HoopsHype.com NBA Blogs - Sam Smith

Bob Whitsitt, now a sports and business consultant, was one of the most successful team sports officials in the 1990’s, executive of the year in the NBA and general manager of NBA and NFL teams. He recalls a day talking to various members of his team and staff about the U.S. fighting a war again.

Whitsitt received several quizzical looks.

“Our country is at war and I’ve got guys who didn’t even know literally what I was talking about,” recalled Whitsitt in an interview last week. “These guys are not stupid people. But they just expect the paycheck to just show up. Sometimes you need to step back and appreciate what a great deal you have here.

“Guys think owners have unlimited pockets and the money is everywhere. Well, c’mon,” adds Whitsitt. “These are going to be interesting times.”

That’s because the economic crisis that is involving Wall Street and Main Street may end up in court as well, namely the 94 by 50 one that NBA players have come to assume is immune from the hardships that face the rest of the world.

“Let’s say this coming February or March a whole lot of NBA offices are going to be hoping the economy really improved,” says Rick Welts, chief operating officer for the Phoenix Suns. “Because next February or March is when teams expect commitments for the following season.

“We’re not there yet,” added Welts, “but this all, obviously, impacts the money available in player salaries.”

No one is about to feel sorry for an NBA All-Star who has to “settle” for $8 million per season.

But the forces are beginning to form in the general economy that could lead to NBA salaries and revenues rolling back along with the rest of the economy.

About time, you say.

It would be interesting to see, and it’s not far fetched for perhaps the first time in the NBA in the last 25 years.

Let’s be clear here. No great depression is imminent for the NBA and its players and teams because finances for the 2008-09 season are pretty much assured.

If the federal “bailout” deal is a success, it should be business as usual. But that remains to be seen for the entire nation.

NBA finances are fairly simple.

There is a national media deal which all teams share, and then there is local ticket sales, broadcasting and sponsorships, the latter which effectively spell the difference between economic success and failure.

Commitments for season tickets, broadcast rights and advertising are pretty much locked up in the early spring. And while there were mumblings about housing issues back then, there seemed to be no great panic on the horizon.

So NBA teams are basically in good shape for this season.

But there are signs already.

The Suns remain one of the NBA stars on the business side. NBA sources said their season ticket renewal rate for this season was about 95 percent, one of the best in the league. But league sources say about four percent declined to follow through on their commitment despite putting down hefty deposits.

The Phoenix experience is not unique. Some team officials say it’s been happening all around the NBA and teams, despite having the majority of the commitments remaining solid, have begun to increase the number of partial ticket plans, increase and encourage group sales, ease payment terms on the tickets and divide up suites to sell per game or for partial season.

Sponsors also are starting to back off in some spots with team officials from several teams saying they are seeing fewer commitments from home builders and mortgage companies, for obvious reasons, and the growing fear about the effects of major financial failures, especially in New York.

New York, Chicago and Los Angles, the three largest markets, generally are unaffected by the economy. With poor teams most of the last decade, Chicago and New York have remained among the top daily grossers in the NBA along with the Lakers, who have been more competitive.

Also, it’s generally agreed around the NBA it’s easiest to sell the most expensive tickets, the courtside and lower bowl tickets. Now, some teams are beginning to wonder about that so called given with the pressure that is being generated on CEOs and spending that seems frivolous or wasteful, like sporting events.

That effect should be seen for next season’s renewals even if the economic rescue plan is successful.

All of this also is likely to lead to serious questioning of the NBA’s Collective Bargaining Agreement, which expires after the 2010-11 season. And even though there is an option clause it’s not likely to be exercised.

That’s because when the last agreement was signed, NBA commissioner David Stern did a disservice to his teams and players’ chief Billy Hunter did a disservice to the majority of his membership. Don’t be surprised if there’s some work stoppage in trying to remedy the issue.

