December 17,, 2012

NBA diminishing return on Hornets in a misguided attempt to create optimum sale value

This has been an embarrassing week for the NBA.

At no time in the history of the league, and likely in the history of professional sports, has a league’s commissioner taken complete control over a particular team’s basketball operations.  But that is what has taken place in New Orleans as David Stern has effectively castrated Dell Demps, the Hornets actual GM, and is in the process of devaluing a franchise that the league needs to sell.

The league took control of the Hornets last December, buying out previous owners George Shinn and Gary Chouest for $300 million. Their desire is now to seek out a new ownership group eager to keep the team in New Orleans and it is more than likely that there have been nibbles by various groups.  The league realized, and rightly so, that with the lockout the chances or selling the team beforehand was remote, as well some of the issues contained in the new CBA with the players were being negotiated in part to protect the value of the team so it made financial sense to sell the team once the lockout ended.  However, once the agreement was signed Chris Paul, the team’s primary player—and it’s lone superstar—publicly indicated his desire to leave the team and said that he would do so at the end of the year as a free agent if he was not moved. 

Unwilling to fall into the same trap that befell the Cleveland Cavaliers, with Lebron James, and the Toronto Raptors, with Chris Bosh, and lose their franchise player for nothing the Hornets management team sought out trade possibilities.  They believed that they had acquired fair compensation in the three team trade with the Houston Rockets and the LA Lakers, but the league, as the team’s owner, needed to sign off on the deal before it could be finalized.  Several owners complained to Stern that the trade was an example of the kind of deal they had gone through the lockout to avoid—having a star player to dictate when he wanted to leave a team and where he wanted to go.  Paul wanted to leave the small market Hornets for the large market Lakers.  Stern followed the instructions of the dissenting owners and voided the deal.

My first thought when hearing about the deal was that New Orleans was re-stocking their team—the Hornets only had five players under contract for this year.  My next thought was that they were taking back a lot of salary and adding players who were either in their prime, Kevin Martin and Luis Scola from Houston, or at the end of their prime, Lamar Odom from the Lakers. For a team that seemed to be in a rebuilding mode this was a deal that was more about the present and less about the future.  The NBA insisted that less money had to come in to the Hornets, more money had to go out and some younger players and/or draft picks had to be included.  This they believed made better economic sense for the long range financial stability of a franchise on the market.

When Demps went back to the Rockets and the Lakers and tried to re-negotiate he found that neither team was capable of feeding the Hornets everything Stern wanted for the team.  In the end the Lakers grew frustrated over the hurdles placed on the deal by the league and pulled out—sending Odom to Dallas--and are now trying to manufacture enough pieces to convince Orlando to trade its franchise player Dwight Howard.

Meanwhile Demps went back to the league and told them that the Lakers had withdrawn their offer and the deal was dead.  Stern instructed Demps to seek out other opportunities and the GM said that the other LA team, the Clippers, were willing to trade for Paul—and the Clippers had more of the young talent that Stern insisted be included in the deal.  Demps then negotiated a trade with the Clippers that had several young players with less salary going to the Hornets, and then sent the particulars of the deal off the league office for approval.  But Stern turned this one down as well claiming it was still not enough.  It seems obvious at this point that Stern does not want the Hornets to trade Paul but cannot tell the team not to look into a deal as this would constitute collusion on the league’s part.  By now the other team executives have come to the realization that dealing with the Hornets is like having nails hammered into their hands. 

The league believes that having Paul in uniform will bring a higher return in the sale of the team, and that the new ownership can deal with Paul’s unhappiness and expected exit on their own terms.  Of course if a sale does not occur before the March trade deadline then the new owners will be left without an option—and without a superstar player.  And the chances are that any potential buyer will want a discounted rate.  Stern is banking on being able to sell the team before March.

With the lockout over and a new CBA in place for at least six years—the contract is for ten years but can be re-opened in six—the only major issue left for Stern is the sale of the Hornets.  It’s as if the long-standing commissioner views this transaction as the culminating moment to his legacy, but not being part of a team’s basketball operations he is unaware of how trades are made, and seems unwilling to learn. It seems as if greed and power have overtaken the commissioner and common sense and logic have long since left his room.

The end result is not a good one for New Orleans basketball.  It is unlikely that the league will be able to sell the team this season for its expected amount if it has an unhappy superstar counting the days until his exit, and the value of the franchise will be severely undercut if, after the trade deadline passes, the team gets nothing in return.  The league must realize that, unlike labour negotiations, they can’t make a low ball offer and then sit and wait for the other side to cave.  With basketball transactions there is more than just the one side at the other end of the table—if teams like the Lakers and the Clippers don’t like what he’s offering they can choose to go elsewhere.  The Lakers did just that, and the Clippers, unless Stern relents, will follow and soon the league will be left without a possible destination for Paul.  Then Stern will need to explain to a depleting New Orleans fan base why his office mucked up the entire process.

…Yes, Tim Tebow is unorthodox.  His throwing motion is awkward and the ball seems to flop when it comes out of his hand.  He has flaws.  He is definitely not Aaron Rodgers or Drew Brees—but then how many of those pin-point passers are there?  Because of his attitude, his personality, and his team-first determination the results will always supersede his talents.  He has tremendous leadership abilities and his team-mates naturally follow.  He is not a great quarterback, and though he is improving Tebow will likely never be a great quarterback.  But analyze this quote from Broncos kicker Matt Prater.  "You know what's fun about this?  Everyone keeps saying what Tim can't do. And he goes out every week and we win. We love the guy. He's so real. Now we just feel like anything's possible.''  Believing is, at the very least, half the battle.

…When explaining his one trade at the baseball winter meetings Blue Jays GM Alex Anthopoulos let it slip that the organization may not be willing to increase its payroll—despite the fact that team President Paul Beeston had stated that the team would and could, when needed, increase it to the $120-$130 million range.  If this is true and the Jays are backing away from their promise then it is a serious slap in the face to its fan base.  As well AA intimated that the payroll would grow with attendance—as if a payroll increase would follow once more butts were in the seats.  Of course this is backward logic for even the feeble minded businessman—people need a reason to go to the stadium and watch the team.  After 20 years of mediocre play it is up to the Jays to do something to create interest—not the other way around.