Mikhail Prokhorov Nets

You’ve probably heard about the sit-down that NBA commissioner David Stern orchestrated between the New York Knicks owner James Dolan and the Brooklyn Nets owner Mikhail Prokhorov:

One source maintained Prokhorov stokes the rivalry fires because he believes the feud “is great for both teams” and insisted it is “not at all personal” against Dolan, the Garden chairman and Cablevision CEO.

So basically, Prokhorov comes into the NBA, buys one of the worst franchises, moves it to the big city and starts picking a fight with the Knicks, who supposedly own New York? That makes sense for the Nets, who have long wanted a piece of the New York pie, but have always been on the outside looking in.

Of course, the Knicks responding to it just makes it effective. So, way to continue leading the Knicks into the abyss, Dolan.

The Cleveland Cavaliers shocked many pundits and draft analysts last night by choosing Anthony Bennett as the top overall pick in the 2013 NBA draft. While many considered this year’s draft to be a weaker draft, that’s a bit of a misnomer; most drafts don’t bring in elite stars, but rather bring in several solid players, several players who will ultimately be journeymen and role players, and quite a few players who won’t be in the league after five years. This is true every year, so why the 2013 draft would be considered significantly weaker is just conjecture.

At any rate, this draft is the last for commissioner David Stern, who won’t be missed, and leaves a league that is rife with unprofitable teams and a business structure based on a few players rather than solid team properties like every other league in the world. During Stern’s tenure, the NBA has limped along with weak profit margins – while the NFL’s profit margin has exploded over the $1 billion mark, and Major League Baseball has almost half a billion, the NBA is just around $183 million in profit (on $4.1 billion in revenue…you have to work really hard to lose that much margin, but Stern has managed to do it), just barely ahead of the NHL. Despite so many people writing that Stern is a fantastic commissioner, the reality is they aren’t business people. After all, a lot of people thought interest-only home loans with adjustable rates were a great idea, too.

But back to the NBA and it’s heralded draft night, there are almost certainly players who will be much better than the pundits think, and time will continue to tell which teams are horrible at evaluating players. The draft also set off several massive trades which may ultimately prove that Danny Ainge and the Celtics know more about building a team than most of the league.

So while no championship is won on draft night, it does show patterns for teams, and it’s always interesting to see which teams consistently blow it while others walk away with solid contributors every year.

The Business of Sports
From: Top Business Degrees

Lebron James

By Marcus Shockley

As the Northeastern United States digs out from under the massive devastation of Hurricane Sandy, people look for ways to prevent the pain and mayhem caused by storms like this. While it may be possible to one day control the weather, in times of desperation people will start grasping at wild ideas, such as the concept of trying to stop a Hurricane by nuking it that comes up whenever there is a massive storm that lashes our coasts.

While the idea of trying to stop a massive force of nature with a “massive force of man” is an idea that is laughable from a nuclear perspective, it has become reality for the NBA under David Stern’s tenure.

David Stern recently announced his retirement as NBA commissioner, effective in 2014. Stern has ruled over the NBA for almost 30 years and has done serious damage to the league and its overall on-court product, and it’s not clear if his successor will be able to rectify it.

Is David Stern the worst commissioner in the history of sports? No.

Has he done some good things? Yes.

Is he a good commissioner? No.

Under David Stern, the NBA diverted its entire marketing force to promote individuals over teams, a direct departure from every other team sport in existence, and diametrically opposed to the model created by the NFL under Paul Tagliabue, who many, including myself, consider to be greatest commissioner who has presided over any sport thus far. Tagliabue turned football into the financial and popular juggernaut that it is today, and one key element of the NFL is that fans root for teams, not individual players. Sure, they love their players as long as they are wearing the team uniform, but Indianapolis Colts fans did not flock to root for Denver when their beloved Peyton Manning was traded to the Mile High City. Needless to say, NFL game pass has long been a popular service for football fans. This guide will walk you through what it is, how it works and whether it’s a good value, fans of NFL teams root for their favorite team, and while some fans might change teams, it’s rare and it’s not because of where the players are going. An added business caveat to this: injuries, while unfortunate, do not normally diminish the immediate value of an NFL franchise.

This concept, which is used effectively in college sports, worldwide soccer and even the poorly managed Major League Baseball, creates more valuable teams, a more loyal fanbase and vast financial power for the league as a whole. It’s exactly the opposite of what David Stern has done.

Over the past 30 years, David Stern has effectively made moves that have created an NBA that is entirely focused on the marketability of individual players and that has grown revenue by some amount, but also created a fragile economy for the sport, limited parity and created an environment where it’s more important to have one ‘star’ player than it is to make the playoffs consistently.

