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The Steele Drum


July 17, 2010 8:26 AM

The NBA: $450 Million and Still Broke

ba-warriors_sale_SFCG1269309241.jpgThe NBA is in huge, huge financial trouble, so massive that it has to get a new labor agreement at the risk of shutting the league down for it. We know that because ... a) it says so; b) it wants Joe Johnson to get $119 million and Darko Milicic $20 million; and c) two groups are fighting over who submitted the highest bid for one of the most mediocre franchises in the league.

No, I don't know how point "a" fits in with points "b" and "c", now that you ask.

Chances are, if you ask the powers that be, they won't reconcile those facts, either. But they probably won't have to, because in general, big-time American sports leagues, their teams and their owners never have to justify their words or their actions when it comes to siutations like this.


When next season rolls around and talks for a new agreement really heat up, they will continue to make point "a'' well enough that points "b" and "c'' will sound like they actually support their claims. The players association will lose ground, sign a deal that takes them collectively backward ... and the public will still claim that greedy players are ruining the game and ought to be thankful they're not picking up garbage, or serving jail time, instead of making millions playing a kids' game.

So for now, let's set "a'' aside and save our brain cells by not even pondering "b.'' Focus on what's going on in the San Francisco Bay Area right now: the Golden State Warriors are changing hands after 16 years under Chris Cohan. The winning bidder, awaiting NBA approval, is a group led by Celtics part-owner Joe Lacob and Hollywood mogul Peter Guber. The loser, everything-mogul Larry Ellison, is complaining that Cohan rejected his bid, which he says is higher.

Total reported price: $450 million, an NBA record, breaking the mark set six years earlier by Robert Sarver's $401-million purchase of the Phoenix Suns.

For the Golden State Warriors.

You might be asking yourself here: The Warriors? The trade-Chris-Webber-for-Tom-Gugliotta Warriors? The Sprewell-choking-Carlesimo Warriors? The draft-Joe-Smith-over-Kevin-Garnett Warriors? The take-Todd-Fuller-over-Kobe-Bryant Warriors? The let-Gilbert-Arenas-walk-away Warriors? The one-playoff-team-in-16-years Warriors? The Baron-Davis-liked-the-Clippers-better Warriors? The huge-contract-for-Corey-Maggette Warriors? The brought-Don-Nelson-back-again Warriors?

Yep. And they were, in fact, the team with the fewest playoff appearances in Cohan's 16-year tenure as an owner.

That's the team that was sold for more money than any franchise before it. And that is also the third NBA team to change hands in 2010: the Nets were sold to Mikhail Prokhorov, and the Wizards were transfered from the Pollin family to Ted Leonsis. (By the way: those franchises have had only minimally more success than the Warriors, in every measurable category.)

Three new owners in less than a calendar year, for a league that, for the past two years, has pleaded poverty relentlessly, because of the recession and modulating attendance and terror over television money and player contracts they were dragging behind them from past seasons. Yet not only did Prokhorov make his first major plunge into an American enterprise, and not only did AOL genius Leonsis make good on his agreement to add the Wizards to the NHL's Capitals ... now, two entities are battling over who can pay more for the Warriors. A team that, despite being perpetual losers for a decade and a half, reaped Cohan a profit of nearly triple his original reported purchase price of $119 million.

These big business brains all want in. With a league that, as far as you and I know, is a month or so away from applying for food stamps.

One plausible explanation is that they all believe the NBA is going to re-work the deal with the players so that their enormous investment will look like a steal in comparison.

A related plausible explanation: the NBA is playing fast and fuzzy with the truth, which is why, once again, the union wants proof of this near-destitution. It wonders, as most of us do, how teams set a free-agent market like the one steaming along now on the sea of red ink it keeps talking about. It also wonders why, if their plight is so bleak, they worked so hard for so long to open up cap space for this summer and make players know how eager they were to use it up.

The NBA is still the only league with as many limits and restraints on salary spending -- yet the salary cap rose this offseason, higher than it had been predicting, as it had been predicting less revenue to base the cap upon. Ratings for the NBA Finals were its highest since the end of the Michael Jordan era, and the LeBron James developments are sure to make the Miami Heat a ratings magnet in the regular season and postseason in the future.

There simply are no outward signs that the NBA is suffering so mightily that the players have no choice but surrender.

What we have is the NBA's word: we're hurting, and someone's gonna have to do something about it. By this time next year, a new owner at Golden State, who had just paid close to half a billion dollars for the franchise, will be joining in the chorus.

Feel free to tune all of them out.

Photo illustration: sfgate.com

You can find me on FanHouse here. You can also find my book on Tommie Smith here, and on Dr. Miles McAfee here.



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