less than 10% of total NBA personnel, they take no financial risk, and the NBA has provided them an avenue that winds up with them making nine figures more annually in the form of individual endorsements. There are also countless people who are slightly less skilled willing to do their jobs for a fraction of the price. The owners just aren’t going to agree to a horrible deal again, and the longer Billy Hunter pretends that it’s possible that they will, the longer this unnecessary lockout will persist.
  • Last year the players’ net income from contracts alone was roughly two billion dollars. The owners net loss was first estimated at 300 million. That last figure was debated by the players, and then revised to some extent, but the reality is that players make a ton of money with an investment of time and energy, and lots of owners lost money with an investment of time, energy, and huge amounts of capital that could have been working for them elsewhere.
  • Make no mistake about it– I am on the side of the owners. For one thing, what many of them want is right in line with what I’m hoping for. Sign me up for a hard cap and more incentive for superstar players to re-sign with their current teams. Don’t even let sign-and-trades happen for max contract ballers unless their salary is reduced to the level that it would have been had they not re-signed with their current team. If Chris Paul wants to leave us after the tens of millions of dollars that we have paid him to play basketball, then make him pay for it financially. He can’t have his Sazerac and drink it elsewhere.
  • My allegiance is entirely 100% to the New Orleans Hornets brand, not the players on the team. If Chris Paul and David West both take off either this year or next, they will no longer be players that I follow. I won’t despise them or anything since it’s understandable that guys would want a change of scenery, and Chris Paul will likely still be the best point guard in the league, but I’m not going to change my allegiance because a player demands to be traded or refuses to re-sign. If a player is not wearing creole blue, white, gold, green, or purple, then they are my sworn enemy. Right now what the players want is directly contrary to what small market teams want, and that means that I can’t support the players at all in these negotiations.
  • I will not shed a tear because a team of NBA players making salaries that often exceed the rest of the personnel in the organization combined (which have at the bare minimum 10 times as many people) will be forced to take a pay cut.
  • The fact that non-millionaires with normal jobs will suffer most from this is a big issue that isn’t talked about enough. Team employees, beer vendors, concession sales staff, bar and restaurant employees near arenas, television staffs, and full-time NBA writers, photographers, and videographers really stand to have their lives disrupted and their futures threatened. With the economy not exactly kicking ass, it’s a safe assumption that many of them can’t afford a year (or more?) without their NBA related job.
  • The longer this lockout goes on, the more players and owners stand to lose. The NBA and basketball in general have been on the upswing lately both in the US and across the globe. TV ratings for the finals were way up (with New Orleans contributing some of the best local numbers of any NBA city). I can’t think of a better way to stop that momentum than a prolonged lockout. The financial implications of a long work stoppage would likely be measured in billions, not millions. Just ask the NHL, who officially slipped to second tier sport status after a similar disagreement between players and owners cost them an entire season, how they feel about the PR hit they took.
  • On the player side of things, guys like James Posey stand to be among the biggest losers in the event of a missed season. He’s owed nearly seven million dollars this year (which he will never see if the season is missed). That’s likely more money than he will make playing for the rest of his career. When I get a few minutes back in the states I’m going to take a look through the league roster to see who else is in a similar situation, and it wouldn’t surprise me to find that there are dozens of players who stand to lose a literal fortune that they may never see again. On top of that, you have to wonder how long the rookies going to sit around twiddling their thumbs making nothing when they could be millionaires? How long are the sophomores going to be able to live the good life that they are now accustomed to without a salary? You can bet that guys like that will be pressuring the Players Association to cut a deal that doesn’t sacrifice the season. For less skilled players on the second year of a two year rookie contract or overpaid veterans at the tail end of their careers and their contracts, not doing so might risk their last NBA paycheck ever.
  • In the end I expect the players to cave. Hopefully for them (and everyone) they do it soon, when they still have unity and leverage, as opposed to later when they will almost certainly have some dissension within their ranks. Think of it this way– if the league offered the players half of what they made last year, that’s the best deal they can get in the entire world… by far.
  • As a fan I do realize that we pay to watch the players perform and not to watch the owners own, but as a businessman I believe that anyone (including small market owners) who invests over 300 million dollars into a franchise should be able to field a competitive team without bleeding money. Right now that just isn’t the case for a lot of franchises, and it causes millions of fans grief. The Hornets have been playing against a stacked deck for years, and it would be really nice if we could get back into a fair game.

Disagree with me a little bit or entirely? Don’t be shy. I can take it.

18 comments
Ahmad
Ahmad

This is right on the money. Although it hurts to say I won't be a fan of CP3 if he leaves. He's my fave player in the NBA. Damn. If they get this stupid deal done, maybe he'll stick around.

