Category Archives: NBA

NBA Fans And Corporate Sponsors Hold The Greatest Power To Punish Donald Sterling

Yesterday, TMZ disseminated a recording</a> that allegedly contained Los Angeles Clippers owner, Donald Sterling, making racist comments about African-Americans. In the wake of the recording’s dissemination, NBA players, civil rights leaders and President Barack Obama have shared their disgust over the recording’s comments and have called for the NBA to take action against Sterling. In response to the recording, NBA commissioner Adam Silver held a press conference and indicated that an investigation into the recording is ongoing and that all sides will be afforded due process. While the NBA holds power to levy serious sanctions against Sterling should its investigation reveal the voice on the recording is his, for the time being, fans and corporate sponsors hold the greatest power to punish Sterling.

As noted above, the NBA has power to sanction Sterling should the voice on the recording belong to him. This ability is held in the commissioner’s “best interest of the game” power. Utilizing that power, Silver can institute investigations and subsequently levy sanctions into matters that affect the best interests of the game. However, it is unlikely that this power would be utilized to directly remove Sterling from his position as an NBA owner. That is because other documents, specifically the NBA franchise agreement, constitution and bylaws, govern that ability. While those documents are confidential, the league can reportedly only remove</a> an owner from his post if the team is embroiled in serious financial difficulties.

Thus, if the NBA’s investigation reveals that the voice on the recording is Sterling’s, it is likely that Silver will issue a combination of a fine and a suspension against Sterling. While Silver could issue a lengthy enough suspension to effectively motivate the 81-year-old Sterling to sell the team, doing so could invoke a legal challenge by Sterling. This legal challenge would likely arise, because Sterling would assert that because he has never been suspended by the NBA before, a suspension exceeding one season would be arbitrary and capricious.

Along with calling for the NBA to remove Sterling as an owner, others have called for the Clippers to refuse to play. While Clippers head coach Doc Rivers has indicated that the team has decided not to do this, the question remains whether the team legally could. Arguably, sitting out from a game would amount to a strike by Clippers players, as they would be boycotting their working conditions under Sterling. However, under the collective bargaining agreement the National Basketball Players Association signed with the NBA in 2011, strikes during the term of the collective bargaining agreement are not allowed. Thus, sitting out a game would violate the terms of the collective bargaining agreement and could open up the players to a labor law claim and also a breach of contract lawsuit.

Yet, another body of law arguably paves a way for the players to legally sit out from play. That is Title VII of the Civil Rights Act. Title VII grants employees the right to sit out from work to boycott an employer’s discriminatory practices. Arguably, Sterling’s conduct and a subsequent refusal to work by Clippers players would fall within the realm of Title VII. However, due to the collective bargaining and contractual issues discussed above, Sterling would likely wage a legal battle should players sit out of a game. Thus, it would be up to a court to decide whether players were within their legal right to not play. Given the legal intricacies of players sitting out from play, it is not a path they are likely to choose.

Given the legal issues limiting the message the NBA and its players can send to Sterling regarding his alleged racist comments, fans hold the greatest power in sending him a strong enough message that such speech will not be tolerated.  Forbes valued the Clippers</a> at $575 million in 2014. That valuation came after Sterling purchased the team for a mere $12 million some 33-years earlier. Thus, the Clippers are a team that fans, corporate sponsors and television broadcast network partners have built into a financial success through their ticket and merchandise purchases, partnership contracts and lucrative television broadcast contracts.

To send the greatest message to Sterling, fans should take a page out of the playbook of the 1960s Civil Rights Movement, which organized boycotts of companies that engaged in discriminatory behavior. The thought behind such movements is to hurt the companies’ bottom line so that they are pushed into adopting acceptable race relations practices. While sitting at home for the remainder of the playoffs will likely not be a strong enough move for fans to hit Sterling and the Clippers’ bottom line, over time, fans’ refusal to attend Clippers games will hurt the team’s bottom line. Additionally, the Clippers’ corporate sponsors should consider pulling their money from the team after reviewing their contracts, which likely include a morals clause. Finally, the team’s television broadcasting networks should consider similar action.

When news of Sterling’s alleged comments arose yesterday, many people cried out and said the comments were part of a pattern of behavior that has been ongoing for decades. Perhaps now is the time to end that behavior. If the NBA and its players are limited in how they can end the behavior, the power lies in the people and corporate entities who have helped line Sterling’s pockets. These individuals and corporations must pull back their monetary support of the team until Sterling not only issues an apology, but demonstrates that he has completely changed his beliefs and feelings towards people of races other than his.

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The NBA Rule That May Make Dwyane Wade’s Free Agency More Interesting Than LeBron’s

LeBron, LeBron, LeBron.

With the 2013-14 NBA season in its infancy, it seems as though the biggest topic of conversation is whether LeBron James is going to opt out of his contract with the Miami Heat two years prior to its expiration and sign a new mega deal.  As pundits weigh in and teams’ salary cap experts scramble to figure out how they might be able to get their hands on the greatest player of this basketball generation, Dwyane Wade’s potential free agency looms quietly in the background.

In 2010, Wade signed a six-year, $110.1 million contract with the Miami Heat.  The contract provides Wade with the option to opt out in 2014 and 2015.  The purpose of opting out for any player is to secure a more lucrative deal than the one he currently has.  However, for Wade, his decision to opt out should be guided largely by his age.  Similarly, teams seeking to sign Wade must also be cognizant of his age as his free agency approaches.

When it comes to Wade’s age, on the surface, the biggest question is how many playing years he has left.  However, below the surface and crouched in the 2011 NBA collective bargaining agreement lies another issue:  the Over 36 Rule.

The NBA’s Over 36 Rule exists to recognize the reality that even though NBA players may be signing contracts that will not expire until after they are 36-years-old, the likelihood of them playing until that age is slim.  The Over 36 Rule applies when a player signs, extends or renegotiates a contract that is four-years or more in length, and the player will be 36-years-old or older when at least one of those seasons begins.  If the Over 36 Rule applies to a player’s contract, a portion of his salary may be reallocated towards the calculation of the salary cap in other years.

When it comes to Wade, who turns 32-years-old in January 2014, the Over 36 Rule and its operation is something his representatives and teams alike must be aware of.  In a perfect negotiation setting, Wade’s agent will secure him a five-year contract taking him into the twilight of his career.  If Wade’s representation seeks a five-year contract, the point at which Wade opts out of his current contract plays a considerable role in how the Over 36 Rule impacts the salary cap of the team signing him.

