Wednesday July 21st, 2010

I am not here to rip David Stern. In fact, if I start a major professional sports league tomorrow, which seems unlikely, I would ask Stern to be the commissioner. He has a grasp on every aspect of his job and his sport, he taps into new revenue streams, he admits mistakes, he encourages his players and coaches to show their personalities, and most important, he seems to genuinely care about fans.

Stern has been called the best commissioner in sports history, and he might be. And that is why I'm writing this. It is about how hard it is to steer a pro sports league even for David Stern.

Stern is whispering about a lockout next season. It's a stage whisper, intended for everybody to hear -- Stern says the NBA lost $370 million last season and the league needs a new pay structure and if the players don't surrender a piece of the pie, there won't be any pie, which, of course, would be crushing news for Shaquille O'Neal.

In related news, the Toronto Raptors just gave $34 million to Amir Johnson, who is a fun player and very nice guy but so is your cousin Lenny and nobody is giving him $34 million. Johnson has limited skills and has trouble staying on the court -- before games, when Johnson goes over to fist-bump opposing players, he fouls them.

And in more related news, the Memphis Grizzlies gave Rudy Gay a franchise-player contract, even though Gay is absolutely not a franchise player. Consider this sequence of events:

In November 2009, Gay reportedly asked for a five-year contract extension in the $65 million range. The Grizzlies failed to sign him. Then Gay put up basically the same numbers as the year before, Memphis finished 28th in attendance in a league that supposedly lost $370 million, and the Grizzlies missed the playoffs. Naturally, Memphis then gave Gay a five-year, $82 million deal. If that's fiscal responsibility, then Antoine Walker should be the next Secretary of the Treasury.

I'm not here to question Stern's numbers. But I do think we need to take a brief tour through recent NBA labor history ... wow, that sounds boring. OK, let's take a hot, saucy tour through recent NBA labor history. Much better!

In the early '90s, NBA rookie salaries got way, way too high; it was like the contracts were made of helium. Glenn Robinson famously demanded a $100 million rookie contract and settled for $68 million, which made him one of the highest-paid players in the league before he ever took a jump shot or let somebody blow by him for a layup.

How could teams fork over so much money for potential? Stern had to do something, so he persuaded the union to accept a rookie salary scale. Rookies would get three-year deals at relatively low salaries.

Stern thought he had solved his problem. But he had also created new ones. He did not anticipate that dozens of players would turn pro earlier than they ever had so they could plow through their rookie contracts and get big paydays. This led to Kevin Garnett's turning pro out of high school in 1995, which led to his six-year, $126 million contract extension from the Timberwolves before he had, in basketball terms, done anything.

Garnett actually turned out to be worth it, but that wasn't the point.

Again, how could teams fork over so much money for potential? Stern had to do something. Now he had two problems: Players were turning pro earlier than he wanted, and they were making money they hadn't earned (even by the ridiculous pro-sports version of the word "earned").

Stern eventually got the union to accept an age minimum (forcing most players to play college basketball for a year, if not actually attend college). Most important, the league (and union) instituted maximum-salary contracts -- and ensured that a player's current team could offer more money, and longer deals, than any other team.

Stern thought he had solved his problem: Salaries had a clear ceiling, and teams could spend more to keep their own players. It looked, for all the world, like he had ensured there would be competitive balance in his league. There was no danger of one team spending an astronomical amount of money and stockpiling stars.

Now, fast-forward to this month.

What happened?

The Miami Heat stockpiled stars: LeBron James, Dwyane Wade, Chris Bosh. And the Heat could do it precisely because of the system that was supposed to ensure competitive balance. Without maximum salaries, James and Wade would be worth at least $30 million a year on the open market -- James might get $40 million. Bosh would probably get more than $20 million. The Heat could not have afforded to spend almost $100 million on the three players, and while those guys all took less than the maximum to sign with the Heat, I doubt they would take that much less than they could get. James would have had to leave more than $100 million on the table to join forces with Wade and Bosh.

With a salary cap and no maximum salaries, precisely the system that the NBA had 15 years ago, there is no way that Miami could horde the three best players on the market.

In fact, with the system in place in the mid-'90s, James, Wade and Bosh might still all be on their (lucrative) rookie contracts. Of course, so would Darko Milicic.

The point here is that Stern can cite his numbers, he can talk about the economy and cost certainty, and he can try to tackle very real problems with very reasonable solutions. But he cannot predict the future. He cannot keep Memphis and Toronto from giving out foolish contracts. When the NBA's collective bargaining agreement expires next year, Stern might just get what he wants. But he'll need some time to know if that's what he needs.

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