The NBA season is slipping away…

November 9, 2011

Today is supposedly the deadline for the owners and players union to come to an agreement over a new Collective Bargaining Agreement (CBA).  The talks have been going on, with the owners having made what is said to be their final offer.  The union side said they would like to negotiate some more on this final offer, and the league (aka David Stern) flat out told them that they accept this or else the owners will start making progressively worse offers as the season gets shorter and shorter, and the pool of money becomes smaller.  The players’ union did not take too kindly to this, and one of the lawyers even said that David Stern was running the players and the league like it was a “plantation.”  David Stern fired back in a brief war of words, the players union lawyer eventually made a public apology and called Stern to apologize in person.

This is just the tip of the iceberg in what seems to be a battle which is really becoming more and more malicious.  Players going after owners (Derek Fisher essentially said Michael Jordan should sell his team if he can’t make money), owners attacking players, players attacking each other, things seem to get worse with each moment.  Now, while Stern has said that they will not move away from the final offer, it has been reported that Stern does have the authority to tweak the deal somewhat.

Really, it would seem that with such a large pool of money at stake (literally billions of dollars for both the owners and players side), they have come down to arguing over about $100 million worth of difference.  Of course this is a large sum of money, but if this was split among players, it would be about $250,000 a player.  We are now entering the final hours before the league potential cancels more games (they are saying you can wave goodbye to the Christmas Day games now) and even just flat out cancel the entire season.

Many more players are said to be preparing to go play overseas as the situation is rather dire.

College Basketball may be the big winner out of all of this.  Everyone looking for their basketball fix will probably tune in to NCAA games, especially as the NCAA basketball season is ready to tip off this week.


The NBA Lockout is a mess

November 5, 2011

Today the owners and union reps will meet again to try and iron out the NBA collective bargaining agreement (CBA), and actually get the season started.  As discussed in previous posts this week, it seems that the chances of getting a deal done are quite small.  Things have been interesting, as it has been reported that Michael Jordan (now an owner) will lead the group of hardline owners who want a 50-50 split or nothing.  Which is opposite of Michael Jordan the player, who of course wanted the players to get a better deal.  It is quite amazing to see the case a single person, 23 years apart, being on opposite sides of the bargaining table in professional sport CBA talks.  It does also show us that in these CBA talks, both sides can have quite legitimate arguments for taking hardline stances… or maybe Michael Jordan is just that competitive, that he doesn’t even want to give small concessions in the CBA talks.

The union which seems to be having splits, is even having splits among the group that is causing the split.  A new article noted that the group that was threatening to decertify today actually did not fully support the decertification process.  Because they would need 30% of individuals to vote in order to start moving towards decertification, and they couldn’t even get 50 people to agree to it out of 400, it looks like the NBA players union may not decertify after all.  What does this mean?  Well, it could mean the chance of talks continuing to try and get a new CBA… but they can only last so long before the season just has to be canned.

Will the NBA close down for a year?

November 4, 2011

I’ll be honest, I don’t things are looking good for the NBA right now with their lockout situation.  As you can read in previous posts here at the IJSF blog, the NBA collective bargaining agreements (CBA) negotiations have been at a deadlock.  All indications from the talks that are going on today is that the owners are angry over having lost a lot of money, and that they want to make up this money by sticking to their guns and having a 50-50 revenue split with the players.  Included in this group of hardline owners is former NBA great himself, Michael Jordan who is now a franchise owner.

50 of the leagues 400 players are preparing to start the process of decertifying the union over the weekend if the talks are still stalled.  This would mean that the labor talks would basically be hitting an end, and the legal battle which would most likely follow, would probably end up canceling the season.

Of course, this is not the best scenario, so a federal mediator will be in the negotiation room on Saturday to try and help them work out a deal.

One interesting post I read was from ProBasketballTalk, which noted several hockey players talking about the NHL lockout and the regrets they had.  Players in this article discuss the lost wages and playing time, and how many of their careers were never the same after the lockout.

People are saying “get it done”, but it doesn’t look good for the NBA, and both sides are set to lose out on a lot of money.

Economic impact of the NBA Lockout?

November 4, 2011

There is always that question of the economic impact sport has, and the common answer given by economists is that there is little/no economic impact from sport on a region.  The research done in peer reviewed journals backs this up, and it has been something which has been discussed here any number of times.