The Over 36 Rule is concerned with the age of a player as of the date of the start of the NBA season, which the collective bargaining agreement defines as October 1.  If Wade opts out of his contract in 2014 and signs a five-year contract that summer, he will be the following ages at the start of the proceeding five NBA seasons:

NBA Season Dwyane Wade’s Age
2014-15 32
2015-16 33
2016-17 34
2017-18 35
2018-19 36

When it comes to the Over 36 Rule, for teams wanting to sign Wade to a five-year contract, it may be in their best interest if he opts out in 2014.  The reason for this, is that it is in this time frame that the Over 36 Rule arguably has the least impact on a team’s salary cap.  With respect to a five-year contract signed by Wade in 2014-15, the Over 36 Rule would operate in one of two ways.

First, assume that Wade unexpectedly retires before this new five-year contract expires.  If that is the case, the portion of his salary he is due for 2018-19, when he is 36-years-old, would be distributed in a pro rata basis and added to his team’s salary cap for the 2014-15 through 2017-18 seasons.  For teams like the Miami Heat who are expected to face salary cap crunches as they attempt to re-sign James, this could pose a problem.

 

In contrast, assume that Wade clears waivers and plays all five years under the new contract.  In that case, the Over 36 Rule would not impact his team’s salary cap until 2016-17.  Under the Over 36 Rule, at that point, the salaries remaining on his contract will be aggregated and attributed to the three years remaining on his contract.  In simpler terms, what this means is that if Wade is still playing in 2016-17, his salary in that year will be higher than what is negotiated because of the Over 36 Rule.  This again has salary cap implications for the team who signs him.  However, these implications aren’t as large as those discussed in the hypothetical above where Wade is no longer playing in the fifth year of his contract.

For the Miami Heat, it would arguably be in the team’s best interest salary cap wise if Wade does not opt out of his contract either in 2014 or 2015.  First, there is the obvious point that the team may be able to secure Wade for less money in 2016 when he is 34-years-old than they will be able to in 2014 when he is 32-years-old.  However, the less discussed issue is that it is in 2016 that the Over 36 Rule has the least impact on the Miami Heat’s salary cap.  One provision of the Over 36 Rule provides that if a 33-or-34-year-old enters into a five-year contract with his prior team that triggers the Over 36 Rule, only his fifth year salary is distributed pro rata.

Why is this a benefit to the Heat?  First, it’s important to understand Wade’s age at each point of a five-year contract entered into in 2016:

NBA Season Dwyane Wade’s Age
2016-17 34
2017-18 35
2018-19 36
2019-20 37
2020-21 38

Teams looking to sign Wade to a five-year contract in 2016 other than the Heat will be subject to the Over 36 Rule beginning in the fourth year of the contract.  This means that those teams would have to distribute the salary he is owed in years four and five of the contract on a pro rata basis in 2016-17, 2017-18 and 2018-19.  The Heat, however, since they are Wade’s prior team, wouldn’t be subject to the Over 36 Rule until the fifth year of the contract.  This means that the Heat would feel less of a burden on their salary cap, as they would only have to reallocate one year’s salary over the course of four years, as opposed to two year’s worth of salaries over three years.

The big take-away here, is that just as in 2010, if Wade wants to remain with the Heat or move to another competitive team, he will likely have to compromise.  And while most pundits pinpoint that compromise being about salary or years on a contract, perhaps the biggest compromise Wade will make is what year he will opt out of his current contract.

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Entrepreneurship for Athletes: The Magic Formula

By:  Todd Burach, Ruling Sports Contributor (Twitter:  @ToddBurach)

For many reasons, a vast majority of professional athletes struggle to manage the lucrative financial rewards of their playing careers. One major well-documented cause is what is called the ‘lure of tangible investment’[1], essentially an athlete’s desire to pursue entrepreneurship. It is a sexy, seemingly financially attractive means to invest one’s time and money. The appeal of entrepreneurship to athletes is powerfully apparent, particularly post career when the bright lights have turned elsewhere. There is a competitive aspect that syncs with an athlete’s psyche. There is the potential for big payouts and the fulfillment of a desire for attention that players often miss once they retire. You will never hear about a former player’s stock and bond portfolio; you will read about their promotional companies, their restaurants, their real estate or their car washes. There is even an MBA course offered at George Washington University specifically focused on entrepreneurship for professional athletes. “Called STAR, an acronym for Special Talent, Access, and Responsibility, the program treats entrepreneurial inclinations…as a weapon to be honed and deployed.”[2]

To certify the appeal of entrepreneurship, there is the business resume of Magic Johnson – an eye opening, former athlete’s entrepreneurial success story. Today, the former orchestrator of the Showtime Lakers is known more for his business accomplishments than his basketball prowess, a lofty feat considering his Hall of Fame playing career. The umbrella conglomerate of Magic Johnson Enterprises is reportedly worth near $1 billion[3]. He has stakes in movie theaters, sports franchises, a promotional company, a movie studio, food service operations, among other ventures. And, considering his major playing contract was the infamous 25 year $25 million deal brokered by the late Jerry Buss in 1981[4], a billion dollar figure is a staggering number.

Magic’s early business highlight reel runs something like this. In 1994, Johnson brokered a deal to create a chain of movie theaters in minority neighborhoods in the Los Angeles area. He recognized a lucrative business opportunity: the inelasticity of the African American community’s demand for movies coupled with the discounted cost per square foot to operate theaters in these neighborhoods[5]. Magic then parlayed this success into a rare partnership with Howard Schultz at Starbucks to bring the infamous coffee shops into the very same neighborhoods as his movie theaters. Magic pitched to Schultz his knowledge of the customer, that he had studied the numbers, and that he would connect Howard’s product with a market in demand. “It became clear that no one knows more about African-American spending power than Earvin. I was expecting a basketball player, but here was this businessman telling me there are 40 million African-Americans who spent over $500 billion last year.”[6]

Magic was not just some athlete selling his name and likeness. As he told Success Magazine, “A lot of athletes go out and want to start sports bars or restaurants, and they do it without a vision of what they’re going to add to their customers.”[7] Magic showed an early passion for the business process. During his playing days, when the Lakers were in Atlanta to play the Hawks, Magic would set up meetings with executives from Coke. He had a unique enthusiasm for business, recognizing early that the dedication and diligence of watching game film to study opponents was akin to what was required to study potential customers. He is a self-described control freak, awake every weekday morning at 6:30, reading the business section of the newspaper. Johnson was unafraid to leverage any opportunity or connection and relied on expert mentors with proven track records to guide him. During a regular season game in LA, he famously asked two courtside season ticket holders ‘How do I get into business?’ The two men, Peter Guber and Joe Smith, subsequently introduced Magic to CAA co-founder Michael Ovitz, who would become a pillar of Magic’s success.

