From the bench

NBA struggles with economics

By Jimmy Chai , On-Line Forty-Niner

Tuesday, October 27, 1998

Many college basketball players would give their right foot to be drafted into the NBA.

But of course, without their foot, they couldn't do much in the league. And forget about the shoe contract.

The recent NBA lockout, which canceled all exhibition games and postponed the beginning of the 1998-99 season, has many fans asking "why?"

Basketball players make millions of dollars that others would give body parts for. Why are they complaining?

The player's argument - While the owners make billions of dollars off the players through every means of marketing possible, the athletes, who have restrictions on their wages due to salary caps and contract limitations, are looking for fairness by raising or even abolishing the salary caps imposed by owners.

The owner's argument - No way are the players going to have uncapped wage restrictions because incomes will soar due to the competitive market place. If this happens, owners say they won't make a profit.

Basically, both sides want each other to show them the money. (I can't believe I wrote that.)

If you have an economics class, you'll know that this is the free market system working at its best.

The stalemate is created by conflict of interest.

It's need versus greed and there is no room for cry babies.

The players went from playing "round ball" to playing "hard ball" when they declared a lockout approximately four months ago which created this stand off.

But there is a certain appeal to watching the negotiation process in motion, and gosh darn it, it needs to be appreciated.

It's kind of like a game if you will.

Players versus the owners with special referee and famed middle man, NBA commissioner, David Stern.

The rules in the free market place are simple.

There are no rules. It's survival of the fittest - power over precedence.

Coaching today's match for both sides will be none other than yours truly.

Players strategy - The players are at a point of no return.

They started the lockout and now they need the key, which is in the hands of the owners.

So far, we know the owners cannot make much money without the players on the floor. The owners have already agreed to raise the minimum base salary for players, but they haven't raised the salary cap.

The players can't go anywhere else because no other league can sustain the money needed to pay the players.

The only real power the athletes have, just like any other employee of any industry, is a strike.

If they give in now, it will show weakness the owners could take advantage of, and it could make things worse.

The owners strategy is simple.

Take away the food and the pigeons will starve.

On a long term tipping scale, the balance favors the owners for the simple fact they have money and lots of it.

Will they follow the route of steel tycoon Andrew Carnegie or maybe the baseball owners and bring in outsiders?

It would not be quality, but they could.

Basically the owners know where they stand (if they give in now, they can still make a profit) and they probably want this to go away as soon as possible.

But first, they need to tie up some loose ends. Make some demands.

The owners want to lengthen the rookie scale from three years to five which the players union agreed on.

But as an added incentive, some how alienate agents and lawyer, who probably started this mess, in some way that does not seem too obvious.

But of course, if worst comes to worst, owners could probably cancel players contracts (due to breach of contract for not playing the beginning of the season) and could issue one year contracts forcing all players to make every year count.

But that's really reaching and only a sports fans dream.

But the truth of the matter is all of these arguments are hypothetical and the strike will probably end in compromise with both sides giving a little and taking a little (little being in millions of dollars as opposed to billions).

But the real winner will probably be the middle man Stern because in the free economic circle, the middle man always comes on top.

The big losers are probably the fans who miss watching Michael Jordan on Sunday afternoon trample the Utah Jazz, again.

To the fans, it's game and they take it personal.

As the immortal Michael Corleone would say "it's not personal, Sonny. It's business."