Thus, I was pleased when I came across this post at NBC’s ProBasketballTalk blog today.  They note that there is no economic impact of the NBA lockout, as the discretionary income used to buy tickets will go to other goods and services in the community.  However, they do note a group that is hurting from the lockout, workers at Orlando’s Amway Center where the magic play.  The article states:

(Community Food & Outreach Center director, pastor Scott) George estimated that between 40 and 75 game-night workers have used the Community Food & Outreach Center’s services over the last few weeks. He said he’s unsure of the exact number because some game-night workers are afraid that if they say something, they might not be able to go back to their jobs when the lockout ends.

While this is less than ten percent of the workers for the Amway Center, and we don’t know how many of these workers already go to the Food and Outreach Center in the first place, it does highlight that it is the little guy/business that is often affected negatively by the lack of games.

I remember earlier this year THE SAME author at NBC’s ProBasketballTalk posted an article making the claim that the Lakers losing early in the playoffs would cost the Los Angeles economy $70 million.  This all traces deeper to the words of an economist, who actually notes that the loss could cost downtown business near the Staples Center around $70 million.  Of course, this doesn’t mean that LA is losing $70 million, but that the spending might be redistributed among other parts of the city/region.  Again, those who would be hurt would most likely be those business such as bars and restaurants that depend upon game traffic and large numbers of fans to help boost business.

I’m hoping that more of those in the media are paying more attention to what the academics have to say about economic impact and sport, though I’ll keep watching to see if NBC is keeping a new consistent message.

NBA Lockout Breakdown

November 3, 2011

Welcome to day 126 of the NBA lockout.

I feel a bit guilty about not having discussed the NBA lockout in greater depth, as I spent many posts discussing the NFL lockout.  The NFL lockout was settled in time for the season to begin on time, and while there seemed to be some bad blood between the players and the owners, the scope of the NFL lockout pales in comparison to the NBA lockout.

We are now several months into the lockout (the lockout is just over four months old) and the talks between players and owners hit a deadlock over splitting the revenue.  The owners want a 50-50 split of revenues, the players were willing to go as low as 52.5%, but have yet to say they will go any lower.  Not only has the talks between players and owners been heated, but some of the players have expressed anger at the union as well.  The big split seems to be between union head Billy Hunter and player rep Derek Fisher who seemed to have come to a disagreement over the revenue split.  It is reported that Kobe Bryant and Derek Fisher were pushing to accept the 50-50 split, and that Billy Hunter actually confronted Derek Fisher about this.  It came to the point where Derek Fisher had to bring in the lawyers and publicly make a statement that there is no split in the union.  Officially there is no issues in the union.

NBA veteran Jerry Stackhouse came out and disagreed with this on ESPN Wednesday, he stated:

“Not to say anything against Derek Fisher, it’s not that I don’t think he’s a great guy,” Stackhouse said, “But I don’t want him negotiating my contract. I want an agent who knows the lingo negotiating my contract. Derek Fisher, he doesn’t negotiate his own contract. He has an agent. So why would I want him negotiating something even bigger than his contract? This [Collective Bargaining Agreement] is something more important to everybody…

“David Stern, he’s made this league what it is,” Stackhouse said. “He’s one of the greatest commissioners in sports. He’s got that title, he’s got the NBA at the place where it is because he’s a shrewd businessman and knows how to work his way, play the media, play things up to get what he wants. We don’t do that. Players are emotional. Players get emotional. So no, I don’t necessarily, particularly want Derek Fisher or any of the executive committee negotiating a contract for me.”

So clearly there is a rift in the NBA lockout, which would seem to give some more power to the owners.  The NBA is also trying out a new tactic in the labor agreements: Twitter.  The NBA has a twitter handle now dedicated to posting the ownerships point of view in the labor lockout.  One player (Nazr Mohammed) pointed out that the players can’t talk to coaches or workout at facilities, but the NBA can send them harassing messages about the lockout through twitter (though it is Mohammed’s choice to receive these messages as well).

