Mike Monroe: NBA owners should know ‘psychic benefits’

Many of my friends enjoy reminding me that I often make short stories very long. But they acknowledge that I occasionally make a valid point, even if they simply nod their heads to patronize me while I’m in the middle of a rant.

But sometimes I’m right, and the world comes around to my way of thinking. For instance, I have written (and ranted) over the last few months about the NBA owners’ insistence during the lockout that they need to have guaranteed profits. I have maintained, all along, that sports is not like a typical business, not like the businesses that made all NBA owners wealthy and able to purchase teams.

Although my friends will make fun of me for quoting myself, two months ago I did in fact write this:

“NBA commissioner David Stern and his deputy, Adam Silver, will have us believe … the league’s business model is broken and requires a whole new system. The trouble with this argument is that owning a pro team is more hobby than business for many of those with the financial wherewithal to do so.

Do you think Mark Cuban loses sleep over the money he likely will lose on last season’s Mavericks, with a player payroll in excess of $90 million?

Not when he gets to sleep with the Larry O’Brien Trophy, as he admits he did after Game 6 of the NBA Finals.”

As it turns out, this assessment of what is keeping the NBA and the players union from making any progress towards a new collective bargaining agreement is gaining momentum, and I’m happy to now have the company of renowned author Malcolm Gladwell.

A staff reporter for The New Yorker, Gladwell is a serious writer, a favorite even of Spurs coach Gregg Popovich. The author of four books, three of them No. 1 New York Times bestsellers, he has a reputation for seeing things with unique perspective. So when he weighed in Monday on the NBA lockout in an , eyebrows arched all across the NBA.

In Gladwell’s view, the owners’ assertion that the NBA’s business model is broken is absurd because basketball isn’t a business at all. Rather, he asserts that most owners are in it for what he terms the “psychic benefits” they derive from owning a team, much as a super-rich art collector derives significant psychic benefit from a piece that may have cost tens of millions.

Gladwell concludes that an NBA owner is losing money “only if he values the psychic benefits of owning an NBA franchise at zero — and if you value psychic benefits at zero, then you shouldn’t own an NBA franchise in the first place. You should sell your ‘business’— at what is sure to be a healthy premium — to someone who actually likes basketball.”

But Gladwell makes no allowance for the economic upheaval of 2008 disrupting the dynamics of psychic benefit theory. Some NBA owners who love basketball just as much as Cuban have been badly buffeted by the recession. The owners of some of the 22 teams reported to have lost money last season no longer can easily afford the psychic benefits they once were willing to absorb.

Trouble is, there’s no reason to expect those owners will soon sell their teams to basketball-loving billionaires willing to treat teams like Van Goghs or Picassos just so NBA training camps will open on time. They would rather crush the players union to get new terms that guarantee profit.

It is left to Spurs owner Peter Holt, chairman of the owners’ negotiating committee and someone who has enjoyed that ultimate psychic benefit on four different occasions, to herd the cats who own the other 29 NBA teams and hope the hardliners who prefer to think only in business terms don’t hiss too loudly at the next negotiating session.


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