LeBron Has it All Wrong
You may have missed it but just this week the NBA announced a new nine year deal with ESPN and TNT for future broadcast rights. The deals mean that the league will start receiving $2.6 billion a year from TV contracts starting with the 2016-17 season, a rather nice little bump from the $930 million a year it received under the old agreement. If you remember, the NBA locked its players out in 2011 saying that most of the teams were losing money and that they couldn’t afford to continue paying the players 57% of the basketball related revenue. The players backed down and accepted a 50/50 split with the owners. LeBron James, who by the way, doesn’t hold any position within the players union, came out and said that all the back peddling the players did 4 years ago is going to be reversed when the new collective bargaining agreement expires after the 2016 season. LeBron said that back in 2011 the owners claimed to be losing $300 million a year and that 22 of the 30 teams were losing money.
James says they won’t want to hear any poverty stories next time because of the new TV contracts and the booming value of franchises–most notably the sale of the LA Clippers for $2 billion dollars this summer. That may seem logical to James and the rest of the players but the question has to be asked “Why should multi-millionaire basketball players get what no other employees get in the United States?” When is the last time a group of employees, making an AVERAGE of $4 million dollars a year, complained that they weren’t getting a big enough piece of the pie? The last time I looked, the value of any pro franchise is based on what someone was willing to pay for it. I didn’t see Chris Paul or Blake Griffin kicking any money into the pot when Steve Ballmer paid his $2 billion dollars for the LA Clippers. All $2 billion came from Ballmer. He risked $2 billion of his own money (regardless of how much he has that’s a boat load of cash) on the purchase. Yet LeBron, and probably most NBA players, think that means they should all get a bigger piece.
In what other business does someone put nothing into the investment, and still demand more than half of the profits? NONE. Because business wouldn’t work if those with no risk made half of the revenue. It’s another example of why professional athletes are so delusional about almost everything. They really do live in a fantasy world. If 10 years go by and the popularity of the NBA fades, and the Clippers are only worth $1 billion dollars, will Paul or Griffin help make up the lose for Ballmer? Hell no. They’ll say that’s his problem, he shouldn’t have paid so much. Team owners may be ridiculously wealthy, but that’s good for them and the gamble they made on businesses that paid off. It doesn’t mean the players should get to equally share in the reward. They get their millions and should be happy for it. Have you ever noticed that the former players who are now involved in ownership… i.e. Michael Jordan, Magic Johnson, Larry Bird… never pull the owners aside and say, “We need to give more to the players, the game is all about them.” That’s because they see the inner workings of the NBA and have their eyes have been opened to the risk the owners make.
LeBron and his fellow NBA brethren would be wise to take their $40, $80, $125 million dollar GUARANTEED, no risk contracts and quietly walk away –or we might see another lockout in 2 years.