The lockout has carried on so long to this point, that the league was forced to cancel games all the way through the end of November.  Each day that ticks by is another day lost, as realistically, to get players through camp and have the season ready to go would take about a month (30 days).  So while November is already cancelled, you can pretty much start ticking off the days in December.  The Christmas day NBA games are usually pretty popular, so I wonder if the the two sides might try to push for some resolution.  We know the season will already be shorter, and there is no way they can extend it with the 2012 London Olympics looming in the summer, I begin to wonder if there will even be an NBA season at this point.  While I have pointed out that the owners have stood strong, and there is fractions in the union, it is important to note that many NBA players are currently making money playing basketball overseas.  Utah Jazz point guard Deron Williams began the exodus of NBA players by signing to play in Turkey, and slowly players have moved to teams all over Europe and China.  So while the NBA has suffered bad PR form this lockout, many overseas teams have had the bonus of having the services and star power of some NBA players on their team so far this season.  The NBA has always looked to try and build a bigger global brand, and it is curious to see whether this lockout causing players to go overseas may help/hurt the league trying to become even more popular overseas.

Yesterday, Chauncey Billups had some strong words trying to show the solidarity of the players.  Billups said he was willing to forgo his $14.3 million contract for this season and sit out the entire year to make sure that there is a fair Collective Bargaining Agreement (CBA) in place for the future.  Billups noted that fair means that it would be economically fair to the players.

NBA players are the highest paid players on average than any other professional sport league in the world.  Their salaries have been the big target point of this round of CBA negotiations, as the owners feel they are taking a big hit having to pay such high salaries.  At the same time, the high salaries and lower number of players in the league seem to have created a case where many of the players can actually afford to sit out a season, where NFL players were not able to.  The availability of leagues overseas providing another avenue for players to earn money for NBA players has been another factor which has probably caused the lockout to be so drawn out.  To be honest, the NBA players are in a much better situation for the NBA players, and seem to be willing to take a loss for the time being in order to get a fair contract.  Both sides are losing money, and right now it almost seems to be a game of chicken to see how will flinch first.

Also, I would like to point out this post about the lockout over at The Sports Economist, another great read and take on the lockout from University of Chicago economist Kevin Murphy.

Comparing Win Efficiency in North American Professional Sports

October 25, 2011

NBC Sports’ ProBasketballTalk (PBT) must be quite bored, as they only have news about the lockout and the National Basketball Association (NBA) season potentially being cancelled to really talk about.  That said, they did post an interesting article today about the concept of win efficiency in professional sports.  The question they were asking, was whether NBA franchises had the best win efficiency, as determined by the number of wins generated by a teams payroll.  The calculation which they pull from a Bloomberg Business Week article is calculated by:

After calculating that “cost per win” number for each team across all four major sports over the last five years, Boudway found the standard deviation for each team within their respective sports. Using that standard deviation — dubbed “Efficiency Index” for the purposes of that particular post — Boudway was able to compare across leagues, and determine the spenders who are getting the greatest payoff per dollar spent relative to their competition.

You can click on this link to see the numbers.  One thing I had a question about was the differences in the number of games played.  Win efficiency is an interesting thing, as I have noted in previous posts about the Tampa Bay Rays, Oakland A’s, and the book Moneyball, there are some teams which are able to win games with lower payrolls.  I decided to play around with the Bloomberg numbers, and normalize them for the differing number of games played by each team.  This produced quite different values than the Bloomberg report.  In fact, it went from having a mix of teams from different leagues at the top, to having mainly NFL teams.  In this, when I corrected for the differences in number of games played, it displays that the NFL is clearer the most efficient at the top.  The problem is of course one of sample size.  The NFL has such a small number of games in a season compared to the other leagues, that it is hard to be able to truly compare a single season of NFL teams (who play 16 games) against MLB teams (who play 162).  Additionally, we have to take into account that the leagues have different structures in regards to salary cap rules (MLB has no salary cap, the rest do).  This thus creates the case where some teams are probably forced to be efficient because they don’t spend much, and because of low number of games for NFL teams, means they are able to seem to be very efficient.  I’m not going to say that the teams at the top of this list are better at money management, or have much more effective management, because those kinds of generalizations are hard to make when we are talking about leagues with different structures.

My numbers (sorry for the length).  First column is their rank, second is their rank in the Bloomberg rankings.

