James Harden will be a restricted free agent next summer. The Thunder have said that they don't want to give him the max deal he could most certainly obtain on the open market, because that put them in luxury tax territory. It's possible that this is just posturing on their part and that they fully intend to pay Harden max money when the times comes, or entice him into taking a team-friendly extension before he can hit the RFA market. It's also possible that they simply do not want to pay the tax under any circumstances and that they'd let him walk after this season. After Bill lays out the basics of the situation, explains why he thinks Harden is such an important player for OKC, and aggressively shoehorns in a 600 word aside about the
relationship between Sam Jone and Bill Russell, he puts on his "I
know nothing about this subject but I'm going to use big words and
hope no one notices what a fool I am" hat and starts to talk
sports business. And that's when I start to want to throw my laptop
at my TV.
If
Harden leaves eight figures on the table to re-sign with the Thunder,
he's a loyal sap. If he does it without securing a no-trade clause —
especially on the heels of the Celtics rope-a-doping Rajon Rondo into
a discount $55 million extension (well below his market value), then
trying to trade him for Chris Paul one year later — his agent
should be disbarred.
But
even then ... why take anything less? Why should James Harden care if
Oklahoma City loses money?
If
he likes playing in OKC with Durant and Westbrook? It's funny, the
Jones/Russell aside I mentioned was tangentially related to the
subject at hand; basically, according to Russell, Jones never wanted
to be the leading man, preferring to play a supplementary rule, which
is why he never pushed himself as much as Russell did. And Harden is
the same way; he came right out and told Sam Presti to draft him
because he wanted to play third fiddle, not be expected to become his
new team's leading guy. You might think Bill would be able to put
his own pieces together and realize that Harden might take sub-max
money to stay in OKC rather than take max money to go to a team that
expects him to take 20 shots a night, but if you thought that, you
would be counting out the always powerful presence of cognitive
dissonance.
Here's
a better question: Why should Harden even believe them?
Because
the team releases audited financials to the league, which in turn
makes certain data from those financials public, and it turns out
that adding Harden at max money and paying both him and the tax would
cause their costs to exceed their revenues?
Didn't
we just come off an acrimonious lockout in which the league cried
poverty for months and months, and then, as soon as the lockout
ended, they had a slew of billionaires lined up to purchase their
teams?
Yes.
Because sports teams are a great investment in the long run,
skyrocketing in value during the past couple of decades and a pretty
safe bet to continue to do so in the future. But that value increase
isn't realized until one sells the team, and in the meantime, many of
them operate at a loss on a year-by-year basis. Some owners are cool
with that, in some cases because they can net their team-related
losses against profits made in other ventures and cut their tax
bills. Others are not, in some cases because they don't have other
significant business ventures and in some cases simply because they
hate the idea of losing millions of dollars every year, even if they
expect to recoup those millions and then some whenever they sell. I
don't know which of those describe's OKC's ownership (or if they even
actually feel that way; there's a good chance they're just bluffing
to try to knock down Harden's price), nor do I care. This is not a
difficult concept to understand. But watch out, here comes BIG BRAIN
BILL, ready to point out that HEY WAIT A MINUTE SPORTS TEAMS ARE
WORTH LOTZ OF DOLLARZ SO WHY SHOULD WE EVER BELIEVE AN OWNER.
Quick
aside about OKC's ownership--if I were writing for Grantland, I'd
footnote it, but then again if I were writing for Grantland there's
also a good chance I'd be a talentless navel-gazing hack, so I'm cool
with things as they are. Anyways, hey Seattle: (/Larry B makes
"smallest violin" finger motions) GET THE FUCK OVER IT.
Yes, sports owners are horrible people. Yes, Howard Schultz
and Clay Bennett are among that group of horrible people. No,
you are not the only city to ever lose a beloved team. Climb down
off your crosses, dry your fucking tears, and enjoy your NFL and MLB
teams. At least you're not Quebec City or Hartford (or Sacramento in
2014 or so). Jesus Christ on a pogo stick. Enough with the Sonics
pity party. If was fine for the first year or two. Now it's time to
shut your cakeholes.
We're
in the middle of an NBA renaissance that mirrors what happened from
1984 to 1993: marketable (and likable) stars, genuine rivalries,
contenders in big markets, a transcendent superstar leading the way
... really, we're about to run back the most successful 10-year
stretch in the history of the league.
