I am certainly not going to be the guy who comes in and starts a giant debate about unions and their value in the modern world. At least, I am not going to get into that debate with all unions. If nothing else, I want to make sure that this page doesn’t devolve into acidic commentary on auto unions, steel unions or even teachers’ unions. If you want to criticize me for going after the low-hanging fruit that are the millionairre unions in professional sports be my guest. But after reading about the NBA players’ union this morning, they can’t possibly escape the wrath.
You don’t have to be a member of Obama’s cabinet to know a bit about the state of the economy in the United States. I can’t think of too many corners of the national or world economy that hasn’t suffered over the last few years. A sports league (the NBA) that relies heavily on citizens discretionary entertainment dollars for revenues was certainly bound to take a hit. As commentators who have been closely following free agency in the NBA we have been focusing a lot on salary cap dynamics and how that cap is expected to go down next year. The ramifications of this are mind-boggling. From “franchise” players who will receive max deals that are calculated as a percentage of the cap to the luxury tax line where teams are penalized financially, it is going to be a crazy time to be an NBA fan.
The bottom line is that everybody knows it is coming. Or to be more conservative if you aren’t guessing the drop in the cap then you are acting irresponsibly. The NBA commissioner David Stern has mentioned this potentially lowered cap at various points throughout this season and now the NBA sent out a memo reiterating that the cap and luxury tax levels are expected to drop. They are doing this because these are financial risks for the teams in the NBA. And now the Players’ union is upset.
“A memo of this nature can have a chilling effect on the market for free agent and rookie signings,” executive director Billy Hunter said through a spokesman. “If it later turns out that the league did not have a good faith basis for making these projections, the NBPA will pursue all available legal remedies, including a treble damages claim for collusion.”
Duh. A memo of this nature should have a chilling effect on the market for free agent and rookie signings. The cap is lower this year than it was last year. The economic outlook hasn’t proven to be any better than it was going into this year. The housing market may stabilize but the credit card industry was scared the last time I checked. Yet the NBA Players’ union is wondering if the NBA had a “good faith basis” for making the lower projecti0ns. Has the Players’ union listened to a speech by the President this year? Have they punched up Google or Yahoo’s finance pages? And this only speaks to ticket and merchandise revenues which can be tied directly to the fans and the revenue they provide directly. What about the collapse of advertising revenue in television and on radio?
I could go on and on, but I think you get the point. The NBA is acting responsibly and the millionairres in the NBA players’ union are apparently in denial when it comes to the economy. Granted with the free agent class of 2010 coming up soon, the union has a lot on the line. Still, just because the timing stinks for them doesn’t mean they can magically make it a good time for NBA teams to spend wildly.