It’s the length of contracts, which has been a huge burden for teams. It’s become evident with a dozen or more players with eight-figure contracts being bought out, released or left to wither on the bench because of lack of production. It was a sensitive issue at the time, and to get a deal, Stern felt the need to agree to five and six-year contracts instead of more reasonable three and four-year deals supported by many within the league. The NHL was out on lockout for the season at the time and Stern didn’t want his league to join in the bad publicity while some owners with dual arenas couldn’t afford both leagues dark.

Now with so many of the top stars, like LeBron James, Dwyane Wade and Chris Bosh, voluntarily seeking shorter, three-year deals, it seems clear that is a long enough time period for a contract and supported by the stars of the game.

It seemed a good deal for the players and an issue its union wouldn’t budge on. But the effect, especially if there is a downturn in revenues from the economic crisis and players’ salaries are adjusted downward, is so much guaranteed money going for buyout players and thus less left for the so called middle class player.

“You want to put those dollars back in the pockets of guys who are producing and not paying guys not to play,” notes Whitsitt. “Giving guys $20 million to go away hurts the product and hurts the team.”

Another issue that is likely to come up again with the economic crisis is the NBA’s continuing slide, like some say with the country, toward a greater division between rich and poor.

Big markets traditionally have been immune to their teams playing poorly. They’ve been able to be profitable anyway. Plus, those big markets have greater revenues from local TV and advertising. So they drive the increases in the salary cap with their bountiful local market revenues.

Now, the economic issues will be putting a greater strain on the typical fan to attend games compared with larger markets that should have a bigger business base to draw from even with some major companies suffering.

Lamented one marketing executive: “The guy is being hit with big gas increases, housing costs. He can’t sell his house. Maybe he can’t buy. He’s worried about his retirement income. We become a luxury pretty fast.”

According to Team Marketing Report, the average NBA ticket last season was almost $50 and almost $300 for a family of four to attend a game. It seems likely fewer individuals and families are going to be able to afford that kind of entertainment.

It usually was said sports and movies were recession proof, though it seems questionable for sports at those prices.

What’s likely to continue is the shift to watching the games on television, especially with more high definition service and national league packages for sale.

It can be something of a financial offset since teams can charge greater advertising rates if TV ratings are higher. But it hardly makes up for the loss at the box office, and figures to hurt the small markets most.

Of course, there are exceptions, and you cannot even buy season tickets in Oklahoma City with the team moving from Seattle. Also, the NBA went a long period with attendance increases with new arenas being built. That trend seems about over now as it’s also going to be increasingly difficult to find financing for a new arena in this credit market. It also figures to affect teams that are for sale as potential new ownership groups are saying it is becoming more difficult now to put togethe r a group and get financing.

“There are only so many Paul Allens,” says Whitsitt, who long worked for the Trail Blazers and NFL Seahawks owner. “They already have teams or don’t want teams. Buying you look for a combination of equity and borrowing and it’s difficult to grind out.

“A lot of guys like to talk and pretend they are experts,” says Whitsitt. “The truth is none of us really know what is going to happen. But logically things don’t look good across the board.”

Three guys show up for their job orientation and who knows what they did, though it seemed to involve drugs and sex. Another guy makes a video apparently demeaning his country and finding enough vile words for an HBO special.

I know I’m excited.

It means our favorite guys are back.

Yes, it’s just about time for the NBA season.

Of course this is an overstatement. But that’s the inescapable burden of the NBA. I’ve been around this league for almost 30 years and believe its people are better than in any sport. No, golf isn’t a sport.

But part of the fun of loving the NBA is our guys do some goofy stuff.

I’m hereafter nominating those goofs for my Reggie Harding memorial award.

My preseason nominations are the Kansas Three, rookies Mario Chalmers and Darrell Arthur from Kansas and Michael Beasley from Kansas State. No, kids, you aren’t in Kansas anymore. And you shouldn’t have brought Dorothy to rookie orientation. Or her sister.