LSUhornet17
LSUhornet17

Joe, you nailed it. Maybe you should drink Schnapps more often. I think the fact that the small markets teams have the most to lose from the players coming out on top of these negotiations has not been said enough. I cringe every time someone mentions that the owners only lose money because they hand out bad contracts. In reality, there is currently such a disadvantage between large and small markets that the small market teams have to overpay to sign almost any meaningful contributor. Small market owners are not the only ones that get killed on contracts, they are just not able to recover or take the loss in stride like a large market team can. I realize that these problems may be alleviated with better revenue sharing (which will be addressed during this mess as well), but I am for anything that may help small market teams achieve more equal footing. Maybe it is not fair that the players have to give up some of what they had been earning in the last decade to help the red-headed step children markets, but I am absolutely for any type of proposal that would help the Hornets stay in this city for years to come. Go owners.

Chuck
Chuck

Drunken Joe is officially my favorite Joe LeBron being "optimistic" about having a season this year just goes to show how far removed from reality he is. There's no chance of a season this year, the owners and players HATE each other and Billy Hunter is doing a pretty bad job. Meanwhile, the owners would prefer not to have a season because they won't lose as much money, while the players can (or think they can) play overseas. I think by January or so both sides will be willing to talk. By then, owners will realize they can't make money off their arenas that are now empty 41 more nights every year plus playoffs, and the players will realize that there aren't 10 European/Chinese teams willing to pay every NBA player to play for them. But hopefully it won't be too late... Also, another victim of this will be people like James Posey for another reason; there definitely, DEFINITELY won't be the mid-level exemption, which for the last few years has been used to overpay role players by teams that think they're one piece away (best example is Posey himself). No way that comes back, so those types of people aren't going to get 6 mil/year. Oh well, no more fatass role players. Brave new world

m_W
m_W

I'm usually rooting for the individual against The Man. Not here. The facts just don't bear it out. As Joe says, all the important things that ensure parity, hard cap, salary limits, cutting guarantees, and pro-owner things. So there that is. Also, I'm totally stealing "He can’t have his Sazerac and drink it elsewhere." Aces.

Yahoo
Yahoo

I agree with most of this. System is busted and the owners ar e forced to pay an artificially high price for Guys like pOsey. You're dead on a out the NHL comParisons. NBA will lose billions long term if they miss a year. Good post during a boring summer.

OldRepublic
OldRepublic

I am personally with the owners in this dispute. If the league doesn't make money, it can't continue as a going concern. In the same breath, some owners have to be saved from themselves: see, e.g., Baron Davis, Mo Williams, Rashard Lewis, etc.

WHDC
WHDC

So sick of players thinking they should make more than owners. Any system in which 7 million a year is what it takes for a small market team to get James Posey is obviously broken. Owners need to hold their ground. Players need to accept reality- they make this much money because people before them have worked really hard, both owners and players.

James Online
James Online

Someone should mention that Jason Smith's father died in a car accident Wednesday night in Colorado. Jason is/was one of the bright spots and a really good guy on the Hornets. This is a sad time for Jason, a class act--mature, bright, and supportive of his teammates. A good player too. Jason: our thoughts and sympathies are with you.

42
42

Someone did. http://www.hornets247.com/news/2011/08/06/losses-family-money-dreams/ Hornets Report had it up Friday after WWL reported it.

James Online
James Online

Excellent. So today LeBron feels confident there will be an NBA season. What's really crazy is that the people who suffer the most, besides fans like us, I mean REALLY suffer, are the folks who work for the teams, arenas, services, and ancillary establishments near the arenas. Those tend to be low-pay jobs filled by ethnic minorities. To watch the players tussle over employment conditions at the level they do must be very depressing for those folks. Wonder if Hunter, Fisher, and the others on the players' side REALLY care about that.... Fisher markets himself as a born-again, Evangelical Christian. His videos go up in the big evangelical "churches" across California every Sunday, exalting the faithful to live a clean, morally-uplifting life. Smug, inauthentic, and at the end of the day, a typically selfish right wing, holier than thou fundamentalist.

MelDee
MelDee

“The credit belongs to the man who is actually in the arena; whose face is marred by sweat and blood; who strives valiantly; who errs and comes short again and again because there is no effort without error and shortcoming; who knows the great enthusiasms, the great devotion, spends himself in a worthy cause; who at best knows in the end the triumph of high achievement; and who at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who have never tasted victory or defeat.” -Theodore Roosevelt Per the aforementioned, I side with the players.

DUCE
DUCE

Yea...Gilbert Arenas, Eddy Curry, Juwan Howard, Rashard Lewis, Peja Stojakovic, etc.. Blood, sweat, and failing. That's about all they did. How can you side with people who make that much money doing nothing for their teams?? Yes, i know the owners offered them the money, but wit a new CBA having a Hard Cap, or something like the NFL (multi-year contracts with only a certain amount of money guaranteed), the NBA would be a lot more competitive.

da ThRONe
da ThRONe

While I don't disagree with this blog. I do think that this puts any blame where a lot of it belongs. The league. They made it so the sport revolves around the players. They took the easy route for marketing and expanding the league. They raised the importance of the players and that's why they lost the last CBA. Mostly I think the system is at fault. Franchises cost a lot more now and it's more important from them to be profitable since the last CBA was signed. From a players stand point they are rich not wealthy and the life spand to earn this kind of salary begins and ends with the NBA so their trying to get as much as they can. Either way the owners have more to lose than the players plus more money, so they will get the advantage in this deal. The longer the players wait the more they will lose.

