Lockout

[marthafokker]

I hope players do play in Europe, that will make it easier to watch European ball.

I do too, that way those players are worned down or injuried to a point they cannot make a real salary when the new CBA is drawn.

[turk3d]

POB was a fraud, where is his punishment?

His punishment is that he will probably be working in a bakery somewhere making minimum wage for the rest of his life instead of making the millions he could have made as a backup Center in the NBA if he applied himself to the sport.

[Sleepy51]

His punishment is that he will probably be working in a bakery somewhere making minimum wage for the rest of his life instead of making the millions he could have made as a backup Center in the NBA if he applied himself to the sport.

Correct, but his punishement would have been more efficient and more economical under a competotive marketplace.

The only reason POB got a multi-year deal is because rookie scale mandated it. That is why rookie scale is broken and stupid. It requires teams to give unproven players a guaranteed deal. Under a competitive market WITH a hard cap you would rarely see guaranteed deals outside of the top 10 picks in a good draft year. In a bad draft year you might not see gtees outside of the top 5. The consequences of a multiyear mistake under a hard cap would disincentivise poor risk assessment. Of course there would still be peaks and valleys and mistakes, but through undilluted consequences, learning and adaptation would occur. The current system of fixed guarantees and transferred risks actually ENCORAGES risk taking and poor risk assessment because the potential.

It is exactly why command economy, price fixing and "too big to fail" all don't work. In evolutionary terms you are removing the selective pressures that IMPROVE adaptation over the long term and encoraging the perpetuation of inferior, mal adapted, failing entities.

[Sleepy51]

Rookie scale transferred the risk of the #1 team pulling a Glen Robinson and displaced that risk over the teams picking below them. While "spreading the risk out" theorheticallu sounds like a good idea, ut has had the unintended consequence of encorgaing poorer risk taking by those top picking teams. Under the rookie scale era we got Younger and less proven draftees in the top spots. The proliferation of high school and underclassmen as early picks was a consequence of defraying the risk of a bust in a top slot. Under a competitive market with all incumbent risks and consequences in tact teams wanted proven players as top picks, and as such players had to stay in school longer to establish that body of work. But with the downside muted for missing on a top pick we saw MORE reaching and gambling.

The law of unintended consequences is a bitch but it is a consistent and persistent bitch that you can not evade. It will ALWAYS rear it's head.

[Souvlaki]

I would welcome a whole new batch of players. If I never had to watch prima donnas like wade and james be coddled by the refs again I wouldn't mind at all. I think the games would be more competitive and interesting. New stars would surely emerge though and we'd be back to square one. Although we might be paying half as much for tickets.

[MauiDad]

This whole lockout appears to be a bitch of a situation that will most likely require a substantial amount of time and negotiating to settle. The system is clearly broken, and to a degree, it is in favor of the players. I don't have enough background on the previous agreement to add much value, but it sounds like the owners made their own bed and as Sleepy pointed out the law of unintended consequences is a bitch. That being said, it seems like the "club" of NBA owners has protected their weaker owners and management from their own stupidity for far too long.

To make the situation more equitable will probably require that the players take a substantial hit in terms of real / guaranteed compensation. As history shows, labor, doesn't like that. And in this case, labor is fairly empowered. I would like to see more "risk" on the players part with respect to their compensation, and more reward when they overachieve both as individuals, and more importantly as a team.

It is a major challenge aligning stakeholders interests, look at the Warriors' previous regimes policies and lack of success as a case study. It sure looked like Lacob and Co. were off to a good start in fixing that problem. It would be great if the NBA could figure out a way to do it sooner rather than later as well, but I fear that it will be later.

[GSWbandwagon]

Sleepy, I posted this before but you didn't really reply to it. How do you explain the NFL's situation? They have a hard cap and no rookie scale. Under your theory there are efficient markets here so the more touted / more sure thing guys would get more money and more guarantees but all that really happens is a slotting system based on where you were picked, what those around you got, and what those taken with the same pick in the recent past got (plus a little bonus for being qb).