Then there’s Josh Howard, who slammed the national anthem this summer on a video (don’t these guys ever learn, Melo?) as the topping for his drug use admissions last season and excess partying in playoff defeat.

I’m told all Dallas Mavericks players this season when standing next to Howard will have to wear those “I’m with stupid” t-shirts that Kenny’s mom wears in South Park episodes.

And then there’s Ben Gordon, who really is a very good and decent guy, who seems to have turned down enough money to bail out Wall Street while working through an aimless free agency.

Oh yeah, Reggie.

Reg was a troubled young man who was one of the first to be drafted by the NBA without attending college. He was a seven footer from Detroit. He played four decent NBA seasons (twice even averaging a double/double through trouble shortened seasons) and one double/double season in the ABA, and was shot dead on a Detroit street corner in 1972 at age 30.

Reg wasn’t the brightest guy and so the story goes once, wearing a mask, he decided to rob a store in his neighborhood. The owner recognized Reg as there weren’t a lot of seven foot holdup men around.

“Reg,” the man said, “don’t do it.”

Replied Harding: “It ain’t me, man.”

You’d think Ron Artest retired this trophy, but Josh is working hard to wrestle it away.

As for my man, Ben, I weep for him.

Eventually, Gordon will be a rich young man. You’d say he probably is now since he’ll likely sign a one-year qualifying offer for about $6.4 million this season and thereafter become an unrestricted free agent.

And then what?

That’s the rub, and I understand Gordon’s position, much stated to the Bulls.

Ben: “I’m the leading scorer on the team for the last three years. I should be highest paid.”

Bulls: “We like you and believe you are valuable and would like you to remain with the Bulls. But you turned down $10 million a year for five years last year and you and the team had a bad season. So we’ll offer you maybe $9 million or so for six years, again more than $50 million. But you really are a classic sixth man, a great scorer with limited ballhanding and passing skills and you’re, what, six foot tall? We haven’t gotten any trade offers for you (OK, Miami said they were thinking briefly about Shawn Marion and Marcus Banks, but who wants Banks’ contract and Marion’s pout?). Go get an offer somewhere and we’ll make a deal. And, who, after all, is going to give you $10 million or more of saved cap room next summer when everyone is waiting for 2010 and LeBron, Wade and Bosh?”

And so Gordon sits with the rest of us suckers watching our money disappear.

Hey, I should have sold my house last year. But I didn’t. Now I can’t.

It’s timing. It’s life.

Sorry, Ben, the market for six foot shooting guards, no matter how good a guy you are and hard you work, isn’t there.

Take the $9 million or $9.5 million (estimate) and be a very, very, very, very rich man.

OK, not as rich as some of your friends.

But, hey, the guys at Lehman Brothers thought they were rich last week.

I understand well how this works.

It’s about respect, right?

No, it’s about competition.

You don’t become a pro athlete unless you compete at everything. They compete in conversation. So when all us old timers who are trying to find the airline without baggage fees say you are rich whether you make $8 million or $12 million and never can spend it all, anyway, we don’t get it.

It’s the same in your office. A salary of $75,000 might sound great until you find out the sinkhole at the next desk makes $85,000. Then it’s misery.

Especially with athletes.

It really isn’t about the money. Sort of. No one really realizes how good they are until you try to play against them. What gets you to that level is the desire (and we’d love to see it more often when they are there) to compete all the time.

Gordon’s like that. And he’s a worker.

I hate this being him because he is a dedicated guy. I’ve traveled with the Chicago Bulls on and off the last few years and just about every city the Bulls land in Gordon gets off the plane and heads directly to a gym to shoot. There are few guys in the NBA who practice as much, certainly not on their shooting. Every summer, Bulls coaches rave about all the work Gordon has put in.

And then it turns out he’s still six feet tall.