  1. 4    New England Patriots    -0.3375
  2. 7    Indianapolis Colts    -0.3
  3. 12    San Diego Chargers    -0.27
  4. 20    Baltimore Ravens    -0.215
  5. 27    Pittsburgh Steelers    -0.1925
  6. 28    Green Bay Packers    -0.19
  7. 30    Atlanta Falcons    -0.185
  8. 1    Nashville Predators    -0.184420649
  9. 33    Philadelphia Eagles    -0.175
  10. 37    New York Giants    -0.1575
  11. 41    Chicago Bears    -0.1425
  12. 42    Tennessee Titans    -0.1425
  13. 5    San Antonio Spurs    -0.136935092
  14. 6    San Jose Sharks    -0.135830777
  15. 44    New Orleans Saints    -0.135
  16. 10    New York Islanders    -0.126996255
  17. 2    Florida Marlins     -0.126493546
  18. 11    Atlanta Thrashers    -0.120370363
  19. 3    Tampa Bay Rays    -0.115494108
  20. 13    Phoenix Coyotes    -0.111535841
  21. 14    Utah Jazz    -0.110431526
  22. 15    Los Angeles Lakers    -0.108222896
  23. 16    Pittsburgh Penguins    -0.10711858
  24. 49    Tampa Bay Buccaneers    -0.105
  25. 17    Orlando Magic    -0.100492689
  26. 19    St. Louis Blues    -0.099388373
  27. 21    Denver Nuggets    -0.093866797
  28. 8    Pittsburgh Pirates     -0.09349523
  29. 9    San Diego Padres     -0.092709556
  30. 52    Dallas Cowboys    -0.0925
  31. 53    New York Jets    -0.0925
  32. 22    Chicago Bulls    -0.091658167
  33. 23    New Orleans Hornets    -0.091658167
  34. 54    Jacksonville Jaguars    -0.0875
  35. 24    Detroit Red Wings    -0.08613659
  36. 26    Boston Celtics    -0.085032275
  37. 32    Phoenix Suns    -0.080615014
  38. 18    Arizona Diamondbacks    -0.071496352
  39. 35    Dallas Mavericks    -0.070676177
  40. 36    Portland Trail Blazers    -0.070676177
  41. 38    Carolina Hurricanes    -0.069571861
  42. 39    Atlanta Hawks    -0.069571861
  43. 43    Houston Rockets    -0.061841655
  44. 25    Oakland Athletics     -0.061282588
  45. 29    Washington Nationals     -0.058925565
  46. 31    Texas Rangers    -0.057354217
  47. 46    Anaheim Ducks    -0.053007133
  48. 34    Cleveland Indians    -0.051854497
  49. 47    Buffalo Sabres    -0.050798502
  50. 63    Denver Broncos     -0.0475
  51. 40    Kansas City Royals     -0.046354778
  52. 45    Colorado Rockies    -0.040855058
  53. 55    Minnesota Wild    -0.036442404
  54. 48    Cincinnati Reds    -0.035355339
  55. 50    Milwaukee Brewers    -0.032998316
  56. 51    Toronto Blue Jays     -0.032212642
  57. 68    Minnesota Vikings    -0.03
  58. 57    Dallas Stars    -0.028712197
  59. 58    Washington Capitals    -0.027607882
  60. 59    New Jersey Devils    -0.027607882
  61. 60    Vancouver Canucks    -0.02319062
  62. 61    Cleveland Cavaliers    -0.022086305
  63. 56    Minnesota Twins    -0.021998878
  64. 62    Detroit Pistons    -0.02098199
  65. 64    Oklahoma City Thunder    -0.017669044
  66. 65    Chicago Blackhawks    -0.016564729
  67. 66    Charlotte Bobcats    -0.015460414
  68. 67    Miami Heat    -0.014356098
  69. 69    Philadelphia 76ers    -0.011043153
  70. 70    Florida Panthers     -0.011043153
  71. 71    Arizona Cardinals    -0.01
  72. 72    Carolina Panthers    -0.01
  73. 73    Atlanta Braves    0
  74. 74    St. Louis Cardinals    0.005499719
  75. 79    San Francisco Giants    0.012570787
  76. 77    Los Angeles Kings    0.014356098
  77. 81    Baltimore Orioles     0.020427529
  78. 75    Houston Texans     0.0275
  79. 76    Kansas City Chiefs    0.0275
  80. 86    Houston Astros     0.029069945
  81. 91    Los Angeles Dodgers    0.036141013
  82. 78    Seattle Seahawks    0.0375
  83. 82    Boston Bruins    0.037546719
  84. 83    Golden State Warriors    0.037546719
  85. 84    Los Angeles Clippers     0.038651034
  86. 85    Colorado Avalanche    0.040859665
  87. 87    Indiana Pacers    0.043068295
  88. 88    Toronto Raptors    0.043068295
  89. 89    Montreal Canadiens    0.043068295
  90. 95    Los Angeles Angels    0.043997755
  91. 98    Philadelphia Phillies    0.0487118
  92. 80    Cincinnati Bengals    0.0525
  93. 93    Columbus Blue Jackets    0.053007133
  94. 94    Tampa Bay Lightning    0.058528709
  95. 99    Detroit Tigers    0.061282588
  96. 96    Milwaukee Bucks    0.06294597
  97. 100    Seattle Mariners     0.06363961
  98. 101    Chicago White Sox    0.064425285
  99. 102    Washington Wizards    0.091658167
  100. 103    Memphis Grizzlies    0.097179743
  101. 109    Chicago Cubs    0.097423601
  102. 104    Sacramento Kings     0.103805635
  103. 111    Boston Red Sox    0.104494669
  104. 90    San Francisco 49ers     0.11
  105. 105    Ottawa Senators    0.110431526
  106. 92    Buffalo Bills     0.115
  107. 113    New York Mets     0.120993827
  108. 108    New Jersey Nets    0.129204886
  109. 110    Calgary Flames    0.143560984
  110. 97    Miami Dolphins    0.1475
  111. 112    Toronto Maple Leafs    0.152395506
  112. 114    New York Rangers    0.200985377
  113. 116    Philadelphia Flyers    0.228593259
  114. 121    New York Yankees    0.228631193
  115. 117    Edmonton Oilers     0.234114835
  116. 106    Cleveland Browns     0.255
  117. 107    Washington Redskins    0.2675
  118. 119    Minnesota Timberwolves     0.312521219
  119. 120    New York Knicks    0.314729849
  120. 115    Oakland Raiders     0.4825
  121. 118    St. Louis Rams     0.585
  122. 122    Detroit Lions    0.805