[Sleepy51]

Sleepy, I posted this before but you didn't really reply to it. How do you explain the NFL's situation? They have a hard cap and no rookie scale. Under your theory there are efficient markets here so the more touted / more sure thing guys would get more money and more guarantees but all that really happens is a slotting system based on where you were picked, what those around you got, and what those taken with the same pick in the recent past got (plus a little bonus for being qb).

Those factors absolutely should influence negotiations. I have no problem with NFL rookie salaries for the most part.

The NFL economy is huge and booming. The guaranteed portion of NFL #1 pick salaries are commensurate with the revenues. He NFL lockout is evennmore of a farce than the NBA lockout. The only reason there is an NFL lockout is because NFL owners have been so flush with cash leading up to the end of ths CBA that it made economic sense to tap their warchests and voluntarily have a work stoppage simply to squeeze players because they could. That and the sweetheart TV deal that wS supposed to pay them even without a season made a lockout an advantageous business strategy. They are just putting the screws to players because they can afford to mis some games to get an even bigger share of the long term profits and to offload the retired players pension.

But as far as rookie salaries, NFL owners have almost complete freedom to negotiate. That the results of those negotiations trend towards a consistent result, within the context of the most profitable entertainment franchise in well...for ever, is evidence to me that their market is working fairly efficiently. Player salaries end up in the same slots year after year ij the NFL because the system is working. The panic about Bradford's contract is part of the con. A long term starting QB is worth more than that deal, hundreds of millions more.

[GSWbandwagon]

Those factors absolutely should influence negotiations. I have no problem with NFL rookie salaries for the most part.

...

But as far as rookie salaries, NFL owners have almost complete freedom to negotiate. Player salaries end up in the same slots year after year ij the NFL because the system is working. The panic about Bradford's contract is part of the con. A long term starting QB is worth more than that deal, hundreds of millions more.

so NFL contracts ending up in a slotting system is a system that works but NBA contracts that end up in a slotting system are a sign of system setup failure? The slotting $s start much higher in the NFL but the system is effectively the same, it's just not formalized.

In 2004 Eli Manning went #1 overall and got $20MM guaranteed. The next year Alex Smith went #1 overall and got $24MM guaranteed. When Eli Manning signed his contract he got the 2nd biggest signing bonus in NFL history. Was rookie Eli Manning the 2nd most valuable (in financial terms) commodity in the NFL? Was rookie Alex Smith 20% more valuable than rookie Eli Manning (who iirc was considered a much better prospect)?

If the NBA hadn't put the rookie salary scale in place, POB would've been paid like a #9 overall pick. The total dollars for rookies would be higher (and correspondingly less money available for vets) but the slotting system would still effectively be in place. Agents wouldn't allow for rookies to be paid on perceived potential and readiness (beyond how it impacts what pick they're taken with).

[Sleepy51]

Those factors absolutely should influence negotiations. I have no problem with NFL rookie salaries for the most part.

...

But as far as rookie salaries, NFL owners have almost complete freedom to negotiate. Player salaries end up in the same slots year after year ij the NFL because the system is working. The panic about Bradford's contract is part of the con. A long term starting QB is worth more than that deal, hundreds of millions more.

so NFL contracts ending up in a slotting system is a system that works but NBA contracts that end up in a slotting system are a sign of system setup failure? The slotting $s start much higher in the NFL but the system is effectively the same, it's just not formalized.


In 2004 Eli Manning went #1 overall and got $20MM guaranteed. The next year Alex Smith went #1 overall and got $24MM guaranteed. When Eli Manning signed his contract he got the 2nd biggest signing bonus in NFL history. Was rookie Eli Manning the 2nd most valuable (in financial terms) commodity in the NFL? Was rookie Alex Smith 20% more valuable than rookie Eli Manning (who iirc was considered a much better prospect)?

If the NBA hadn't put the rookie salary scale in place, POB would've been paid like a #9 overall pick. The total dollars for rookies would be higher (and correspondingly less money available for vets) but the slotting system would still effectively be in place. Agents wouldn't allow for rookies to be paid on perceived potential and readiness (beyond how it impacts what pick they're taken with).

