David Stern: Service with a smile
LAS VEGAS -- Last week, LeBron James tipped the balance of power in the league and the NBA revised the 2010-11 salary cap upward to $58.04 million. In a business where celebrity and liquidity are vital to the health of the game, July 2010 has been a monumental month for the NBA.
Summer League, which is usually an exhibition of young talent and a summer schmoozefest for league insiders, has been buzzing with the fallout from James' decision to sign with Miami, followed closely by talk of the looming negotiations over the collective bargaining agreement.
Those two issues were the dominant themes as David Stern's press conferences in Las Vegas following a meeting of the NBA's Board of Governors.
On the James firestorm, Stern offered a series of nuanced qualifiers and condemnations.
On LeBron James: "With respect to LeBron's departure from Cleveland, a couple of things. One, he was certainly entitled to do that. I think he's both a terrific player and a very good person. Had he asked my advice in advance, I might have suggested that he advise Cleveland at an earlier time than apparently he did that he was leaving, even without announcing where he was going, so we could have eliminated that. I would have advised him not to embark on what has been come known as 'The Decision.' I think that the advice that he received on this was poor. His performance was fine. His honesty and his integrity shine through. But this decision was ill-conceived, badly produced and poorly executed. Those who were interested in it were given our opinion prior to its airing."
On Dan Gilbert: "I think that remarks by Dan Gilbert, the owner of the Cavaliers, catalyzed as they may have been by hurt with respect to the manner and the fact for himself, his team, and particularly for the people of Cleveland, though understandable, were ill-advised and imprudent. I have notified Cleveland that they will be fined $100,000 for those remarks under my power as Commissioner."
Whatever misgivings Stern had about James' orchestration of his decision-making process, the commissioner certainly didn't disown the public preoccupation that accompanied the lead-up to the announcement.
"I'm a devout reader of The Sports Business Daily -- and I've never seen so many pages devoted to one subject, not to the World Cup, not to the [baseball All-Star Game], but to the decision and its aftermath," Stern said. "It was just wild."
Stern's remarks about the collective bargaining agreement didn't vary a whole lot from his comments at press conference during All-Star weekend and the NBA Finals. The owners have furnished the players with their numbers. The players don't agree, in large part, with those numbers and the means by which they're being calculated. Stern maintained that the two sides aren't as far apart as the players suggest, but also said, "We're asking for fundamental changes in the system and the players, as Billy Hunter has said publicly, would very much like the present system to continue. So you can fill in the gaps for yourselves on that."
Those gaps are deep chasms. Fundamental change vs. the status quo is a very oppositional duality. Stern has provided the players with numbers that the union believes adamantly are false. The players insist the owners have exaggerated the 30 teams' aggregated losses, the number of teams that are unprofitable and the degree to which they're losing money.
Given that owners across the league have been doling out hefty contracts for the better part of two weeks, Stern was asked to reconcile that free spending with the reported losses in revenue.
"Our owners spend within the system," Stern said. "They're encouraged, praised, and otherwise driven to improve their teams. Of course, they have the capacity. It winds up driving them to unprofitability. They want to change that system so when they get driven to it, whatever they do, there won't be losses. That's all."
Regarding the increased estimate in revenue that nudged the salary cap number higher for 2010-11, deputy commissioner Adam Silver returned to what the owners see as an intrinsic problem in the current system. "Part of the problem with the existing system is it's based largely on revenue, not net revenue," Silver said. "Although our actual revenue numbers were better than what we projected, it came at a large cost. Our teams did a spectacular job in a down economy of increasing ticket sales, but that came at the cost of additional promotions, additional marketing, additional staff."
Most teams -- or at least management -- were ecstatic when the league bumped up the salary cap number by nearly $2 million. The salary cap estimate has been a moving target for the past year, a dynamic that's rarely discussed publicly, but one that's very peculiar. In what other industry do those charged with conducting the day-to-day business operations not know what their tactical budget is going to look like six months from today?
Since last July, the guesstimate of the salary cap has gone from somewhere in the neighborhood of $50.4 million to $53.6 million. Then, in February, Stern announced that the league projected an aggregate loss of $400 million this year after suffering losses of $200 million in each of the first four years of the current CBA. It's worth noting that this proclamation came down during one of the year's two most fluid trade markets -- the February deadline. A rosier $56.1 salary cap estimate was released in April on the eve of the postseason. Then, just after the trade-rich draft period, the league released the surprisingly high actual cap number of $58.04 million.
Skeptics might see the timing of the ever-shifting cap number as a deliberate attempt by the league to retard spending at times when management are most eager and able to spend. The league might respond that such are the realities of the current system. Don't like it? Change it.
Over the next year, that change vs. more of the same debate in the NBA will be as resonant as anything we've seen in a historic election.