Small Market Owners Driving the NBA Lockout?

by October 26, 2011

NBA team owners in the smaller markets insist that they’re losing a ton of money each year, and have been moaning about it for years. And even though they haven’t made their finances public to prove just how bad things are, raising serious doubts about their claims as a result, they’re the ones who are holding things up in this latest lockout. ESPN explains: “A couple of days before the start of training camp in 2006, David Stern received an uncomfortable letter at the NBA’s New York offices. Eight owners signed a petition that demanded Stern address the small market/big market financial disparity they felt was a serious and growing problem. Obviously, they didn’t need to write him a letter like he was their local representative in Congress; he works for them. They did so to make a symbolic point and then released the letter to some media outlets to make sure the issue became public. It read: ‘We are asking you to embrace this issue because the hard truth is that our current economic system works only for larger-market teams and a few teams that have extraordinary success on the court and for the latter group of teams, only when they experience extraordinary success. The rest of us are looking at significant and unacceptable annual financial losses.’ The authors of the letter were Paul Allen of Portland, Herb Simon on Indiana, Bob Johnson of Charlotte, George Shinn of New Orleans, Larry Miller of Utah, Michael Heisley of Memphis, Glen Taylor of Minnesota and Herb Kohl of Milwaukee. Johnson and Shinn have since sold their teams and Miller has passed away, giving way to his son, Greg. But the situations in those markets haven’t changed. In essence, that letter is the root of the current lockout. And, it is turning out, perhaps a core reason the owners can’t make a deal with the players after more than two years of negotiations … They are furious that the players are getting paid so much. They are furious that the NBA’s current revenue sharing ($60 million a year) is worth less than half of a league like the NHL ($137 million). And they are trying to take advantage of throwing their new weight around. This is what deputy commissioner Adam Silver was referring to last week when he mentioned ‘robust’ discussions about revenue sharing at recent owners’ meetings. This is also what Hunter has been referring to when he’s described a fracture within the ownership ranks. At the heart of this labor dispute is money, of course. But there’s that other classic element at play as well: power. And who has it among the ownership ranks is changing.”