Musings on the Chris Paul Trade Fiasco

December 6, 2010
"Q. Can you explain when trades are made, or if a free agent wants to be signed, what is the process that Dell [Demps] has to go through, do you say yeah, we'll do that trade or we won't do that trade?

DAVID STERN: Actually, the league generally approves all trades, number one. And number two, as far as we're concerned there have been while this process has been going on, there have been two significant transactions. And our response to both of them was you guys are management, you understand your budget and your instructions, just go ahead, because we've got Jac Sperling, Hugh Weber here, and if they recommend it, then we're going to be approving it."
(Thanks to Hornets Report for the transcript)

December 8, 2011
367 days later, we experienced one of the most surreal days in NBA history, as the stunning news that the Lakers had acquired Chris Paul without giving up Andrew Bynum (thus suddenly making the Paul-Howard dream seem viable) was trumped by the truly shocking decision by the NBA, as the owner of the New Orleans Hornets, to block the trade, in what I think might be the worst thing David Stern has done in his nearly 28 years as NBA commissioner.

I was certainly wasn't surprised that Stern did something so heavy-handed, but I was truly shocked that he did something so, well, dumb. I am used to the commissioner's tyranny, but his surpassing intellect has never been in question. (I thought Jan Hubbard's portrait of Stern from October was spot on.) Yet this decision made so little sense on so many levels, and seemed so poorly thought-out and short-sighted, without any sense of the repercussions and precedents which seemed patently obvious.

Stern *has* to understand this; he's too smart not to. One is left to conclude that he's completely lost control of his owners. The lockout often seemed to pit small-market owners vs. large-market owners as much as owners vs. players. It appeared at the end of the lockout that the intra-owner squabbles were not sufficiently healed, a perception only strengthened by today's actions, which seems driven by small-market owners, as evidenced by Dan Gilbert's now-annual uninformed, unhinged screed. I believe that, for the bulk of his career, David Stern ran the owners, but it couldn't be more clear that he works for them now. It is probably time for a change at the top.

Again, I'm just stunned by how much nonsense there is surrounding today's actions. Let me try to itemize my thoughts:

1. The Competitive Balance Canard
I have fully supported the idea that increased revenue sharing was needed in the NBA, but this was strictly from the perspective of allowing teams to compete from a business perspective. I know I'm not the first to say this, but the whole idea that payroll is related to competitive balance is debunked by pretty straightforward analysis.

The effect of the new collective bargaining agreement (CBA) on competitive analysis will likely be minimal, especially so if players are willing to leave money on the table as free agents. For the owners and the league to have expected more competitive balance from this deal is seriously misguided. In fact, elements like a more punitive luxury tax may serve to create less competitive balance, as teams like Utah will likely never go into the luxury tax, as they did a few years ago when they had a contending team. It's a fair question to ask if the more punitive luxury tax will make it tougher for small-market Oklahoma City to keep its burgeoning juggernaut together.

If the owners had truly wanted competitive balance, they should have sought a radical overhaul in which the max salary was eradicated, thus making it harder to fit multiple superstars on the same team. Stop saying this had anything to do with competitive balance. The Lakers were acting perfectly fairly under the system in place, a system which is not designed to create competitive balance, as much as the owners want to believe it does.

2. If Owners Wanted System Issues, Why Didn't They Negotiate Harder For System Issues?
I was surprised that the lockout ultimately wrapped up as soon as it did, mainly because I thought the owners were going to press harder on the so-called "system issues". Truth is that the owners did exact some meaningful changes, such as creating greater monetary incentives for free agents to sign with their own teams.

But, as the lockout wrapped up, the rhetoric from the owners side was that the lockout was about competitive balance more than money. Yes, likely some elements of B.S. in there, I know, but let's take it at face value. If that were truly the case, why did the owners give ground on so many system issues at the end, rather than give back on some of the huge concessions they got from players on basketball-related income (BRI) in exchange for more favorable system issues?

By the end, money should not have been a problem for the owners. They absolutely crushed the players on BRI, just crushed them, and there's reportedly an increase of more than $100 million a year coming from the Lakers new local TV deal alone, not to mention better local-TV deals for teams like the Celtics and the Rockets, with an increase in national TV revenues on the horizon in a few years, given the trajectory of the league. With smart revenue sharing, there was more than enough money moving into the owners' hands to allow them to concede BRI for system issues at the end if they'd wanted. The owners essentially dictated the terms of this lockout, and do not now have grounds to complain about the system they dictated, which essentially seems like what happened today.

3. Superteams Are Great For The League
When one steps back, it's really just surreal to think that The Decision was a key event which incited the owners, and continues to do so today. A free agent, after playing out his contract, opted to leave money on the table to join another franchise, in a mid-major market, so that he could maximize what he perceived to be his best chance to win a championship.