Early on in his business career, Johnson had an ironically unlucky experience that put in perspective just how easily an entrepreneurial career can fail regardless of someone’s name or likeness. In one of his first business endeavors, Magic opened Magic 32, a chain of retail sporting goods stores. It made perfect sense to him on the surface; the face of the most beloved sports franchise in a city selling sporting goods to the people of that very same city. Yet Magic 32 closed its doors just a year later. When asked about the failure, Magic said, “I didn’t ask a single customer what they’d be interested in.”[8] He had not thought about the consumer’s interests, he had only thought of his own.

While Magic was able to stem the financial tide of this business failure and gainfully learn from the mistakes he had made, many athletes are not so lucky. Often times athletes choose to invest too much of their assets in one project (Google: Curt Schilling, 38 Studios) or become repeat offenders, refusing to recognize and learn from what went wrong the first time around (Google: Rocket Ismail). Athlete or not, failure is the nature of the beast in entrepreneurship. Henry Ford failed and went broke five times before founding the Ford Motor Company. Bill Gates started a business called Traf-O-Data before launching Microsoft. The probability/likelihood of failure in entrepreneurship is what ultimately increases the return and the attention when an entrepreneurial venture actually does work. Often times, many athletes (especially when funding investments with private wealth) do not afford themselves the opportunity to stay solvent if and when a venture fails.

For current pro athletes looking at Magic Johnson’s achievements as a model for themselves, these successes must be taken in context. For one, Magic’s business resume is what author Malcolm Gladwell would define as an ‘outlier’, “things or phenomena that lie outside normal experience.”[9] In other words, Magic is the exception, not the rule. Gladwell suggests that individuals with ‘outlier’ success stories are the result of two inputs, the 10,000 hour rule (i.e. a heck of a lot of practice towards achieving greatness) and access (a window to apply that greatness). Referring back to Magic, Johnson has been a diligent student of entrepreneurship since early in his career. While there is no way to verify the total aggregate hours Magic has dedicated to business, we can presume his totals reside near the tipping point required (to keep with the Gladwell theme). As for access and opportunity, Magic happened to be in a community (Los Angeles) at a time (post riots) with a viable business opportunity (movie theaters). Derrick Coleman, in contrast, the 1991 NBA Rookie of the Year, had similar entrepreneurial aspirations as Magic, investing to revitalize his hometown. However, Coleman invested in a city (Detroit) at a time of great financial duress (The Great Recession), especially for a community supported by a cyclical industry (autos). [10] A great entrepreneur and a great business model, without opportunity and access, is just that, a business model.

Magic’s experience with Magic 32 is a key teaching point for athletes clamoring for the bright lights of entrepreneurship. It is not necessarily true that if YOU build it, they will come. In entrepreneurship, your jumpshot doesn’t make you profitable. It might get you the meeting, but it certainly won’t sell your jackets. Magic failed before he succeeded. This is an important point, because the likelihood of failure far outweighs the likelihood of success in entrepreneurship. As an athlete, with the vast majority of your lifetime earnings in your rearview mirror when you retire from your sport, you HAVE to allocate accordingly when investing in a business venture. A 20-something college graduate with a job in financial services investing the bulk of his or her investable assets into a start-up is a lot different than a 33 year old professional athlete investing the bulk of his or her investable assets in a start-up. That 20 something with a finance job has a lot of years of peak earnings salary in front of them.  As an athlete, it’s almost certain that your peak earnings years are behind you. You have to be safer with your capital, and entrepreneurship, while sexy, is not safe. You simply don’t have the ability to make big mistakes.

The entrepreneurial success of Magic Johnson should be taken more for the lessons that it teaches rather than as the key to long run financial health for athletes.  For one, Magic invested more of his business acumen in these ventures than he did his personal capital. This is a fact he sometimes receives flack for, but should rather be rewarded.  He had a passion for business that defined him as an ‘outlier’ not just amongst athlete entrepreneurs, but entrepreneurs in general. This distinction is vital, because in the boardroom, the former pro athlete and the four year corporate veteran are all peers. “I think the problem is that for some athletes, our ego has been fed our whole life and we’re not used to people treating us as peers,” Magic recounted.[11]

Magic had a vision for his movie theaters that offered something to his end customers, not a vision for a business that offered something to himself. The latter leads to failure, which he learned the hard way from Magic 32. Importantly, Johnson was able to stomach the financial loss of his sporting good store, and live to see another day. It is wise to understand entrepreneurial investments in the construct of your broader financial picture. The bulk of lifetime earnings are likely behind you. Can you afford to lose what you’ve invested at this point in your life? Because, no matter how great that pitch sounds, it is more than likely you will fail. It is nothing to be ashamed of, most great entrepreneurs do.


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Guest Post: A Proactive Cure for the Athlete Wealth Disease Epidemic – Part 2

By:  Todd Burach (Twitter:  @ToddBurach)

Todd Burach works in wealth management in New York City. He specializes in asset allocation and investment strategy for upper high net worth clients, including corporate executives, professional athletes and entrepreneurs.  He is a 2007 graduate of Syracuse University where he was a member of Coach Boeheim’s back-to-back Big East championship teams. In 2012, Todd completed his MBA at New York University with concentrations in Finance and Economics.

2. Facilitate and encourage the conversation.

The NFL is currently working vigorously to improve player safety as it relates to concussions. In June of 2012, 2,000 NFL players filed a unified lawsuit against the league “alleging that the NFL failed to acknowledge and address neurological risks associated with the sport and then deliberately failed to tell players about the risks they faced.”  The NFL would be wise to apply lessons learned from the concussion epidemic to its current experience with ‘Athlete Wealth Disease’. Both issues impact long-term player health and can be minimized, altered, and arguably avoided when players are armed with relevant knowledge. Further, in both cases, many of the negative outcomes are born from a pervasive culture that exists amongst players – on the playing field, it is the machismo culture of hitting, while off the field, it is the ‘baller’ lifestyle. Both the concussion and post-career financial problems that result can impede the ability of players to live normal, productive lives. What we need is for players, leagues, media outlets and fans to discuss all aspects of Athlete Wealth Disease, especially solutions, in the same manner in which we discuss concussions.