The biggest issue today is that the only way for small-market or mid-market teams to succeed in today’s NBA is to get your hands on one of the few superstars in the league – such as Oklahoma City or San Antonio did with Kevin Durant and Tim Duncan respectively – and hope they don’t leave as soon as they really hit their professional peak (as Dwight Howard and Lebron James have done). Once a team like the Boston Celtics or Miami Heat manage to lure three superstars to their team, the only way for another team to compete with them is to send an equal or greater force against them, much like attempting to nuke a hurricane.

There are several reasons for this, but the most egregious is how stars get more beneficial calls than other players, and the lack of true zone defenses is designed to allow the stars more points. As an example, Shaquille O’Neal, one of the most gifted centers to play in the NBA, was allowed to charge his way to the basket, knocking his opponent to the floor, and it was rarely called. Considering Shaq’s impressive physical skills, this gave him an incredible, nearly insurmountable advantage in the post that other teams could not contend with. The result? Four NBA championships for O’Neal and his teams. Now, this is not to say O’Neal could not have won titles even if the games were called fairly, but giving a player of his ability that kind of advantage is exactly what David Stern had in mind. He’s repeated this pattern for years, and it’s created players who are far too powerful. The fans follow the players – if Lebron leaves Miami for Charlotte (won’t happen), suddenly there will be a rash of new Charlotte Bobcats fans and an exodus of Miami Heat fans. This creates a fragile economy for the sport – if Lebron is injured, the Miami Heat suddenly have significantly less fans, as the Chicago Bulls found out last season when Derrick Rose went down with an ACL injury.

This focus on the individual players has stymied economic parity and growth in the NBA. It’s not currently possible for a team to be competitive in the NBA without loading up on ‘name’ players who will get the benefits of being stars. Are you a fan of the Wizards, Cavaliers, Hawks, Orlando or any of a dozen other teams without a group of stars? You’re out of luck. You’re team’s not contending this year or any year in the near future. The NBA still suffers from the image that there are ‘favored’ teams, something very few people believe about the NFL.

I don’t know if Adam Silver will correct these problems, but it’s definitely fixable. It’s a problem built over 30 years of misguided marketing, where individual player shoe releases make more noise than some of the teams in the league.

National Basketball Association commissioner David Stern answers questions from the media regarding failed contract negotiations between the NBA and the players association in New York June 30, 2011. REUTERS/Lucas Jackson (UNITED STATES – Tags: SPORT EMPLOYMENT BUSINESS BASKETBALL)

        
        

The NBA and the players’ association representatives met yesterday, giving fans hope that if things went well, the possibility of pro basketball this season might still be a reality. This week, meaning, by Friday, is pretty much the last week any kind of deal could be reached before affecting the season, because of training camp schedules and then the pre-season.

Unfortunately, they walked away without any resolution, leaving a lot of doubt on the season. NBA Commissioner David Stern said that he has not asked any of the owners to take the ultimate step regarding this season, but it doesn’t sound like there is any plan for a meeting in the near future:

The Owners are scheduled to hold a Board of Governors meeting on Thursday and while Stern may not ask for a vote, the final power to scrub the pre-season may be granted to the Labor Relations Committee simply by virtue of process.

Stern warned that while yesterday was a “bad day”, he hoped that phone conversations could re-start the process which seemed awfully close yesterday.

The silver lining is that the players and owners apparently started discussions over the biggest point of contention, which is how to split revenues. This could have been a result of more people being brought into the negotiations, but normally, when a group that’s trying to agree on something gets bigger, that usually just makes it more difficult.

Regardless of how both sides try to spin the result of yesterday’s meeting, the reality is that everyone knows the lack of a resolution is a very bad sign for the upcoming season:

“I think coming out of today, obviously because of the calendar, we can’t come out of here feeling as though training camps and the season is going to start on time at this point,” players’ association president Derek Fisher(notes) of the Lakers said.

The only real movement in the discussions is that the players seem willing to give up more revenue, although no formal proposal was made. Despite everyone involved expressing disappointment, Stern seems to be the ‘less glum’ of the participants, probably due to the change in position by the players:

“We did not have a great day,” said commissioner David Stern, though he was not nearly as glum as the players. Perhaps Stern recognized important movement in the players’ stance. Just last week the two sides had exchanged proposals, according to Stern, while engaging each other in conversations that were inspiring to both union and management. While union chief Billy Hunter said he hadn’t been expecting to reach an agreement Tuesday, he was hoping to achieve progress to build on the gains of last week.

As we’ve stated before, in this negotiation, the owners have far more leverage to get what they want than the players, and it’s pretty much a waiting game for them until the players’ wallets start hurting enough, and they concede.

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Interested in playing basketball overseas? You might want to check out this handy guide.