Pity the Billionaire (with apologies to Tom Frank)

I haven’t yet commented on the mega television deal the NBA has signed with its cable television partners. Beginning in 2016-17, the league will pull in about $2.7 billion a year for nine years, triple what it is currently making. With franchise values soaring – they increased on average by 25%, according to Forbes magazine – NBA owners must be feeling pretty flush right about now. And those valuations came before Steve Ballmer purchased the LA Clippers for two billion dollars, roughly three times the team’s estimated value.

In the wake of the new television deals, it was unsurprising that some players would start to suggest that they deserved a bigger piece of this now very large pie. It is well understood – now – that the owners fleeced the players during the 2011 lockout. Though the Mike Wilbons of the world actually took the owners’ ridiculous cries of poverty at face value, it ought to be universally understood by now that the owners *always* cry poverty and, in doing so, misrepresent both the nature of their profits and losses and, more fundamentally, the unusual benefits of owning a professional sports franchise in the United States.

Regardless, the increase television revenue will result in a significant increase in the per-team salary caps, once the new deal kicks in. This will, of course, mean more money for the players. How that money will be distributed has been one subject of discussion this week. Kevin Durant said this week that the max contracts imposed on elite players meant that guys like him were being undervalued. In market teams, this is unquestionably true. But lifting the cap on maximum individual contracts won’t affect the players’ aggregate haul, since the team caps are going to remain. For that reason, junking the max contracts would benefit a handful of superstars, while doing little or nothing for the rank and file.

Despite this reality, Mavericks’ owner Mark Cuban jumped on Durant’s statement this week to suggest that yes, perhaps the owners should consider getting rid of the limit on individual contracts, in exchange for a significant concession from the players. Cuban suggested putting guaranteed contracts on the table. Because it’s Cuban, this was treated as a clever and serious trial balloon. In fact, it’s a sick joke. What Durant proposed would not, were it to happen, be a significant concession by the owners. True, it might cause some of them to hand out really stupid contracts. But it won’t affect meaningfully their bottom lines. Players giving up guaranteed money, on the other hand, would be a major concession.

And it raises a question – does Mark Cuban think it reasonable that the league’s own contracts not be guaranteed?

The depth of entitlement of sports owners is hard to overstate. They talk about market competition, when in fact they are largely protected from it. They wring their hands about how much money the players make, while sitting on fortunes that most people can only dream of. They regularly fleece taxpayers while spouting garbage about community responsibility.

Cuban had the nerve this week to say that, when all is said and done, yada, yada, that nearly $100 million a year each team will make from television alone is really no big deal. That’s because Cuban is already so ridiculously wealthy that an extra few tens of millions of dollars means little to him. But when it comes to what teams spend, every owner turns into Silas Marner, hording their lucre as if their lives depend on it. It’s this mindset that allowed Wal-Mart, by the way, to announce it was eliminating health insurance for up to 30,000 workers this week, because of extra unanticipated costs of roughly $170 million dollars. That represents roughly one eight of one percent of the company’s gross profit. But Wal-Mart officials still had the gall to talk about how concerned they needed to be about their expenses. When you’re  a billionaire in America – and, I know, they don’t all think this way – it’s seems to be the default understanding that, no matter how much you make, you deserve it. And everyone else is just pushing their grubby paws in your face asking for handouts.

So please, for heaven’s sake, the next time there is a labor dispute in pro sports, is it too much to ask that sports media have memories more than five minutes old, that team and league analyses of their finances perhaps should not be taken at face value and that it is a not uncommon habit among a good number of the wealthiest Americans to regard themselves as unfairly put upon no matter how good they have it?

Pretty please.




  1. Two of the most invaluable academies of thought are law and accounting. If one becomes familiar with both, that person knows a lot. Your Walmart point makes me think about Forbes’ estimated team valuations and they could be invalid because of the seediness of the owners(their tax evasions and socialistic mechanism that keep wages down on employees). So when LA sold for $2 billion to Ballmer, who isn’t as great as people think, I wasn’t shocked. Now when Milwaukee sold its team for $550 million, I thought whoever bought that got a steal. These tax dodges happen in politics, entertainment, and commerce.

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