As a result, this decision created MASSIVE INTEREST IN THE LEAGUE, with the most popular season in years, with captivating storylines all the way from The Decision through the end of The Finals almost a year later. And this was apparently a big problem.

You may not want to hear it or acknowledge it, but the fact is that a Lakers superteam of Paul/Bryant/Howard (which is where I believe we were headed) would be great for the NBA. It would capture the conversation and interest of the casual fan, and more than anything, it would finally bring the rhapsodized, fetishized era of the NBA '80s back to life.

The most treasured era of the league is the mighty '80s, when the loaded Celtics and Lakers (and Sixers and Pistons, to a degree) reigned over a top-heavy league with little overall competitive balance. A Lakers superteam to counter the Heatles, with an emerging superteam in (tiny-market) Oklahoma City, with another strong contender in Chicago. Loaded teams for the Lakers, Heat, Thunder and Bulls? Gotta tell you, as a neutral observer, it sounds like a whole lot of fun to watch, and I'm sure it would be crazily popular for the league. And truth be told, all of those franchises have done it fairly, with some combination of strong management and luck.

It's just another thing that I thought was crazy today. When I first heard about the trade, I thought, wow, this is another bogus conspiracy theory which is going to stick around with David Stern - the fact that an NBA-owned team was going to deliver CP3 to the Lakers. When, in reality, it was all logical to me - an imminent free agent was using the leverage he had to get somewhere he wanted to be, and the Hornets were getting the best deal they could under the circumstances.

By luck, and system, the league was going to benefit, overall. Instead, I do believe that blocking the trade is a matter of the NBA fixing the league to a certain indirect degree, as there is no reasonable cause to block this reasonable trade, though of course it's an unwitting fixing, as no one in their right mind would go out of their way to fix the league AGAINST a Lakers superteam. But that's what the NBA has done - they've gone out of their way to make a heavy-handed, unwarranted, illogical, unfair decision that could not be in more opposition to the league's best interests. Instead of the world talking about a potential Lakers superteam, they're talking about the blocking of the trade.

4. Screwing Over the Small-Market Hornets
Continuing the nonsense, if there's one team that got screwed over today, of course it's the team the NBA owns, the New Orleans Hornets, in one of the league's smallest markets. Now they apparently can't trade Chris Paul, and are presumably stuck with him for a lame-duck season, in which the story of the blocked trade will follow him and the franchise around all year, at the end of which, New Orleans will end up with no compensation. This helps increase the value and facilitate the sale of the Hornets how?

5. Chris Paul of All Players - Really?
Chris Paul is the guy that you're going to try to turn into the villain for leaving a small-market team as a free agent - really? Chris Paul has never experienced anything close to good ownership in his entire career, with the clownish George Shinn followed by the unprecedented league takeover. All along, Paul's stood by the franchise, to Oklahoma City and back post-Katrina, committed to the community and to helping rebuild New Orleans. If the NBA wants to make an example of a free agent, this is not the guy to do it with.

Paul's never had a chance in his NBA career because of his team's ownership situation, yet has not wavered in his commitment to the city of New Orleans. He's done nothing wrong, and has every right to try to get to a team he wants to play for.

But now, Paul has been blocked, and he and the league are paralyzed and who knows what comes next. I believe that the NBA has essentially restricted Paul's freedom of movement (even if indirectly or implicitly) by refusing to trade him for a fair return, possibly ultimately limiting his options in where he can end up. If the players wanted to strike tomorrow, until the trade was restored, I would understand where there were coming from. They have the right to free agency, and that includes the right to employ leverage as an imminent free agent.

With a better owner, whether it's Gary Chouest in New Orleans or Larry Ellison in San Jose, Paul might well be a happy Hornet. Paul is working within the system which has been collectively bargained, not undermining it.

UPDATE: I originally wrote this post late last night. Some good back-and-forth with various TrueHoop Network colleagues has helped me crystallize my thinking further, and I'd refine my concluding opinion like so:

I believe that the Chris Paul trade was vetoed for one reason: because it was to the Los Angeles Lakers. As fun as it may be to hate the Lakers, that's not sufficient reason to veto the trade. The Lakers were operating fairly within the system, and Paul was as well, in using his leverage as an impending free agent to help direct where he wanted to go. If the owners wanted to reduce the leverage of players in Paul's situation, this should have been addressed in system changes within the new CBA.

I believe the owners and the league were some combination of too oblivious, ineffectual, divided and dumb to realize a revised system which actually achieved competitive balance, and are now trying to unilaterally impose competitive balance which they couldn't achieve through system changes. This is serving to indirectly restrict Paul's freedom of movement and to effectively manipulate the league.