It is not effectively the same. It is effectively different. The "slotting" in the NFL is an effect, not a cause. Consistency in the results is a product of negotiations freely entred into. Teams have the power to say "no I will not pay that." The fact that they don't more often and that hey still make piles of profits is evidence that NFL guaranteed money has been restained by the competetitive market. There is no financial crisis in the NFL. there is a financial opportunity for owners to bend playerw over BECAUSE the existing system has prepared them financially to dominate players at the exiriation of this CBA.

Their situation if fundamentally different than the NBA and has nothing to the NBA's system of risk transferrence through price fixing.

[azwfan]

Lets not kid ourselves, the players love the rookie scale. It means more money for veterans... who are the ones with a vote.

[Sleepy51]

Lets not kid ourselves, the players love the rookie scale. It means more money for veterans... who are the ones with a vote.

It means more money for veterans in omore ways than one. The proscribed multi year rookie deals are tge foundation of contract demands come extension tine. No proven rotation player is going to accept kess security that bottom 15 picks get as a handout.

The expired CBA absolutely allowed owners to offer unguaranteed deals to any non rookie player. But that becomes an untenable negotiating position when your agent can point at guys who have never stepped foot on an NBA court who get two guaranteed years right away. It sets a baseline for everything that follows.

[Twinkie defense]

No rookie scale in the NFL has been a big problem - and why you never see top picks traded. No rookie scale penalizes the worst teams and helps keep the best teams on top. The only people it benefits is people who are not in the League, agents and rookies. As a result, there will be a rookie scale in the next agreement.

[Twinkie defense]

I would like to see more "risk" on the players part with respect to their compensation, and more reward when they overachieve both as individuals, and more importantly as a team.

Hear hear.

[cladden]

POB was a fraud, where is his punishment?

He only got the one contract. That's pretty far away from having a 10 year backup career. This happens everywhere. People are better at job interviews than they are at the job they actually interview for and they always get to prove themselves for a little bit and the company ends up paying for it. That's why companies gotta be better at interviewing/scouting. I think POB's ability to derail the entire league is slightly exaggerated.

[cladden]

I would like to see more "risk" on the players part with respect to their compensation, and more reward when they overachieve both as individuals, and more importantly as a team.

Hear hear.

I imagine a ton of twilight of their career veterans who could make decent money playing for a regular team taking low base salary deals to play with LeBron and Wade for a chance at a bigger payout when/if they win the championship. I would hate that. Is the team still taking some sort of cap-hit for performance-based bonuses or not?

The thing that I personally would like fixed in this CBA is the draft lottery. I do not want to root for my team to lose ever again. I want there to be a completely even lottery for all teams missing the playoffs. Tanking has an incredibly negative effect on the game but I still want my team to do it because it's the only right thing to do if you're not going to make the playoffs.

[Twinkie defense]

Finally, I'm not sure what economic principles Sleepy is espousing, but I will say that it is a mistake to try to apply any free market capitalist principles to what is a totally manufactured, and decidedly un-free market system that the involved parties are simply trying to re-manufacture in a way that best preserves their interests, as allowed under their joint collective bargaining agreement.

In terms of trying to apply free market principles to the CBA, it should be noted that teams' incentives are not even solely - or perhaps even primarily - financial. They are trying to get fans and win games. If they do those things, there is a good chance that they will make money. But it's important to note that they could also make money by simply being cheap, as we see in the less regulated MLB - and in fact teams are saying they will lose less money if there are no games this season, which I think we can all agree would be a sad circumstance for fans.

(If on the other hand, it is being proposed that we should have a free market system governing the NBA, I don't think that is something that either players or owners would agree to, although there may be something to it in that the League would in all likelihood contract, which I would argue would be a good thing).

That's right, teams' primary incentives are not to make money. And so in pursuit of their true interests they are "forced" to make bad economic decisions - signing free agents for what the "market" dictates rather than for what they are "worth" in terms of fans and wins; and they are cajoled into keeping their own FA players because fans would be really, really unhappy if a team simply kept its young players around until either they make too much or are proven to not be any good, and only signed cheap FAs instead of stars.

