On Monday, the NBA announced the cancellation of the first two weeks of the 2011-12 season. It is the second time games have been cancelled in NBA Commissioner David Stern's tenure. The rift between the owners and players is so great that it's highly unlikely that there will be a resolution any time soon.
Should Congress have to intervene in the NBA lockout, it will be more than justified. As of 2010, the public has spent $2.9 billion financing NBA arenas compared to only $3.2 billion in private financing. That means that the public and NBA owners are almost equally invested in the infrastructure of basketball. Our cities agreed to fund these stadiums with the expectation that there would be games -- we aren't paying for empty arenas. And indeed, it will be the local workers and businesses around the arenas that will truly bear the brunt of this lockout.
Most fans are apprehensive about getting the government involved in sports -- but the government is already heavily involved in sports. We the people grant the NBA and other leagues an antitrust exemption so that they can collectively negotiate broadcast contracts. This is a privilege, not a right, and can be revoked. We also grant the NBA the right to collectively negotiate with the players union -- another privilege.
So if the NBA's lockout of its players, workers and fans is not in the best interest of the public, Congress can and should investigate. The Senate Judiciary Committee has a subcommittee on antitrust, competition policy and consumer rights, which would seem to be the appropriate body to investigate the lockout.
Guess who chairs that subcommittee? Milwaukee Bucks owner and Wisconsin Senator Herb Kohl.
Now, if the Judiciary Committee did take up the issue, Kohl would likely recuse himself. But what are the odds it takes up the issue in the first place with Kohl on the committee?
Ideally, Kohl should turn over his gavel to someone else on the committee without a direct conflict of interest -- someone like Sen. Al Franken or Sen. Richard Blumenthal. Then, the committee could call as its first witness none other than Kohl, so he could explain why he and the other owners are willing to shut out local businesses and workers in the interests of his own profits.
Kohl has stated that the Bucks have been losing money for years. And he borrowed $55 million from the NBA last year according to his Senate financial disclosure form, though that doesn't necessarily mean they're losing money. Nor does it mean Kohl himself is losing money. The Bucks owner has a net worth of at least $200 million.
It is true that the Bucks are the least-valued franchise in the NBA. Forbes estimated the team to be worth $258 million. But guess how much Kohl paid for the Bucks in 1985? $19 million. The Bucks may or may not be losing money, but Kohl could still sell the club and make a couple hundred million dollars.
So if the economic outlook is so grim for owners, why don't Kohl and other concerned owners sell? Keep in mind that absolutely none of them will actually lose money by selling their clubs. (Former New Orleans Hornets owner George Shinn ran that club into the ground and still sold the team for $300 million to the NBA after buying them in 1987 for $32.5 million.)
The truth is that NBA owners know as long as they can continue to take advantage of the antitrust exemptions we grant them and as long as fans continue to remain apathetic about the lockout, they can continue to put pressure on the players by withholding their paychecks. Problem is, that means they're withholding the paychecks of stadium workers and affecting local economies. And that means hundreds of millions of dollars in tax subsidies are going to waste.
Only Congress can force NBA owners to explain why the pursuit of their own profits should trump the massive public investment we've made in the game. But when Congress is made up of an NBA owner and at least 244 other millionaires, don't hold your breath.
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