We demand that athletes be role models on and off the field, at all times. We demand that athletes do the right thing. As a result, we discuss, dissect and debate players’ offfield behavior, good or bad. However, these discussions tend to shy away from the facts that Sports Illustrated brought to light three years ago. Our heroes are going broke just as much if not more often than they are debilitated by playing injuries. (65% of NFL players retire from the league with permanent injuries). So why don’t we talk about it? ESPN’s 30 for 30 film “Broke,” directed by Billy Corben, could be seen as a step in the right direction. The film offers the usual examples of athletes who have struggled financially and certainly encourages the conversion. However, the discussion needs to shift towards solutions. And, rather than an occasional headline about a former star who has fallen or a documentary on the sexy lifestyle that carries players into bankruptcy, this must become an ongoing conversation. Embracing the discussion will force the hand of players associations, leagues, media and fans to find solutions and accountability for this epidemic – just as we have begun to do with respect to concussions.

3. Nudge

In “Nudge: Improving Decisions About Health, Wealth, and Happiness”, University of Chicago economists Richard Thaler and Cass Sunstein discuss innovative ways in which to encourage people to follow the most advantageous path. The trick is simple: start them on it. Thaler and Sunstein suggest ‘nudging’ people in the right direction with what they call ‘libertarian paternalism’. According to the libertarian paternalist, “one must not just maximize choice for others, but must set a default or no-action-required option that will cause people to make optimal choices (i.e., those widely agreed upon to make one better off, e.g., saving money for retirement)”.  In studying 401(k) retirement plans, for example, Thaler and Sunstein found that the vast majority of people never adjust the allocations of their 401(k) retirement portfolio after the initial set-up. The authors attribute this inaction to the tendency of individuals to become too overwhelmed by the decision making process, choosing instead to avoid it altogether. Therefore, when one starts a job and is required to enroll in a retirement portfolio, the libertarian paternalist recommends that the default option be set for a ‘Target Retirement Date’ fund, a portfolio that reallocates holdings automatically as retirement approaches. This ‘default option’ would help to steer those too overwhelmed with making big financial decisions to paths widely considered optimal.

Nudge-like provisions have, in fact, begun to emerge in sports. As a result of negotiations for the most recent collective bargaining agreement, the NBA Player’s Association will now default players into a league retirement plan, with the option to opt out. Those who go through the effort to opt out tend to be those well versed in personal finance, while those who do not know to opt out or do not want to deal with it have been nudged to the right path (and Thaler and Sunstein are somewhere smiling).  What the NBA has quietly done represents an important step toward preventing Athlete Wealth Disease. We need more nudges, in more forms, and next time it should not be so quiet.

For a long time we have known that professional athletes struggle with money and with the growth of sports business, we are talking big money. Occasionally, when financial market news becomes Main Street news, we will read a headline about a Mark Brunell or a Terrell Owens. Yet, when markets turn around, and Wall Street worries subside, we too quickly stop talking about a very correctable problem that still exists. The Athlete Wealth Disease epidemic is preventable. We should demand more out of the players associations whose mission is to ensure “that every conceivable measure is taken to assist players in maximizing their opportunities and achieving their goals, both on and off” the playing surface. We need to give the issue a voice – on TV, in the papers, in the blogosphere – the way we talk about and worry about concussions. Finally, leagues should follow the lead of the NBA and continue to ‘nudge’, by being more thoughtful in the structured programs used to secure the financial futures of our sports heroes.

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Guest Post: A Proactive Cure for the Athlete Wealth Disease Epidemic – Part 1

By:  Todd Burach (Twitter:  @ToddBurach)

Todd Burach works in wealth management in New York City. He specializes in asset allocation and investment strategy for upper high net worth clients, including corporate executives, professional athletes and entrepreneurs.  He is a 2007 graduate of Syracuse University where he was a member of Coach Boeheim’s back-to-back Big East championship teams. In 2012, Todd completed his MBA at New York University with concentrations in Finance and Economics.

Curt Schilling had a storied baseball career. He accomplished feats on the field of play that most athletes can only dream of achieving. Schilling won World Series rings with the Arizona Diamondbacks and the Boston Red Sox, highlighted by his 2001 World Series MVP Award. He is one of four pitchers to amass 3,000 strikeouts and fewer than 1,000 walks over the course of a career, joining Ferguson Jenkins, Greg Maddux, and Pedro Martinez.  However, despite athletic triumph that most players will never know, Schilling recently experienced a career milestone of sorts that, regrettably, many professional athletes will more than likely achieve:  bankruptcy.

“According to Chapter 7 bankruptcy documents filed in Delaware, Mr. Schilling’s company, 38 studios, and three subsidiaries owe more than $150 million to creditors, but have assets of no more than $50 million.”

Unfortunately, this is a familiar tune for many of us who follow sports. See the below statistics from the 2009 Sports Illustrated report, “How (and Why) Athletes Go Broke” by sports writer Pablo S. Torre published in the midst of the Great Recession, and highlighted again at the start of ESPN’s 30 for 30 documentary “Broke”:

- By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce. 

- Within five years of retirement, an estimated 60% of former NBA players are broke.

Torre’s article outlines several theories intended to explain how athlete after athlete can blow through so much money time after time. While the article is worth reading in its entirety, the quick synopsis of the how (for the sake of this writing) is summarized below:

1. The Lure of the Tangible – ‘chronic over-allocation to real estate and bad private equity’

2. Misplaced Trust – ‘hiring the wrong people as advisors’

3. Family Matters – ‘the divorce rate for pro athletes ranges from 60% to 80%’

Torre called attention to the epidemic of financial troubles amongst athletes at a time when financial markets were a hot topic even outside of Wall Street. Yet now, more than three years removed from the onset of the most impactful financial crisis since the Great Depression, with stock markets marking new highs, real estate prices off their bottoms, and credit markets beginning to open, professional athletes and their business ventures are still going broke. What this tells us is a very important, albeit somewhat readily apparent lesson: the epidemic of financial duress for professional athletes is not cyclical.  Athletes do not go broke only when markets go down. Athletes will go broke all the time.  That is, unless, something changes.