It's this manufactured system which is maintaining perverse incentives - incentives that are not geared towards rewarding the best players, not geared towards rewarding wins, but instead towards maximizing player salaries, even though teams would rather reward wins and a great fan experience (which, it should be noted, is also what is in the fans' interest).

It's the system that is maintaining these perverse incentives, and that's why the system needs to change. Look at the NFL draft, for instance. Even though there is no official slotting or cap on rookie pay, if teams did not step up and pay players what they and their agents expect, anarchy would result. Players would refuse to sign, teams would be ostracised, and if teams attempted to basically change the terms of the CBA by colluding to not pay the top picks according to their unofficial slots they would be sued.

I think most people would agree that last time around, teams signed off on bad deals - bad I would say due to the overall percentage of money that goes to players, an amount that is unheard of in any other business ("superstar" author JK Rowling makes maybe 20% of Harry Potter revenue), bad because of the size of guaranteed contracts going to players, and in the NFL, bad due to the amount of guaranteed money going to rookies.

Players have a pretty good gig - who else gets guaranteed money? I don't blame them for wanting to keep it, but it's pretty hard for me to feel sorry for them. And more importantly, I think the game(s) will be better served with some changes.

[Twinkie defense]

POB was a fraud, where is his punishment?

He only got the one contract. That's pretty far away from having a 10 year backup career. This happens everywhere. People are better at job interviews than they are at the job they actually interview for and they always get to prove themselves for a little bit and the company ends up paying for it. That's why companies gotta be better at interviewing/scouting. I think POB's ability to derail the entire league is slightly exaggerated.

Sure, as a single individual POB is not derailing anything. But collectively, when a business is compelled to pay $4 million to a non-performing employee, I think you can see how that would be detrimental to the League, the quality of play, and the fan experience, when it happens again and again. Even if rookie scale were not guaranteed, that would be a big improvement - then, Steph Curry still gets his millions, but Patrick O'Bryant gets a ticket to Japan.

I can't think of any other business where an incredible interview gets you four million. The system is out of whack.

[Chris Porter's Hair]

POB was a fraud, where is his punishment?

He only got the one contract. That's pretty far away from having a 10 year backup career. This happens everywhere. People are better at job interviews than they are at the job they actually interview for and they always get to prove themselves for a little bit and the company ends up paying for it. That's why companies gotta be better at interviewing/scouting. I think POB's ability to derail the entire league is slightly exaggerated.

Sure, as a single individual POB is not derailing anything. But collectively, when a business is compelled to pay $4 million to a non-performing employee, I think you can see how that would be detrimental to the League, the quality of play, and the fan experience, when it happens again and again. Even if rookie scale were not guaranteed, that would be a big improvement - then, Steph Curry still gets his millions, but Patrick O'Bryant gets a ticket to Japan.

I can't think of any other business where an incredible interview gets you four million. The system is out of whack.

While I agree with your general sentiment, drawing an analogy to more traditional businesses breaks down in a few other ways. There aren't many businesses where a single employee has the impact on the "company" like a professional player in the NBA does. If we assume that each team spends about $50m on 15 players, then if all they did was risk $4m on one rookie a year, even that wouldn't be tragic; it would be spending a bit above average on one unproven quantity. It is more the overall ecosystem where they then also risk spending 30% of their overall pool on one guy who can get hurt, or forget how to play, or get arrested, or etc. etc.

There are also some checks and balances in play that aren't being discussed. In exchange for giving a rookie 3 guaranteed years, you also get right of first refusal for their next contract (i.e. they become restricted free agents). This helps less attractive markets keep top players; if it really went total free market, all the players would ride out their rookie contract, which might now expire after two years or whatever, and then all decide to go to NY, Miami, Chicago, and Los Angeles. Those teams could have their choice of which players they wanted. Other cities could of course offer more, but we'd quickly get into the "you have to overpay to get free agents" scenario that everyone laments here and now.

I definitely believe the owners have often behaved irresponsibly in doling out contracts. But I don't think it is quite so simple as, "They shouldn't have to guarantee players anything and should all just pay them what they are really worth", either.

[floppymoose]

We need prof farnsworth's "what-if" machine so that people could see the consequences of all these quick fixes being proposed.