On a recent September evening at Madison Square Garden, it might have been the height of basketball season. An impressive lineup of NBA stars had assumed their positions on the court. The giant video screen flashed overhead, carefully programmed to punctuate every development in the game. And the prosperous white men in suits had even turned up to stake their claims to prime courtside real estate.
On the opposite side of the court, spectators in wheelchairs filled the first few rows, prized perches normally occupied by distinguished season-ticket holders like Woody Allen and Spike Lee. It was a reminder, along with the hundreds of empty seats dotting the arena, that this was no regular NBA game.
The occasion was the fifth annual New York All-Star Basketball Classic, a showcase contest whose roster included hometown favorites John Starks, Stephon Marbury, and Chris Mullin, playing alongside flashy young stars like Kevin Garnett and Jerry Stackhouse. Proceeds from ticket sales would benefit Wheelchair Charities, Inc., a nonprofit organization that raises money for paraplegic and quadriplegic patients at Goldwater Hospital on Roosevelt Island. A typical off-season event, it was an opportunity for the league and its players to demonstrate their community involvement.
But with a three-month-old lockout posing a genuine threat to the upcoming NBA season for the first time in the league’s 52-year history, these familiar sights and sounds seemed an unfair tease. (At press time, the NBA had postponed training camps indefinitely and canceled the first week of preseason games. And though the NBA just offered the union a new proposal last Friday, by most accounts, the regular season is unlikely to begin on schedule in November.)
The standoff between the NBA and its players comes down to a dispute over how to divvy up the spoils from one of the most lucrative commercial ventures in the history of American sports. Since 1984, when David Stern was named commissioner, the league has quadrupled its annual revenues, in part on the strength of marketing and media ventures that have lifted pro basketball to unprecedented worldwide popularity. The NBA’s extraordinary success relies heavily on a power dynamic that over the last decade has allowed the league to manipulate the images of its basketball players with the goal of maximizing their commercial value. For their part, players have realized that their appeal is what’s making basketball sell so well and have for the first time begun to show signs of chafing under the NBA’s tight strictures. In addition to trying to rein in player salary costs, the NBA has also made player conduct an issue in the current negotiations. In the wake of Latrell Sprewell’s attack on P.J. Carlesimo and controversies over marijuana use among players, the league has proposed new contract clauses aimed at regulating player behavior on and off the court.
In a sense, the fight over money and morality is simply providing a stage for the league and the players to act out a power struggle.
Jim McIlvaine, a center for the Seattle Supersonics, is on the players’ union negotiating committee and secretary-treasurer of the executive committee. In a recent interview, he characterized the labor dispute this way: “People ask me all the time what the real sticking point in negotiations is. They say, ‘Is it the money or is it the marijuana thing?’ I tell them, ‘You know, it really all comes down to control. The owners want more of it and the players want more independence.’ ”
From the NBA perspective, the biggest issue is the proportion of revenues going to player salaries. According to the league, player payroll ate up 57 percent of the ’97-98 NBA income. League officials say 15 of the 29 teams are not making a profit, blaming skyrocketing salaries. A contract provision known as the Larry Bird exception is partly why players can demand so much money. It permits teams to exceed the league-wide salary cap that otherwise limits each team’s total annual payroll to $26.9 million in order to re-sign certain players who are near the end of their contracts. In 1997, the Bird exception meant that the Chicago Bulls could pay Michael Jordan a reported $33 million. The Minnesota Timberwolves took advantage of the same loophole before the start of last season to sign Kevin Garnett to the biggest NBA multiyear contract yet, a six-year deal worth a reported $126 million. The players have steadfastly refused to discuss the elimination of the Bird exception, a move they say would unfairly deprive them of their ability to earn their market value.
On a bench after the benefit game, Stephon Marbury hunkers down for the press barrage. After two years at point guard for the Minnesota Timberwolves, the 21-year-old has combined prolific basketball skills and unyielding determination to negotiate the path from a playground in Coney Island to the NBA. The public, he says, has misconstrued the NBA players’ position as “greedy.” The dispute is not over player demands for higher salaries, he says, but their right to negotiate based on their value to a team. (An end to the Bird exception would effectively impose a ceiling on players’ salary increases, regardless of their on-court contributions or their ability to fill arenas with paying customers.)
Marbury pauses, “I mean, Jerry Seinfeld makes $225 million a year and nobody’s saying nothing about that.”
There is little doubt that Marbury has a thorough grasp of the free-market principles that won him a three-year, $5.67-million contract with the Minnesota Timberwolves in 1996. Throughout his conversation with reporters, Marbury’s hands are in constant motion as an incessant stream of young autograph seekers thrusts event programs at him to sign. In the open market, the signature he just penned is worth hundreds of dollars. But Marbury, and most other NBA stars, gives away signatures for free. Perhaps the idea of some enterprising youngster making a few bucks off his autograph isn’t as troubling to him as the NBA spawning his image into millions of dollars in revenue, and then pleading poverty at the negotiating table.
Of course, the players’ astronomical market value is in large measure the product of NBA commissioner David Stern’s legendary marketing prowess. A profile of the commissioner posted on the NBA’s official Web site highlights his instrumental role in the development of the lucrative NBA Properties, the league’s marketing arm, and NBA Entertainment. The NBA, in its haste to capitalize on the players’ images, may have helped create its own monster.
“People rave about David Stern’s marketing genius. Well he’s spent the last year doing an incredible job trashing the images of NBA players,” observed a player advocate who spoke on the condition of anonymity.
Beyond the debate over free-market economics, legitimate questions remain about the extent of the NBA’s financial difficulties. Andrew Zimbalist, an economist at Smith College, argued in a recent New York Times op-ed that the NBA has overstated its money problems.
“Basketball is profitable,” Zimbalist told the Voice. “They [the NBA] don’t have much to stink about.” He further suggested that some teams could be doing what amounts to “cooking the books.” Because so many teams own arenas and media outlets, they can channel team income into these other holdings in order to make it appear the teams are losing money.
Earlier this month, just weeks after walking out of a negotiating session with players over what Stern called “insulting” proposals, the NBA opened a flagship retail store on Fifth Avenue in Manhattan. The NBA, Stern says in a press release, “will utilize every asset within the NBA organization to make the flagship store an exciting and unforgettable experience for customers.” Occupying some 35,000 square feet, the building boasts a split-level, state-of-the-art design.
In the midst of pleading poverty to the players, a number of teams have signed coaches and other top-level management personnel to lucrative multiyear deals. In August, the Milwaukee Bucks signed new coach George Karl to a four-year, $20-million deal–42 percent more than he was getting with the Seattle Sonics, who fired him this summer. Although the average player salary for the 1997-98 season is between $2.2 and $2.6 million (just under the $3 million coaches’ average), union records show at least 110 players earn less than $1 million a year. As commissioner, Stern earns a reported $8 million annually. The NBA did not respond to a request for more details on its finances or negotiating position.
The NBA’s finances could get a whole lot worse if it loses the arbitration currently pending. By October 19, NBA nemesis John Feerick (he ruled against the NBA in the Sprewell arbitration) will decide if the league has to pay $800 million to a group of players who have guaranteed contracts. The players filed a grievance against the NBA in June, alleging that it could not legally withhold their pay during the lockout.
Regardless of which side prevails, the showdown’s significance seems best measured not in the implausible amounts of money at issue, but in the degree to which the NBA loosens its tight-fisted grip on the notion that its players are nothing more than a product.