The fact of the matter is that we – professional athletes and those charged to support them – need to do more. We need to implement proactive solutions that address the root of the issue before an athlete ends up in the next Pablo Torre article or “Broke” documentary.

How can we influence professional athletes to make smarter decisions?

1. Demand more from Players Associations.

The NFL Players Association as a whole strives “to do whatever is necessary for the betterment of our membership,” while the NBA Players Association pledges to ensure “that every conceivable measure is taken to assist players in maximizing their opportunities and achieving their goals, both on and off the court.”  It is safe to say that the long-term financial health of players falls squarely within the confines of these stated objectives. However, of the four major sports leagues in the United States, only one players association (the NFL) has a formal Financial Advisor Program. The NFLPA Financial Advisor Program’s mission is ‘to provide an additional layer of protection – not just from poor financial advice, but from outright fraud.’  While this stated mission is certainly just and warranted, it inadequately addresses the overarching problem. As Torre explained, trusting the wrong people is just one reason that players go broke.

For more effective and meaningful financial support, players and their advocates should demand their players associations form Player Finance Divisions, tasked specifically with promoting the current and long-term financial health of its players. In addition to services similar to those offered by the current NFL Financial Advisor Program, these divisions would provide education and outreach programs, alumni initiatives, foundation management workshops, and research of potential programs. The necessity of such support has been widely recognized. Forbes contributor James Crotty wrote in his February 2012 article on Allen Iverson that “an NBA that cared more about its personnel and brand would have required that Iverson, as well as all players, pass a yearly financial planning and retirement course before they were allowed on the hardwood.”  The NBA is a corporation much the same way my employer is a corporation.  My firm offers annual educational seminars on 401(k) plans and retirement benefits and takes an interest in the health of its employees. Why? Employees who are physically, emotionally, and financially healthy are superior employees. They are more productive, more committed, and ultimately present a stronger representation of a company’s brand. 

Between the NFLPA Financial Advisor program and Rookie Transition Program, which provides business training to new players, players associations have certainly demonstrated a commitment to aiding athletes in their financial health. The documentary “Broke” includes clips of Former NFL player and coach Herm Edwards speaking at a rookie symposium highlighting this fact. “A goal without a plan is a wish,” Edwards told the players in attendance. The Financial Advisor programs and Rookie Symposiums currently in place seem to be just that. Bankruptcy statistics suggest that these programs need broader scope, new life, increased funding, more staffing, and a lot more media attention.

Visit RulingSports.com tomorrow for Part 2 of Mr. Burach’s piece.

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NCAA and Major Professional Sports Leagues Seek to Prevent Sports Betting in New Jersey

On Tuesday, the NCAA, NBA, NFL, NHL and MLB filed a lawsuit in the United States District Court for the District of New Jersey seeking declaratory and injunctive relief challenging the State of New Jersey’s “plan to sponsor, operate, advertise, promote, license and authorize gambling on amateur and professional sports.”  The lawsuit names New Jersey Governor Christopher Christie, the state’s Director of Gaming Endorsement and the Executive Director of the New Jersey Racing Commission as defendants.

On January 17, 2012, Governor Christie signed into law N.J.S.A. 5:12A-1, which according to the lawsuit, “purport[ed] to permit wagering at casinos and racetracks on the results of certain collegiate and professional sports or athletic events.”  According to the lawsuit, the act signed into law by Governor Christie violates federal law.  In particular, the plaintiffs assert that allowing gambling on amateur and professional sports in New Jersey violates the Professional and Amateur Sports Protection Act, and contravenes the Supremacy Clause of the United States Constitution.  The Professional and Amateur Sports Protection Act generally outlaws sports betting, save for certain exceptions, which the plaintiffs argue do not apply to New Jersey’s law.  Notably, those exceptions are:  that New Jersey conducted sports gambling activity prior to the law’s enaction in 1992, New Jersey authorized sports betting in a one-year period following the law’s 1992 enaction or the gambling relates to pari-mutuel animal racing and jai alai games.

The plaintiffs’ lawsuit comes just three weeks before the public comment period for comments on proposed regulations concerning the licensure and operation of sports gambling in New Jersey expires.  The timing is notable, because according to the lawsuit, once the regulations are in place, New Jersey casinos and racetracks will be able to allow their patrons to gamble on sporting events.

Ultimately, the plaintiffs are seeking a declaration that New Jersey’s sports gambling law and its regulations violate Professional and Amateur Sports Protection Act in that the New Jersey law allows sports gambling in contradiction to the federal law.  Additionally, the plaintiffs seek an injunction preventing the implementation of New Jersey’s sports gambling law and regulations.  The plaintiffs are also seeking costs, attorney’s fees and other relief as the court finds appropriate.

The defendants will now have to file an answer in federal court responding to the allegations in the complaint.  Given the nature of this matter, one can expect that it will not be settled out of court.  Rather, those planning on placing bets in New Jersey during the football season will more than likely have to hold onto their money, as the legal process will likely drag out to determine whether New Jersey’s sports betting initiative violates federal law.

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Which Team Will Sign Dwight Howard?

By:  Richard Braun, Ruling Sports Intern (Twitter:  @RicBraun)

When the Nets traded for Joe Johnson last night, Dwight Howard’s desire to move to Brooklyn took a major hit. As a result, if he wants to maximize his future earnings, Howard is going to need to be open-minded about his future home.

Howard’s next contract will almost certainly be for the maximum salary allowed under the NBA collective bargaining agreement, which for him starts at $15.5 million in the first year of the contract. However, under the new CBA, players who re-sign with the team who owns their Bird Rights can get a maximum of a five year deal with 7.5% annual raises. A free agent, on the other hand, can only get a four year deal with 4.5% annual raises. Any team Howard is traded to gets his Bird Rights, which is why he has such a vested interest in where Orlando trades him – wherever he gets traded to can offer him significantly more money than anyone else. By forcing Orlando to trade him where he wants to go, he is trying to have his cake and eat it too.

His dream of going to Brooklyn, however, now appears unlikely of ever becoming a reality. Even though the Nets and Magic have engaged in trade talks that would send Brook Lopez and filler to Orlando for Howard, the Magic can get better deals elsewhere. Houston, Atlanta, and both Los Angeles teams can all offer much better deals for the Magic than Brooklyn can. And given the falling out Howard has had with the Orlando front office this past year, they are unlikely to do him any favors. And because of last night’s Joe Johnson trade, New Jersey no longer has any cap flexibility going forward, and would not be able to sign Howard as a free agent for anything more than the Mid-Level Exception.