Ryan Schwan
Ryan Schwan

Sure, I'll disagree. Three simple points: 1. The NBA generated 4 billion dollars in revenue. The players made 7% more than half that amount. I'm supposed to cry because the owners had 1.8 billion dollars worth of revenue and weren't all able to make a profit? Do you know what the "owners" make? Do you think that those "losses" don't include a very nice amount of money going into the owners pockets as "salary" or "Consulting fees" or whatever euphemism they use? Me, I'd rather the money generated by basketball go to the players, rather than some faceless dude who owns the team. What possible allegiance should I have to that guy? 2. Oh, I should feel sorry for the owners because they risked their Capital and it didn't make a return BECAUSE OF THE CONTRACT THEY AGREED TO. Wah. They need to be real capitalists and accept that risking capital sometimes doesn't work out for you. 3. The Owners claim 300 million dollars worth of losses, which, by the way, every financial expert who has looked at those numbers says is at least 50% higher than it should be. The players have offered $160,000,000 in concessions. If the Owners could just counter in good faith and say 50%! (Which equates to about $300 million, then the deal would be done. Instead, they have asked for $800 million per year, and aren't backing off of it. You know what makes negotiations fail? Hard-line tactics.

Joe Gerrity
Joe Gerrity

1. Not to get too technical, but the owners did not make 7 percent more than half that amount. They made 14 percent more if you look at it that way. I think we look at this issue entirely differently because you don't live in the city, and you don't see the financial impact that the team has on the community. It's a huge organization that the owner supports, and no single player is ever going to have the impact on peoples' lives that an owner will. Running a business and employing and providing stability to hundreds or thousands of people on a full or part time basis is remarkably more important to me than ensuring that an average NBA player continues to as much annually than a female PHD will make in two lifetimes. That "faceless dude" is the one signing paychecks for countless people you will never meet. He's the one providing food for families and health care for Junior (sorry). The player is the one that half the time doesn't give a crap about the city and would abandon ship for a 15% raise in Texas, or possibly even to take a pay cut elsewhere. What possible allegiance should I have to that guy? I agree with the rest of what you said in one. I would like to know what Shinn used to pay himself and his family, but I would bet the farm that it wasn't tens of millions a year. 2. I'm not asking you to feel sorry for them. They made a bad contract last time. If you haven't noticed, the Players Association won't acknowledge that. Hence, the problems in negotiations. One side is starting with awful and hoping to move to bad. The other side is starting at good. 3. Fine, I don't want to speculate on the real number, but I did say that the figure was debated. Let's just go with what you said and say they lost 200 million. LOOK AT THE NET PROFIT BOTH SIDES MADE. 100,000 for the owners, and 2 billion for the players???? In what world is that a good faith compromise? As I said, player salaries are absurdly high, they take no financial risk, they provide little to nothing to the local economy with their share of the money, and they make all the profit! Are you Billy Hunter? The last deal was freaking awful for the owners. That is not in any way a starting point for negotiations this time around. How can you possibly say that 6 million dollars for the average player is reasonable figure to fight for? How is that not a hard-line tactic? If the league was making money, then I'm all for higher salaries. It isn't, so player salaries have to go down.

James Online
James Online

Very reasonable assessment, Joe, thanks. Take a look at the Warriors fan blog--"Fast Break"--for an equally insightful analysis by a brilliant blogger (Adam Laurindsen) that features a more players' oriented view. The European Championship, Eurobasket, begins at the end of the month. Some of the NBA'as brightest stars will be playing. Games will be streamed via FIBA. tv. Honest competition for the love of sport and country. Marco Belinelli has been leading the Italian team in friendlies the past week. He teams up with Danilo Gallinari and Andrea Bargnani for the Italians. You'll see talents Marco can't display given the CP3-centric Hornets approach. Dirk leads the Germans. Pau, Marc, and Vasquez lead the Spanish. I'm hoping NBA TV, ESPN, or others might carry some of the games.

James Grayson
James Grayson

Joe these are my sentiments exactly. Because we are the fans of a small-market team we have to side with the owners. My only issue, is that big market owners might actually begin to force a system where by they reap the benefits and they too leave small-market teams out to dry. I just hate how there's so many over-paid NBA players, it sickens me. The fact that Rashard Lewis is one of the richest players in the league is disgusting. Sure, others may argue "but the Owners GAVE them the contract." Yes, that is true. However, the market is so out of hand, that if a player DOESN'T get that contract he walks. It's tough to balance, but the players have ALL of the bargaining power when it comes to setting market value. Only when it's the fringe or lower type NBA players do the owners or "organisations" have the power. I just hope that a profitable league is balanced with the prosperity of players, without jeopardising either's stake in the league. It sounds simple enough, but be damned if either side see's it this way. Thank god for the NFL.

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