No one on that Bulls team gets as much defensive attention, so it didn’t go so well with Ben Wallace averaging $15 million. Geez, and the guy can’t make a layup.

Gordon asked for $15 million last season and didn’t budge. The Bulls offered $10 million and didn’t budge.

Next!

So this summer Luol Deng signed after he rejected a deal last year close to $60 million for five years. It was announced this time at more than $70 million. But with, according to league sources, perhaps $20 million deferred in the first five seasons, the present value of the contract is believed to be slightly less than Deng was offered last season. The Bulls are believed to have made a similar proportional offer to Gordon, like Deng, slightly less than Gordon could have made last year. But seemingly a lot of money.

Gordon averaged more points than Deng as well and now Larry Hughes is there making about $13 million a season and he’s no Ben Gordon. Where’s the loyalty?

So Gordon remains unsigned.

It seems clear the Bulls will not trade him, and though Gordon this summer talked of having played his last game for the Bulls and never playing for the qualifying offer, he has nowhere else to go.

Were he even to get an overseas offer, he’d still be a Bulls free agent when he returned as you cannot by rule play out your free agency somewhere else. Plus, the European offers have been even less than the qualifying offer and much less than Gordon keeps rejecting here.

So he’ll come in and disrupt the team by, what, shooting all the time?

Duh.

It’s what he does.

Gordon’s not going to hurt the team, and the Bulls know it.

First, he’s not a bad guy, and he would become unrestricted if he signs the one year offer. Not a great time to lay down.

Plus, he always comes in shooting anyway. What’s he going to do to undermine the team? Pass?

So the Bulls will panic because they can’t afford to lose him in free agency and get nothing in return? Right? Hardly.

Admittedly, it’s not a great free agent class next summer, though Carlos Boozer and Hedo Turkoglu could be there. The teams most likely to be $10 million or more under the cap to sign someone unrestricted likely figure to be from among Memphis (not spending money), Oklahoma City (probably not with the big relocation fee due), Portland (got guards), Miami (going for Boozer, we hear), Indiana and maybe Minnesota. So if you are spending, you lock in Ben Gordon and pass on a chance for Wade or Bosh? LeBron is going to New York or New Jersey, as we know.

No. If Gordon wants to go anywhere and get paid he probably would have to come back to the Bulls anyway for a sign-and-trade. Which is why the Bulls don’t seem in any hurry to make a deal.

And with a signed Deng and No. 1 pick Derrick Rose, they need Gordon. Who else is going to score? Gordon has a chance to have a terrific season, and perhaps the team improves as a result.

The Bulls have made it clear they aren’t going to make a bad deal to accommodate Gordon, and they aren’t about to panic. Most Americans’ portfolios don’t look like they did two weeks ago, and so the timing isn’t great for Gordon, either.

But Gordon still has a chance to be guaranteed some $50 million or more. Hey, it would be more than Josh Howard got.

I know, I know. Bad example.

My guess: Gordon ends up re-signing with the Bulls at some point.

I’m afraid I’m the guy who defined athletes’ political activism through the words of Michael Jordan.

It was some 20 or so years ago when I was the beat writer covering the Chicago Bulls before their championship run. One of the great charms of Jordan as the guy’s guy he really most is – and I always felt perhaps the biggest reason for his amazing success – was his constant, almost relentless pursuit to make everything a contest, including conversation.

There’s rarely been anyone better at getting the last word, and making it a good one.  Jordan wanted to win the conversations, too.

Politics never has been a big priority with professional athletes, and particularly not among team athletes.

There have always been exceptions, like Bill Walton, who was something of campus activist while at UCLA. Walton once even went to deliver a letter to Richard Nixon asking him to resign. And there was Roosevelt Grier, the former NFL lineman, who was at Robert Kennedy’s side when he was assassinated. Barack Obama has drawn comparisons to the Kennedys and Bobby had several athletes with him at times, including Lamar Lundy and Deacon Jones from the NFL.