This leaves Howard with two options – play out the season in Orlando and sign elsewhere in the offseason, hoping that Orlando agrees to a sign-and-trade so he can get the 5 year deal, or agree to sign an extension with whatever team he is traded to. If he isn’t traded, he stands to lose around $40 million for the life of the contract because of the lower annual raises and the shorter term deal.

Atlanta in particular now seems to offer Howard more than he originally thought was possible. After shedding the contracts of both Joe Johnson and Marvin Williams (sent to Utah for the expiring contract of PG Devin Harris), Atlanta is now loaded with enough cap space to make a run at two big time free agents next offseason. Not only is Howard potentially a free agent next offseason, but so is Chris Paul. Atlanta doesn’t need to wait that long, however. They could offer all-star big man Al Horford in a deal, which would trump just about any deal any team can offer. Horford has five years left on a deal that pays him $12 million annually, so Orlando could build around him for the long term. Atlanta could throw in promising PG Jeff Teague in a deal as well, and likely would need too in order to make salaries match up (as a non-luxury tax paying team, if Atlanta sends out less than $19.6 million in outgoing salary, they can bring back in that amount plus $5 million). The fact that Atlanta is Howard’s hometown is just icing on the cake. A Dwight Howard-Josh Smith tandem on the court would certainly be a menace defensively, and Atlanta would then be a major player in free agency in 2013.

Houston can also make a better offer than the Nets, and they appear willing to do so despite Howard’s refusal to agree to an extension there. Houston has six first round picks from the past three years, plus PG Kyle Lowry and the expiring contract of SG Kevin Martin. It makes for a decent offer, and certainly would be a better package than what the Cavs and Raptors got in return for their exiting superstars. If Howard was unwilling to resign in Houston, however, it would result in him passing up on a 5th year in his contract and the higher annual raises. He would be dependent on Houston agreeing to a sign-and-trade that would allow him play wherever he wants to play but still get his big contract.

Dallas is another team that has reportedly been on the fabled Howard “wish list”, but like Brooklyn they can offer very little. Dallas could sit on their cap space for one more year and hope Howard signs there as a free agent next offseason, but they risk coming away with nothing in that scenario. And again, Howard would be accepting less money, short of a sign-and-trade.

A sign-and-trade next offseason for Howard, whether he stays in Orlando or is traded to a place he doesn’t want to be long term, is a tricky proposition for him. A sign-and-trade occurs when a player signs with the team that owns his Bird Rights, but he is then traded immediately to another team. The benefit to the player is that he gets a bigger contract than he may have if he had just signed with a team as a free agent. The team, meanwhile, gets something in return in the trade, which usually isn’t much more than a trade exception but is better than nothing. A team gets a trade exception (TPE) when they trade a player into another teams cap space and does not get equal salary in return. You get one year from the date of the trade to use the TPE. Cleveland and Toronto both got trade exceptions when LeBron James and Chris Bosh were sent to Miami, but neither team used them. In fact, usually teams don’t use the TPEs when they get them – the Lakers had one after trading Lamar Odom last off-season, but have yet to use it and likely won’t. What this means for Howard is that he will be at the mercy of whatever team owns his Bird Rights – they could easily decide it is not worth it for them to get the TPE, and just let Howard walk.

All of this leaves Howard in a sticky situation unless he opens his mind about his future home. By overplaying his hand and being stubborn with his demand to go to Brooklyn, he risks missing out on the max contract he can earn. By agreeing to go to Houston or Atlanta, he will be making it much easier for Orlando to trade him and will guarantee him a massive contract extension.

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Former NBPA Executive Director Charles Grantham’s Analysis of the New NBA Collective Bargaining Agreement

From 1988-95, Charles Grantham served as the first executive director of the NBPA.  Grantham rose to the ranks of executive director after beginning work with the NBPA upon completing his MBA at the Wharton School at the University of Pennsylvania.  Prior to holding the position of executive director, Grantham served as the NBPA’s vice president of marketing and administration and executive vice president.  The vast roles that Grantham held at the NBPA provided him with extensive insight into the inner-workings of one of the nation’s most recognized labor unions.  As the Miami Heat and Oklahoma City Thunder face off in the 2012 NBA Finals after a shortened season caused by a labor dispute, Ruling Sports asked Grantham to provide his assessment of the labor deal that the NBA and NBPA struck in December 2011.

When asked to assess the deal that the NBPA was able to obtain for players in the new collective bargaining agreement, Grantham noted that when an employer locks employees out during the course of labor negotiations, the bargaining power shifts in such a way, that most of what the union can obtain for employees will not necessarily be characterized as “good.”  Grantham explained, “When you’re in the environment of a lockout, most if it will not be good.  It’s really about maintaining what you have.  At the end of the lockout, you look at how much you were able to keep and what you had to give away.” 

Given the negotiation predicament a union is placed in when management locks employees out, Grantham strongly suggests that unions work to fully negotiate a new collective bargaining agreement prior to the expiration of the collective bargaining agreement that is in place.  If completing a new agreement is impossible, Grantham  believes that the union should agree to extend the in-place collective bargaining agreement for one year, with the hope that a new collective bargaining agreement will be adopted during that time and a lockout or strike can be prevented.

Grantham’s basis for strongly suggesting that the NBPA work to enter into a new collective bargaining agreement or extend the term of an in-place collective bargaining agreement to prevent a lockout is based largely upon the career span of NBA players.  Reports indicate that the average career length of an NBA player is 4.8 years.  Given this, NBA players have a short time frame upon which they can capitalize upon their talents and secure enough financial resources to keep them financially afloat for a lifetime.  Missing games due to strikes or lockouts caused in part by the NBPA’s inability to negotiate a new labor agreement with the NBA, can substantially affect an NBA player’s earnings potential.  Thus, when the NBPA fails to reach an agreement with the NBA before a collective bargaining agreement expires, Grantham says that the union must ask itself, “For what reason may players lose some portion of their salary?”

In the case of the new collective bargaining agreement that the NBPA entered into with the NBA, Grantham does not believe that reason enough existed for the players to lose a portion of their salary as a result of the lockout which shortened the 2011-12 NBA season.  “What did you get in return for the lockout?  I don’t see much that was gained by the NBPA in the lockout.  In the long-term, they got a ten-year deal with an out after six years.  They lost 20 percent of their salary for what?  They came into an abbreviated season, and because the number of games was reduced, there’s the question of whether injuries could have been prevented through training camps and the number of games.  I just can’t put my arms around what the lockout gained for the players.  I know what it gained for management.” Grantham said.