You will notice that in both rankings the Detroit Lions are dead last.  When you lose most of your games, you just can’t be considered to be very efficient unless you are paying your players close to nothing.  While adjusting for the number of games changes things a bit, there is still a 0.95 correlation between Bloomberg’s rankings and my adjusted ones.

City of Memphis contemplating suing the NBA over the lockout

October 20, 2011

The Memphis Grizzlies, the cities National Basketball Association (NBA) franchise, currently play at the FedEx Forum.  However, with the NBA currently locked out, and looking more and more likely that there is going to be a big cutback in the length of the season (or possible no season at all), the city of Memphis has started to worry.  The reason?  The FedEx Forum is actually paid for through revenues produced by the team.  However, if there is no team playing there, then that means the city will have to make the bond payments.  Fox Memphis say the City Council is estimating that these will be somewhere in the neighborhood of $18 million.  Those who will have to bare the burden?  Most likely the local taxpayers.  Things are getting urgent, city councilwoman Julie Fullilove notes:

“Should this lockout stay until December, then there’s a very big bill there that the city of Memphis will be responsible for, and whether or not we file a lawsuit, which may set precedent among other cities in this nation, is something we’ll have to wait and see. But it’s only being proactive that’s he’s offering this resolution.”

So with less than a month and a half away from the deadline when Memphis will start having to cough up some cash to make bond payments, the city has started to look at the potential for a lawsuit against the NBA.  Curiously, when Fox Memphis talked to the individual in charge of the bond, he noted that there is currently a surplus in the account to pay the bond through 2028.  He  even notes that he is confused where the city got the idea that they needed to pay up $18 million soon, and that it would be the taxpayers who would have to pay it.

So there we have it, the City is thinking of suing the NBA for being locked out, claiming it will cost them part of the bond payment.  The guy in charge of bond payments says there is more than enough money for the next decade and a half.  The $18 million doesn’t seem to add up that the city would have to pay because of basketball not playing, as they only receive about $3.5 million a year currently from ticket sales and revenue.  I think this may just be a political powerplay to help the politicians in the city council to look good.  I don’t think it really will do much, and I doubt that they have much of a case against the NBA.  Case in point to this being about politics, the City Council Chairman noted:

“I want the citizens of Memphis to know that we are not sitting by idly, waiting for this to hit us and for us to say we’re sorry.”

Still, it would be curious to see if cities can take action over lost revenue because leagues do not play because of a lockout.  I wonder, would the city sue the players if the players were on strike?