But mostly athletes, if they took sides, were Republicans based on their exceptional earnings and desire to keep corporate tax rates lower – something generally associated with the GOP. You could hold the Republican national convention in the locker room at a PGA golf tournament and have trouble finding anyone as liberal as John McCain.

In the late 80s, one of the senators from North Carolina, Jordan’s home state, was Jesse Helms, in my opinion a very bad man and whom I believed to, let’s say, have racial views that didn’t seem egalitarian. Jordan loved to debate, no matter the topic, and even on issues you would never hear him discuss, he’d have strong opinions. So I was making my case for Harvey Gantt, the black mayor of Charlotte. I said Jordan should be working for him

Jordan knew him and liked him, and his politics, which Jordan didn’t discuss often, skewed much more toward Gantt.

But there was this restraint holding him back, one that is regularly counseled to the greatest of the athletes, meaning the ones who are the most marketable: Don’t offend anyone.

And Jordan truly was the first in that field.

Sure, big-name athletes always have endorsed products. Wheaties boxes have features athletes for decades. I would buy anything I could that had Mickey Mantle’s picture on it.

But in his groundbreaking shoe deal with Nike, Jordan became the first true athletic corporate figure.

So as I droned on and on about the pernicious Helms, Jordan eyed me and with a twinkle in his eyes, offered: “Republicans buy sneakers, too.”

I did a few of those Ralph Kramden “hom-a-na, hom-a-nas,” and fell silent.

Swish!

Jordan’s imprint is on virtually every style change in the NBA in the last 20 years, from longer uniform shorts to shaved head.

And despite an occasional condemnation from an activist like Jim Brown, politics as well.

Heck, Charles Barkley for years used to ruminate about running for governor of Alabama, though he’d vacillate between which party he’d represent.

But this year, with Obama running for president, the first black man to represent a major political party for president in the U.S., it appears that in record numbers professional athletes are taking an active role in support for the Democratic ticket, which probably is most representative of their history.

While professional athletes historically have been Republican-leaning or apolitical because of their economic levels, the huge majority, other than golfers and tennis players, come from poor or modest backgrounds which align with the Democratic party platform.

Generally counseled to avoid political discussion, this year’s extraordinary American presidential contest has shaken many from their neutrality.

Among those who have been active in the Obama effort have included former great centers Bill Russell and Kareem Abdul-Jabbar. Rookie (again) Portland center Greg Oden announced on his blog his support for Obama and afterward Obama gave Oden a phone call and, according to Oden, Obama said the Trail Blazers looked strong this season with the Oden/LaMarcus Aldridge pairing.

Hey, the Democrats keep saying they needed to get more to the center. Is this what they meant?

Others who have been involved with the Obama effort include the Suns’ Grant Hill, Atlanta’s Marvin Williams, Barkley, the Knicks’ Stephon Marbury and the Clippers’ Baron Davis. Though it’s not just the Democrats getting support as the Kings’ Spencer Hawes has been an active worker for Republican candidates.

Davis has hosted events for Obama in California and declared after Obama’s acceptance speech Davis felt like “going out to Venice Beach to register people.”

For anyone who’s even been there, “people” would be a loose term.

Obama’s chief strategist David Axelrod said he was at an event with Davis and was impressed by Davis’ commitment and said the campaign has been pleased with the show of support in the usually neutral athletic community.

“A number of these athletes are deeply involved in their communities and they see an awful lot of need,” said Axelrod. “Obama is a guy who inspires a sense of both involvement and possibilities for solving these problems and they respond to that.

“From a generational standpoint athletes relate to him,” Axelrod added. “There’s a feeling among some people that all athletes are selfish and disinterested, but it’s not true. There are so many who are involved in the community, give of their ti me and money, like tremendous efforts after Hurricane Katrina, and they see Obama as someone who can inspire change.”

And, by the way, yes, Jordan has been a contributor to the campaign.