Given Grantham’s belief that the NBPA should strive to adjust its position in labor negotiations in a way to prevent players from missing games, how then does the executive director of the NBPA prepare players for labor negotiations?  According to Grantham, “The biggest component is getting the players mentally prepared for what these negotiations are about.  These are business negotiations; too often, we get bogged down in the legality of the negotiations.  We’re looking at an ever-growing economic pie.  What percentage of that pie do we perceive as being equitable and the players entitled to as the league’s performers?  You really should be preparing them for negotiations five to six years out from when the negotiations begin.  Timing is everything.  There are some things that you have to build in to get the players to understand the value of the union’s representation.  If you tell them that there is a collective bargaining agreement process every few years, and that everything that their life revolves around is contained in that collective bargaining agreement, then you can get them involved.  It takes the players’ support to make the union effective.  “

One way to get players involved in the collective bargaining agreement negotiation process is to educate them upon the processes’ importance in their ability to collect lucrative salaries.  According to Grantham, “What a player has to understand, is that there were hundreds of players before him that fought through this process and enabled him to negotiate a fair share of the NBA’s revenue, so that he could enjoy a six-year, $50 million contract.”

While the most recent NBA lockout largely centered upon the NBA and NBPA’s negotiations over the percentage of revenue players would receive, Grantham believes that in going forward, the NBPA must begin finding leverage for itself by negotiating what he calls “quality of life issues.”  Grantham detailed this notion by explaining, “What’s harming most of our athletes today?  Dementia, mental incapacitation, the inability to maintain financial footing, making transitions after retirement and suicide.  For the first time, you can see that the real issues facing athletes are quality of life issues.  The real issues facing athletes today aren’t necessarily their salaries.  These are all things that unions can take a leadership position in, and a lot of it starts with collective bargaining agreement negotiation.  As salaries start to rise, and revenues continue to, quality of life issues are much easier for the union to obtain during negotiations.”

Finally, if the NBPA is unable to prevent the NBA from locking out players in the future due to stalled labor negotiations, Grantham believes that the union must find a way to circumvent a lockout other than decertification of the union.  Grantham noted, “There was a time that decertification worked, and that was many years ago.  It was before the legal system caught up with the system whereby a union would decertify itself to put more antitrust scrutiny on management.  Back then, the application of decertification was so new, that the machinery wasn’t tuned and the court couldn’t figure out that this was a maneuver.  More recently though, the courts have adjusted.  Ultimately, we all knew when the agreement expired that we would be facing a lockout.  The problem though, is what happens to the players in the meantime?  The NBPA could say, ‘We’ve got this lawsuit going which will allow the guys to keep working.’  That would be great, but that is not the way that the system works.  As a strategic plan, I no longer see the value of decertifying.  If anything, it was demonstrated in the recent NFL and NBA labor negotiations that the unions need to re-think that strategy going forward.”

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Legal Implications Surrounding the Brooklyn Nets’ Move to the Barclays Center

By:  Richard Braun, RulingSports.com Intern (Twitter:  @RicBraun)

            Whenever a new stadium is approved to be built or remodeled for a team, such as what has recently been approved in Minneapolis for the Vikings and in San Francisco for the Warriors, the controversy typically revolves around how these facilities are financed. The Brooklyn Nets, however, face a different series of legal issues as they prepare to move into their new home, the Barclay’s Center.

            Back in 2003, real estate developer Forest City Ratner proposed the Atlantic Yards project – a multi-billion dollar plan to develop the Vanderbilt Yard and Prospect Heights, a neighborhood just outside downtown Brooklyn. Headed by then-Nets owner Bruce Ratner, the plan would come to include the future home of the Nets, the Barclays Center. About half of the proposed area was already owned by the city, but various private parties owned the remaining half. To acquire control of the remaining half, the state declared the area blighted and seized the property using eminent domain.

            The modern formulation of the limitations of eminent domain can be traced back to the 2005 Supreme Court Case Kelo v. City of New London. The 5th Amendment of the United States Constitution states that private property cannot be taken for public use without just compensation. The Kelo ruling loosened the “public use” requirement, meaning that the land must be used by the public, for simply a “public purpose.” In writing the majority opinion, Supreme Court Justice Stevens allowed “public purpose” to include economic development and the removal of blight, but the Court mostly wanted state legislatures to determine on their own the full extent of their eminent domain power. In dissent, Justice O’Connor, while stating different public uses that the Court has allowed in the past, said that “the sovereign may transfer private property to private parties, often common carriers, who make the property available for the public’s use—such as with a railroad, a public utility, or a stadium.” (emphasis added) What O’Connor is saying any building that is open for the public counts as a public purpose, and that includes stadiums. This passage in the Kelo dissent specifically outlined the authority New York had to seize private land for Ratner’s Atlantic Yards project and the Barclays Center.

            In order to comply with the law as stated by Kelo, the private land still needed to be classified as blighted, and the Empire State Development Corporation (ESDC) in 2006 came to the conclusion that the area was indeed blighted. In their study, the ESDC claimed that it was highly unlikely that blighted conditions on the project site would be removed without public action[1]. This assertion has been met with a great deal[2] of[3] skepticism[4], and eventually the land owners took Ratner and the State of New York to court over what they considered an unconstitutional taking, in violation of the Fifth Amendment. The New York Court of Appeals, however, followed the holdings from Kelo and other cases in upholding the State’s ability to seize private land for the Atlantic Yards project, even if not all of the property being seized was blighted. The property owners also sought to stop the taking by claiming that the actual motivation behind the approval of Atlantic Yards was for the private gain of Forest City Ratner, not any public purpose. The Court disagreed, holding that eminent domain was just a means to an end, the end being the public purpose.

            In the wake of the Kelo decision, 43 states[5] imposed new limitations on their eminent domain laws. New York was not one of them, and as a result it was next to impossible for the residents in the proposed Atlantic Yards area to mount a successful challenge to the State’s eminent domain power. The Court ruled that any property that was underdeveloped was subject to eminent domain.  However, this is a ruling that can apply to just about any piece of property. Further, the New York Court of Appeals was very deferential to the ESDC in their decision, even though the ESDC is an agency appointed by the State that is comprised entirely of unelected officials. As a result, Ratner secured the legal victories he needed in order to begin building the Barclays Center, which is scheduled to open in time for the 2012-13 NBA season.