Yes,
and yet, the luxury tax is still a real thing that costs real money
if a team's payroll exceeds a certain threshold. I'm not saying
every team should avoid paying it in all circumstances. I'm not
saying I think the Thunder should definitely let Harden go. I'm just
saying, it's incredibly dumb and simple-minded for some clod like
Bill to say DURRRR HARDEN IZ GOOD SO DEY SHOULD PAY WUTEVER IT KOSTS
TO KEEP HIM. Look, here's one of Bill's own footnotes from elsewhere
in this very article:
3.
That number jumps to $38 million the following season. And remember,
the luxury-tax penalties become more punitive a year from now. For
the 2012-13 season, the NBA's cap is $58.3 and the luxury tax
threshold is $70.3 million — numbers that could curve up if the
league continues to thrive. The following summer, steeper tax
penalties will mean that any tax team pays $1.50 for every dollar
over the tax — and also, they'd be more restricted with their free
agent exceptions. "repeater"
tax penalties that make it hairier for the repeat offenders. Ken
Berger and Zach Lowe explained the gory
details last summer.
SHAME
ON YOU, SAM PRESTI, FOR ACTING LIKE THAT'S SOMETHING WORTH
CONSIDERING WITH REGARD TO HARDEN'S NEXT CONTRACT.
So
listening to Oklahoma City's brain trust whine about "the bottom
line" like they're some mom-and-pop hardware store in East
Shartsquatch ... I mean, it just doesn't add up, especially when you
factor in their profits from this season and the previous four.
Look,
I don't want to sound like I'm some kind of shill for greedy sports
owners here. I hate them and I hate the Thunder and I hate their
fanbase and I hate all of you who are reading. But the fact that
franchises are businesses can't be swept under the rug here. DAW
WHATEVER DEY IS MAKIN MUNEY NO MATTER WUT SO ALL DER ARGUMENTS IS
AUTO-WRONG isn't going to cut it.
Clay
Bennett's group paid $350 million for the Sonics. If you don't think
they could sell a franchise that features Harden, Westbrook and Kevin
Effing Durant for $500 million in about 2.3 seconds, you're eating
bath salts again. Billionaires overpay for sports franchises all the
time. It's the ultimate ego purchase. It's like buying a 700-foot
yacht. You get to walk around with your chest puffed out, give
humblebrag nterviews, sit courtside and swing your genitals like a
lasso, basically.
But
if you're losing money every year you hold the franchise, and don't
have a way to balance out those losses, at some point your only
choice will be to sell. And if you really like owning the team, you
don't want to sell. Therefore: you might not want to run your team
at a loss.
You
know why we'll never find out if some billionaire would severely
overpay for a lovable contender starring Kevin Durant that's going to
win 60 games and make the Conference Finals AT WORST every year for
the next decade?
Any
team that lets Westbrook take 25 shots a game is always at risk of
being upset in a 7 game series. And I hope it happens to OKC this
season. And next season. And the one after that. Forever. Grrrrrrr
Because
there's a better chance of Clay Bennett buying a summer house in
Seattle then selling the Thunder right now.
So
again, why should he happily plunge payroll deep into the luxury tax
zone to pay his team's third best player?
Maybe
you didn't notice, but the Thunder became Young America's Team last
season. Attend one of their road games this season and glance around
at the crowd. You know what you'll see? Dozens and dozens of kids
wearing Thunder jerseys. You know why?
Little
kids are front-runners!
He
only mentioned this 1,000 times during the NHL playoffs last spring.
It's just as unclever an observation now as it was then.
It's
the same reason so many people in my age group became Cowboys,
Steelers and Yankee fans. It's the same reason I took my son to his
first Clippers game last spring, and by halftime, he was demanding a
GRIFFIN jersey. If you were a little front-runner and your hometown
team sucked, who'd grab your fancy? Probably Durant and Westbrook and
that dude with the crazy beard, right?
Probably
the Lakers or Heat, but yeah, I'll allow that the Thunder are
climbing that list. Doesn't put money in the pockets of the Thunder,
though.