            The use of eminent domain does not receive the same amount of press as public stadium financing, but it is a popular tool for securing land for new stadiums. Its use is more liberal in New York than in other states, but just about every state can seize private property for a new stadium if the property meets that state’s definition of blight. And unlike public financing, which is typically voted on either by a legislature or public referendum, the public has little recourse in the event of a taking.


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The NBA Draft Lottery: Which Team Should Pick First?

On May 30, 2012, the 2012 NBA Draft Lottery will be held.  Since 1990, the NBA has engaged a weighted lottery to determine which of the fourteen teams that did not make the playoffs in the previous year (or the team to which they traded their draft pick) will receive the top draft pick.  The NBA’s process of selecting which team will receive the number-one draft pick for its draft differs from that of other major sporting leagues.  Other major sporting leagues generally assign draft picks through an opposite win-loss record, meaning that the team with the most losses in the previous season will be awarded the first draft pick.

Under the NBA’s weighted draft lottery system, the NBA team with the worst record in the previous season receives the greatest number of lottery combinations (250).  The rationale behind this is that by giving the team more combinations, it is more likely that they will be awarded with the number one pick through the lottery.  However, this has not always proven true.

Over the last ten years, the following teams have been awarded the number-one pick in the NBA Draft through the Draft Lottery:

Year Team Record Player Selected
2002 Houston Rockets 5th worst Yao Ming
2003 Cleveland Cavaliers Tied for worst LeBron James
2004 Orlando Magic Worst Dwight Howard
2005 Milwaukee Bucs 6th worst Andrew Bogut
2006 Toronto Raptors 5th worst Andrea Bargnani
2007 Portland Trail Blazers 6th worst Greg Oden
2008 Chicago Bulls 9th worst Derrick Rose
2009 Los Angeles Clippers 2nd worst Blake Griffin
2010 Washington Wizards 5th worst John Wall
2011 Los Angeles Clippers (to Cavaliers) 8th worst Kyrie Irving

The chart above notes which teams received the number-one pick in each respective year, and also notes their previous season record.  Notably, only twice in the last ten years have teams ranked last received the number-one draft pick through the NBA Draft Lottery.

This fact obviously raises some concerns, especially for the first NBA Draft Lottery following last year’s NBA lockout.  One thing owners attempted to accomplish through the NBA lockout was parity amongst all 30 NBA teams.  As such, owners attempted to create salary structures and revenue sharing provisions which would allow teams in smaller markets to compete with teams in larger markets.  While market shares are one way in which a league can create parity, allowing teams across the league to draft the greatest talent possible also assists in creating parity.  Understandably, the better players that a team can draft, the more likely that fans will be energized to buy tickets and attend games.  In contrast, the worse players that a team drafts and subsequently, the worse that a team plays, the less likely that fans will purchase tickets to attend games.

Interestingly, though, receiving the number-one draft pick does not always correlate to a team having a successful season in the following year.  The following chart denotes whether the teams who received the number-one draft pick from the lottery made the playoffs in the season following the lottery:

Team Did Team Make Following Year’s Playoffs?
Houston Rockets No
Cleveland Cavaliers No
Orlando Magic No
Milwaukee Bucs Yes (Eastern Conference 8-seed)
Toronto Raptors Yes (Eastern Conference 3-seed)
Portland Trail Blazers No
Chicago Bulls Yes (Eastern Conference 7-seed)
Los Angeles Clippers No
Washington Wizards No
Cleveland Cavaliers No

Notably, only three of seven teams receiving the number-one pick in the last ten years made the playoffs in the season following the draft.  Those teams were:  the Milwaukee Bucs, Toronto Raptors and Chicago Bulls.  Interestingly, neither of the two teams which had the worst ranking and received the number-one pick (i.e., 2003 Cleveland Cavaliers and 2004 Orlando Magic) made the playoffs in the year following the draft.  The Bucs, Raptors and Bulls had the 6th, 5th an 9th worst records, respectively, going into the years that they won the lottery for the number-one pick.  Thus, one could argue that the better a team’s record is in the season before it wins the lottery for the number-one pick, the more likely it is that the team will make the playoffs.

Given the playoff history of teams who have received the number-one pick in the NBA Draft Lottery, which shows that the better a team’s record the previous season, the more likely they are to make the playoffs with the number-one pick on their roster, one must question whether the NBA Draft Lottery needs to be revamped.  This year, the following fourteen teams will be put into the lottery to receive the number-one pick in the 2012 NBA Draft:

2012 Lottery Teams Likelihood of Receiving #1 Pick
Charlotte Bobcats 25%
Washington Wizards 19.90%
Cleveland Cavaliers 13.80%
New Orleans Hornets 13.70%
Sacramento Kings 7.60%
Brooklyn Nets 7.50%
Golden State Warriors 3.60%
Toronto Raptors 3.50%
Detroit Pistons 1.70%
Minnesota Timberwolves 1.10%
Portland Trailblazers 0.80%
Milwaukee Bucs 0.70%
Phoenix Suns 0.60%
Houston Rockets 0.50%

Looking at the teams listed above, there are clearly some whose need for the talent a number-one draft pick brings to a team is greater than others. Clearly, the Charlotte Bobcats, who went 7-59 in the 2011-12 season, are the team needing the talent of a number-one pick the most.  Notably, a number of small market teams will be contending for the lottery pick.  Cleveland, which used its 2003 lottery pick to draft LeBron James in 2003, felt the sting of being a small market team when as a free agent, James decided to sign with the large- market Miami Heat.  The lottery contenders also include small market teams, the Sacramento Kings and Golden State Warriors, whose owners are seeking to relocate their respective team to a larger market.  Then, there is the team which was recently sold to new owners after being held by the NBA, the New Orleans Hornets.  Arguably, given their win-loss records last season, along with the challenges they face with respect to ownership and market issues, Charlotte, Cleveland, Sacramento, Golden State or New Orleans are the most deserving of winning the lottery for the number-one pick.

However, should analysis like this even need to be completed?  Or, would the NBA be better suited by moving to a model in which the team with the worst record in the preceding season receives the number-one draft pick in the following year’s draft?  Arguably, basing draft positions solely upon a team’s ranking would provide a more fair model which better addresses the wide-scale needs of NBA teams.

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