In
2012, you can follow any NBA team you want, whenever you want,
however you want. You can watch them on your laptop, your iPad, your
iPhone or your giant TV. Really, it doesn't matter where the Thunder
play — they could play every home game in Pyongyang and have the
same relevance.
Money
from League Pass subscriptions is split evenly among all teams. So
is most money derived from sales of apparel.
Throw
in revenue sharing, the league's savvy digital presence, the real
potential of staggering fees for the league's next television deal
(up in 2016), and the Thunder's success with season ticket sales
(they're fifth in the league this season) and I'm pretty sure the
Thunder's owners won't be panhandling on the streets of Oklahoma City
after paying James Harden.
/Larry
B hangs head in exasperation
And
since we're here, shouldn't we mention how well the NBA is doing
right now? How does that NOT play into this Harden dilemma?
It
does, you horse's ass, it's just not the end of the discussion. Holy
fucking shitballs.
Unlike
the NFL, the NBA doesn't have concussions hanging over it like a
black cloud. Unlike baseball, the NBA actually appeals to people
under 25. Unlike hockey, the NBA is a white-collar sport that can
charge white-collar prices.
Those
first two statements are true (if not nearly as significant as Bill
thinks they are). The third one could not be more false.
Of
the four major sports, it's the only one that will unquestionably be
sitting in a better place five years from now.
The
odds that the concussion thing do anything to put football in a worse
place in five years than it is now are incredibly long. Baseball
will be fine too. Hockey is the sport that might be in worse shape
in 2017 than it is now, and here's why they're in their second nasty
lockout in the last seven years: BECAUSE A BUNCH OF ITS FRANCHISES
ARE OPERATING AT A LOSS ON A YEAR-BY-YEAR BASIS AND THEY DON'T LIKE
DOING THAT, EVEN IF THEY ARE ALSO INCREASING IN VALUE AS THAT
HAPPENS.
So
even if Oklahoma City loves to break out the small-market violin when
it suits them, the facts say differently — if anything, they're one
of the three or four most "global" NBA teams right now.
GRRRRRRRR
SOME DUDE IN GERMANY BUYING A LEAGUE PASS SUBSCRIPTION AND A DURANT
JERSEY DOES NOT HELP THE THUNDER PAY THEIR PLAYERS IN ANY MEANINGFUL
WAY.
Forbes
evaluated
the Thunder to be worth just $348 million, a remarkably dumb number.
If any billionaire called up Clay Bennett and offered him $348
million for the Thunder, Bennett would laugh and hang up. You aren't
even getting his attention unless it's a number that starts with "5."
And even then, he's probably hanging up.
We're
just going in circles at this point. Let's can most of the rest of
Bill the Finance Genius's ignorant fist-pounding analysis and wrap
things up.
Really,
it's no different than the Thunder's dilemma with Harden: On paper,
he isn't actually a "max" player, just like Oklahoma City
isn't actually worth $500 million. But saying what something should
be
worth ignores the concept of value itself: Value is determined by
the market for that value,
not what we believe that value should be.
Thank
you, page two of an "Fundamentals of Microeconomics"
textbook.
If
Oklahoma City's owners don't want to pay full price for Harden, then
they're really saying, We
moved an NBA team from a booming city in the Pacific Northwest to a
much smaller city that generates much less revenue and compromises
our ability to win championships, but the fans here are so grateful
that they won't hold it against us that we just tossed away a
puncher's chance at a dynasty. If
that's true, they're taking advantage of the goodwill of Oklahoma
City's fans — really, they should be flipping their asset, cashing
out and selling to an egomaniac billionaire who won't worry about
losing a few bucks, just about owning one of the NBA's hottest
franchises and getting shown on nationally televised games 20 to 25
times per year.
Ladies
and gentlemen, your future Minnesota Timberwolves and/or Milwaukee
Bucks VP of Common Sense.
1.
Important note for this season: I'm giving up my four-year vow to
avoid typing the word "Thunder" in an NBA column after the
Sonics were hijacked from Seattle with the implicit consent of the
NBA's commissioner, David Stern. It's just too much of a pain in the
ass to keep the "Zombies" thing going, and more important,
Chris Hansen is definitely bringing the Sonics back to Seattle.
That's happening. Let's start looking forward instead of backward.
And
try to forget about this horrible joke that you crammed down our
throats for four years.
